Within hours of Iman Rachman’s resignation on Friday, officials said they were preparing more steps to support the market, including changes to the shareholding structure of the exchange and higher caps on insurers’ capital market allocations.

The moves capped a volatile week for Indonesian assets after the index compiler flagged concerns about transparency in Southeast Asia’s biggest market, sending benchmark stocks to their worst two-day losses in nearly three decades before regulators stepped in. The Jakarta Composite Index closed 1.2% higher.

“This should be seen as less of a regret and more of a reset,” said Mohit Mirpuri, senior partner at SGMC Capital Pte. “Times of stress often accelerate change, and this opens the door for new leadership with a clear mandate to raise standards, improve market structure and strengthen investor confidence.”

Sentiment has started to recover after regulators on Thursday PROVIDED reform measures, including doubling the minimum free float—the number of shares available for public trading—to 15% starting next month and the possible market participation of sovereign wealth fund Danantara. The efforts reflect a push by the authorities to meet MSCI’s demands for greater transparency—failure to do so by May risks cutting Indonesia’s weighted index and even downgrading its border status.

HSBC Holdings Plc became the latest bank to downgrade Indonesian equities on growth concerns. Goldman Sachs Group Inc. and UBS Group Both AG downplayed the market, citing at first the risk of more than $13 billion in outflows triggered under an extreme scenario.

This week’s episode has revived doubts in Indonesia’s financial markets, which have long been seen as a beneficiary of the country’s rapid economic growth. Growing investor concerns over public finances, the sudden departure of the finance minister and a widening fiscal deficit have prompted many investors to withdraw. Global funds have discarded Indonesian bonds from September to November, before returning in the last month of 2025.

At the heart of the concerns is the low free float of Indonesian equities, as the country’s biggest companies are thinly traded and controlled by a few wealthy individuals—a structure that investors say distorts the index and manipulates risk. The issue has been a point of contention for years, with investors arguing that such low liquidity in some sectors makes large parts of the market uninvestable and untrackable.

Exchange officials have already tried to encourage market participants. Rachman, who was appointed to his position as CEO less than four years ago, has endorsed for extended trading hours and introduced short selling as a way to improve liquidity, although success was limited.

Currently, MSCI does not have a minimum free float required for a country’s market classification, which depends on factors such as accessibility and economic development. However, the index compiler requires a free float of 15% over a period of time for a security to be included in the investable emerging-market universe, with some exceptions.

In a statement earlier this week, MSCI raised concerns about “opacity in shareholding structures and concerns about possible coordinated trading behavior” in Indonesia. It says it needs more granular and reliable information, including stronger monitoring, to support a better assessment of free float and investability across securities.

Many investors remain in limbo over whether regulators will do enough to satisfy the index compiler’s demands. “The reforms outlined are positive in direction, but implementation and the appointment of a credible successor will be the key to determining whether these concerns will completely disappear,” said Gary Tan, a portfolio manager at Allspring Global Investments.

So far this week, global funds have offloaded a net $739 million dollars worth of stocks through Thursday, on track for the biggest weekly outflows since mid-April.