A display board at the Indonesia Stock Exchange on Dec. 30, 20134. (JG Photo/Safiir Makki)

Indonesia’s stock exchange will give listed companies a two-year time limit to free float at least 7.5 percent of their shares or face being delisted from the exchange, said a senior bourse official.

Hoesen, director of evaluations at Indonesia Stock Exchange (IDX), said on Friday that it will be issuing a regulation effective on Jan. 30 forcing companies to comply with the ruling or face sanction.

This regulation, he said, was aimed at boosting liquidity in the market as well as reducing sleeping stocks, or stocks that have not been trading for a long time.

Hoesen was confident, however, that the sanction would not need to be applied.

“Delisting would be the last sanction that will be taken by the exchange for those that fail to comply,” said Hoesen, adding he believed the new regulation would not discourage companies to list their shares at the exchange.

“I don’t see this regulation forcing listed companies to voluntarily delist,” he said, adding the exchange is optimistic that two years is a reasonable period of time for those below the 7.5 percent level to drag themselves above the benchmark.

According to data from the exchange, some of Indonesia’s biggest companies currently offer less than 7.5 percent of their shares on the open market.

Cigarette maker HM Sampoerna, which is owned by US tobacco giant Philip Morris USA, has just 1.82 percent of its shares available for trading on the market.

Meanwhile, cement maker Holcim Indonesia’s free float is 4.32 percent, while that of automotive financier Adira Dinamika Multi Finance has only 5 percent of its shares freely trading.

Separately, Hoesen said that the exchange has increased annual fees that must be paid by listed companies.

The increase will see annual charges rise by 10 times, to a range of Rp 50 million to Rp 250 million ($4,130 to $20,660), from approximately Rp 5 million to Rp 25 million.