(Bloomberg) -- Indonesian officials plan to meet with MSCI Inc. executives on Monday, according to people familiar with the matter, after saying they were blindsided by the index provider’s threat to reclassify the country as a standalone market — a much more severe step than they thought was under discussion during months of talks.
The Financial Services Authority and the Indonesia Stock Exchange will seek clarification on why MSCI put standalone status on the table and launched its consultation ahead of a review previously expected in November, the people who attended a briefing on Sunday said, asking not to be identified because the discussions were private.
The FSA released a statement on Sunday that said the meeting was to provide updates and gather input and perspectives as part of an “ongoing effort to further strengthen market integrity and maintain public trust.”
Representatives from FSA, asked for further comment Monday, referred to the Sunday statement. Spokespeople from the country’s stock exchange didn’t immediately respond to a request for comment. Representatives from MSCI also didn’t respond to a request for comment.
In its announcement last week warning that the country’s emerging-market status was in jeopardy, MSCI said feedback from market participants showed Indonesia hadn’t made sufficient progress in addressing concerns over the investability of its stock market, including opaque shareholding structures and suspected coordinated trading. It said significant concerns also remained about a lack of evidence of meaningful enforcement.