JAKARTA: The Financial Services Authority (OJK) plans to impose a 5% limit on owning shares in the Indonesia Stock Exchange (IDX) following the rollout of demutualisation, which will transform the bourse from a member-owned mutual company held by brokerages into a shareholder-owned private company.
“So, any entity seeking to become a shareholder in the stock exchange is allowed to do so, provided that their shareholding doesn’t exceed 5% of total shares issued by the exchange,” Hasan Fawzi, the OJK’s chief supervisor of capital markets, said.
Hasan also noted that ownership above the planned cap would still be possible, particularly for entities that met the criteria for classification as a strategic shareholder, including state asset fund Danantara, Bank Indonesia (BI) and the Finance Ministry.
Such exceptions, however, would first be subject to a specific process in accordance with the new OJK regulation, he stressed.
“There will be criteria that should be met by certain entities like those three. If the criteria are met and, following a review and approval process, it is deemed possible, then those entities may be allowed to hold a stake exceeding the aforementioned 5% limit,” Hasan added, without going into further details.
The OJK is aiming to finalise the regulation on the bourse’s planned demutualisation this month.
Hasan said the authority had held initial discussions with the Law Ministry to harmonise its new regulation after completing internal processes.
Once the regulation takes effect, the IDX is set to make several adjustments to its articles of association, as the demutualisation plan will overhaul its governance structure, ownership and organisational nature.
The long-standing plan to demutualise the bourse has been expedited through its inclusion in the broader capital market reforms introduced earlier this year, specifically to address global stock market index compiler MSCI’s transparency concerns over Indonesian equities.
Analysts have expressed cautious optimism about Danantara’s entry into the capital market, acknowledging that the move could help stabilise market shocks while warning of potential risks to the bourse’s independence.
Hasan previously said the entry of external shareholders, including the state asset fund, the Finance Ministry and the central bank, “must not undermine the IDX’s independence”, as mandated under the revised Financial Sector Development and Strengthening (P2SK) Law.
“We will set this out clearly in the OJK draft regulation, particularly regarding certain decision-making mechanisms, the issuance of regulations and the working framework, which must first be approved by the OJK before they come into force,” he said.
In February, Danantara chief executive officer Rosan Roeslani said the fund was assessing plans to become a shareholder of the IDX.
Rosan pointed out at the time that it was common practice for sovereign wealth funds, a role Danantara partly fulfills, to hold stakes in global bourses, typically ranging from 15% to 30%.
He also said IDX ownership following its demutualisation would not be limited to the state wealth fund, noting that opportunities would also be open to other similar funds and foreign investors. — The Jakarta Post/ANN
