Market infrastructure - Indonesia
Institutions and organisation
Indonesia Stock Exchange (IDX)
The Indonesia Stock Exchange began operations in December 2007 and was formed following the merger of the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX). Its 125 shareholders are licensed local brokers.
JSX started as an Association of Stockholders in 1912 and was reopened as an official stock exchange in 1977.
SSX originally opened in 1925 and was located in East Java.
Three market types (segments) are available for the scripless trading environment:
| Regular Market | T+2 settlement cycle; | |
| Cash Market | T = SD; | |
| Negotiated Market | Settlement cycle depends on the agreement between buyer and seller. |
Equities and warrants can be traded on all market segments, but fixed income instruments are tradable on the negotiated market only.
Equity trades in physical shares can be executed in the negotiated market only.
CSD - PT Kustodian Sentral Efek Indonesia (KSEI)
KSEI was created in December 1997 and obtained a preliminary operating licence at that time. KSEI acts as settlements and central depository agent according to the provisions of the Capital Market Law.
Clearing House - PT Kliring Penjaminan Efek Indonesia (KPEI)
KPEI was incorporated in August 1996 and became a legal entity in September of that year.
Central Bank - Bank Indonesia (BI)
The new Central Bank Act, enacted on 17 May 1999, conferred on BI the status and position of an independent state institution. BI is a fully autonomous civil legal entity responsible for formulating and implementing policies as stipulated in the new Central Bank Act. BI is regulated by its statutes. As a public legal entity, BI has the authority to issue policy rules and regulations.
In its capacity as central bank, BI has the objective of achieving and maintaining the value of the Indonesian Rupiah (IDR) and the stability of the exchange rate against other currencies. BI is also the regulator of the Indonesian banking sector and operator of the interbank payment system.
Regulatory structure
The responsibilities of the regulatory bodies are as follows:
- Ministry of Finance
The Ministry of Finance has the ultimate responsibility for regulating the IDX through Otoritas Jasa Keuangan (OJK). - Central Bank (Bank Indonesia - BI)
BI, an independent body reporting directly to the House of Representatives, is responsible for the following:- Achieving and maintaining stability of the Rupiah (IDR);
- Formulating and implementing monetary policy;
- Regulating and ensuring a smooth payment system;
- Supervising the national banking system.
- Financial Services Authority (Otoritas Jasa Keuangan - OJK)
Otoritas Jasa Keuangan (OJK), the Indonesia Financial Services Authority, is an independent government institution, supervising the banking industry, the capital market, and non-bank financial institutions, such as insurance and pension funds.
Previously, the capital market was supervised by the Indonesia Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK). On 31 December 2012, Bapepam-LK transferred its market supervisory functions to OJK, and ceased to operate. Starting from 1 January 2013, the capital market and non-bank financial institutions have been supervised by the OJK.