INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Monic N. Devina, D. Meitiara P. Bakrie and Nesya Ashari, ABNR Counsellors at Law
of peer-to-peer trading platforms for cryptocurrencies in Indonesia. For stock trading, all activities are centralised with the IDX and every party involved in stock trading needs to obtain a licence beforehand from the OJK and fol - low the IDX rules. The closest structure to a peer-to- peer trading platform is the securities crowdfunding platform stipulated in OJK Reg 17/2025. This regula - tion defines securities’ crowdfunding as an offering of securities by an issuer directly to an investor using a publicly accessible electronic system. The issuer will be exempted from the normal capital market rules on initial public offerings if the offer is through an OJK- licensed provider and only for a period of not more than 12 months; it should not raise more than IDR10 billion. 6.7 Rules of Payment for Order Flow No specific regulation on payment for order flow exists in Indonesia. In general, all securities brokers need to execute their trade orders themselves and may only assign them to another broker if there is trouble in the trading system or if the stock exchange suspends them while an outstanding order needs to be exe - cuted. Furthermore, the securities brokers must also disclose fees charged to customers when facilitating a trade (including their fee) and fees charged by the stock exchange. A benchmark fee (or commission) that may be charged by a securities broker must be agreed and stipulated by members of the Indonesia Securities Company Association. 6.8 Market Integrity Principles The fundamental principles of Indonesian capital mar - ket laws and regulations are:
companies, partnerships, associations or organised groups) are prohibited from: • deceiving or misleading other parties through the use of whatever means or methods; • participating in a fraud or deception against another party; • giving false statements on material facts; or • failing to disclose material facts that are necessary in order to avoid a statement being misleading. A violation of the market-abuse prohibition is subject to imprisonment for up to ten years and a fine of up to IDR15 billion. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations Aside from the IDX rule on the use of the automated ordering feature in a securities trading platform (see 6.5 Order Handling Rules ), high-frequency and algo - rithmic trading are not yet specifically regulated in Indonesia. In practice, many players already use these technologies in both securities and futures commodi - ties trading. This practice is also acknowledged by both the OJK and the IDX. The OJK, under its digital finance innovation rule, rec - ognises the use of retail algorithmic trading as part of innovation that needs to be recorded at the OJK. Once recorded, the OJK will include a provider of retail algorithmic trading in a regulatory sandbox. The OJK will then further analyse the activities to deter - mine whether the provider may continue their services in retail algorithmic trading. Additionally, in a press release on the IDX’s mission for 2018–21, one item was to increase securities transaction liquidity by per - fecting the features and capacity of the trading system (including to anticipate customers that use algorithmic trading and high-frequency trading as their trading methods). The mission was then implemented with the introduction of an automated ordering feature in the securities trading platform operated by securities brokers that allows users to order securities through the platform, based on algorithms and parameters in the platform.
• disclosure; • efficiency; • fairness; and • protection of investors.
For investor protection, the Indonesian Capital Mar - kets Law stipulates two key areas of market abuse: insider trading and market manipulation. The Law stipulates that parties (which includes individuals,
393 CHAMBERS.COM
Powered by FlippingBook