The Indonesia Stock Exchange (IDX) officially enacted the Decree of the Board of Directors of the Indonesia Stock Exchange Number Kep-00003/BEI/04-2025 concerning Exchange Regulation Number II-Q on Equity Liquidity Provider Activities on the Exchange (“Exchange Regulation Number II-Q”), and the Decree of the Board of Directors of the Indonesia Stock Exchange Number Kep-00004/BEI/04-2025 concerning Exchange Regulation Number III-Q on Equity Liquidity Providers on the Exchange (“Exchange Regulation Number III-Q”) as the legal basis for the implementation of Equity Liquidity Providers.

According to provision I.5 of Exchange Regulation Number II-Q, an Equity Liquidity Provider is defined as a Member of the Stock Exchange who has received approval from the Exchange to trade shares and is obligated to quote certain stocks listed in the Equity Liquidity Provider Securities List in order to support the creation of liquidity for those stocks.

In general, Exchange Regulation Number II-Q comprehensively governs the activities of Equity Liquidity Providers, including the legal framework for determining the criteria of shares eligible for quotation by Equity Liquidity Providers. These criteria consider parameters such as daily transaction volume and frequency, market capitalization, price spread, free float ratio, and the stock’s fundamentals. The criteria are further regulated in Exchange Regulation Number II-Q.

The implementation of the Equity Liquidity Provider program does not apply to all shares listed on the IDX. Every six months, specifically the first period published on the last Trading Day of February, and the second period published on the last Trading Day of August, IDX will evaluate and publish the Equity Liquidity Provider Securities List, which contains a selection of shares based on certain criteria. These shares may be quoted by Equity Liquidity Providers on each Trading Day with the aim of increasing share trading liquidity on the IDX.

Exchange Regulation Number II-Q also stipulates a transitional period for the issuance of the Equity Liquidity Provider Securities List for the year 2025, with the first period list issued on May 8, 2025. All shares included in the Equity Liquidity Provider Securities List as of May 8, 2025, will be included in the second period list unless conditions as stated in provision III.5 of the Regulation’s Appendix apply.

Meanwhile, Exchange Regulation III-Q governs the requirements and application procedures for Exchange Members intending to become Equity Liquidity Providers. These requirements include not being under suspension, having a minimum Adjusted Net Working Capital (MKBD) of IDR 100 billion, having an internal policy Standard Operating Procedure (SOP), and having a system to submit Equity Liquidity Provider quotations.

Exchange Regulation Number III-Q also stipulates that if an Exchange Member intends to become an Equity Liquidity Provider and submit quotations for the first period of 2025, they must fulfill all the requirements set out in the Appendix of this Decree and submit a request to select the shares they wish to quote, as referred to in provision V.3. of the Appendix, no later than August 14, 2025.

With the enactment of these two regulations, the strategic role of Equity Liquidity Providers in the Indonesian capital market is expected to enhance share trading liquidity, ensure shares are traded in accordance with their fair value and fundamentals, and increase investor confidence in the quality and integrity of trading on the IDX.

If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of the leading corporate law firms in Indonesia, with extensive experience handling similar matters. Our team of professional corporate and civil lawyers makes us one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author:
Dewi Susanti