Client Alert: Short Selling, Margin Trading and Share Financing

Friday, 16-08-2024

OVERVIEW

The OJK plans to introduce transformative measures to Indonesia’s capital market, including Intraday Short Selling and enhanced Margin Transaction Financing, designed to stabilize market fluctuations and curb excessive volatility through POJK 6/2024. 

By requiring investors to buy back securities or close their positions by the end of the trading day, these regulations aim to create a more controlled and resilient trading environment. Additionally, the updated governance and risk management standards are set to boost market liquidity, deepen financial markets, and make investing in Indonesia more attractive. 

This marks a significant alignment of Indonesia’s capital market practices with international standards, ensuring greater transparency and stronger financial practices. As the market adjusts to these new regulations, it is essential for participants to fully understand and comply with the requirements to maintain stability and investor confidence, ultimately contributing to a healthier and more dynamic trading landscape.

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