Jakarta –Indonesia Stock Exchange (IDX) has officially enacted the Stock Exchange rule Number II-Q concerning Stock Liquidity Provider Activities at the Exchange and Stock Exchange rule Number III-Q concerning Stock Liquidity Providers at the Exchange as the legal foundation for implementing Stock Liquidity Providers. These rules will enforce today, May 8, 2025, representing IDX’s commitment to continuous innovation in enhancing liquidity in the Indonesian Capital Market and creating a more orderly, fair, and efficient capital market that is attractive to all market participants, both domestic and international.
IDX Business Development Director Jeffrey Hendrik stated that the enforcement of these regulations is the result of studies and coordination with various stakeholders. “The role of Liquidity Providers becomes particularly important in increasing market depth and quality, especially in supporting fair price formation and reducing bid-ask spreads on stocks with low liquidity,” said Jeffrey.
In general, rule Number II-Q comprehensively governs Stock Liquidity Provider activities, including the legal framework for criteria of stocks that can be quoted by Stock Liquidity Providers. The criteria for quotable stocks consider parameters such as daily transaction volume, daily transaction frequency, market capitalization, price spread, free float ratio, and stock fundamentals. Regulations regarding stock criteria are further detailed in the Decree of the Board of Directors of PT Bursa Efek Indonesia number: Kep-00003/BEI/04-2025 regarding rule Number II-Q concerning Stock Liquidity Provider Activities on the Exchange.
It should be noted that the implementation of Stock Liquidity Providers does not apply to all stocks listed on IDX. Every six months, IDX will issue a Stock Liquidity Provider Stocks list containing selected stocks based on specific criteria that can be chosen by Stock Liquidity Providers for daily quotation with the aim of increasing liquidity and trading efficiency for these stocks.
Meanwhile, rule III-Q concerning the requirements and application procedures for Exchange Members interested in becoming Stock Liquidity Providers. The requirements include Exchange Member status not under suspension, a minimum Net Adjusted Working Capital (NAWC) of IDR100 billion, possession of internal policy Standard Operating Procedures (SOP), and systems for submitting Stock Liquidity Provider’s quotations.
The license application process for all Exchange Members interested in becoming Stock Liquidity Providers is officially opens on May 8, 2025. IDX invites all interested Exchange Members to submit Stock Liquidity Provider license applications in accordance with the provisions stipulated in these regulations.
With the enforcement of both rules, it is hoped that the strategic role of Stock Liquidity Providers in the Indonesia capital market will enhance stock trading liquidity, ensure stocks are traded in accordance with fair value and fundamentals, and increase investor confidence in the quality and trading integrity in IDX.
The complete rules Number II-Q and III-Q can be accessed through the official IDX website at www.idx.co.id: > Regulation > IDX Regulations > Trading Regulation tab and Exchange Membership Regulation tab.