Consider Market Conditions, OJK And IDX Call There Is An Opportunity To Reopen Short Selling

JAKARTA - The Financial Services Authority (OJK) and PT Bursa Efek Indonesia (IDX) will not rule out the possibility of opening short sellings in the near future, but will continue to consider market conditions.

Chief Executive of the Capital Market Supervisory, Derivative Finance, and Carbon Exchange OJK Inarno said that the decision to postpone short selling was agreed as a solution from the regulator to restore market confidence after the decline in the combined stock price index (JCI).

"OJK will postpone the implementation of short selling activities by paying attention and considering the situation," he said at a press conference, Monday, March 3.

Inarno conveyed that based on input from market participants, he decided to postpone the short selling due to a very high volume.

In addition, Inarno added that his party always conducts a review in stages, so it cannot confirm how long it will take for the delay.

"But we will review and if it is stable, we will definitely reopen it," he explained.

Meanwhile, Inarno said that regarding the reopening of short selling this year, it is possible to open it, but still taking into account market conditions.

On the same occasion, IDX President Director, Iman Rachman said, the initial goal of short selling is to increase liquidity so that there are expected additional transactions.

"Indeed, if you look at today's conditions, it is not right, so it is decided that the OJK will have a postponement, especially the postponement of the implementation of short selling," he said.

Iman said that after the postponement of the short selling implementation, the exchange would see and review the next conditions.

Iman added that currently there are 27 Exchange Members (AB) for short selling, and nine ABs who are on boarding to get a short selling transaction permit.

"But with this decision, we have also postponed the onboarding process of Exchange Members, there are two short selling, regular and intraday short selling (IDSS). Of course we are not all open," he explained.

However, Iman said that when the short selling delay was reopened, the implementation would only be on LQ45 shares and only domestic retail investors would apply.