OJK Issues Financing Regulations For Effect Transactions And Short Selling Transactions

Illustration. (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) issued Financial Services Authority Regulation Number 6 of 2024 (POJK 6/2024) concerning Financing Effect Transactions by Stock Companies for Customers and Short Selling Transactions by Stock Companies.

POJK 6/2024 is a refinement of the provisions previously regulated in the Financial Services Authority Regulation Number 55/POJK.04/2020 (POJK 55/2020) concerning Financing Effect Transactions by Stock Companies for Customers and Short Selling Transactions by Stock Companies.

"Especially the provisions related to governance and prudential aspects of securities transaction financing activities to customers by the Stock Company," said Head of the Ministry of Literacy, Financial Inclusion and Communications of OJK Aman Santosa in Jakarta, quoted from Antara, Friday, May 3.

Aman explained, the issuance of POJK 6/2024 aims to increase liquidity and deepen financial markets through financing margin transactions and/or Short Selling transactions.

"As well as strengthening risk management for Stock Companies that provide Stock transaction financing to customers or Stock Companies that carry out Short Selling transactions," said Aman.

He continued, improvements in order to strengthen governance and risk management of credit transaction financing and Short Selling transactions in POJK 6/2024 are expected to meet the needs of capital market players and are in line with international practices.

The substance of the POJK 6/2024 arrangement, among them:

1. Financing the settlement of Securities transactions by Stock Companies.2. Stock Exchange Obligations related to Stock Companies that provide Financing for the settlement of Stock transactions.3. Customer Requirements that can receive financing for the completion of Securities transactions.4. The principal of the customer's Stock Transaction Financing Agreement. 5. Requirements for Transactions in customer Stock transaction financing.6. Customer Effect financing mechanism.7. Short Selling transactions by the Company 8. Sanction Provisions.9. POJK 6/2024 comes into effect six months from the date of promulgation.

"Since the enactment of POJK 6/2024, the provisions in POJK 55/2020 have been revoked and declared invalid," said Aman.