Check Out How To Make Intraday Short Selling Transactions Before IDX Launches

Director of Trade and Regulation of IDX Members Irvan Susandy. (Photo: Special)

JAKARTA - The Indonesia Stock Exchange (IDI) will soon introduce an Intraday Short Selling (IDSS) scheme in short selling trading in the Indonesian capital market. IDSS Director of Trade and Member Regulation of the IDI Exchange, Irvan Susandy, revealed a number of conditions for investors who wish to make IDSS transactions.

"First of all, investors must open a short selling account to securities that already have a license as a Short Selling Exchange Member, then have to prepare initial funds of at least IDR 50 million and investors must purchase shares that have been short selling at the end of the day for transaction settlement," said Irvan in a written statement in Jakarta, Thursday, January 23.

Irvan continued, regarding the short selling/IDSS requirements, there are no differences for individual (retail) and institutional investors. However, in its implementation there is a transition period, where in the first year the short selling/IDSS transaction was only intended for retail investors.

"Until one year after being implemented, IDSS transactions are still only applied to retail investors first with the aim of familiarizing the mechanism for market players," he said.

For information, as of October 3, 2024, the IDX has imposed regulations related to short selling listed in Exchange Regulation Number II-H concerning Requirements and Securities Trading in Margin and Short Selling Transactions and III-I concerning Margin Membership and/or Short Selling. Currently, the IDX is preparing Exchange Members to obtain licenses as Short Selling Exchange Members (AB) so that they can provide short selling transaction facilities to their customers.

"Until the end of 2024, there have been 6 Exchange Members who are in the process of obtaining a Short Selling AB license and 17 other ABs in the pipeline are conducting internal assessments," said Irvan further.

Meanwhile, regarding the socialization of the implementation of IDSS, Irvan said that his party had carried out a number of activities to increase the awareness of market players so that they would be better prepared to accept the implementation of the IDSS mechanism.

"Throughout 2024, the Exchange has also carried out a series of market awareness activities related to short selling transactions to investors and the public to increase public awareness of short selling transactions on the IDX," he added.

The implementation of the IDSS mechanism by the IDSS is said to provide opportunities for investors to gain potential profits when the market is down or bearish. The exchange hopes that its implementation can increase market liquidity and increase fair price disclosure.

"Hopefully, it can increase market liquidity and increase fair price disclosure so that it can expand investor bases and increase investor experience in stock transactions on the Exchange," he concluded.

The IDX also ensures that it will supervise the IDSS transactions that occur. In conveying Short Selling transactions, Exchange Members are required to submit the Short Selling flag so that it can support the creation of a reasonable, orderly and efficient market.