IDX Launches Short Selling And Intraday Short Selling Soon To Anticipate Market Uncertainty

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesia Stock Exchange (IDX) has revealed that it is preparing to launch several new financial instruments designed to help investors deal with uncertain market conditions.

IDX Development Director Jeffrey Hendrik said that one of the products that will soon be introduced is short selling and intraday short selling (IDSS) in the Indonesian capital market.

Jeffrey said that this product is expected to provide more strategy options for investors, especially when the market experiences high fluctuations in a short time.

"Currently, the finalization of permits for stock exchange members who will provide short selling services is still ongoing," he said, Thursday, February 6.

However, Jeffrey said the IDX targets that this instrument will be launched in the near future with a possible launch in March or the beginning of the second quarter of this year.

According to him, with this new strategy, investors are expected to be more optimal in managing their portfolio in the midst of dynamic and challenging market conditions.

Previously, IDX Director of Trade and Member Arrangements 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.