Indonesia\u2019s capital market is set to change its face. If no obstacles\narise, the Financial Services Authority (OJK) will soon issue new\nregulations on the demutualisation of PT Bursa Efek Indonesia (BEI).<\/p>\n
Demutualisation is the way BEI is transforming. It is not merely\nabout changing the ownership structure of BEI; demutualisation will also\nchange how BEI operates, moves, raises capital, and determines its\ngrowth direction.<\/p>\n
Currently, ownership of BEI is tied to membership. As stipulated in\nLaw No.\u00a08 of 1995 on Capital Markets, only securities companies that\nhave obtained a business licence to act as broker-dealers can become\nshareholders of the stock exchange.<\/p>\n
After demutualisation, this structure will change. BEI will become a\nlimited liability company (PT) whose ownership is no longer solely\ndependent on exchange members (AB). Consequently, after the\ntransformation, BEI will become a profit-oriented entity.<\/p>\n
This change is mandated by Law No.\u00a04 of 2023 on the Development and\nStrengthening of the Financial Sector (P2SK), which was subsequently\nupdated through Law No.\u00a04 of 2026 on Amendments to the P2SK Law.<\/p>\n
The revised P2SK Law explicitly places demutualisation as part of\nefforts to strengthen Indonesia\u2019s capital market. Thus, the goal of\ndemutualisation is not merely to change the legal status of the\nexchange, but to strengthen governance, increase investor confidence,\nand broaden stakeholder participation.<\/p>\n
Demutualisation of the domestic stock exchange is inevitable. The\nquestion now is not whether BEI needs to be demutualised, but what BEI\nwill become after demutualisation.<\/p>\n
This question was the common thread of a focus group discussion (FGD)\ntitled \u201cDemutualisation of the Exchange, For What?\u201d held by\nInvestortrust at The Habitate Jakarta recently.<\/p>\n
The FGD featured three presenters: Poltak Hotradero (Business\nDevelopment Advisor of PT BEI), Lily Widjaja (Executive Director of the\nIndonesian Securities Companies Association\/APEI), and Gilman Pradana\nNugraha (Executive Director of the Indonesian Issuers\nAssociation\/AEI).<\/p>\n
The FGD respondents consisted of Suria Dharma (Vice President\nDirector of PT Samuel Sekuritas), Gregorius Cahyo Priono (President\nDirector of PT Panca Global Sekuritas), Intan Syah Ichsan (Director of\nPT Samuel Aset Manajemen), Lucky Bayu Purnomo (Founder of LBP\nEnterprises), and Kukuh Komandoko Hadiwidjojo (Chairman of the Financial\nSector Legal Consultants Association\/HKHSK).<\/p>\n
Interestingly, the forum, attended by executives of securities\ncompanies, investment managers (MI), issuers, analysts, and other\ncapital market stakeholders, did not show a battle between camps\nsupporting and rejecting demutualisation. All speakers accepted\ndemutualisation as inevitable.<\/p>\n
The debate instead shifted to more substantive matters, such as how\nthe exchange should be designed after demutualisation, what is to be\nachieved, and who will ultimately enjoy the benefits of\ndemutualisation.<\/p>\n
This broad support is an important asset for realising the\ndemutualisation of the exchange, an aspiration held by capital market\nstakeholders for decades but never realised.<\/p>\n
The Mutual Model is Outdated<\/strong><\/p>\n Demutualisation is not a new phenomenon. Australia, Singapore, Hong\nKong, Japan, the United Kingdom, the United States, and several other\ncountries have already gone through the process since the late\n1990s.<\/p>\n Of the world\u2019s 30 largest exchanges, 17 have demutualised and are\nlisted on an exchange, three have demutualised but are not yet listed,\nand six have become corporations without going through a demutualisation\nprocess.<\/p>\n \u201cBEI is the only exchange in that group that is still mutual and not\na state-owned enterprise,\u201d said Poltak Hotradero.<\/p>\n Demutualisation is essentially an answer to the rapid development of\ntrade, technology, and investment. Moreover, capital market products are\nincreasingly complex and capital needs are growing.<\/p>\n A modern stock exchange is not just a meeting place for buyers and\nsellers of shares. An exchange requires technology, infrastructure,\nsupervisory systems, connectivity, product development, and even the\nability to expand and make acquisitions.<\/p>\n Under current conditions, a mutual exchange model is difficult to\nmaintain. One weakness of a mutual stock exchange is the potential for\nconflicts of interest between the exchange owners, who are members or\ntrading participants, and the exchange as a market operator that must be\nindependent.<\/p>\n In a demutualised model, ownership is separated from membership\nrights and management functions, so that the governance structure can be\nmade more professional and oriented towards market development. In fact,\nexchanges that demutualise generally conduct an initial public offering\n(IPO) of shares on the exchange they operate themselves.<\/p>\n In a mutual exchange, AB holds two positions at once: as a user of\nexchange facilities and as an owner. Problems arise when the interests\nof the two are not aligned.<\/p>\n The experience of Singapore Exchange (SGX) can be used as a\nbenchmark. After merging, demutualising, and conducting an IPO, SGX\ndeveloped technology on a large scale.<\/p>\n After demutualisation, SGX also strengthened supervision, expanded\nproducts such as exchange traded funds (ETFs), real estate investment\ntrusts (REITs), derivatives and indices, and made strategic investments\nand acquisitions. Not long after, the Singapore exchange soared.<\/p>\n For this reason, Poltak Hotradero reminded that Indonesia should not\nmake demutualisation the finish line. \u201cDemutualisation is kilometre\nzero. How far the journey goes after kilometre zero will be determined\nby the entire capital market ecosystem,\u201d he said.<\/p>\n Poltak\u2019s statement is understandable. If demutualisation only stops\nat changing shareholders, what changes is only the corporate structure.\nBut if the change is used to enlarge the exchange\u2019s capacity, deepen the\nmarket, expand products, increase liquidity, and strengthen trust, what\nchanges is the face of Indonesia\u2019s capital market.<\/p>\n Indonesia\u2019s capital market indeed has very broad room to grow. The\nasset value of Indonesian ETFs, for example, is only around US$1\nbillion, far below Japan (around US$843 billion), China (US$675\nbillion), Taiwan (US$349 billion), South Korea (US$331 billion),\nAustralia (US$200 billion), and India (US$121 billion).<\/p>\n Similar opportunities exist for derivative products, asset\nsecuritisation, and other investment instruments in the domestic capital\nmarket, especially those needed by institutional investors. By\ndemutualising, BEI can grow rapidly, from merely a stock exchange to a\ncomplete market ecosystem.<\/p>\n Ownership and Trading Rights<\/strong><\/p>\n The AB do not dispute demutualisation. Nor do they dispute the method\nused for demutualisation, including listing BEI. They had accepted the\nidea long before the revised P2SK Law was issued. An APEI survey in July\n2026 showed that of around 79% of members who responded, more than 90%\nsupported demutualisation.<\/p>\n In other words, the debate in Indonesia\u2019s capital market has now\nshifted from \u201cdemutualise or not\u201d to \u201cdemutualise for what\u201d. \u201cWhat\nremains a concern is the implementation details,\u201d said Lily Widjaja.<\/p>\n The essence of demutualisation is the separation of ownership rights\nfrom trading rights. This means that BEI shareholders do not\nautomatically become AB. Conversely, AB do not automatically own BEI\nshares.<\/p>\n The separation is urgent because so far exchange ownership and\nmembership have gone hand in hand. This is also one of the reasons why\ndemutualisation is urgent. The old structure makes it difficult to\nseparate business interests from market regulation interests.<\/p>\n In this context, the economic value of the exchange has drawn the\nattention of AB. BEI has continued to record profits. In 2024, for\nexample, BEI\u2019s net profit increased 16.2% to Rp673 billion compared to\nRp579 billion in 2023 (year on year\/yoy). A year later, profit jumped\nagain by around 59%, to Rp1.07 trillion. During that period, no\ndividends were distributed. The exchange\u2019s profit was designated as\nretained earnings.<\/p>\n APEI is pushing for the economic value attached to old shareholders\nto be resolved before new investors enter after demutualisation. The\nresolution of the exchange\u2019s economic value should ideally be carried\nout by an independent appraiser or public appraisal service office\n(KJPP), through a number of approaches, such as price to book value\n(PBV) and price earnings ratio (PER).<\/p>\n \u201cA combination of dividends and capitalisation of retained earnings\ncan also be considered, because not all of BEI\u2019s equity is realistic to\ndistribute in the form of cash dividends. The exchange still needs\nworking capital, liquidity, and reserves,\u201d said Lily Widjaja.<\/p>\n Beyond all that, there is another principle that has been\nhighlighted: demutualisation must not create two classes of AB. Members\nwho own shares must not obtain privileges in trading, supervision, or\nmarket access compared to members who do not own shares.<\/p>\n In essence, the basic philosophy of the capital market must remain a\nguiding principle: that the capital market is an instrument of equity, a\nplace where the public\u2014even with small capital\u2014has the opportunity to\nenjoy the growth of large companies. For this reason, the goal of\ndemutualisation must be truly guarded so that a more commercial exchange\ndoes not turn into an exclusive exchange.<\/p>\n Trust Cannot Be Compromised<\/strong><\/p>\n Whatever the process, demutualisation of the exchange must be carried\nout in ways that can create trust in Indonesia\u2019s capital market.\nDemutualisation must be an entry point for the transformation of the\ndomestic stock exchange towards a more efficient and competitive\nmarket.<\/p>\n Through demutualisation, the Indonesian stock exchange is expected to\nbe more agile and responsive, and have the ability to compete with\nregional and global exchanges. \u201cTrust is a non-negotiable requirement.\nThe final form of demutualisation will greatly determine how market\nparticipants assess BEI\u2019s credibility,\u201d stressed Gilman Pradana\nNugraha.<\/p>\n Gilman\u2019s view is in line with Intan Syah Ichsan. For Intan, the most\nimportant question is not who BEI\u2019s shareholders will be, but the trust\nthat follows. Why? Investors do not buy Indonesian shares because they\nknow who owns the exchange, but because they trust the prices formed in\nthe market.<\/p>\n \u201cFund managers do not buy Indonesian shares because of BEI\u2019s\nownership structure. We buy because we trust the price discovery process\nformed in the market,\u201d she said.<\/p>\n This means that the goal of demutualisation does not stop at\nownership structure matters. Separating ownership and membership alone\ndoes not automatically eliminate conflicts of interest.<\/p>\n The biggest concern arises if market infrastructure is controlled by\ncertain economic or political forces. Based on this reasoning, a\nproposal emerged that BEI shareholders should not have special influence\nover listing, supervision, rule enforcement, or disciplinary\ndecisions.<\/p>\n In addition, the independence of the self-regulatory organisation\n(SRO) function must be protected structurally, for example through a\nregulatory committee or an independent SRO unit with appointments,\nbudgets, and decision-making separate from the business interests of BEI\nmanagement.<\/p>\n Intan Syah Ichsan even proposed that the success of demutualisation\nhave measurable indicators, such as increased liquidity, increased\nparticipation of domestic, foreign, and institutional investors,\nimproved ownership concentration, and reduced cost of capital.<\/p>\n \u201cWith such indicators, after three years the public can objectively\nanswer whether demutualisation has succeeded or not. So, the ultimate\ngoal of this change is not the change in legal entity status, but its\nimpact on market quality,\u201d she explained.<\/p>\n The AB also view demutualisation from the perspective of economic\njustice and investor confidence. In this regard, the economic rights of\nold shareholders need to be resolved before a new shareholder structure\nis formed.<\/p>\n In Suria Dharma\u2019s calculations, with equity of around Rp9 trillion\nand 94 AB, the book value per member is roughly Rp100 billion. BEI\u2019s\nvaluation could be much higher if using the PER approach.<\/p>\n However, the issue of economic justice is only a small part of the\nlarger issues in demutualisation. \u201cWhat must be answered is what BEI\nwill be like after demutualisation and whether the change can increase\ninvestor confidence,\u201d said Suria.<\/p>\n Not Just Dividends<\/strong><\/p>\n Gregorius Cahyo Priono placed the goal of demutualisation in a\nbroader context. Dividends are indeed important, but demutualisation\nmust not be reduced to an effort to distribute economic value to\nshareholders alone.<\/p>\n The larger goal is how the exchange can improve the welfare of the\nnation, while strengthening the entire capital market ecosystem,\nincluding securities companies. Moreover, securities companies currently\nmust increase capital, among other things to meet the adjusted net\nworking capital (MKBD) requirements. Furthermore, the responsibility of\nsecurities companies as gatekeepers of the capital market is now even\ngreater.<\/p>\n \u201cBEI is currently like a cooperative that wants to build a large\nmall. To build a large mall, investors, capital, professional\nmanagement, transparency, and public oversight are needed. Our hope is\nthat this demutualisation process runs without political content.\nThrough demutualisation, the exchange must become an efficient\ninvestment \u2018home\u2019 for market participants,\u201d he said.<\/p>\n Of course, the legal foundation of demutualisation is also in the\nspotlight. In this perspective, the P2SK Law cannot be read in\nisolation. It must be read together with the Capital Market Law, the\nLimited Liability Company Law, the Financial System Crisis Prevention\nand Handling Law (PPKSK), and the previous P2SK Law (2023).<\/p>\n Kukuh Komandoko Hadiwidjojo chose Malaysia\u2019s experience as a\nreference. When demutualising its stock exchange, Malaysia did not\nseparate the operator and regulator functions at once. They strengthened\ngovernance and conflict of interest prevention mechanisms first, before\nseparating regulatory functions further.<\/p>\n \u201cThe presence of the state as a shareholder does not automatically\nbecome a problem. What is far more important is how the independence of\nthe exchange is maintained,\u201d he stressed.<\/p>\n It must be acknowledged that the issue of demutualisation is quite\ncomplex. After all, related institutions, such as OJK, the Ministry of\nFinance, Bank Indonesia, and the Investment Management Agency (BPI)\nDanantara have different mandates and risk channels.<\/p>\n Therefore, state ownership cannot be calculated based on each entity\nseparately. \u201cIt must also be viewed in aggregate, including affiliate\nrelationships, ultimate beneficial owners (UBO), and acting in concert.\nOur main problem is not a lack of legal rules. The problem is the design\nof the regulatory architecture and its implementation,\u201d explained\nKukuh.<\/p>\n Lucky Bayu Purnomo sees demutualisation as an important evolution to\nstrengthen transparency and capital market governance. However, the\nownership design must still take into account an ownership cap to\nprevent concentration of power.<\/p>\n Lucky compared practices in Australia and Singapore, which have\nownership reporting mechanisms at certain thresholds. The principle is\nsimple: whoever the shareholder, whether a company, state-owned\nenterprise, sovereign wealth fund, or ministry, must be subject to the\nsame control logic.<\/p>\n \u201cBut demutualisation must not stop at ownership figures.\u201d<\/p>",
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