Beyond Meeting Global Standards: Analyst Reveals Three Strategies for Indonesian Capital Market Reform
Jakarta, VIVA — Calls for capital market reform have intensified following the resignation of several senior officials at the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX), as well as criticism from global index providers regarding transparency. However, analysts argue that renewal efforts will be insufficient if they focus solely on meeting global standards.
Political economy analyst for capital markets Kusfiardi stressed that capital market reform must ensure structural sovereignty. He also warned that improvements must not turn Indonesia into a financial colony.
“Capital market reform must ensure structural sovereignty, not merely meet global standards that are not necessarily neutral,” Kusfiardi said, as quoted by Antara on Thursday, 19 February 2026.
Kusfiardi offered three policy recommendations needed to overhaul the domestic capital market. First, he emphasised the importance of macroprudential instruments to control short-term speculative capital flows, including through the imposition of progressive taxes on hot money.
Second, he called for governance audits of the OJK and IDX by independent international bodies free from conflicts of interest. These audits would aim to strengthen accountability and supervisory credibility.
Third, Kusfiardi proposed strengthening a transparently managed market stabilisation fund. This measure would ensure regulatory bodies can protect domestic investors during periods of extreme volatility.
The proposals respond to the OJK’s eight-point reform agenda, which includes strengthening risk management. Kusfiardi argued this must be accompanied by oversight of high-frequency trading practices and the reinforcement of market stabilisation instruments.
Kusfiardi also highlighted that market inclusivity has not been matched by adequate structural protections, despite IDX data showing that retail investor numbers have surpassed 21 million, with daily transaction contributions exceeding 50 per cent.
He noted that high volatility often generates significant profits for global institutional investors, whilst domestic retail investors bear disproportionate risk. Yet domestic retail investors have the potential to serve as a liquidity cushion when foreign investors execute exit strategies.
“Market democratisation must not stop at the quantity of participation — it must guarantee a fair distribution of risk,” Kusfiardi continued.
He reiterated that regulatory reform must not be merely administrative but must address the root causes of market structure issues, as leadership changes at the OJK and IDX could add to market uncertainty.