IDX and Alpaca Explore Cross-Border Capital Market Access
PT Bursa Efek Indonesia (IDX) and AlpacaDB, Inc. (Alpaca) officially signed a Memorandum of Understanding (MoU) on Tuesday (1/9) at the IDX Main Hall in Jakarta.
This MoU marks the initial step for IDX and Alpaca to exchange knowledge and experience while exploring potential cooperation in providing cross-border capital market access. This includes enabling Indonesian market participants to access international markets and allowing international market participants to access the Indonesian market.
The MoU was signed by Jeffrey Hendrik, President Director of IDX, and Yoshi Yokokuma, Co-Founder and CEO of Alpaca. Alpaca is a technology-based broker-dealer and clearing member registered in the United States with the Financial Industry Regulatory Authority (FINRA). Alpaca possesses experience in facilitating cross-border transaction access, including through the Foreign Mandate Delivery (PALN) mechanism.
This exploration is part of IDX’s efforts to respond to the needs and aspirations of Exchange Members to expand investment options and access for Indonesian investors. Currently, access to foreign markets is available through mechanisms previously regulated under the futures market framework. Following the transfer of regulatory and supervisory authority for financial derivative products, including PALN, to the Financial Services Authority (OJK), IDX and its Exchange Members see an opportunity to explore the provision of PALN services through Exchange Members within the capital market.
The exploration of cooperation between IDX and Alpaca includes the potential provision of access for Indonesian Exchange Members to foreign securities markets through a secure and structured scheme, as well as the potential for reciprocal access for international investors and financial intermediaries to capital market products and services in Indonesia.
In the process, IDX and Alpaca will exchange knowledge and experience regarding foreign market access mechanisms, including how transactions can be conducted through overseas broker-dealers. IDX will also study various provisions and models that can be applied according to the needs of the Indonesian market and applicable regulations. As part of this process, IDX will continue to coordinate and discuss with the OJK, Exchange Members, and other relevant parties. The results of these studies and discussions will serve as considerations in drafting regulations and mechanisms for foreign product services in the Indonesian capital market.
IDX President Director Jeffrey Hendrik stated in his remarks, “Through the signing of this MoU, we are exploring opportunities to open broader reciprocal capital market access. This initiative is the first step for the Indonesian capital market to provide access to Exchange Members to the global market, while simultaneously opening opportunities for international brokers and market participants to access the continuously developing Indonesian market.”
In line with this, Alpaca Co-Founder and CEO Yoshi Yokokawa stated that this collaboration is a strategic step to expand the connectivity of the Indonesian capital market with the global market.
“Indonesia has one of the most dynamic and rapidly growing investor communities in the world, and collaborating with IDX is an important step to connect Indonesian financial institutions and their clients to the global market, while bringing the Indonesian capital market closer to international investors,” said Yoshi.
The MoU between IDX and Alpaca is part of the initial stage for knowledge exchange and exploration. The signing of this MoU does not mean that Alpaca has been appointed as the sole party to facilitate PALN for Exchange Members. In future developments, Exchange Members may potentially collaborate with various foreign brokers to access foreign securities markets.
Through this exploration, IDX will continue to encourage the development of a cross-border market access framework that provides more options for Indonesian investors to access the global market, while expanding access for international market participants to the Indonesian capital market. The signing of this MoU also reflects IDX’s commitment to expanding cooperation with various institutions to support the development of an Indonesian financial market ecosystem that is increasingly strong, trusted, and integrated with the global market.