OJK evaluates Special Monitoring Board, considering "bid-offer" transparency options
Jakarta (ANTARA) — The Financial Services Authority (OJK) plans to conduct a comprehensive review of the Special Monitoring Board (PPK) at PT Indonesia Stock Exchange (BEI), including considering enhanced transparency through the presentation of indicative bid and offer prices in the market.
The review follows various submissions from market participants regarding trading transaction transparency, which is believed to trigger market speculation.
“Yes, we will conduct an evaluation,” said Hasan Fawzi, Acting Head of Capital Market, Financial Derivatives and Carbon Exchange Surveillance at the OJK, when met following the Annual Report Award (ARA) socialisation event at BEI headquarters in Jakarta on Friday.
Hasan explained that the original purpose of implementing the Special Monitoring Board was to provide investors with the opportunity to revitalise shares that meet certain criteria.
“So, beyond perhaps public relations and socialisation, the original purpose was indeed very good. We want to give all investors the opportunity to, shall we say, revive or reactivate shares that fall within certain criteria,” Hasan said.
Additionally, he noted that the policy was also intended to create space for shares that have been inactive in trading and would face difficulties if placed on the regular board.
On this occasion, Hasan assured that the OJK remains open to various inputs, including from Parliament, to ensure the policy continues to support fair price formation in the Indonesian stock market.
“Of course, if there are suggestions or obstacles, certainly Mr Jeffrey (Acting BEI Managing Director) and his team will continue to evaluate and refine. Actually, there have already been various refinements. But, if it is felt that something more is still needed, we are certainly very open and will monitor. This includes the very constructive suggestions we received from Parliament,” Hasan said.
In terms of mechanism, Hasan explained that the Special Monitoring Board uses a Full Periodic Call Auction (FCA) system to gather buying and selling interests that were previously limited to certain shares.
“So, in the context of price formation, the treatment happens to be periodic call auction. Therefore, it is needed to gather selling and buying interests from interested parties who previously had limited interest in certain shares,” Hasan said.
Through this mechanism, the process of matching buy and sell offers occurs periodically, differing from the regular board which uses Continuous Auction.
“So if Continuous were used on the PPK, sufficient buying and selling power would not be created. Hence there is a delay in the matching process periodically, unlike the regular board which uses Continuous Auction,” Hasan explained.
Nevertheless, the OJK remains open to refinements in transparency, including the possibility of displaying indicative bid and offer information in the market.
“But if certain transparency is then presented, for instance with indicative best bid (highest buying price) or best offer (lowest selling price), that will certainly be part of what we will evaluate going forward,” Hasan said.
Previously, the Chairman of Commission XI of the Indonesian House of Representatives Mukhamad Misbakhun stated the need for a review of the Special Monitoring Board provisions at BEI, as they were excessive, rigid and restrictive of investor movement in the Indonesian capital market.
According to him, the current Special Monitoring Board provisions tend to be excessive and rigid, thereby limiting investor movement in the Indonesian capital market.
“I mentioned earlier that if the Monitoring Board is too rigid, too excessive, a newly rising share immediately gets halted. Yet investors are still pursuing it. This certainly creates what? It creates an unfavourable situation,” Misbakhun said.