Indonesia grapples with stock market enforcement as index sinks below 5,000
Analysts question whether the current approach will deter future misconduct or simply lead wrongdoers to treat fines as just part of the cost of doing business.
The Indonesia Stock Exchange's Composite Index has plummeted below 5,000, placing it among the worst-performing major bourses globally. This decline, exceeding 40%, has been primarily attributed to concerns over market transparency and coordinated trading prompted by MSCI, the global index provider. The Financial Services Authority (OJK) is taking steps to reinforce capital market enforcement, in response to escalating scrutiny.
OJK's head of the relevant department, Agus Firmansyah, indicated that the authority would prioritize administrative sanctions over criminal procedures in addressing market violations. However, analysts remain skeptical about the efficacy of this approach, questioning whether it will deter future misconduct or merely lead wrongdoers to view fines as an inevitable cost of business.
The OJK is adopting the "una via" principle, which mandates a single legal channel between administrative sanctions and criminal proceedings, as required by the recently revised Financial Sector Development and Strengthening (P2SK) Law. Furthermore, the Supreme Court has advised OJK to reserve criminal proceedings for serious violations, as a last resort.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
