Indonesia’s Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) have decided to postpone a rule that allows short selling of equities in a bid to help alleviate volatility in the local stock market.
“[We will] postpone the implementation of short selling and review the relaxation policy on share buyback without requiring RUPS,” Financial Services Authority (OJK) deputy commissioner for capital market investment management and securities supervision Aditya Jayaantara said as quoted by CNBC Indonesia and cited by Jakarta Post.
This decision was taken in a bid to ease the pressure on the Indonesia Stock Exchange (IDX) Composite, which plunged 3.3% recently.
OJK chief executive for the stock exchange, derivative market and carbon exchange Inarno Djajadi said in the same discussion that he expected the decision to maintain stability and increase transaction liquidity in the stock market, according to Jakarta Post.
Short selling was previously set to be implemented in March or April this year with a target for short selling transactions to increase the market’s liquidity by 2% to 3%.