Indonesia Doubles Capital Rules for Securities Firms

The financial regulator in Indonesia is preparing to double the capital requirements for securities firms and certain asset managers. This initiative, led by the Financial Services Authority (OJK), is designed to mitigate the risks of stock market manipulation and improve the overall transparency of the domestic financial sector. These reforms come after the global index provider MSCI INC highlighted investability risks in the region earlier this year. Eddy Manindo Harahap, a deputy commissioner for capital market investment management supervision at the OJK, explained that the new structure will categorize firms based on their financial strength. > Stronger capital firms can engage in all activities, while those with limited capital will only be allowed to engage in certain activities, so risks can be better managed. Under the upcoming regulations, securities and brokerage firms will be organized into three tiers. The minimum paid-up capital for the lowest tier will increase to 1 billion rupiah ($58,326), up from the current 500 million rupiah. The highest tier will be required to hold at least 110 billion rupiah. Asset managers will be divided into two tiers. For full-range firms, the capital requirement will rise to 50 billion rupiah, with a minimum requirement of 1 trillion rupiah in assets under management. These high-tier managers will have the authority to oversee various investment products, including offshore mutual funds, provided they maintain specific internal departments such as dedicated audit divisions. In addition to capital hikes, the OJK plans to enforce stricter requirements for compliance units within securities firms to prevent market misconduct. This focus follows data revealing that between 2022 and 2025, nearly one-quarter of all penalties related to stock market manipulation involved securities firms or their leadership. While a specific implementation date was not provided, officials indicated the rules would take effect in the near future.