Indonesia to scrap pandemic-era trading restrictions at end-March: regulator

INDONESIA’S financial services authority will ease some pandemic-era rules for the stock market, including on trading hours and short-selling, it said in a letter to investors.

The agency known as OJK had imposed the temporary rules at the start of the Covid-19 pandemic in 2020 to protect the market against volatility.

Inarno Djajadi, head of capital markets supervision at OJK said in the letter, a copy of which was obtained by Reuters on Friday (Mar 3), that the regulator will not extend the rules beyond the end of this month as the government removed all coronavirus-related mobility restrictions late last year.

An official at the regulator authenticated the letter, but declined to comment further.

According to the letter, from April the regulator will allow short-selling to resume for a list of stocks where it was previously suspended. The threshold at which trading is halted will be raised from the current 5 per cent drop in the main index to a 10 per cent drop.

The regulator will also bring back in stages pre-pandemic auto-rejection rules, which limits how much share prices can go up or down in a day.

Due to high volatility during the pandemic, the exchange had restricted the bottom limit so that transactions are rejected when share prices fall by 7 per cent, while the upper limit was unchanged.

This will revert to normal from April, bringing the bottom auto-reject threshold to 20 per cent to 35 per cent, depending on share price levels.

The letter also said trading hours would be adjusted to match the central bank’s settlement timings.

It was not immediately clear whether this meant market close would revert to 4 pm Jakarta time (0900 GMT), as it was before the pandemic. Currently the market closes at 3 pm REUTERS