Enforcement policy draws questions about deterrence
Analysts have questioned whether relying on administrative penalties will discourage misconduct or encourage offenders to regard fines as a routine business expense.
OJK's approach follows the "una via" principle in the newly revised Financial Sector Development and Strengthening (P2SK) Law. It requires the regulator to select one legal route for a violation: administrative sanctions or criminal proceedings. The policy is part of OJK's effort to address misconduct and rebuild market confidence.
Agus Firmansyah, who heads OJK's capital market, derivatives and carbon exchange regulation and development department, said the Supreme Court had also recommended using criminal proceedings only as a last resort for serious violations.
"If there is any indication of violations in the capital market, the OJK will look into it and act as the gatekeeper," Firmansyah said at a workshop for journalists in Lombok, West Nusa Tenggara, on Saturday.
OJK's enforcement record through Sept. 30, 2026, included 112.79 billion rupiah in fines imposed on 136 parties following case examinations in the capital market, derivatives and carbon exchange sector. It also revoked two licenses, canceled one Registered Certificate, suspended six licenses, issued 18 written warnings and made five written orders.
In a separate enforcement case, OJK said it had found evidence of stock-trading manipulation involving PT Dian Swastatika Sentosa and fined related participants 1.5 trillion rupiah, or about $83.2 million. Other investigations found manipulation of share allocations during the initial public offerings of PT Barito Renewables Energy and PT Petrindo Jaya Kreasi.
A sell-off deepens
Tuesday's decline left the Jakarta Composite Index down more than 40 percent since the beginning of the year, making it the world's worst-performing major stock market. MSCI's concerns about transparency and coordinated trading have been the main drivers of the losses.
The benchmark had already lost 29.79 percent for the year by the end of September, when it closed at 6,071.14, according to OJK. Its September decline was 6.96 percent, while foreign investors sold a net 10.24 trillion rupiah in equities that month.
The selling intensified on Oct. 16 as investors reacted to MSCI's proposed reclassification of Indonesia. The index dropped nearly 12 percent, its largest one-day fall since January 1998, prompting a 30-minute trading halt. That session pushed its year-to-date loss beyond 40 percent.
By mid-October, global funds had withdrawn a net $4.9 billion from Indonesian stocks in 2026, putting outflows on course for a record year, according to Bloomberg. The rupiah had also weakened about 8 percent that year and was Asia's worst-performing currency.
MSCI weighs standalone status
MSCI launched a consultation on Oct. 15, 2026, on moving the MSCI Indonesia Indexes from Emerging Market to Standalone Market status. The proposal remains subject to a final decision.
Analysts have estimated that such a move could prompt billions of dollars in additional withdrawals. Mirae Asset Sekuritas Indonesia estimated about $3 billion in passive outflows, using Indonesia's remaining weight of roughly 0.4 percent in the MSCI Emerging Markets Index. Citigroup put potential passive outflows in the mid-single-digit billions of dollars.
Henry Wibowo of Alphagate Capital estimated that a downgrade could bring up to another $5 billion in foreign outflows.
If the change goes ahead, Indonesia would become the first Asia-Pacific market with MSCI's standalone classification. Argentina, Nigeria, Ukraine, Zimbabwe and Lebanon are among the markets already in that category.
Disclosure reforms and index restrictions
Indonesian authorities have responded to MSCI's concerns by announcing more detailed investor-classification disclosures, enhanced disclosure for shareholders owning more than 1 percent, and High Shareholding Concentration (HSC) reporting. They have also set out a roadmap toward a 15 percent minimum free-float requirement.
MSCI is keeping its existing freeze on certain index changes for Indonesian securities until further notice. It will not raise Foreign Inclusion Factors or Number of Shares, admit additional securities to the MSCI Indonesia Investable Market Index, or move securities into larger size-segment indexes.
The index provider will continue removing securities identified by Indonesian authorities under the HSC framework. It will also continue using 1 percent shareholder disclosure data to revise its free-float estimates.
MSCI will accept comments on the reclassification proposal through April 30, 2027, and announce its decision no later than June 30, 2027.
