Indonesia lawmakers grill candidates for top regulatory jobs after market turmoil
An electronic board displaying stocks is reflected as people look on at the Indonesia Stock Exchange (IDX) in Jakarta, April 8, 2025. REUTERS/Willy Kurniawan/ File Photo
JAKARTA, March 11 : Indonesia's parliamentary financial commission will on Wednesday assess candidates for top jobs at the Financial Services Authority after an equity market rout in January triggered a spate of resignations.
Four officials, including the agency's chair and chief supervisor of capital markets, quit suddenly on January 30, days after index provider MSCI warned it could downgrade Indonesia to "frontier" status due to transparency and governance issues among listed firms.
The MSCI warning triggered selloffs that within days had wiped about $120 billion off Indonesia's equity market, exacerbated by rating agency Moody's downgrading the country's sovereign credit rating outlook.
Parliament is considering 10 candidates for a total of five vacancies at the agency, known by its Indonesian abbreviation OJK. They include the current interim chair Friderica Widyasari Dewi and interim capital market supervisor Hasan Fawzi.
NEW TEAM TO IMPLEMENT VITAL REFORMS
The new leadership will oversee capital market governance reforms proposed by OJK and the Indonesia Stock Exchange (IDX) to address the concerns raised by MSCI, which include doubling the minimum free float of listed company shares to 15 per cent over the next three years.
Frideria and Hasan both pledged to push forward with the proposed reforms to win back investor trust before MSCI's next review in May.
Hasan said capital-market achievements, including the main index hitting record highs in 2025 and 2026 had masked deep problems, including price manipulation, fake transactions, the use of nominee accounts and the spread of misleading information.
The reforms are meant to address those problems and restore public trust, he said, outlining a goal to increase the total market value of listed firms on the IDX to 25 quadrillion rupiah ($1.48 trillion) by 2031, up from around $790 billion now.
"For years it's true that public information transparency is a weakness that we must address immediately," said Hasan, who was previously OJK's chief digital asset supervisor.
Friderica, whose career includes stints at the Indonesia Stock Exchange and a local investment bank, underlined the importance of improving transparency relating to beneficial owners of listed companies.
"Regarding MSCI, they have acknowledged our proposals, but they cannot necessarily immediately accept them, they would have to see our consistency on implementation," she said.
Another candidate, retired OJK official Agus Sugiarto, said he would focus on improving credibility, tackling fraud and enhancing policies to support President Prabowo Subianto's programmes.
Most of the other candidates are officials with OJK, the central bank, the finance ministry and the state deposit insurer.
SELECTION PROCESS FAST-TRACKED
The panel is due to announce its picks after 1100 GMT on Wednesday, and they will require certification by the wider parliament on Thursday.
This selection process for the OJK leadership is quicker than the usual months-long process. Finance Minister Purbaya Yudhi Sadewa said on Tuesday that the appointments were being fast-tracked because of concerns about financial market volatility due to the conflict in the Middle East.
"The war ... speeds up the need for more definitive persons at the OJK," Purbaya told reporters.
($1 = 16,860.0000 rupiah)
