Indonesia is limiting foreign ownership of electronic trading platforms. The news was revealed this Tuesday by the official from the central bank of the country, Bank Indonesia. According to the statement, Indonesia is going to limit the foreign ownership of all electronic trading platforms up to 49 percent.
The statement was made by the executive director of the financial market deepening at Bank Indonesia at the news briefing. Any company that provides an electronic trading platform for Forex trading will have a maximum limit for foreign ownership. Apart from this, companies need to comply with the new requirements. The company providing electronic trading platform needs to operate as a limited liability entity only. It should maintain minimum equity all the time, which is set to 10 billion rupiahs (approximately $700,000.) At the same time, the company needs to have at least 30 billion rupiahs as a paid-up capital at the time of establishment.
Existing companies will have three years for the transition
The new rules are not only for the new companies but for the already established ones with foreign ownership that has a proper license to operate as an electronic trading platform provider. Such companies will be given a three-year period for the transition. This will allow them to comply with the newly brought measures properly without any major issues. There are additional requirements for the companies to comply with the new cap apart from the criteria regarding the funds. The companies that provide such platforms must have a reliable and safe infrastructure. They need to operate with good governance and ensure that the rules for the safety of transaction data are fully followed.
Seemingly Indonesia is following the lead of China. Previously, the Chinese government had imposed a cap for foreign ownership of the securities firms. The cap was the same – 49 percent for all securities firms. Due to this cap, foreign companies were unable to have a stake of more than 49 percent in Chinese securities firms until August 2018. At that time the China Securities Regulatory Commission (CSRC) has changed the decision and issued rules to raise the ceiling cap. Since last August the cap for foreign ownership of Chinese securities firms was raised up to 51 percent.