This article was accepted into the corpus but its outbound wikilinks were never NER-processed — typical at the deepest BFS hop or when the run's entity cap was reached. No expansion funnel to show.
| Capital Market Law (Indonesia) | |
|---|---|
| Name | Capital Market Law (Indonesia) |
| Enacted | 1995 |
| Enacted by | People's Representative Council (Indonesia) |
| Citation | Undang-Undang Republik Indonesia Nomor 8 Tahun 1995 |
| Status | in force |
Capital Market Law (Indonesia) is the principal statutory framework governing securities markets in Jakarta and across Indonesia. The law establishes definitions, regulatory powers, institutional responsibilities, and enforcement mechanisms for activities on the Indonesia Stock Exchange, addressing issuance, trading, and disclosure for state-owned enterprises, banks, and private issuers. It interacts with international standards such as those from the International Organization of Securities Commissions, and with regional arrangements involving ASEAN financial cooperation and bilateral agreements with jurisdictions including Singapore and Japan.
The law traces legislative genesis to reform pressures following the 1988 capital market initiatives under the New Order (Indonesia) and the aftermath of the 1997 Asian Financial Crisis, prompting the People's Representative Council (Indonesia) to pass comprehensive securities legislation in 1995. Influences included comparative models from the United States Securities Act of 1933, the United Kingdom Financial Services Act 1986, and reform programs linked to the International Monetary Fund conditionalities. Subsequent amendments were driven by events such as the 2008 Global Financial Crisis and domestic corporate scandals involving conglomerates like Salim Group and Bakrie Group, leading to regulatory strengthening through instruments inspired by the Basel Committee on Banking Supervision recommendations and World Bank technical assistance.
The statute defines key terms relevant to transactions on the Indonesia Stock Exchange and over-the-counter markets, including "securities" encompassing shares, bonds, and "derivatives" connected to exchanges such as Bursa Efek Indonesia. It distinguishes between public offerings by listed companies and private placements involving limited liability companies (Indonesia), and sets out criteria for "insiders" related to entities like Bank Mandiri, Bank Rakyat Indonesia, and Pertamina. The law’s definitions interface with corporate governance norms exemplified by rulings involving PT Telekomunikasi Indonesia Tbk and disclosure regimes shaped by precedents from Hong Kong Stock Exchange and Tokyo Stock Exchange practices.
Administration of the law is principally vested in the Capital Market and Financial Institution Supervisory Agency and the Financial Services Authority (Indonesia), which coordinate with the Ministry of Finance (Indonesia) and central banking functions of Bank Indonesia. Rulemaking authority interacts with self-regulatory organizations such as the Indonesia Stock Exchange and clearing institutions like Kustodian Sentral Efek Indonesia. Cross-border supervision involves liaison with Securities and Exchange Commission (United States), Financial Conduct Authority, and regional bodies including the ASEAN Capital Markets Forum. Institutional architecture reflects comparative models from the Australian Securities and Investments Commission and the Monetary Authority of Singapore.
The law regulates activity by brokers, underwriters, asset managers, investment banks such as Bank Central Asia, custodian banks like Bank Negara Indonesia, and institutional investors including BPJS Ketenagakerjaan and Pertamina Persero. Tradable instruments covered include equity, corporate bonds, government securities issued by the Ministry of Finance (Indonesia), sukuk structured in accordance with Islamic finance precedents as in Malaysia, and exchange-traded funds modeled after products on the New York Stock Exchange. Market infrastructure participants, including clearing houses and central securities depositories such as KSEI, operate under licensing regimes paralleling those in Canada and Germany.
Enforcement tools include administrative sanctions, criminal penalties, and civil remedies pursued by the Financial Services Authority (Indonesia) and prosecutors in the Attorney General's Office (Indonesia). Provisions address market manipulation, insider trading, and misleading disclosure, with penalties informed by cases involving conglomerates like Lippo Group and enforcement patterns observed in South Korea and India. Investor protection mechanisms involve mandatory prospectuses, periodic financial reporting aligned with International Financial Reporting Standards, and dispute resolution through arbitration panels similar to those in Hong Kong and Singapore. Cooperation with international agencies such as the International Organization of Securities Commissions enhances cross-border enforcement against entities in Switzerland, Netherlands, and United Kingdom.
Recent reforms amended governance rules, market access, and fintech integration following directives influenced by G20 agendas and consultations with the World Bank and International Monetary Fund. Legislative updates expanded regulatory coverage for crowdfunding platforms akin to structures in United Kingdom and Australia, and clarified rules for digital assets in line with frameworks from Japan and Singapore. Notable judicial and administrative decisions interpreting the law emerged from disputes involving PT Freeport Indonesia, PT Garuda Indonesia Tbk, and securities litigation with cross-references to precedents in Supreme Court of Indonesia rulings and arbitration awards connected to International Chamber of Commerce. Ongoing debates concern harmonization with ASEAN Economic Community objectives and alignment with standards promoted by the Financial Stability Board.
Category:Law of Indonesia