TEMPO.CO, Jakarta - An Indonesian capital market expert has warned of conflict-of-interest risks if the Finance Ministry, Bank Indonesia (BI), and sovereign wealth fund Danantara become shareholders of the Indonesia Stock Exchange (IDX).
Budi Frensidy, a professor at the University of Indonesia and a capital market observer, said the involvement of the three state institutions is conceptually possible but would require strict safeguards.
"The potential for conflicts of interest does exist, particularly because the Finance Ministry manages fiscal policy and government bond issuance, Bank Indonesia oversees monetary stability and financial markets, while Danantara acts as a state investor," Budi told ANTARA on Tuesday.
According to Budi, the IDX serves as a key market infrastructure institution that must remain neutral, independent, and trusted by all market participants.
Potential Benefits and Risks
Budi said state participation could strengthen capital support, accelerate market infrastructure development, and provide long-term strategic direction. However, it could also create perceptions that fiscal, monetary, or state investment interests may influence the stock exchange.
For that reason, he argued that any ownership by the Finance Ministry, BI, or Danantara should be strategic but limited, preventing the institutions from dominating the IDX's operational decision-making.
"There must be a clear separation between the roles of shareholders, regulators, market supervisors, and investors," he said.
Budi noted that similar arrangements have been adopted in several jurisdictions. In Hong Kong, the government, through the Exchange Fund, holds roughly a 6 percent stake in Hong Kong Exchanges and Clearing (HKEX). Malaysia, meanwhile, has demutualized its stock exchange and established governance mechanisms to manage potential conflicts of interest.
"A relevant model for Indonesia is not dominant state ownership, but minority strategic ownership supported by strong governance," he said.
He added that safeguards should include ownership limits, restrictions on operational intervention, fit-and-proper tests to ensure the independence of board members and executives, independent committees to handle conflicts of interest, greater transparency in strategic decision-making, and strong oversight by Indonesia's Financial Services Authority (OJK).
"The goal of demutualization should be to make the IDX more professional and competitive, not to turn it into an extension of the government," he said.
Legal Basis for State Ownership
The possibility of the Finance Ministry, BI, and Danantara becoming shareholders of the Indonesia Stock Exchange is stipulated in Article 8B(1) of Law No. 4 of 2026, which amends Law No. 4 of 2023 on Financial Sector Development and Strengthening. The amendment was enacted on June 4, 2026.
The provision states that "the Ministry of Finance, Bank Indonesia, and the Daya Anagata Nusantara Investment Management Agency may become shareholders of the Stock Exchange."
However, Article 8B(2) of the law also stipulates that such ownership must preserve the independence of the Indonesia Stock Exchange as the country's capital market authority.
Read: Finance Ministry, Bank Indonesia, and Danantara May Become IDX Shareholders
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