Launching the Acceleration of Exchange Transaction Settlement from T+3 to T+2 - Photo by IDX

JAKARTA (TheInsiderStories) – Indonesia Stock Exchange will launch the acceleration of market transaction settlement from T+3 to T+2, aspire to expedite capital flow liquidity. Indonesia becomes the second country in South AseASEAN that implements such system.

Some other countries like United States, Canada, Japan, and Saudi Arabia have implemented the T+2 transaction settlement. Head of executive for Capital Market Supervisory at Financial Service Agency (FSA) Hoesen explained, the T+2 program aims to develop the Indonesian capital market so that it can more competitive compared to other market.
In addition, the implementation of the T+2 transaction is also to boost the liquidity in the market, accelerating the re-investment, operational cost efficiency as well as increasing the transaction capacity of the securities companies.

In a legal basis for implementing T+2, FSA has issued OJK Regulation Number 21/POJK.04/2018 concerning the Time of Exchange Transaction Settlement. While, in order to implement the new regulation, the players in the capital market industry have adjusted the system in their companies.

All parties stated that they were ready to carry out the accelerated migration of exchange transaction settlement from T+3 to T+2. In line with that, the IDX and the Clearing Guarantee body have also adjusted the relevant regulations regarding the settlement.

On the other hand, the IDX also changes the methodology of the LQ45 and IDX 30 index using free float to calculate the market capitalization, which previously used the weighted average method. The method uses all shares listed as the weight of the stock price index calculation.

The implementation of the LQ45 index methodology changes is carried out in stages and starts Feb. 1, 2019 and ends August 1, 2019. IDX said in circular letter, the changes in the methodology of the LQ45 and IDX30 indices, it was conducted to describe the actual market conditions.

Previously the method used with the method of weighted average or market capitalization weighting using the method of using all shares was recorded as the weight of the stock price index calculation. However, not all listed shares are traded.

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