Jakarta. The Indonesia Stock Exchange (IDX) plans to introduce a new enforcement mechanism in early November that will allow it to freeze accounts linked to suspected trading violations, rather than automatically suspending trading in the affected stocks.

The move is intended to strengthen market oversight while protecting liquidity and allowing other investors to continue trading, IDX President Director Jeffrey Hendrik said Monday.

According to Jeffrey, stock trading suspensions have frequently drawn criticism from market participants because they can disrupt liquidity and restrict investors' ability to buy or sell shares.

The exchange is therefore preparing a more targeted approach that would restrict trading activity in accounts associated with suspected violations without necessarily halting transactions in the stock concerned.

"We have received considerable feedback that suspending stock trading disrupts market liquidity and affects our large number of retail investors, who need access to liquidity," Jeffrey told a press conference at the IDX building in Jakarta.

He said the new account-freezing mechanism was designed to strike a balance between enforcing trading rules and maintaining orderly market activity.

Under the planned arrangement, the IDX will conduct preliminary investigations into suspected trading violations. If indications of misconduct are identified and further action is required, the exchange will coordinate with the Financial Services Authority (OJK).

OJK Chief Executive for Capital Markets, Financial Derivatives and Carbon Exchange Supervision Hasan Fawzi said certain trading violations could also constitute criminal offenses and be referred to law enforcement authorities.

Hasan cited market manipulation, coordinated transactions designed to create artificial prices, and the dissemination of false or misleading information as examples of conduct that could lead to criminal investigations.

The planned enforcement mechanism would allow regulators to focus restrictions on accounts suspected of wrongdoing while reducing the need for broader trading suspensions that also affect investors not involved in the alleged violations.

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