Jakarta. Authorities will initially restrict ownership of the Indonesia Stock Exchange (IDX) to domestic individuals and entities as part of its demutualization process, while allowing foreign participation only through Indonesian legal entities, a senior financial regulator said on Tuesday.

The policy is outlined in the newly enacted Law No. 4 of 2026 and will be implemented in stages under regulations currently being drafted by the Financial Services Authority (OJK).

OJK Capital Market Supervisory Chief Hasan Fawzi said the first phase of demutualization will involve private share transactions among existing exchange members rather than an initial public offering.

“The initial stage will most likely be conducted through private transactions among current exchange members,” Hasan said during the 25th anniversary celebration of Investor Daily at the Indonesia Stock Exchange in Jakarta.

Under the law, the Finance Ministry, Bank Indonesia, and Danantara -- Indonesia's sovereign investment agency -- will be given the first opportunity to acquire shares in the exchange.

Hasan said an IPO would be considered only after the demutualization process has been completed and the exchange has demonstrated stable financial performance.

“An IPO is not the first step,” he said. “We will complete the demutualization process first. After evaluating its business performance and profitability, the exchange may eventually pursue a public listing.”

The legislation specifies that IDX shareholders must be Indonesian individuals or Indonesian legal entities.

“Even if foreign investors participate, they would have to do so through Indonesian legal entities rather than through direct ownership,” Hasan said, adding that OJK is still refining the technical details for the implementing regulations.

He stressed that the ownership changes would not affect IDX's independence as a Self-Regulatory Organization (SRO), noting that all exchange rules would continue to require OJK approval.

“OJK's supervisory framework remains unchanged,” Hasan said. “All regulations issued by the Indonesia Stock Exchange will continue to undergo review and approval by OJK, ensuring the exchange's independence as a Self-Regulatory Organization.”

He added that OJK would consult broadly with listed companies, investors, brokerages, and other market participants before finalizing the regulations.

In drafting the new framework, OJK has studied demutualization models adopted by major international exchanges, including Hong Kong Exchanges and Clearing, as well as exchanges in Japan and South Korea.