Jakarta. Phintraco Sekuritas became the first stock exchange member to obtain a stock liquidity provider license from the Indonesia Stock Exchange (IDX).

"Parties eligible to become stock liquidity providers are exchange members who have met the criteria set out in Exchange Regulation Number III-Q," Irvan Susandy, the director of trading and member regulation at IDX, was quoted as saying in a press statement.

Some of the criterias include that the member's status is not currently suspended. The member has a minimum adjusted net working capital of Rp 100 billion, as well as a standard operating procedure for internal policies. They must also have a system for submitting stock liquidity provider quotations.

The new status allows Phintraco Sekuritas to play a strategic role for investors, namely ensuring liquidity in the market. For listed companies, they can also ensure the stock price discovery process can be carried out in accordance with enterprise value.

Stock liquidity providers also enjoy three incentive alternatives, namely transaction fee reduction option, a monthly cash incentive option, and the option to select more quoted stocks. These incentives will take into account the fulfillment of daily obligations by the stock liquidity providers.

"We hope that the stock liquidity provider can improve market depth and quality, particularly in establishing more reasonable stock prices, and reduce the bid-ask spread for stocks with low liquidity," he added.

Phintraco Sekuritas president director Ferawati said that her company was ready to take on the new role in terms of infrastructure and human capital. 

"The presence of  stock liquidity providers encourages more stable trading and increased transaction volume, thereby making the Indonesian capital market healthier, more competitive, and more attractive to both retail and institutional investors," Fera said.

The company is currently exploring with several potential listed companies to participate in the stock liquidity provider program. Phintraco Sekuritas has begun contacting investor relations representatives of listed companies, particularly those on the stock liquidity provider list with sound fundamentals but limited liquidity. It is also following up on interest from several listed companies not on the list.

"We hope that the presence of stock liquidity providers will increase the liquidity and depth of the Indonesian stock market, resulting in more efficient transactions and stock prices reflecting fair value," Fera said.