Indonesia Allows State Agencies to Own Shares in Stock Exchange under Revised Financial Law

The revised Financial Sector Development and Strengthening Law (UU P2SK) approved by Indonesia’s legislature now permits the Ministry of Finance, Bank Indonesia and the state‑linked Danareksa to become shareholders of the Indonesia Stock Exchange (IDX/Bursa Efek Indonesia). Analysts say state ownership could inject capital, enhance technology and infrastructure, boost market depth and signal government commitment, but also raise concerns about conflicts of interest because the exchange also acts as a self‑regulatory organization.

The amendment also expands Bank Indonesia’s mandate to support real‑sector growth and gives the DPR new binding powers to evaluate the central bank, OJK and LPS performance and to approve budget changes. Critics warn that these provisions could undermine the operational independence of the central bank and other regulators, potentially affecting investor confidence.