IDX Restricts Short Selling to Selected Liquid Stocks

RRI.CO.ID, Jakarta – The Indonesia Stock Exchange (IDX) has implemented several measures for the initial phase of short selling. This initial phase will be limited to stocks, exchange members, and investors meeting specific criteria.

Director of Development at the IDX, Iding Pardi, said the exchange is prioritizing highly liquid stocks to reduce the risk of trading manipulation and cornering. “We’re selecting liquid stocks, so they aren’t easily controlled by certain parties,” Iding said in a statement in Jakarta on Friday, September 18, 2026, as quoted by Antara.

In addition to stock selection, the IDX has established pricing requirements for short-selling transactions. Transactions must be executed at or above the current market price, while the exchange maintains parameters that allow it to temporarily halt trading.

The IDX has also adopted a limited approach to gauge the impact of short selling on the market. Investors and exchange members are given time to adapt before the scope of transactions is expanded.

“So, the stocks are limited, and there are also specific criteria for exchange members. There are even criteria for investors,” said Iding.

In the initial phase, prospective stocks are drawn from the LQ45 index. The IDX is still analyzing five stocks that will represent various sectors based on their liquidity levels.

“For each sector, we look at the most liquid stocks, and those are the ones we include on the short-selling stock list,” said Iding.

He added, short selling can be used as both a trading strategy and a hedging instrument. Therefore, the initial regulations are designed to ensure that this instrument develops without creating opportunities for market manipulation.

On the other hand, the IDX has also removed the IDR 50 (less than USD 1) minimum share price as part of capital market reforms. This policy is intended to improve the price discovery process.

Iding emphasized that the removal of the floor price was not a request from Morgan Stanley Capital International (MSCI). “This is purely an initiative from us, the IDX, and the Financial Services Authority (OJK), to align with international best practices,” he said. ***