New Framework on Liquidity Providers Officially Effective by 2025: Boosting Securities Trade Liquidity

In an effort to establish a firm legal basis for the business activities of liquidity providers, which is essential to improving the liquidity levels of securities that are traded via entities that provide systems or platforms that facilitate transactions in securities or financial instruments within organized markets (“Market Organizers”),[1] the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has officially introduced Regulation No. 18 of 2024 on Liquidity Providers (“Regulation 18/2024”), which is set to come into force on 8 May 2025.[2] Upon entering into force, various provisions that specifically relate to liquidity providers, as set out under the following regulatory frameworks, will be simultaneously repealed and replaced:[3]