Indonesia lawmakers to grill candidates for top regulator jobs after market turmoil

JAKARTA - Indonesia’s parliamentary financial commission will on March 11 assess candidates for top jobs at the Financial Services Authority after an equity market rout in January triggered a spate of resignations.

The agency’s chair, deputy chair, and the chief supervisor and deputy chief supervisor of capital markets quit suddenly on Jan 30, days after index provider MSCI warned it could downgrade Indonesia to “frontier” status due to transparency and governance issues in equities.

The MSCI warning triggered sell-offs that within days had wiped about US$120 billion (S$152 billion) off Indonesia’s equity market, exacerbated by rating agency Moody’s downgrading the country’s sovereign credit rating outlook.

Among the 10 candidates the Parliament is considering for five posts at the agency, known by its Indonesian abbreviation OJK, are the current interim chair Friderica Widyasari Dewi and interim capital market supervisor Hasan Fawzi.

The new leadership will oversee capital market governance reforms the OJK and the Indonesia Stock Exchange have proposed to ease concerns raised by MSCI, which include doubling the minimum free float of shares of listed companies to 15 per cent over the next three years.

Most candidates are officials with OJK, the central bank, finance ministry and the state deposit insurer. The panel’s picks will require certification by the wider parliament on March 12.

This selection process for the OJK leadership is quicker than the usual months-long process. Finance Minister Purbaya Yudhi Sadewa on March 10 said it was being accelerated because of concerns about financial market volatility due to conflict in the Middle East.

“The situation is shaky. The war affects the markets, oil prices. It speeds up the need for more definitive persons at the OJK,” Mr Purbaya told reporters. REUTERS