The Indonesia Stock Exchange (BEI) is introducing a new regulation starting in 2025, which will prevent investors from canceling stock orders during specific market sessions. This rule, called the "non-cancellation" policy, will apply during the pre-opening and pre-closing sessions. While investors can still place new orders during these periods, they will not be allowed to modify or cancel existing ones.

Irvan Susandy, Director of Trading and Member Regulation at BEI, explained that this policy follows an analysis of trading data. The data showed an increase in cancellations just before the market opens and closes. Such actions raised concerns about the potential for price manipulation. Irvan highlighted that these cancellations could lead to prices being formed unnaturally.

The non-cancellation rule aligns with best practices at global stock exchanges. Many international markets have adopted similar measures to prevent market manipulation. The goal is to ensure stability and to stop abnormal price formation during critical trading sessions.

The policy will specifically target the pre-opening and pre-closing sessions. For the pre-opening session, the non-cancellation period will run from 8:56 AM to 8:58 AM, with orders being restricted from changes at exactly 8:57:59. Similarly, during the pre-closing session, the rule will be in effect from 3:56 PM to 4:01 PM, stopping order modifications at exactly 3:59.

The rule also aims to curb "spoofing," a tactic where traders place large orders without the intention of completing them. Spoofing is designed to manipulate the market by creating false signals about supply and demand. BEI hopes the non-cancellation rule will help reduce such manipulative practices, ensuring a more transparent market.

Although BEI has not confirmed an exact timeline for the rule’s implementation, it is expected to be in place by 2025. The exchange is still in the process of testing and developing the policy to ensure its effectiveness.

This move is part of BEI's broader efforts to modernize and strengthen market integrity. By addressing issues like spoofing, the exchange aims to protect investors and foster a more reliable and fair trading environment.

BLOOMBERGTECHNOZ