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[JAKARTA] In a desperate bid to support the market and prevent another potential rout, Indonesia’s securities regulator took sweeping action on Wednesday (Mar 19), fast-tracking a policy that had been in the works but is now being deployed at full speed and which took effect a day earlier.

The Financial Services Authority (FSA) has reinstated a policy allowing publicly listed companies to conduct share buybacks without shareholder approval – a measure taken during the 2020 pandemic crisis to help restore investor confidence.

“This move provides greater flexibility for issuers while ensuring market stability,” said Inarno Djajadi, head of capital market supervision at the FSA, at a media briefing on Wednesday.

Starting Mar 18, this policy will be in effect for six months, allowing companies to buy back up to 20 per cent of their paid-up capital.

The move came on the heels of a sharp decline in the local stock market on Tuesday, driven by rising concerns over President Prabowo Subianto’s recent policies as well as rumours – which were quickly shot down – that Finance Minister Sri Mulyani Indrawati was stepping down.