In a letter to investors, Indonesia's financial services administration announced that it will relax some stock market regulations from the epidemic era, including those regarding trading hours and short-selling.
In order to safeguard the market against volatility, the OJK agency had put in place the temporary regulations at the commencement of the COVID-19 epidemic in 2020.
The government eliminated all mobility limitations relating to the coronavirus late last year, according to Inarno Djajadi, head of capital markets supervision at OJK, who stated in the letter that the regulator will not prolong the rules through the end of this month.
A representative of the regulator confirmed the authenticity of the letter but would not further.
The letter states that starting in April, the regulator will let short selling to resume for a list of equities for which it had previously been prohibited. The main index will need to fall by 10% before trading will be suspended, up from the existing threshold of 5%.
The regulator will gradually reinstate the pre-pandemic auto-rejection rules, which set a daily cap on how much share prices can increase or decrease.
The exchange has tightened the bottom limit so that transactions are denied when share values fell by 7% due to the significant volatility during the epidemic, but left the upper limit unaffected.
The bottom auto-reject threshold will return to normal in April and range from 20% to 35%, depending on share price levels.
Also, the letter stated that trading hours would be modified to coincide with central bank settlement times.
It wasn't immediately apparent if this meant the market close will return to its pre-pandemic time of 4 p.m. Jakarta time (0900 GMT). The market closes at 3 p.m. at the moment.