Indonesia’s Financial Services Authority (OJK) has suspended the underwriting licence of brokerage firm UOB Kay Hian Sekuritas and imposed a series of penalties on issuers and executives, as the regulator moves to demonstrate tougher enforcement amid renewed scrutiny from global index provider MSCI.
On Saturday (Feb. 7), the regulator froze UOB Kay Hian Sekuritas’ underwriting activities for a year and fined the firm Rp250 million ($14,865) for breaches linked to the 2019 initial public offering of PT Repower Asia Indonesia Tbk (REAL). The sanction effectively bars the firm from participating in IPOs until 2027, although its brokerage operations will remain unaffected.
According to OJK, the broking firm failed to properly conduct customer due diligence on eight referral clients represented by its Singapore parent, UOB Kay Hian Pte. Ltd., which acted as the beneficial owner during the IPO process.
The regulator found that the share subscriptions were funded by UOB Kay Hian Credit, while investor documentation inaccurately listed the clients as employees of Repower Asia, which amounts to misleading information used for fixed allotment purposes.
The OJK also ordered the brokerage to update its securities account opening documentation to comply with Indonesia’s anti-money laundering and counter-terrorism financing rules within 10 working days.
In addition, a former director of UOB Kay Hian Sekuritas was fined Rp30 million and barred from capital market activities for three years for governance failures during the underwriting process, while the Singapore parent was separately fined Rp125 million for providing incorrect information that contributed to the breach.
The sanctions are part of a broader enforcement sweep announced by OJK, targeting what the regulator described as systemic lapses in IPO governance, disclosures, and use of proceeds.
The enforcement action is part of a broader investigation into suspected market manipulation, commonly referred to locally as “stock frying”, with OJK confirming that multiple issuers and securities firms are under examination.
While the regulator has not disclosed the number of parties being examined, officials said they are reviewing trading patterns and fund flows that indicate potential manipulation and are coordinating with law enforcement authorities.
UOB Kay Hian Sekuritas said the suspension relates solely to administrative shortcomings in the Repower Asia IPO and is not connected to allegations of market manipulation. The firm said it respects the regulator’s decision and will strengthen internal compliance while continuing its non-underwriting activities.
Alongside the broker sanction, OJK imposed administrative penalties on listed companies PT Repower Asia Indonesia Tbk and PT Multi Makmur Lemindo Tbk, citing weaknesses in disclosure, use of IPO proceeds, and reporting of material transactions. The regulator said these cases reflect recurring deficiencies in governance standards surrounding public offerings.
The crackdown comes as Indonesian authorities seek to reassure international investors following MSCI’s recent review of Indonesia’s equity market, which flagged concerns over free float levels, ownership transparency, and market integrity.
Reform programme
On February 9, the OJK, the Indonesia Stock Exchange (BEI) and the central securities depository KSEI jointly announced an accelerated reform programme aimed at strengthening the credibility and transparency of the capital market, positioning enforcement actions such as the UOB Kay Hian suspension as part of a longer-term structural agenda rather than isolated penalties.
OJK said the reform package comprises eight action plans designed to improve ownership transparency, investor classification, free float requirements, and data granularity. Measures include raising the minimum free float threshold for listed companies from 7.5% to 15% on a phased basis, expanding investor classifications, and enhancing disclosure of shareholders owning more than 1% of a company’s equity.
Hasan Fawzi, acting chief executive for capital markets supervision at OJK, said enforcement and reform are being pursued in tandem to restore confidence.
“The acceleration of market integrity reform is not a short-term response, but a structural effort to build a market that is credible, transparent, and globally competitive,” Hasan said during a press briefing at the stock exchange on Monday.
Regulators have sought to frame recent sanctions as evidence of stricter discipline rather than signs of systemic weakness. According to OJK, between 2022 and January 2026, the authority imposed Rp542.5 billion in administrative fines on more than 3,400 parties, including Rp240.6 billion related to stock trading manipulation.
As of early 2026, OJK was investigating 42 suspected capital market crimes, most of them involving alleged price manipulation schemes such as pump-and-dump trades and pre-arranged transactions.
Beyond enforcement, OJK, BEI, and KSEI are also advancing institutional reforms, including preparations for the demutualisation of the stock exchange and closer coordination with international bodies such as the World Bank. A cross-agency task force has been formed to oversee implementation and ensure coordination between regulators, law enforcement agencies, and market institutions.
