In Pursuit of Market Resilience: Demutualizing the Indonesia Stock Exchange as a Governance Alignment Paradigm Honorable Chairman and Board of Directors of Yayasan Universitas Pelita Harapan, Honorable Rector, President, and Vice Presidents of Universitas Pelita Harapan, Esteemed Members of the Senate, Deans, and Colleagues, Distinguished Guests, Partners, And most importantly, my beloved family, students, and friends gathered here today. Good morning, Shalom, peace be with you all. Standing before you today as I am inaugurated as a Professor of Law is a moment that fills me with deep humility. I am fully aware that I stand here not because of my own strength, but purely by the grace of God, who has guided every single step of my life and academic journey. As legal scholars and practitioners, our calling is to construct instruments of justice, designing systems and institutions that are clean, honest, fair, and transparent. As a reflection of this very responsibility, I am deeply grateful that this calling has culminated in a piece of ongoing research that I am currently finalizing and is now forthcoming for international publication in the very near future. It is from the heart of this upcoming publication regarding IDX demutualization, that I draw the core inspiration for today’s address. In this spirit of continuous academic stewardship, I am honored to present my oration, titled: In Pursuit of Market Resilience: Demutualizing the Indonesia Stock Exchange as a Governance Alignment Paradigm. Esteemed Audience, Today, our financial world is changing rapidly. Capital markets are no longer just about numbers, profits, or normal economic ups and downs. Instead, they have become a major battlefield for global political conflicts. Trade wars, geopolitical rivalries, and international sanctions have turned the flow of money into political weapons. For a developing country like Indonesia, which relies heavily on foreign investment, this global tension creates real trouble. When global giants like the United States and China clash, it creates shockwaves that trigger sudden capital flight and heavy volatility in our domestic market. But as a legal scholar, I want to emphasize one crucial point: we cannot just blame outside factors for our market's instability. External shocks will always happen. Financial markets do
not break simply because a crisis hits; they break when investors lose trust in the fairness, honesty, and speed of the institutions that run the market. The main finding of my research is that Indonesia's true weakness during a global crisis is not a lack of legal rules. Rather, the problem lies in how our institutions are structured, how rules are enforced unevenly, and how limited our system is when it needs to react quickly to a crisis. Distinguished Colleagues, The root of this structural weakness lies in the way the Bursa Efek Indonesia, or the Indonesia Stock Exchange (IDX), is organized. Right now, the IDX operates under a mutualized structure. To put it simply, it is owned by its own members—the securities and broker companies. This means these brokers wear three hats at the same time: they are the owners of the exchange, they are the active traders, and they are also the entities that the exchange is supposed to supervise and discipline. While this model worked well when our stock market was small and just starting out, it is no longer fit for today's complex financial world. This structure blurs the line between market participation and market oversight, which weakens the exchange's authority and damages its credibility. Think about it: when the IDX needs to hand down harsh sanctions or suspend a broker company for market misconduct or regulatory violations, it is essentially disciplining its own owners. This creates a massive conflict of interest. Investors can easily perceive the exchange as hesitant, delayed, or selective in its enforcement. In a world where investors can move billions of dollars with a single click, any sign of hesitation causes immediate capital flight. Furthermore, fighting global crises requires huge, long-term investments in advanced surveillance software and cybersecurity. But because the exchange is owned by brokers, these vital tech upgrades are often blocked or delayed because members want to keep their own operational costs low. We have seen the painful reality of this weak supervision in massive financial scandals like Jiwasraya and Asabri, which cost the public trillions of rupiah due to delayed enforcement. The problem is not that we lack laws; the problem is that our institutional setup stops us from enforcing the law quickly and impartially. Ladies and Gentlemen, How do we fix this? My study looks at how two global superpowers handle their markets: China and the United States.
In China, the state controls everything. The stock exchanges are direct arms of the government. When a crisis hits, the government steps in instantly to freeze assets and stop the bleeding. This works fast, but it completely bypasses legal due process—a model that does not fit Indonesia's democratic values and legal tradition. In the United States, they use a completely different approach. Their major exchanges, like the New York Stock Exchange and NASDAQ, are fully demutualized corporations. Ownership is completely separated from trading rights. Because brokers do not own the exchange, the exchange can oversee them strictly, independently, and without any internal bias. Indonesia currently sits in a fragile, awkward middle ground. Unlike China, we do not have a centralized command system. Unlike the U.S., we have not insulated our exchange through demutualization. We expect the IDX to be a tough, neutral referee, but we leave it structurally dependent on the very players it is supposed to referee. Honorable Members of the Senate and Esteemed Guests, This is why the demutualization of the IDX—changing it from a private member-owned entity into a transparent, shareholder-based corporation—is no longer just an option. It is a strategic necessity to clear up the conflicts of interest in our market. By removing the brokers from exchange ownership, we allow the IDX to prioritize long-term market stability, high disclosure standards, and cutting-edge tech over the short-term profits of a few broker firms. However, my research also offers a strong warning: Demutualization is not a standalone remedy. Turning the exchange into a corporation means it will now chase profits. If we are not careful, we might just replace broker control with big shareholder control. Demutualization will only bring true legal certainty if it comes with strict safeguards. It must include an absolute firewall between the exchange's commercial business and its regulatory duties. It requires an independent board of directors that represents the public interest, not just big investors. And most importantly, it demands strong, independent, and aggressive oversight from the Financial Services Authority, Otoritas Jasa Keuangan. Yet, as I stand here mapping out the architecture of our nation’s capital markets, I am deeply reminded that the pursuit of justice, integrity, and knowledge is never a journey walked alone. Every academic breakthrough, every paper finalized, and every milestones reached on this podium is a collective testament to the community, the mentors, and the family who have carried me through the years.
An academic achievement of this magnitude is never a solo journey. As I stand here today, my heart is overflowing with gratitude for the people who have carried, guided, and shaped me into the person I am today. To the leadership of Universitas Pelita Harapan, my academic peers, my students, and my international research partners—thank you for your brilliant collaboration, your trust, and for walking alongside me. I also want to express my sincere appreciation to the organizing committee of today’s event. Thank you for your tireless dedication, your hard work behind the scenes, and for making this inauguration a beautiful reality. I would also like to express my deepest, lifelong gratitude to my doctoral promotor, and my forever academic mentor, Prof. Dr. IBR Supancana, thank you for your endless guidance, your wisdom, and your patience from my PhD days until this very moment. You did not just teach me the law; you taught me how to be a true scholar, pursuing academic luxuries. Your guidance has been the compass of my academic career, and I am forever grateful. To my family, I am profoundly indebted to you. To my Papa, thank you for being the ultimate pillar of my life. Thank you for always leading by example, for opening the doors of opportunity, and for being the perfect role model of hard work and integrity. Papa, thank you for raising me to be a man of responsibility—teaching me to always stand accountable for every action, every decision, and every deed. Every path I walk today was made possible because you showed me the way. This title is a reflection of your legacy. To my wife and my children, thank you for your endless patience, for enduring the long nights where I was buried under books and papers, and for being my ultimate anchor. Thank you for your unconditional love. This honor belongs to you just as much as it belongs to me. To my parents-in-law and my sister-in-law, thank you for your incredible support, your prayers, and for embracing me so warmly. Your constant encouragement and backing throughout this challenging journey have meant more to me than words can describe. To my brothers, cousins, nephews, nieces, and sisters-in-law, and to my beloved uncles and aunts who are here today, thank you for being my lifelong community. Thank you for your prayers, your shared joy, and for always believing in me through every chapter of my life. And finally, there is one person who is not in this room today, but whose presence lives forever in my heart. I want to pay a special tribute to my late mother. More than anyone else, I deeply wish she were here today to see this moment. She was the one who taught me the values of
dedication, absolute honesty, and always maintaining a grateful heart. To me, she will always be the ultimate symbol of loyalty. She sacrificed so much so that I could pursue my dreams. Mom, I carry your love, your values, and your blessings in every single step I take. Esteemed Audience, True legal certainty is not just about writing perfect laws on paper; it is about building institutions with structural integrity and a heart for justice. Let us continue to use our intellect and our talents to be faithful stewards of the nation God has given us. Thank you. May the grace, love, and fellowship of our Lord Jesus Christ be with you all, now and forevermore. Amin.