The law and related implementingregulations that constitute the regulatory frameworkaffecting the capital markets in Indonesia are largelyconsistent with the International Organization of SecuritiesCommissions (IOSCO) Objectives and Principles of SecuritiesRegulation. Nevertheless this assessment finds thatlegislative reforms and other actions that are in theprocess of being implemented to clarify and expand thesecurity regulator's authority and to cure certainself-acknowledged gaps should be accelerated. Further, theassessment concludes that attention must be paid to assurethat implementation of the regulatory framework results in asystem that reliably detects, deters, and sanctionssecurities violations and reliably identifies and preventsor mitigates prudential concerns. This may require legalreforms beyond those necessary to reform the specificcapital markets law, as discussed more extensively by theseparate legal assessor. How significant such further reformwill be to enforcement effectiveness will depend in part onthe manner in which regulatory enforcement powers andauthorities are augmented and enhanced under the capitalmarkets law revision. Capital markets operations are heavilydependent on legal certainty, and in particular reliableapplication of contract, company, insolvency, and otherlegal protections.
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