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Ethics and Regulations of the Stock Market

Updated: Oct 12, 2023

Stock analysis

Stock market is a place where companies sell their shares to the public, and investors buy shares as a part of company ownership. However, the stock market must be regulated with strict ethics and regulations to protect everyone involved.

  • Transparency: Companies must honestly and timely provide information to the public about financial performance and risks. Investors have the right to know all information before investing.

  • Insider Trading Prohibition: It is prohibited to use material and non-public information unfairly to buy or sell shares. This harms other investors who are not privy to that information.

  • No Market Manipulation: Engineering false supply or demand to artificially influence stock prices is prohibited.

Stock Market Regulations
  • Regulatory Authority: Each country has a regulatory authority overseeing the stock market to safeguard it and investors. In Indonesia, in addition to regulating other financial services, OJK is the regulatory authority with full jurisdiction over the capital market.

  • Reporting Requirements: Companies must regularly disclose financial reports and other crucial information to the public.

  • Insider Trading Ban: Regulations forbid insider trading and impose sanctions on violators.

  • Investor Protection: Mechanisms are in place to fairly resolve disputes between investors and companies.

  • Supervision and Law Enforcement: OJK monitors the stock market and collaborates with law enforcement agencies to address legal violations.

By adhering to ethics and regulations, the stock market can be a secure and trustworthy place for investment, benefiting all parties involved.


Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).

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