The Indonesia Stock Exchange (IDX) has launched the Indonesia Alternative Market Trading System (SPPA), a new electronic trading platform that allows the trading of Sukuk and bonds on the secondary market.
“SPPA has been designed in such a way as to accommodate the needs of the bond and Sukuk market players in Indonesia, with the hope of increasing liquidity and efficiency in the market,” Hasan Fawzi, the business development director at the IDX, said.
Leading up to the finalization of the program and its official launch, the exchange held discussions with focus groups and the Inter-Dealer Market Association to identify the business needs of market players.
The IDX also partnered with global bond trading solution provider AxeTrading to fully develop the system and design it according to best practices.
“To increase the size and number of market participants, drive interest from new debt issuers and to better meet growing local funding requirements, exchanges have to innovate their bond trading offering and effectively embrace both voice and electronic trading,” said AxeTrading, whose AxeChange software powers the execution of SPPA.
The AxeTrader Quoting and Execution Management System supporting SPPA also gives fixed-income dealers the tools they need to boost their training with automated workflows, as well as access to voice and electronic trading in the Indonesian, Asian and global markets. It interacts across 23 execution venues (including the IDX SPPA) and connects 11 market data sources to provide dealers with market aggregation and trading workflows in a single desktop.
SPPA is the second iteration of the platform, which was first developed in 2019 following approvals from Otoritas Jasa Keuangan or the Financial Services Authority. According to the IDX, the first version of the electronic trading platform was “very simple and had limited facilities”, leading to its further development over the span of one year.
There are currently 21 dealers who have become SPPA users after having participated in the SPPA piloting program, which includes training and a market simulation.
Along with the SPPA launch, the IDX also issued four regulations on trading that support the system.