Bourse to get electronic settlement system<\/p>\n
JAKARTA (JP): The Indonesian Central Securities Depository
\n(KSEI) will introduce electronic settlement operations in October
\nto boost efficiency amid the significant increase in volume of
\nbanking shares, its president said on Tuesday.<\/p>\n
Erry Firmansyah said that electronic settlement on the Jakarta
\nStock Exchange would initially be limited only to shares of 20
\ncompanies, mostly banks.<\/p>\n
\"With electronic settlement, the physical exchange of share
\ncertificates during the transaction settlement would be
\neliminated, thus reducing significant clerical workload.\"<\/p>\n
Erry said it would help ease the burden of the transaction
\nsettlement work, particularly concerning shares in the banking
\nsector.<\/p>\n
As of last week the total volume of shares traded on the
\nJakarta Stock Exchange was 752 billion (500 billion of which were
\nbanking shares), compared to only about 150 billion in the same
\nperiod last year.<\/p>\n
KSEI director Eddy Sugito said that with the electronic
\nsettlement the broker was on line with KSEI. The broker then
\nregularly issues customer account statements similar to those
\nissued by commercial banks to their depositors, he added.<\/p>\n
Customer account consists of cash and share accounts.<\/p>\n
In the current manual settlement system, Eddy said, the share
\nseller has to physically transfer the shares into the buyers'
\npossession through KSEI, which completes the transaction
\nverification.<\/p>\n
With the new system, the physical form of the shares remains
\nat the same place, while the cash and share accounts of the
\nseller and the buyer at KSEI will change accordingly.<\/p>\n
\"The fund in the seller's cash account would increase as the
\nbuyer's decrease,\" Eddy said, adding that the seller's share
\naccount would decrease as a consequence.<\/p>\n
Erry said that shares of the companies to be applied in this
\nnew electronic settlement system must first be preregistered to
\nthe exchange administration agency before their trading could
\ncommence.<\/p>\n
He did not have the information on the shares of which
\ncompanies would come under the system.<\/p>\n
Erry said KSEI's computer system was in the final stage of the
\npreparation for the turn of the millennium in 2000.<\/p>\n
\"We are now undergoing a series of final tests of our computer
\nsystems for Y2K compliance,\" Erry said.<\/p>\n
He said that Tuesday was the last day for KSEI to replace all
\nunits of personal computer in use with new ones to ensure there
\nwould no disruption in the Y2K compliance of the entire hardware
\nsystem at KSEI.<\/p>\n
He said KSEI hired consulting firm Ernst & Young to help with
\npreparation for Y2K. (udi)<\/p>",
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