Brokerage firms urged to sack errant brokers<\/p>\n
JAKARTA (JP): Securities companies should establish an
\ninternal control system to monitor their employees, Chairman of
\nthe Capital Market Supervisory Agency (Bapepam) I Putu Gede Ary
\nSuta said yesterday.<\/p>\n
Putu said that the agency has discovered a number of cases and
\ndisputes caused by unprofessional brokers.<\/p>\n
"A number of brokers have traded shares in their own
\nportfolios and not for their clients, or they execute their
\nclients' orders through other brokers and not at their own
\nbrokerage houses," Putu added.<\/p>\n
"How can a brokerage house survive if its own staff members
\nare no longer loyal to the company?" Putu said in his keynote
\naddress at a recent discussion.<\/p>\n
Putu also warned securities firms not to employ brokers or
\ndealers who do not have licenses issued by the agency or who have
\nbeen fired from other firms.<\/p>\n
"It should not have happened that an errant broker in one
\ncompany turned out to be a hero in another company. But it
\nhappened here," he said.<\/p>\n
Bapepam, according to Putu, will blacklist any errant brokers
\nand tighten the procedures for licensing new brokers. New brokers
\nwill also be examined for their understanding of capital market
\nprograms which are described in the capital market's blue print.<\/p>\n
Healthy brokerage<\/p>\n
Putu said that the capital market blue print stipulates that
\nsecurities firms should improve capital soundness and enhance the
\nsecurity of share transactions and the quality of services.<\/p>\n
"It seems to me that the market players are not active in
\nmaterializing what has been outlined in the blueprint," he said.<\/p>\n
He said that Bapepam has considered revoking the licenses of
\n11 inactive brokerages by the end of this year and to take action
\nthat will not allow unprofessional brokerages to survive.<\/p>\n
"Once again, I urge you to start by opening client accounts in
\nyour offices. If you can't do that, then why should we (Bapepam)
\nauthorize margin trading."<\/p>\n
He said that as an enforcement measure, the agency is likely
\nto prevent investors who do not have accounts at brokerage houses
\nfrom buying shares on the primary market.<\/p>\n
Responding to Putu's statement, the chairman of the
\nassociation of securities companies, Yannes Naibaho, told
\njournalists after the discussion that the association is willing
\nto help its members to comply with Bapepam's guidelines.<\/p>\n
"But I should say that it is not easy for all securities firms
\nto open client accounts in their offices. The point is the gap of
\ncapital between investors," Yannes said.<\/p>\n
He said that investors will prefer to move to other brokerages
\nif they are required to open accounts.<\/p>\n
Commenting on Putu's warnings on errant brokers, Yannes said
\nthat it would not be easy to prevent brokers from committing
\nillegal practices.<\/p>\n
Yesterday's discussion was attended by the managements of both
\nthe Jakarta and Surabaya stock exchanges, Chairman of the
\nIndonesian Public Companies Association Rosano Barack, the
\npresident of Indo Exchange, Scott Coffey, and Chairman of the
\nJakarta Brokers Club Nurkhamid Akhmad. (alo)<\/p>",
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