Capital market blueprint launched<\/p>\n
JAKARTA (JP): The Indonesian capital market aims to become the
\nlargest in Southeast Asia by 2020, 24 five years from now.<\/p>\n
At least that is the optimistic scenario outlined in the
\ncountry's capital market blueprint launched by the Capital
\nMarket Supervisory Agency (Bapepam) on Thursday.<\/p>\n
The short-term targets stipulated in the 27-page blueprint
\nincludes the splitting of the stock depository and settlement
\nagency into two separate institutions -- a central depository
\nagency and a clearing and settlement agency. The central
\ndepository agency, which will hold all securities
\ntraded on local exchanges, will be set up before August this
\nyear, while the establishment of the clearing and settlement
\nagency must be completed before 1997.<\/p>\n
The blueprint does not, however, elaborate on the future of PT
\nKliring Deposit Efek Indonesia which at present, besides handling
\nclearing and share settlement, also acts as a custodian agency
\nfor investors.<\/p>\n
A number of banks currently operating as custodians for both
\ntheir domestic and foreign clients are being encouraged to take
\npart in the establishment of the planned central depository agency.<\/p>\n
Bapepam chairman I Putu Gede Ary Suta said that procedures for
\nthe central depository agency are being hammered out. This
\nincludes the use of nominees as well as the ownership of shares.<\/p>\n
Yet the blueprint does not examine the future of the stagnant
\nSurabaya Stock Exchange (SSX), which in practice acts more like a
\nbranch of the Jakarta Stock Exchange (JSX) at the moment, rather
\nthan an independent stock exchange.<\/p>\n
Other short-term objectives also include the introduction of a
\nset of regulations to encourage the establishment of mutual funds
\nand to boost their trading on the stock exchanges.<\/p>\n
The planned regulations are expected to deal with the
\nmarketing of the products of mutual funds to investors on the
\nprimary market.<\/p>\n
The improvement of public confidence in the country's capital
\nmarket is also one of the objectives given in the blueprint.<\/p>\n
There are many potential local investors but they are
\nreluctant to enter the capital market for fear of being cheated
\nby brokerage companies.<\/p>\n
The negative image of the stock market is understandable,
\ngiven the small size of the brokerage companies on the Jakarta
\nand Surabaya stock exchanges.<\/p>\n
Some brokerage companies do not only lack capital but are also
\npoorly managed to boot.<\/p>\n
To protect the investing public, the blueprint outlines a
\nnumber of procedures for stricter supervision of brokerage
\ncompanies and other capital market supporting agencies.<\/p>\n
The introduction of the blueprint comes hot on the heels of
\nthe enactment of the Capital Market Law in January this year.<\/p>\n
The newly introduced capital market law provides a stronger
\nlegal framework, not only to ensure fair trading but also to
\nattract new domestic investors. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/capital-market-blueprint-launched-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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