Pros and cons of new JSX nomination rules<\/p>\n
JAKARTA (JP): The new procedures for nominating stock exchange
\ndirectors, included in a new regulation issued last week by the
\nCapital Market Supervisory Agency (Bapepam), have been criticized
\nas unfair by a number of smaller securities companies.<\/p>\n
A director of PT Argaartha Sekuritas, Nurkhamid Akhmad, told
\nThe Jakarta Post yesterday that the new procedures allow major
\nsecurities companies to install their own people on the board of
\ndirectors and pursue their own interests through the directors.<\/p>\n
Bapepam regulation No. 04\/PM\/1996 stipulates that the
\ncandidates for directors and commissioners of the stock exchange
\nshould be nominated by a minimum of three active exchange
\nmembers, who have a combined trading value and trading frequency
\nof at least 4 percent of the total trading value of the exchange
\nduring the last 12 months.<\/p>\n
The majority of each group of three securities members, which
\nnominate the candidates, must be local securities companies and
\neach member of the group must have a minimum of 0.2 percent of
\nthe total transaction value and frequency.<\/p>\n
\"The regulation is surprising and we don't understand how
\nBapepam could make such a ruling,\" said Nurkhamid, who is also
\nthe chairman of the Jakarta Brokers Club.<\/p>\n
Based on last year's trading activities, only 74 securities
\ncompanies met the minimum trading value and frequency required.
\nThey represent 37 percent of the Jakarta Stock Exchange (JSX)'s
\ntotal membership.<\/p>\n
A local securities company, PT Makindo, was among those at the
\ntop with a total trading value of 8.7 percent of the total value
\nof trading on the JSX.<\/p>\n
Fair<\/p>\n
However, a director of PT Sigma Batara, Ignasius Yonan, argued
\nthat the fears of inactive brokerages were unfounded.<\/p>\n
Yonan told the Post that each member must realize that the
\nhighest authority on the stock exchange is the general
\nshareholders meeting and not the directors.<\/p>\n
\"Furthermore, each member has only one vote in the general
\nshareholders meeting, meaning that even the inactive securities
\ncompanies also have the right to choose or turn down any
\ncandidates nominated,\" he said.<\/p>\n
Yonan hailed the new regulation as fair overall.<\/p>\n
\"It's fair because the less active members still have the
\nright to elect the directors in the general shareholders
\nmeeting,\" he contended.<\/p>\n
He said that it is misleading to assume that the elected
\ndirectors will automatically represent the interests of the major
\nsecurities companies.<\/p>\n
The most important thing, according to Ignasius, is that none
\nof the regulations on the stock exchange have loopholes allowing
\ndirectors to collaborate with exchange members. (08)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pros-and-cons-of-new-jsx-nomination-rules-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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