Reporting system urged for state bond tradings<\/p>\n
The Jakarta Post, Bandung<\/p>\n
A senior official of the Surabaya Stock Exchange (BES), where
\ntrading in corporate bonds takes place, has proposed a regulation
\nrequiring all government bond transactions to be reported to the
\nexchange in order to make the bond market more transparent.<\/p>\n
BES president director Bastin Purnama said all transactions
\ninvolving government bonds should be reported to the exchange on
\na daily basis, just as transactions in corporate bonds have to be
\nreported to the Capital Market Supervisory Agency (Bapepam).<\/p>\n
"At present, the BES records about Rp 1 trillion worth of
\ntransactions involving government bonds every day, while actually
\nthe total value of transactions could reach up to Rp 2 trillion.<\/p>\n
"This means that many traders are not reporting their
\ntransactions to the BES," he said over the weekend on the
\nsidelines of a media workshop on risk management in Bandung, West
\nJava.<\/p>\n
He said the figure of Rp 2 trillion had been obtained from the
\ncentral bank, where government bonds are traded.<\/p>\n
Government bonds are traded over the counter (OTC), which
\nmeans they are traded outside the exchange.<\/p>\n
There should be a regulation so that traders have to report
\nevery transaction they make to the exchange so that the real
\nprice of the bonds can be accessed and assessed by the public,"
\nhe said.<\/p>\n
"In the United States, trading in government bonds was
\ncommonly OTC, but traders there had to report their transactions
\nwithin hours of their taking place."<\/p>\n
Bastian believed that the recent crash in that has affected
\nthe mutual funds industry was partly caused by a lack of
\ntransparency in the government bonds trade.<\/p>\n
"The total asset value of mutual funds is now heading toward
\nRp 20 trillion, while last week it was still over Rp 40 trillion.
\nThis is partly caused by a lack of information on government bond
\ntransactions in the market," he said.<\/p>\n
The lion's share of mutual funds use government bonds as their
\nunderlying assets.<\/p>\n
He urged Bapepam to require such reporting to support the
\ncreation of transparent capital markets here. "That's why we
\nestablished the exchange in the first place: to create a well-
\nregulated, transparent and liquid market."<\/p>\n
Such a reporting requirement could also support the use of the
\nIndonesian Government Securities Trade System, which had been
\nestablished to promote transparency in the country's capital
\nmarkets.<\/p>\n
At the moment, reporting was done only on a voluntary basis,
\nsaid Bastian. (006)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/reporting-system-urged-for-state-bond-tradings-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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