10 firms to begin scripless trading soon
JAKARTA (JP): Ten major companies listed on the Jakarta Stock Exchange (JSX) will enter scripless trading in October, this year.
The president of the Indonesian Central Securities Depository (KSEI) Erry Firmansyah said on Thursday that the conversion of the companies' shares into scripless format would start early next month.
The 10 companies are PT Indofood Sukses Makmur, PT Indosat, PT Sinar Mas Agro Resources and Technology, PT Bank Panin, PT Berlina, PT Matahari Putra Prima, PT Astra Internasional, PT Jaya Pari Steel Corp. Ltd., PT Adindo Foresta Indonesia and PT Telekomunikasi Indonesia.
Erry said the 10 companies would be the second batch of firms listed on the JSX to be traded under a scripless system.
The first batch, which were launched on July 17, included PT Multipolar, PT Dankos Laboratories, PT Suparma and PT Sari Husada.
"After succeeding with the first four companies, KSEI will start its second batch," Erry announced in a news meeting held in conjunction with the 23rd anniversary of the Capital Market Supervisory Agency (Bapepam).
In scripless trading, the certificates of ownership of the shares are kept in an electronic share account under a specified investor at KSEI, whereas the current format locates the certificates of ownership in the traditional custodian bank.
By October, investors holding the shares of the 10 companies cannot trade their shares unless they have registered their ownership in the new format.
Indofood will be the first company in the second batch to start its scripless trading by Sept. 29, and Telkom the last with a target for Oct. 24.
Bapepam chairman Herwidayatmo said the changeover to a scripless format would help create a more efficient stock market.
"The step by step implementation of scripless trading and settlement will be continued because it involves many parties and concerns a cultural change in trading," Herwidayatmo said.
But he warned that the conversion to scripless trading would lower the stock trading of the companies that make the transition.
"It's quite normal. Any change in the trading system is bound to affect investors who are not used to it," he explained.
Herwidayatmo added that the transition period was simply the price everyone had to pay before the benefits of scripless trading could be felt.
During the news meeting, Herwidayatmo also addressed the importance of good corporate governance for publicly listed companies.
He suggested that companies form an audit committee to offer the board of commissioners professional and independent opinions on the company's management quality.
Herwidayatmo also announced that for this year alone, Bapepam had issued fines amounting to Rp 10.2 billion (US$1.18 million) to 131 parties for violating existing stock market regulations.(bkm)