83 regulations issued to support Capital Mart Law
83 regulations issued to support Capital Mart Law
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam)
issued 83 regulations here yesterday to support the
implementation of the newly introduced Capital Market Law.
The issuance of the regulations marked the full implementation
of the Capital Market Law, which was approved by the House of
Representatives (DPR) late last year.
Bapepam's new regulations were mostly taken from the agency's
existing capital market rulings, covering almost all issues in
stock and bond trading activities, including licensing procedures
and capital requirements of a stock exchange operator and its
supporting agencies.
The new elements in the regulations include the increase of
the foreign ownership portion in listed securities companies to
85 percent and in listed mutual funds to 100 percent from 49
percent previously. Foreign ownership in other types of companies
is still limited to a maximum of 49 percent.
The other new aspects also include the issuance of detailed
guidelines on the transactions of shares of mutual funds and the
improvement of the regulations on the activities of a stock
exchange operator, stock clearing and settlement agencies.
The new regulations also strengthen the control on share and
bond issuers, especially that related to the accounting quality
and the utilization of proceeds raised from share or bond
issuance.
A public accountant is, for example, required to immediately
report to the capital market watchdog if they find a breach
taking place in a listed company or if they feel the financial
condition of a listed company is at a critical stage.
The requirement to report the utilization of funds raised from
the public is also being imposed on bond issuers. Such a
requirement was previously imposed on share issuers only.
Bapepam Chairman I Putu Gede Ary Suta said that activities
related to tender offers, transactions involving conflicts of
interest, disclosure of information, merger and takeovers are
still bound by the old rulings.
"Issuing regulations regarding those subjects is much more
difficult. We need much longer to avoid contradictions with other
rulings," he told newsmen during the launching of the new
regulations.
The required capital for a stock exchange operator and its
supporting agencies, such as clearing, settlement and rating
agencies as well as securities firms is being kept at previous
levels.
The minimum paid-up capital of an exchange operator remains at
Rp 7.5 billion (US$3.2 million), while that of clearing and
settlement agencies is still set at Rp 15 billion.
Domestic and foreign joint-venture securities companies
operating both as underwriters and brokers are, as before,
required to have a minimum paid-up capital of Rp 10 billion.
If the securities companies operate only as brokers or as fund
managers, the minimum paid-up capital is set at Rp 500 million
for a domestic firm and Rp 1 billion for a foreign joint-venture.
The minimum paid-up capital for securities companies engaged
both in brokerage and fund management is set at Rp 1 billion for
a domestic firm and Rp 2 billion for a foreign joint venture.
Putu said that if securities companies' services cover not
only underwriting but also brokerage and fund management
activities, the minimum-paid up capital is set at Rp 10.5 billion
for a domestic firm and Rp 11 billion for a foreign joint
venture.
He said that unlike existing foreign joint ventures, many
domestic companies have yet to adjust to the new capital
requirements, which were actually introduced last year.
"The local securities companies have to adjust their capital
to new requirements in two years beginning Jan. 1," he said.
Most of the new regulations, however, do not stipulate strict
punishments, except for fines on companies which file financial
reports late, or break other important rules.
The fines are set at Rp 500,000 for each day late for a stock
exchange operator, Rp 1 million for share issuers and Rp 100,000
for capital market supporting agencies such as stock
administration agency, trustee and securities firms.
Unlike before, individuals such as the director, the
commissioner of a listed company, and those holding over five
percent of listed companies' shares, could also be fined if they
do not report important events that could affect share prices.
The fine for individuals is also set at Rp 100,000 per day late.
The new Capital Market Law, which replaces outdated 1952
capital market regulations, contains 16 chapters and 123
articles, covering all activities in the capital market.
The regulations related to technical aspects of the activities
of the stock exchange and other capital market supporting
agencies are regulated by Bapepam. (hen)