Bapepam to boost law enforcement

Bapepam to boost law enforcement

JAKARTA (JP): The Capital Market Supervisory Agency promised
here yesterday to strengthen its law enforcement to protect the
investing public.

Agency chairman I Putu Gede Ary Suta said all capital market
players and their supporting institutions should abide by the
existing regulations or lose their licenses.

"We have preventive and repressive measures ... This means
that who ever acts against the law will be penalized," Putu said
in a hearing of the Budgetary Commission of the House of
Representatives.

The agency Monday temporarily suspended five brokerage
companies because they no longer met operational standards, such
as being currently active and operating with licensed brokers.

The five brokerage houses are PT Artha Adya, PT Creative
Securities, PT Danagajah Sakti, PT Pancasumber Dhanamandiri and
PT Sararadana Investindo.

Putu said he temporarily revoked their licenses as a warning
to them.

"We have given them 90 days to improve their condition, or
have their licenses revoked permanently," Putu said.

Putu said he was sad to find out that owners of the suspended
brokerage houses, mostly well-known businesspeople, paid no
serious attention to improving their brokerage businesses.

"Perhaps these reputable businesspeople consider the brokerage
house business merely a side job," he said.

Putu also warned that all companies involved in capital market
activities should continue to improve their financial performance
to anticipate growing competition in financial services in the
country.

"Globalization of financial services will result in tight
competition," he said. "So that all the market players should
equip them with big capital to allow them to survive," he said.

Of the 214 securities companies in the country, around 100 are
operating with weak capital.

Putu also told House members about the latest developments in
the country's capital market.

He said that the value of shares and bonds issued through
local bourses was Rp 61.91 trillion and Rp 18.48 trillion
respectively as of July 4, 1997.

He said that the market capitalization of JSX increased
significantly to Rp 266.59 trillion as of July 4, from Rp 152.25
trillion at the end of 1995.

To ensure smooth transactions on the JSX, the agency issued
licenses for PT Kliring Penjamin Efek Indonesia (clearing and
guarantee firm) in June and to PT Kustodian Depositori Efek
Indonesia (central securities depository) to support scripless
trading.

He said scripless trading was expected to start early next
year on the JSX.

"With the scripless system, both securities trading and the
settlement will be done electronically," he said.

Currently only securities trading is done electronically while
the settlement is done manually, he said. (aly)