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)