Bapepam to get greater power for investigation

JAKARTA (JP): The government will propose a bill on the capital market to the House of Representatives (DPR) in early October which will grant greater investigative and supervisory power to the Capital Market Supervisory Board (Bapepam).

"The bill is being finalized by a steering committee involving executives from the Ministry of Finance, the Ministry of Justice, Bapepam, Bank Indonesia, Cabinet Secretariat and Investment Coordinating Board," Bapepam's chairman, Bacelius Ruru, said in a hearing with the House Commission VII here yesterday.

"The new legislation will address important issues regarding the roles of Bapepam and market players and will provide self- regulatory authority to the supporting agencies and increase the types of fund management to be allowed," he said.

He said the bill will replace the 1952 one which can no longer accommodate the latest developments in the capital market.

The new law will empower Bapepam to conduct judicial investigations into irregularities and violations in the capital market, he said, adding that such tasks have thus far been implemented by various government agencies, including the directorate general for taxation.

"The new investigative authority is crucial in enabling Bapepam to enforce the capital market rules because any delays in dealing with capital market fraud affect the public's confidence in the market and discourage domestic and international investors from doing business on the domestic stock exchanges," he cautioned.

"Another priority of the bill is to develop the over-the- counter market, called Bursa paralel," he said.

The over-the-counter market was designed to help both small- scale companies and investors participate in investment activities under special requirements which are more lenient than those on the Jakarta and Surabaya stock exchanges.

The Bursa Paralel also imposes lower capitalization requirements and lower listing fees.

"We hope the bill will help develop the over-the-counter market because the nominal price of issued shares will be reduced to between Rp 250 and Rp 500, far below the Rp 1,000 minimum par value of the shares listed on the regular markets," he added.

Performance

Ruru reported that the domestic stock markets showed significant growth last year.

"The JSX (Jakarta) market, for example, recorded a total trading volume of 3.84 billion shares valued at Rp 19.08 trillion (US$8.8 billion) last year, up from 1.70 billion shares worth only Rp 7.95 trillion a year earlier," he said.

Through May 20, trading volume reached 1.93 billion shares worth Rp 10.73 trillion, he added.

The market capitalization of the JSX soared from Rp 24.8 trillion in 1992 to Rp 69.3 trillion last year.

During the same period, the Surabaya Stock Exchange (SSE) increased its trading volume to 266.86 million shares valued at Rp 1.15 trillion from 38.74 million shares worth Rp 1.36 trillion, he said.

He added that up to May 20 the volume of trading in SSE reached 137.72 million shares totaling Rp 556.03 billion. (fhp)