Bapepam to get greater power for investigation

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)