Capital market bill states stronger law enforcement
Capital market bill states stronger law enforcement
JAKARTA (JP): The bill on the capital market will provide a
stronger base not only to ensure fair trading but also to
encourage trading activities.
Bacelius Ruru, chairman of the Capital Market Supervisory
Agency, said yesterday that the stronger investigation power to
be endowed to the agency would make law enforcement more
effective.
Speaking at a seminar on the bill on the capital market,
Ruru said that the clearer definition about trading frauds such
as insider trading and price manipulation would enhance the
fairness, efficiency and liquidity of the market.
The bill, which will be submitted to the House of
Representatives in March, will have 16 chapters and 123 articles.
It will replace the outdated 1952 Capital Market Law.
The current law is not only too brief but also too weak to
cover the rapid development in capital market activities, Ruru
said.
Another important aspect in the draft law is the inclusion
of a legal base for the introduction of a book-entry settlement
system, he said.
"The introduction of the book-entry system would not only
stimulate trading activities but could also reduce transaction
costs," he said in the seminar, held by the Panca Marga youth
organization.
Investors, under the book-entry trading system, more
popularly called scripless trading, would no longer need to keep
their shares, as their stock holdings would automatically be
booked on their electronic stock accounts, Ruru said.
Small investors
The agency's chairman said that the new law would also
provide small-scale investors with a greater opportunity to be
involved in stock trading activities.
The introduction of the open-end investment funds will give
more opportunity for small investors as the new investment
facilities would be less risky, he said.
I Putu Gede Ary Suta, also an executive of the agency, told
the same seminar that the bill would enforce a stricter sanction
against unregistered financial intermediaries and a stronger
penalty to those involved in trading fraud.
"People involved in price manipulation will, for example,
receive heavy punishment," Putu said.
The introduction of the new capital market law is a priority
in the agency's programs, in addition to the improvement in the
professionalism of the capital market supporting agencies.
Many local securities, for example, still lack commitment in
research activities, he said, adding that another weakness of the
local securities firms is their inability to take great benefits
from the big role of the foreign investors on local stock
markets.(hen)