Experts say laws needed for e-commerce

Experts say laws needed for e-commerce

JAKARTA (JP): Experts and Internet businessmen demanded on
Tuesday that local stock markets allow the listing of prospective
internet start-up companies to raise cheap funds to finance their
investment.

They also demanded the government provide a legal
infrastructure for the development of electronic commerce to
anticipate the growing demand for it.

Felia Salim, former director of the Jakarta Stock Exchange
(JSX), said existing stock market regulations allowed only long-
established companies with adequate financial track records to
raise funds on the market.

The regulations made it impossible for local Internet-based
companies to go public because they were mostly start-up
companies and had not generated profits, he added.

"The government and the exchanges should consider changing the
existing regulations on the stock market, by creating a second
market for example, to give more opportunities for startup
businesses such as Internet-based companies to raise funds
through the market," she said at a seminar on e-commerce and
government policy conducted by the Asia Foundation.

The head of the Capital Market Supervisory Agency's stock
market supervision unit, Nur Sigit, said the agency was open for
any suggestions from market players, and was ready to modify
regulations to accommodate the demand for Internet companies to
raise funds through stock markets.

He noted that the Surabaya Stock Exchange (SSX), which had
less rigid listing requirements than the JSK, could possibly
accommodate the interests of Internet startup companies by
modifying its listing regulations.

Meanwhile, JSX corporate secretary Saka Abadi said the
exchange would possibly allow startup Internet companies to offer
stocks to the public through the exchange.

He noted that the exchange was currently studying the
possibility of introducing three different trading boards for
different types of companies.

The first or the main board would be reserved for established
companies, the second board for prospective startup companies
like Internet or mining companies, and the third for companies
offering stocks with a nominal value of below Rp 500 a piece.

Saka also said that the exchange would continue to proceed
with its scriptless trading program. When trading became
scriptless, Saka said, retail investors could also conduct stock
trading from home via the Internet.

Meanwhile, Sachin Gopalan, the cofounder of Kemana.com, and
Jerry Justianto, the cofounder and chief technology officer of
www.AsiaGateway.com, demanded the government provide a legal
infrastructure for on-line transactions or e-commerce.

Gopalan said the failure of the government to provide
legal assurances on the security of making transactions on the
Internet would discourage customers from purchasing goods from
it.

Jerry said the absence of a strong legal infrastructure for e-
commerce would also deter foreign investors from investing in e-
commerce providers here, because they would know that the
businesses would not generate much profit as not many customers
would be willing to make purchases on the Internet.

Indonesia Net Exchange director Eddie Darajat said such a
legal infrastructure for e-commerce was necessary to provide a
conducive climate for e-commerce business.

But he warned that the government should never control the e-
commerce industry as it would be counterproductive for the
industry.

"We don't need the government to regulate the industry. But we
need the government to immediately provide a conducive
environment for healthy e-commerce development by encouraging e-
entrepreneurship and eliminating the barriers in
infrastructures," he told

Ichjar Musa, special assistant to the coordinating minister
for economics, finance and industry, acknowledged that it was not
easy for the government to react fast and produce effective
measures to help develop e-commerce.

"The way the government is currently handling Internet-related
issues is so fragmented. You can't expect the government to act
efficiently on this issue since there is hardly any solid
coordination between related government institutions," he said.

Meanwhile, Minister of Industry and Trade Jusuf Kalla said the
government would provide better support for the development of e-
commerce in the country.

One of the significant steps to be taken soon by the
government would be to launch a National Certification Authority
(NCA), he said.

The NCA, currently being developed by the government in
cooperation with Indosatcom, an e-commerce division with state-
owned international call provider PT Indosat, aims to assess the
financial and legal capabilities of an individual or company to
participate in on-line trading.

"That way, both the customers and sellers can be sure that the
party they are dealing with do exist and are capable financially
and legally of making a transaction with them," he said. (cst)