Futures exchange boss threatens to resign

JAKARTA (JP): The president of the Jakarta Future Exchange (JFX) threatened Tuesday to resign if the government does not issue the exchange's operating license by the end of this year.

"I will resign because I feel incapable of carrying out the wishes of the exchange shareholders," JFX President Hasan Zein Mahmud was quoted as saying by Antara news agency.

He expected his resignation might prompt the government to issue the license faster.

JFX, established in August 1999, was initially scheduled to start trading in March. But installation problems with its computer system, forced the exchange to postpone trade to July.

The exchange then promised to start business in September but the Commodities Futures Exchange Supervisory Board (Bappebti) refused to issue its operating permit.

According to Bappebti, the exchange had yet to meet requirements.

Hasan Zein, who is a former president of the Jakarta Stock Exchange, said he was in the dark why Bappebti had not issued the license.

According to him, the exchange had met all technical and non- technical requirements.

"In fact, if Bappebti requires this and that from us tomorrow, we'll be ready to comply. We have everything prepared," he added.

"It's like a car that has its engine running and is ready to drive. The government only needs to blow the whistle to get the car moving," Hasan said.

He said that the exchange shareholders surrendered up to Rp 17 billion (US$1.8 million) in capital to establish JFX.

"Each month, JFX spends Rp 300 million to Rp 350 million to cover electricity and telephone bills, but thus far there is no income," he explained.

JFX director Rico Manayang has said that Bappebti would issue a license within 45 days of the submission by JFX of documents stating that all requirements had been meet.

The exchange submitted the documents in July, he said.

Among the necessary requirements were the installment of the exchange's computer system, which took JFX several months to complete.

Other requirements were brokers and the commodities futures contracts.

A futures exchange serves as a centralized location where buyers' and sellers' agents meet to trade futures on whichever commodities the particular exchange lists for trading.

JFX plans to trade crude palm oil and Robusta coffee initially.

Later, the exchange plans to trade pepper, plywood, cocoa and rubber next year.

JFX further planned to expand futures trading to foreign exchange, interest rates and government bonds. (bkm)