House finally passes futures exchange bill

House finally passes futures exchange bill

JAKARTA (JP): The House of Representatives passed the long
awaited futures exchange bill into law yesterday after a long
debate with the government.

Minister of Trade and Industry Tunky Ariwibowo said the
government would prepare a set of rulings for the implementation
of the new law.

He said a new ruling would also be needed to support the
establishment of the Futures Exchange Supervisory Board
(Bappebti) and its supporting institutions.

"There are a lot of benefits to be gained by the public from a
futures exchange in Indonesia. It will provide price information,
instruments to minimize price risks and quality standardization
as well as funds for the public," Tunky said after the bill's
endorsement.

He was optimistic the bourse would be successful, saying
several associations had agreed to trade their commodities on the
bourse in a big volume.

"We hope the futures exchange in Indonesia will start before
the year 2000," he said.

Debate on the futures commodity trading bill had become
lengthy because legislators and the government failed to reach an
agreement over the ministerial decree No: 393/1996.

The bill was submitted in December, 1996.

The ministerial decree, issued by the Minister of Industry and
Trade last year, formed a team to prepare the establishment of a
futures commodity exchange.

Decree

The decree stipulates that the team's members are government
officials and members of the Association of Indonesian Coffee
Exporters and the Federation of Edible Oil and Fats.

Legislators objected to the team's establishment, saying it
should not precede the passing of the bill. They also accused the
government of colluding with the private sector by involving
company executives in the team.

Golkar, the Armed Forces (ABRI), the United Development Party
(PPP), and Indonesian Democratic Party (PDI), launched again
their critiques against the decree, which they said had given
monopoly to certain parties over the planned bourse.

"The involvement of the two associations in the team could
give the public a bad image of the futures exchange," said
Maxandi of the ABRI faction.

"Therefore, the ABRI faction appreciates it if the government
revises the ministerial decree in accordance with the futures
exchange law," he said.

Tunky agreed to revise the decree but would not dissolve the
team altogether.

Ahmadi Noor Supit of the Golkar faction also expressed the
faction's regret over the protracted debate, but appreciated the
government's willingness to revise the decree in accordance with
the commodity exchange law endorsed yesterday.

Golkar called for some changes to the bill, including the
admission of a clause stating that the only commodities which may
be traded at the bourse were mining, agricultural and forestry.

"The Golkar faction believes that currency should not be
traded on the Indonesian Futures Exchange because we are not yet
prepared," said Ahmadi.

"Once Indonesia is prepared for currency trading in the
future, trading won't occur on the futures exchange but in other
bourses under the supervision of the Ministry of Finance," he
said. (jsk)