House wants changes to capital market bill
JAKARTA (JP): The House of Representatives urged the government yesterday to revise its capital market bill to ensure fair trading practices.
The Indonesian Democratic Party asked for changes in the sections relating to licensing procedures for stock broking firms and the role of the capital market supervisory agency (Bapapepam).
Ni Gusti Ayu Eka Sukmadewi, speaking for the party's faction in the House, said that the licensing procedures for stock broking companies should be clarified to prevent indirect involvement of publicly-listed companies in stock trading activities.
She said brokerage companies which were wholly or partly-owned by publicly-listed companies should not be allowed to operate on the domestic stock market in order to prevent insider trading and other forms of trading fraud, she said in her party's statement during the opening of debates on the proposed capital market law in the House's special committee.
Made during the opening debates on the proposed capital market law, the party's statement was apparently directed towards the indirect involvement of a number of publicly-listed companies in stock trading activities.
"Securities companies should not be allowed to have ownership relationships with other firms engaged in the stock exchange to guarantee fair trading," Gusti Ayu said.
The PDI, the smallest faction in the House, also called on the government to revise the provisions concerned with Bapepam's supervisory role as well as those regarding the accounting system and penalties.
Listed firms
She said that Bapepam, which, under the proposed legislation, will oversee companies whose shares are owned by more than 300 parties with a minimum paid-up capital of Rp 3 billion -- whether or not they are listed on the capital market -- should focus its supervisory attention only on listed firms, she said. She said that if the government wanted the agency to supervise non-listed public firms as well, it should think of different name.
Regarding penalties, Gusti Ayu said that the sanctions for capital market crimes should be clearly defined to prevent misinterpretation.
The United Development Party also asked the government to revise the licensing procedures for the capital market supporting agencies, including broking companies, underwriters and fund managers.
H. Muchsin, spokesman for the party's faction in the House, said that Bapepam concern itself with supervisory tasks, while the issuance of licenses should be handled by the ministry of finance.
Finance
Muchsin said that the draft law, which would provide Bapepam with greater authority, does not make any stipulations regarding the agency's financial powers.
"The draft law should also give Bapepam stronger powers in its financial management to enable it to support its greater supervisory tasks," he said.
The draft capital market law, submitted to the House late last month, will be debated by the House's special committee until Oct. 22.
The draft law, which is scheduled to be implemented in January, will replace the 1952 Capital Market Law. The new law, which contains 16 chapters and 123 articles, covers not only the legal bases for all activities on the capital market but also provisions in relation to capital market crimes.
For example, the bill provides Bapepam with greater investigative powers and introduces heavier penalties, in the form of both terms of imprisonment and fines. The maximum term of imprisonment under the proposed law is five years, while the maximum fine is Rp 15 billion (US$6.7 million).
Bapepam, which at present is allowed to investigate only written reports, will be permitted to carry out field investigations in dealing with suspected capital market crimes. (hen)