Idle fund managers may lose licenses

Idle fund managers may lose licenses

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam)
warned 19 inactive investment management companies yesterday to
improve their performance or lose their licenses.

The agency's head of investment and mutual funds bureau, Aris
Ilyas, said the capital market authority would soon summon them
to find out the reason why they did not start their businesses.

The agency would take tough actions if the companies did not
report their operations and performance to the agency, he said.

"They have to start their business at least by the end of this
year," he said. "If they do not give a logical reason for being
inactive, their licenses will be revoked," he said.

He said there were 63 management investment companies which
have obtained licenses from the agency and 44 of them have
managed the mutual funds while the remaining 19 are not yet
operational.

He said as of July 1997 there were 67 mutual funds managed by
25 investment management companies with total funds managed
totaling about Rp 7.48 trillion (US$2.87 billion).

He said of the total 67 mutual funds, 28 funds were mostly
invested in fixed income funds, 21 in equity funds and the
remainder in money market funds.

"Mutual funds have become a backbone for local investors in
the capital market,' he said. (aly)