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)