JSX to confirm amount of equity participation

JSX to confirm amount of equity participation

JAKARTA (JP): The Jakarta Stock Exchange (JSX) will confirm the amount of its equity participation in the Clearing and Guarantee and Central Custodian houses at the next shareholders' meeting.

The two new houses which are required by the new capital market law will handle the clearing and settlement of transactions, duties which are currently held by the Indonesian Securities Clearing Depository (KDEI).

KDEI, founded in 1993, is controlled by seven state banks -- Bank Bumi Daya (13.34 percent), Bank Dagang Negara (13.34 percent), Bank Exim (13.33 percent), Bank Negara Indonesia (13.3 percent) Bapindo (13.33 percent), Bank Rakyat Indonesia (13.33 percent), Bank Tabungan Negara (13.33 percent).

JSX and the Surabaya stock exchange own only five percent and 1.6 percent respectively.

In 1994 the house adopted a netting system for the settlement of all shares listed on the JSX. It is now preparing a book entry settlement system which is expected to be effective when the stock exchanges begin scripless trading.

The new capital market law stipulates the establishment of two different houses to carry out the function of the existing KDEI.

The law also states that stock exchanges must become the majority shareholders of the Clearing and Guarantee house because its role is closely related to the exchange's activities.

According to the law, custodian banks, securities companies, and securities registration offices are allowed to have equity participation in these two houses.

It also stipulates that other parties will also be allowed if the total equity from these parties is not sufficient.

The Chairman of the Indonesian Capital Market Supervisory Agency (Bapepam) I Putu Gede Ary Suta said recently that the agency had set the establishment of these two houses as its priority program after issuing a number of new regulations.

The JSX's president Hasan Zein Mahmud said that for the equity participation in the clearing and guarantee house alone, JSX should allocate some Rp 15 billion (US$6.4 million).

Equity participation is one of the eight proposals to be approved in the JSX annual shareholders' meeting to be held in mid April, informed sources said yesterday.

In the meeting, the shareholders will also elect new directors and commissioners. (08)