New exchange awaits decree
New exchange awaits decree
JAKARTA (JP): The operation of the country's commodities
futures exchange now awaits a presidential decree, expected to be
issued by the end of this year, a senior official said Tuesday.
The chairman of the Indonesian Commodity Exchange Board
(Bapebti), Arifin Lumban Gaol, said that Bapebti had completed
draft operating regulations for the exchange.
"What we're waiting for now is a presidential decree and it
is expected to be issued by the end of this year," he told
journalists at the sidelines of a seminar on commodities exchange
here.
The exchange was slated to start operation between March and
July next year, he said.
The creation of the commodities exchange is mandated by the
1997 Futures Exchange Law.
Bapebti, which currently operates a conventional commodities
exchange, will likely act as the futures exchange supervisory
board when the exchange is in full operation next year.
The supervisory board would be under the Ministry of Industry
and Trade.
Daily operation of the exchange would be operated by a private
exchange management and commodities clearing houses, under which
commodities traders and brokers would work.
Arifin said the main commodities to be traded on the exchange
would be coffee and palm oil.
Other commodities such as rubber, pepper, cocoa, shrimp,
soybeans, cotton, cloves and plywood could also be traded there.
He said plywood was included in the list because its trading
was no longer monopolized by a single business group in the
country.
Arifin said that total transaction value should reach more
than US$200 million per annum to allow transparent and fair
trading practices in the market.
"If the transaction value is less than that, certain investors
could dictate prices," he said.
Hanafi Sofyan, president of commodities futures brokerage firm
PT Indofutop, said around 40 brokerage firms were ready to
operate in the exchange next year.
All those brokerage firms had met the required net adjusted
working capital of at least Rp 10 billion each, he said.
"We have no problems in terms of meeting the capital
requirement. But we might also need fresh capital from foreign
partners," he said.
He said the management of the exchange would also need
assistance from developed exchanges abroad in terms of marketing,
information technology and exchange management.
Arifin noted that the United States Agency for International
Development, the Asian Development Bank, the World Bank and
Australian Aid had provided assistance for the development of the
local commodities futures exchange. (aly)