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Friday, August 28, 2009

Bapepam-LK let the investors buy mutual funds via the Internet, if provided investors know enough

as published in Bisnis Indonesia daily newspaper
Irvin Avriano (21)
Bisnis Indonesia

JAKARTA: Capital Market Supervisory Agency and Financial Institution (Bapepam-LK) allows the purchase of mutual funds through internet facilities, as long as investment management able to provide sufficient understanding to investors.


There is now a mutual fund dealer (Agen Penjual Reksa Dana/Aperd) which provides internet facilities for investors to buy mutual funds that do not need face to face, both when buying products or buying his unit alone. But there is a doubt that those kind of connection not represent the needs of compliance to Bapepam-LK's rule.


Investment Management Bapepam-LK Bureau Chief Djoko Hendratto said the authority does not limit the capital markets recognize the principle of investors (know your client/KYC) only on the purchase of mutual funds or the purchase of prime new mutual funds next.


"The bottom line for investors can obtain quality information together with direct engagement, buying online is fine," he told the press this weekend.


According to Djoko, currently the most important for each investment manager (IM) and the mutual fund dealer that is applying the KYC principle, thus allowing the purchase of mutual funds based on Bapepam-LK's rules No. V.B.4.


Those rules of Sales Agent Securities Investment Fund noted that sales of mutual funds can only be employees who already have a vendor representative permit mutual funds (Wakil Agen Penjual Reksa Dana/Waperd) or the Aperd.

Thus, the rule can be interpreted Waperd has instructed to sell mutual funds directly, by meeting face-to-face, to prospective investors who are interested because the mandate of the Aperd usually a bank, or IM.

However, these rules do not spell out the minimum limit that must be done meeting the investment manager who represented the investment manager representatives (Wakil Manajer Investasi/WMI) or Waperd.

Djoko assess the existing regulations should be more flexible, especially with ease due to technological advances, "So do not be left behind with the development."

President Director of PT Manulife Aset Manajemen Indonesia Denny Rizal Thaher agreed with Djoko. He considered the seller's agent usually has to do screening and documenting KYC risk borrowers at a time.

He explained the purchase of mutual fund transactions in the seller's agent is the extension of the IM, so there should be no risk and KYC screening every purchase of a new mutual fund at the same Aperd.

"I think once screened should, and do not need many times, provided that continued to be updated periodically, for example every year."

Chairman of Mutual Fund Managers Association of Indonesia (Asosiasi Pengelola Reksa Dana Indonesia/APRDI) Abiprayadi Riyanto also agreed with that statement, but he said the KYC screening and assessing the risk profile needs to be done every time when an investor to buy a new mutual fund products.


"Then to top it up no problem [not screened again], but for the new purchase [screening] should still be done."


He considered it as an extension Aperd rights and obligations of some of the MI client, of course, an explanation for the mutual fund product is different from an MI with a mutual fund from another MI.


However, a sales force in the mutual fund industry said the permissibility of purchase through online limited by the interpretation of the statutory agency Bapepam-LK.


According to him, the investment management firm is usually more aware of the technical from the sale of mutual funds online in order to allow the practice.


However, these sources said, usually can be different interpretations of the statutory agencies and the legal aid bureau or the inspection and investigation and should be harmonized to match the sound. (21)

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