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Friday, February 12, 2010

Regulators and margin players' need finally met

By Irvin Avriano A.

Regulators and margin players' need finally met

JAKARTA: Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK), Indonesia Stock Exchange (IDX/Bursa Efek Indonesia), and margin trading market players, agreed perception of settlement based on a basket of shares in margin trading (basket stocks).

Securities Transaction and Institution Bureau Chief of Bapepam-LK Nurhaida said the agreement was made when the margin transactors reiterated the proposal to change the previous settlement of one-on-one into the basket system earlier this month. Currently, as many as 63 securities firms from exchange members could do the margin trading.

Previously, Nurhaida inform, margin rules of Bapepam-LK consider limiting settlement based solely on one-on-one. In fact, he said, authorities did not restrict the right way in the Bapepam-LK's rules or BEI regulations.

"In our last meeting the previous perceptions have met, and it was very good because it is the ideal in practice," said Nurhaida to the press today.

Settlement of one-on-one is a settlement system based on the ratio of margin collateral one share only.

Settlement of basket is a settlement with the weight of margin trading in a group of stocks that traded in margin, not just one stock. It opened opportunity margin ratio can use the collateral from other stocks in the group's shares when the ratio was reduced margins.

This is useful when the condition of a margin call, when the additional capital required for each stock on margin when the market price falls.



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