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Friday, April 16, 2010

Minimum value of KPD stays at IDR10 billion: Bourse studies on new product for SME

Wednesday, 14/04/2010 00:00 WIB

Irvin Avriano A.
Bisnis Indonesia

Minimum value of KPD stays at IDR10 billion: Bourse studies on new product for SME

JAKARTA: The Capital Market and Finance Institution Supervisory Agency (Bapepam-LK) ensures the minimum value of discretionary fund worth IDR10 billion is final and fixed.

Chief of Bapepam-LK Ahmad Fuad Rahmany made the statement following the spreading speculation that KPD IDR10 billion minimum value is subject to cut which was as if confirmed by the delayed of KPD regulation postponement.

Formerly, KPD regulation would be deliberated last Friday but then delayed until yesterday and thus extended until tomorrow (today). "There is still discussion on the governing provision which need inputs from industry players," he said yesterday.

Previously Bapepam-LK proposed the minimum KPD value was IDR25 billion. But it sparked various responses such as the Indonesian Mutual Fund Management Association (APRDI) with the proposal of IDR1-5 billion.

Fuad said it is necessary to understand that KPD is not product but management service. KPD is the bilateral management service involving investor and investment managers (IM).

Legal assistance and regulation bureau chief of Bapepam-LK Robinson Simbolon said the cut of KPD minimum value was constituted upon considering the general and best practice of Indonesia finance market.

Commonly instituonal investor has the investment capacity of IDR10 billion. the minimum KPD value of IDR10 billion, according to Robinson, aims at the distinguisher of KPD and other investment instrument.

Dealing with the delayed deliberation of KPD regulation, Robinson said the capital market authority still waits for the input from market players for the formulation of governing provisions of the under process regulation.

"The provision which still waits for input from players for instance is the duration of contract shift from the old to the new one or the change of custodian which could be barely done briefly in the transitional period," he said.

Fuad also said Bapepam-LK also studies the new form of capital market investment such like mutual fund scheme. But he could not detail the studies here.

Capital market development researcher of Bapepam-LK I.B. Aditya Ja-ya-an-ta-ra said the new product aims to improve financing form capital market to the small and medium enterprises (SME).

The investment product here will combine the scheme of regular mutual fund and private equity fund (RDPT) which is commonly called specific purpose fund.

One of the reasons for the studies is that the IPO regulation for SME is not much used yet. There are only seven enterprises using the scheme since 2003.

Now the stock listing regulation at the stock exchange is for SME with under IDR100 billion assets and those with under IDR40 billion assets is stipulated by regulation of Bapepam-LK No. IX.C.7.

"The IPO requirement is far more lenient but yet it is not effective. We hope the new scheme which is still studied here could encourage new emitter from SME," he said. (Bisnis/iaa/10)

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