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Friday, April 16, 2010

Overseas securities allowed to become investment portfolio

Thursday, 15/04/2010 00:00 WIB

Irvin Avriano A.
Bisnis Indonesia

Overseas securities allowed to become investment portfolio

JAKARTA: The Capital Market and Finance Institution Supervisory Agency (Bapepam-LK) opens chance to overseas securities to become investment portfolio through the discretionary fund (KPD) whose beleid is issued this week.

Chief of Bapepam-LK Ah-mad Fuad Rahmany said in the regulation the Investment manager (IM) will be allowed to allocate the securities issued at the overseas bourse for investment portfolio with KPD service.

However, it requires that the securities here is listed in the bourse or the local capital market of its origin and accessible. "It is not regulated yet but now it is allowed 100 percent of overseas securities when it is the investor demand," he said in Bapepam-LK building in Jakarta yesterday.

Fuad statement here accommodated the proposal given by the Indonesia Mutual Fund Manager Association (APRDI) this week on the importance of KPD regulation to open chance to investors to have investment to overseas securities.

The KPD regulation alone which is on process is the Regulation No.V.G.6 on the customers fund management guidelines based on bilateral and individual fund management agreement by the IM.

The regulation that was formulated few months before is deliberated to restrict and protect the investors and IM to use portfolio investment management service use at capital market. The regulation will be deliberated this week.

Fuad stressed out in the regulation the capital market authority also drop off the scheme of notary mandatory use in KPD creation which is then called as the customers fund management (PDN).

BApepam formerly inserted the notary use proposal in the earlier draft or when sought input from mutual fund industry players and investment management. "We cancel the notary use clause as some experts said it is unnecessary. Both parties agreement is enough."

Besides, the capital market authority also shortens the transitional period of the regulation in only three months from the earlier plan of one year. Besides, the saving, deposit, and clearing account in the KPD portfolio is also allowed in very limited time.

The administrator of the (APRDI) Michael Tjandra Tjoa-jadi who also leads PT Schroder In-vest-ment with KPD fund of IDR17 trillion as from the total of KPD worth IDR40 trillion responded positively the chance for overseas securities investment.

With the flexibility of investment policy and overseas portfolio, investors particularly the overseas ones could have more trust to the local IM for investment. It could help local IM to compete at international level.

Michael said the association actually still needs to recommend the need of finance market instrument in the investment portfolio. The problem is that almost all portfolios needs clearing account and deposit assets to keep the liquidity.

For the notary mandatory use clause, he considered it necessary particularly for the local investor as it might be helpful in case of dispute. (Bisnis/iaa)

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