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Tuesday, April 20, 2010

Securities in discretionary fund is reviewed: Regulator studies set up of finance market instrument investment limit

Saturday, 17/04/2010 00:00 WIB

Irvin Avriano A.
Bisnis Indonesia

Securities in discretionary fund is reviewed: Regulator studies set up of finance market instrument investment limit

JAKARTA: Bapepam-LK reviews securities instrument placement in the investment portfolio of discretionary fund (KPD).

Chief of Bapepam-LK Ahmad Fuad Rahmany said the issue is included in the final draft of regulation on KPD No.V.G.6 on the customers fund management guidelines based on bilateral and individual discretionary fund agreement by investment manager.

"We have inserted the recommendation on deposit, clearing account, cash as the securities but there is certain limit. Only this, there is no other change," he said to Bisnis yesterday adding that until yesterday the regulation has not been deliberated yet.

Based on the analysis of Bisnis, Fuad and some other relevant officials of Bapepam-LK held a meeting on the finance service authority (OJK) with Finance Minister Sri Mulyani and relevant department or institutions and thus the regulation has not been deliberated yet.

The relaxation is given following the facilities given by Bapepam-LK previously in relation to the overseas securities in the KPD investment portfolio.

Both recommendations are contributed by the Indonesian Mutual Fund Managers Association (APRDI) and some other mutual fund industry players.

In the regulation early draft, the capital market authority banned the finance market instrument to become part of the investors investment portfolio managed by an investment manager (IM) using KPD scheme.

The instrument is only allowed in the portfolio early placement of investment.

Based on the information collected by Bisnis, Fuad has studied the finance market instrument investment limit set up in the KPD by 25 percent at maximum.

Formerly, Taxation and regulation compartment head of APRDI Michael Tjandra Tjoajadi said the recommendation on overseas securities and finance market instrument here had been addressed to the capital market authority.

When asked about KPD, Investment management bureau chief of Bapepam-LK Djoko Hendratto failed to provide any comment. "Just wait until the deliberation."

President director of PT Recapital Asset Management Bowo Witjaksono Suhardjo added the recommendation on bond market instrument here was related to the investment policy of some institutions whose investments were on the hand of IM.

"The usually have certain allocation composition stipulating the existence of finance market securities so as to be liquid in case of need for fund."

Legal assistance and regulation bureau chide of Bapepam-LK Robinson Simbolon said in addition to some industry players recommendations, the capital market authorities also added three clauses in the regulation transitional period.

First, three months grace period is given for KPD that has not deposited yet any fund at the custodian bank.

Second, a year period is given to KPD with assets under management worth less than IDR10 billion so as to increase the fund, or up to the due date contract.

Third, a year grace period is given to each KPD with large number of investors to split investment into individual contract. (Bisnis/iaa)

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