Bapepam-LK Delays Application of Direct Market Access

Monday, 24/05/2010 00:00 WIB

Bapepam-LK Delays Application of Direct Market Access

Irvin Avriano A.

Bisnis Indonesia

BOGOR: The Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) delays the application of direct market access (DMA) in online trading despite previous approval from bourse members and Indonesia Stock Exchange (BEI).

"We curb the DMA application for a time being since our supervisory has not been sufficient to supervise the practice," Chairperson of the Bapepam-LK Ahmad Fuad Rahmany told the press last weekend.

DMA is a mechanism for foreign securities firms to trade securities via domestic bourse members. Under the mechanism, the foreign firms can directly access the sale and purchase transaction using the online trading facility.

BEI has included the clause on the DMA application to the requirement of facilities that securities firms have to be provided in the online trading service, which has come into effect since earlier this month.

However, added Fuad, the bourse authorities still needed to monitor every transaction. Unfortunately, the authorities had not yet had a device to run such a supervisory role.

Commenting on this, Director of PT BNI Securities Jimmy Nyo admitted no securities firm had used the DMA facility despite permission from BEI.

"So far, no firm has used the DMA facility and we think the agency's [Bapepam-LK] decision is appropriate to prevent unpleasant thing from happening."

Separately, members of the Indonesian Brokers Association (IPEI) approve the plan to merge into a new association, which will be called the Indonesian Capital Market Professionals Association (APPMI).

The agreement was announced at the extraordinary national conference held in Bogor during Saturday-Sunday.

"With this, the extraordinary national conference of the IPEI approves the plan to merge into the new association, but with some notes in mind," told Chairperson of the IPEI Saidu Solihin at the closing of the conference yesterday.

The merger will involve the Indonesian Floor Traders Association (AWP2EI), the Indonesian Underwriters Representatives Association (AWPEEI), and the Indonesian Investment Manager Representatives Association (AWMII).

The merger was coined three years ago and a MoU was signed on November 10, 2009. The MoU agreed to a request for approval from the members of each association. (Bisnis/iaa)