Indonesian Capital Market

For parties that do research and data needs associated with the Stock Exchange, Indonesian Capital Market Directory (ICMD) is one solution that is where ICMD data contains data and information on issuers in

.ECFIN is the official who issued ICMD (www.ecfin.co.id) offers ICMD compilation CD of the year 2000-2009. From ECFIN website mentioned that the data provided by them is the data is up to the end of 2009, except data of shareholders, directors & commissioners, the number of employees, a summary of the Financial Statements (LK), the ratio of performance indicators and growth, and development of the price & value of stock trading , which until 2008. Latest information, ECFIN also been published ICMD 2010.

While LK (whether annual, quarterly, audited and unaudited) and the Annual Report (Annual Report) have been provided by the Stock Exchange from 2004 until 2010. For 2004 to 2006 we will have to download the data one by one, where we can use a download manager for downloading applications such as Download Accelerator Plus, Internet Download Manager, and so on. When this article was created, the data reports can be downloaded directly without going into IDX site only from 2007 to 2010, where we can use a web application such as a copier to download Teleport Pro, Web Coppier and so on.

Corporate Governance has become a buzzword more people hear. It always raises the question: how do we know that a firm put into practice the principles of good Corporate Governance? It is not hard for companies to say that it has acted upon the principle which represents fairness, transparency, accountability and responsibility. Although it needs a systematic assessment to assure whether a company really deploys those principles.
In fairness, minority stock holders will be guaranteed; transparency will increase punctuality and accuracy of a company’s information on performance; accountability will create an effective control system in accordance to the distribution of power; and responsibility will increase reliability between stakeholders and the environment.
a. Corporate Governance
The Indonesian government and International Monetary Fund (IMF) introduced the concept of good corporate governance as sound corporate management for economic improvement of Indonesia. It was hoped that the concept can guarantee the future of stockholders and creditors. According to Asian Development Bank (ADB) research the sources of economic crisis in Asian countries including Indonesia are:
�� Dysfunctional supervising system of board of directors and audit committee in securing stockholders importance
�� Unprofessional corporate management
It is hoped that the concept of GCG can increase stockholders professionalism and welfare without jeopardizing other stakeholders. GCG is a system that organizes and controls a company to create added value to all stakeholders. The main framework in GCG are:
�� The importance of stockholders to gain accurate and punctual information
�� Company obligation to expose corporate performance, ownership and stakeholders information accurately and punctually.
With four main components of GCG, fairness, transparency, accountability and responsibility.
Indonesia started to implement CGC principles since the signing of the Letter of Intent (LOI) with IMF, which contained scheduling of corporate management improvement in Indonesia.
b. GCG Principles
In order to guide the achievement of the principles, the National Committee of Corporate Governance has launched a book on Good Corporate Governance Guidance.


involved in such towards this Law and/or laws of conduct or other Party if necessary; and/or
4. Affirmed requirements and/or permits Party (ies) suspected to violate or have involved in such towards this Law and/or laws of conduct to perform certain action needed to complete loss emerged from the violation.
�� Investigation
In verse 101 (1) and (2), it stated that in opinion to Bapepam that violations towards this Law and/or Laws of Conduct cause impairment towards the existence of Capital Market and/or endangering investors and community, Bapepam affirmed the initiative to start the inspection, and a Civil Officer from Bapepam will be given special authority to conduct inspection to Capital Market criminal act based on rules of Kitab Undang-undang Hukum Acara Pidana.
The inspector is authorized to:
1. Receive reports, announcements, and complains concerning criminal action carried out in Capital Market;
2. Examine the veracity of reports or information concerning criminal action in Capital Market;

3. Examine Party(ies) suspected to conduct or involved in criminal act in Capital Market;
4. Request, inspect, ask for information and evidence from Party(ies) suspected to conduct or witness criminal actions in Capital Market;
5. Inspect bookkeepings, notes and other documents related to criminal act in Capital Market;
6. Inspect every location suspected to have evidence of bookkeeping, notes and other documents, and hold them in custody as evidence to criminal act in Capital Market;
7. Block bank accounts or other accounts in financial institution of Party (ies) suspected to conduct or involved in criminal act in Capital Market;
8. Ask expert opinion in performing the duty as inspector in Capital Market; and
9. affirmed when the inspection starts and ends.
Moreover, Bapepam are in cooperation with Police Department, Board of Attorneys, the Department of Justice and Human Rights, Center of Financial Transaction Analysis Report (PPATK), and Commission for the Supervision of Business Competition (KPPU) of the Republic of Indonesia.
c. International Relations
In compliance to providing improvements to the Indonesian Capital Market, Bapepam joins international relations with foreign market.
Bapepam signed several bilateral MOU’s and LoI’s with foreign regulators in information, experience exchange and law enfocement.
In multilateral perpective, Bapepam actively participated several international organizations, such as ASEAN, APEC, World Bank, ADB, IMF, and IOSCO.
In IOSCO, a world body of Capital Market regulators, Bapepam is one of the first countries outside Americas besides France, Korea and England since 1984. As one of active member of IOSCO, Bapepam are in line with IOSCO’s development and acitivities such as discussions concerning strategic steps of capital market, became a member in several committees, working groups and task force within IOSCO, as host of IOSCO’s meetings, filling out questionaires regarding capital market development, fulfilling several IOSCO resolutions, conducting IOSCO Self Assessment towards IOSCO Objectives and Principles Methodology, and in effort to become one of the signatories of Multilateral MoU.
Link to : http://www.iosco.org/, http://www.world-exchanges.org

It is obvious that anyone taking part in Capital Market needs security and law assurance. In creating an orderly, fair and efficient Capital Market activity, as the authority of Capital Market, Bapepam has the following duties:
a. Monitoring and Market Surveillance
Monitoring is conducted to prevent violations or unlawful act in Capital Market. It is also conducted in compliance to market players according to the existing regulations.
Surveillance towards daily transactions is the responsibility of Capital Market Authority and Stock Exchange, considering the number of crimes is possibly exist more in daily trading process (Secondary Market).
b. Law Enforcement
In implementing firm law enforcement in the Capital Market, Bapepam has the authority to conduct inspection and perform administrative penalty for those who involved in illegal actions.
Bapepam also has the authority to investigate those who are involved in violations and crime in Capital Market. Bapepam is a part of the Criminal Justice System that has the authority to bring a suspect to court of justice.
�� Inspection
According to verse 100 (1) Law No. 8, 1995 regarding Capital Market, Bapepam is permitted to conduct inspection to those who are suspected to be involved in a violation of Law and/or other rules of conduct.
Moreover, according verse (2) it stated that in compliance with inspection in verse (1), Bapepam has the authority to:
1. ask for information and/or confirmation from Party(ies) suspected to violate or have involved in such towards this Law and/or laws of conduct or to other Party if necessary;
2. obligate Party(ies) suspected to violate or have involved in such towards this Law and/or laws of conduct to perform or not perform certain action;
3. inspect and/or copy notes, bookkeepings, and/or other documents, which belong to Party(ies) suspected to violate or have involved in such towards this Law and/or laws of conduct or other Party if necessary; and/or
4. Affirmed requirements and/or permits Party (ies) suspected to violate or have involved in such towards this Law and/or laws of conduct to perform certain action needed to complete loss emerged from the violation.
�� Investigation
In verse 101 (1) and (2), it stated that in opinion to Bapepam that violations towards this Law and/or Laws of Conduct cause impairment towards the existence of Capital Market and/or endangering investors and community, Bapepam affirmed the initiative to start the inspection, and a Civil Officer from Bapepam will be given special authority to conduct inspection to Capital Market criminal act based on rules of Kitab Undang-undang Hukum Acara Pidana.
The inspector is authorized to:
1. Receive reports, announcements, and complains concerning criminal action carried out in Capital Market;
2. Examine the veracity of reports or information concerning criminal action in Capital Market;
3. Examine Party(ies) suspected to conduct or involved in criminal act in Capital Market;
4. Request, inspect, ask for information and evidence from Party(ies) suspected to conduct or witness criminal actions in Capital Market;
5. Inspect bookkeepings, notes and other documents related to criminal act in Capital Market;
6. Inspect every location suspected to have evidence of bookkeeping, notes and other documents, and hold them in custody as evidence to criminal act in Capital Market;
7. Block bank accounts or other accounts in financial institution of Party (ies) suspected to conduct or involved in criminal act in Capital Market;
8. Ask expert opinion in performing the duty as inspector in Capital Market; and
9. affirmed when the inspection starts and ends.
Moreover, Bapepam are in cooperation with Police Department, Board of Attorneys, the Department of Justice and Human Rights, Center of Financial Transaction Analysis Report (PPATK), and Commission for the Supervision of Business Competition (KPPU) of the Republic of Indonesia.
c. International Relations
In compliance to providing improvements to the Indonesian Capital Market, Bapepam joins international relations with foreign market.
Bapepam signed several bilateral MOU’s and LoI’s with foreign regulators in information, experience exchange and law enfocement.
In multilateral perpective, Bapepam actively participated several international organizations, such as ASEAN, APEC, World Bank, ADB, IMF, and IOSCO.
In IOSCO, a world body of Capital Market regulators, Bapepam is one of the first countries outside Americas besides France, Korea and England since 1984. As one of active member of IOSCO, Bapepam are in line with IOSCO’s development and acitivities such as discussions concerning strategic steps of capital market, became a member in several committees, working groups and task force within IOSCO, as host of IOSCO’s meetings, filling out questionaires regarding capital market development, fulfilling several IOSCO resolutions, conducting IOSCO Self Assessment towards IOSCO Objectives and Principles Methodology, and in effort to become one of the signatories of Multilateral MoU.
Link to : http://www.iosco.org/, http://www.world-exchanges.org

Basic question rises when we hear investment in Capital Market: How do you really make transactions in Capital Market and what do we do to invest in it?
a. Trading Mechanism
�� Primary Market
�� Definition : Primary Market is a transaction process of securities before being listed in Stock Exchange. In Primary Market, the Underwriters through the Selling Agents/Brokerage Companies offer securities newly issued by a company to the investors. The first public securities issue made by a company is referred to as an Initial Public Offering (IPO).
�� conduct; offering, ordering, price, settlement, tax
�� Secondary Market
�� Definition : Secondary Market is a transaction process of securities after it is listed in Stock Exchange. The existence of Secondary Market is to provide investors with the opportunity to buy or sell stocks and other listed securities after the Initial Public Offering (IPO) is over.
In this market, Securities are traded from one investor to another.
This market also provides chances in buying back issued shares which must be based on the existing procedures in rules regarding buy-back.
�� Implementation:
�� Stock Exchange; price priority, time priority, stock price index. ( http://www.jsx.co.id/trading.asp?cmd=menu1)
�� Trading Rules, Cost and Tax
A. STOCK
JSX classifies the market into three segments:
a. Regular Market
b. Negotiated Market
c. Cash Market
a. Regular Market
Stocks which are trading at the Regular Market are based on fix lot and time of the continuous auction market mechanism. The prices formed on the regular
market are used as the quoted prices for the Jakarta Stock Exchange.
Terms and Conditions for Regular Market Transactions currently are as follows:
·The total shares traded in a standard lot of 500 shares
· Price movements (increments) for shares:
- For the price below Rp. 500, the fraction is set at multiplies of Rp 5 and maximum price movement Rp 50
- For the price between Rp 500 to Rp 5,000, the fraction is set at multiplies of Rp 25 and maximum price movement Rp 250
- For the price above Rp 5,000, the fraction is set at multiplies of Rp 50 and maximum price movement Rp 500
· All transaction (matching) is done based on time and price priority.
b. Negotiated Market
In this market, stocks are traded by direct negotiation between buying broker and selling broker based on the last stock price in Regular Market.
c. Cash Market
This market is provided for exchange member who failed to settle their trading obligations in Regular and Negotiated Market. The settlement in this market is based on the cash and carry system.
Settlement
Should a transaction has been matched, the delivery of the share certificates and payment must be settled through The Indonesian Clearing and Settlement Corporation (PT Kliring dan Penjaminan Efek Indonesia/KPEI), and The Indonesian Central Securities Depository (PT Kustodian Sentral Efek Indonesia/KSEI) at 3 exchange days after the transaction or T+3.
Transaction Fees
For every transaction, an investor has to pay a fee to the brokerage firm based on an agreement between them. This fee may not exceed 1 % (one percent) of the value of both buying and selling transaction. Fees varies among brokerage firms, basically it is determined as a certain percentage of total value buying/selling transaction or a% x (number of stock x price per stock). This fee is subject to 10% Value Added Tax.
Taxes
Income Tax amounting 0.1% will be charged on selling transaction or 0.1% x (number of stocks sold x price per stock).
How to obtain dividend
Investors should buy the stock until “Cum Dividend Date”, at the time when buyers become eligible to receive a declared dividend. However, in the case of buying stock in a script way, buyer should register his/her name on the book of company through Registrar until the Recording Date.
B. Bonds and Convertible Bonds
Trading
In Indonesian Capital Market, Surabaya Stock Exchange provides information system for fixed income (bond) market, which is known as OTC-FIS (Over the Counter-Fixed Income Service). It provides bond’s bid and offer quotations, transactions, and trade reporting on a real-time basis. The system enables participants to enter, withdraw and amend bid or sell quotations at anytime before execution of transaction.
There are two types of bond trading transaction in Surabaya Stock Exchange, namely: Negotiation Transaction and Reporting Transaction.
In Negotiation Transaction, participants submit one quotation, either buy or sell through OTC-FIS system. Then other participants who are interested in this quotation can submit sell or buy order through OTC-FIS. Should the agreement has been reached between both parties, they deliver the confirmation through OTC-FIS at the end of the same bourse day when the order submitted.
In Reporting Transaction, transaction is done outside the system between both parties. Then, they report this transaction into the system. Participants are securities companies both member or nonmember of Surabaya Stock Exchange, and some banks which are actively trading bonds.

Fees
Usually, there are no fees charged to the investors in Bond transaction. However, the Securities Companies who act as the Dealer take a “spread” between buying and selling
price, which including some fees charged to the securities companies related to OTC-FIS’s Bond transaction (varies from 0.005% - 0.01%).
Taxes
· Bond which is traded or reported its trading to the Exchange, Interest and Capital Gain are subject to final tax of 20%.
· Bond which is not traded or reported its trading to the exchange, Interest and Capital Gain are subject to With-Holding Tax of 15% not final, which at year end can be credited and will be subject to Corporate Income Tax (maximum 30%).
Settlement
The settlement process will be depending on the type of the bond. For script Corporate Bond, the settlement process is conducted between the participants through the custodian based on the agreement. For scripless Corporate Bond, the settlement is conducted by overbooking between account holders in KSEI. For Government Bond, the settlement is conducted by book-entry settlement in Bank Indonesia.
C. Rights
Most of rights’ trading rules follow the same procedure applied on stock’s trading mechanism. On the exercise date, the investors pay the fund to the issuer through brokerage firm, and in return, they will receive new stocks.
D. Warrant


Warrants holders can convert their warrant into new common stock by paying the exercise price to the issuer through brokerage firm. Most of warrant’s trading rules follow the same procedure applied on stock’s trading mechanism.
E. Stock Index Futures
1. Trading Session in SSX is similar with stock trading in JSX, and it is based on electronic auction system operating continuously during exchange hours.
2. Trading is facilitated by Future Automated Trading System (FATS), and is conducted in each brokerage firm’s office (remote trading), and supported by RMOL system or Risk Monitoring On Line. RMOL is a real time reporting system, which will enables the investors to monitor their current open position and balance of their capital.
Type of Contract:
1. Spot Month Contract, which will be matured on the last exchange day at respective month.
2. Second Month (next month) Contract, which will be matured on the last exchange day at following month, right after spot month.
3. Quarter Contract, which will be matured on the last exchange day at the nearest quarter month (March, June, September and December), right after second month contract.
Similar to stock investment, investors should open an account in brokerage firm. For each contract, the investor should place an initial margin amounting to Rp 3 million for each contract. The order will be inputted by FATS Trader into FATS terminal for further process. The only different thing is the settlement in this Stock Index Future is T+1, not T+3 as prevailed in stock trading in JSX.
Contract Specification of LQ45 index futures
1. Underlying is LQ45 Index that calculated and published by Jakarta Stock Exchange
2. Each index point is converted into Rupiah by using a contract multiplier, currently Rp 500,000 for each point
3. Settlement is in cash
4. Settlement period is T+1
5. Matching mechanism is price priority and time priority.
6. Last Trading Day is the last bourse day in contract month
7. Initial margin is Rp 3 million per open contract
8. Fee is Rp 50,000 excluding VAT, per contract
F. Mutual Fund
In case of the Open-end Mutual Fund, the amount an investor pay to own a piece of a Mutual Fund depends on NAV per unit, which is determined at the end of each day. In case of the Close-end Mutual Fund, trading mechanism follows stock trading mechanism.
Fees
Investment Manager charges selling fee to investors when they buy unit/stock of mutual fund, which varies between 1% to 3% of total value. When the investors would like to sell/redeem their investment, then Investment Manager would charge them a redemption fee, which usually varies between 1% to 2% of total value.
Tax
Mutual Fund investors are exempted from taxation.
�� link to : http://www.jsx.co.id/trading.asp?cmd=menu1

b. Investment Guidance
�� How to Invest in Indonesian Capital Market
Before investing in Capital Market Instruments, an investor must open trading account at one of the Securities Companies. Before choosing appropriate Securities Companies, investors should consider several factors as follow:
• Should the Investors prefer to invest in IPO’s stocks or Bonds, they can choose Securities Companies which actively involved as Underwriter.
• Should the prospective investors need only basic service, such as executing order only, they can choose Securities Companies which have experience of fast and accurate execution, or the one with more booth in Stock Exchange or have many traders.
• Should the investors need more advise in making their investment decision, they can choose Securities Companies which have more qualified and experience analysts.
The investor should open an account first by filling in the required opening account documents. In general, brokerage firms usually require their clients to deposit a certain amount of money – which varies among companies - as a guarantee for settlement. It implies that the clients have sufficient funds to do the transaction. After they have been approved, investors then are able to start the investment by placing a bid or offer on a stock or any other securities.
For stocks transaction:
The transaction starts by placing an order of a stock at a certain price. That order can be delivered through a written note or by phone to the broker-dealer. The order should contain the name of the stocks, the amount to be bought or sold and the price. The order will then be verified by the Brokerage firm and inputted to the trading system in Stock Exchange.
The investors’ bids/offers from various Securities Companies will be pooled at the trading floor via JATS. The system, will then match those order base on price priority and time priority.
For bonds transaction:
• The transaction starts by asking broker-dealer to place a bid or offer into OTC-FIS system, so it can be seen by other participants in real time. Through OTC-FIS, the participants can observe the best quotation about particular bond, then the interested participants can contact the counterpart for further negotiation.
�� How to Choose Capital Market Instruments?
A. Investment Strategy
a. Before starting to invest in Capital Market, investors should consider the following factors:
(1) The funds to be invested should be idle and excess funds.
(2) Decide what investment objectives are and prioritize them.
(3) Risk Tolerance: How much risk are the investors willing and able to bear in pursuing their objectives? It is determined by personality, age, job
security, health, net worth, amount of cash the investors have to cover emergencies, etc.
(4) Time Horizon: The length of time the investors put the funds.
a. Choose Capital Market instruments, which best with the investors’ overall investment strategies.
After instruments have been selected, learn as much as possible about the issuers, and conduct securities screening to narrow the candidates down to a few that the investors will pay closer attention to.
The investors can start by studying the prospectus, which contains:
· The issuers’ line of business and company’s history
· Number of stocks or bonds offered in IPO, Nominal Value of the stocks or bond and Offering Price
· The objectives of the IPO
· The issuer’s business outlook and risks
· Dividend and interest Policy
· Historical Financial Performance
· Selling Agents
· Schedule related to IPO process.
Investors can obtain the prospectus from Securities Companies and also read it on the newspaper during public offering period.
Should the investors have limited time and expertise; Securities Companies usually provide a professional guidance through their Research Analysts. The Analysts prepare reports on a regular basis, which contain both fundamental analysis and technical analysis. Fundamental analysis highlighten on fundamental factors of the issuers, such as their financial conditions, result of operation, and macroeconomic factors, which will influence their prospects. Technical analysis highlighten on the estimation of future securities price movement based on historical price and volume movements.
It also should be noted that some instruments, such as derivatives, can be very risky investment if it is not used properly, and it is therefore highly recommended that the investors should seek independent financial advice before investing in derivatives securities.
B. Evaluation of Capital Market Instruments
a. Evaluation of General Economic and Industry Trend Evaluation of general economic and industry trend plays an important role in Capital Market investment. Fiscal and monetary policies issued by the government such as taxation, interest rate, government spending, inflation rate, will have a significant influence to all industries and companies within the economy. Those policies will affect the revenue, the expenditure and earnings of all industries and companies, which eventually will influence rate of return to the investors.
b. Reading Financial Statement
Investors should screen out companies whose stocks or bonds will be bought, by analyzing thoroughly the issuers’ financial statements. Financial statement is included in the prospectus, and in addition, the issuers are required to publish financial statement regularly (quarterly, semi annually and annually) in newspaper. Financial statement can also be obtained through securities companies.
Financial Statement consists of:
· Profit and Loss Statement/Income Statement:
A financial statement that shows the flow of the firm’s sales, expenses, and earnings over a period of time.
· Balance Sheet:
A financial statement that shows what assets the firm controls at a fixed point in time and how it has financed these assets.
· Cash Flow:
A financial statement that summarizes its sources and uses of cash over a specified period of time.
Financial Ratios
These ratios are widely used by Investors in Capital Market:
C. CREDIT RATING
Compared to stock investment, the investors who interested in bond investment can utilize credit rating, which applied to every bond issues in the country. Since credit risk or default risk is the possibility of loss due to the weak ability to pay the coupon and the principal, bond rating plays important role by providing fundamental analysis for bond issues. Rating concerns with the assessment of the ability of the issuer to fulfill the obligation. Below are rating description provided by PEFINDO.


�� Basic Tips for Investors
The following are basic safeguards when “shopping” for investments:
(a) Don’t buy securities offered in unsolicited telephone calls, ask for
information in writing before you decide.
(b) Beware of sales people who try to pressure you into acting immediately.
(c) Don’t buy on tips or rumors. Not only it is safer to get the fact first, but also it is illegal to buy or sell securities based on “inside information” which is not generally available to other investors.
(d) Get advice if you don’t understand something in a prospectus or a piece of sales literature.
(e) Be skeptical of guarantees or promises of quick profits.
(f) Check the credentials of anyone who tries to sell you securities.
(g) Remember that prior success is no guarantee of future success in an Investment arrangement.
(h) Be careful with illiquid investments. Ask about the liquidity and understand that there may not be a ready market when you want to sell.
(i) Be sure you understand that the risks involved in trading securities especially derivatives instruments.
(j) Be careful with speculation. Speculation can be a useful investment tool for those who can understand and manage the risks involved.

Go Public is an activity to offer securities to the public.
a. Registration Statement
Registration Statement is a document that must be submitted to Bapepam by Issuers in the Public Offering process. Those who are obliged to submit Registration Statement are:
�� Participants initiated Public Offering
�� Public Companies
• Limited Corporation
• Capital submitted is more than Rp. 3.000.000.000,-
• Stock holders of more than 300 (three hundred) people
b. Background and Benefits of Go Public
Several benefits for companies to go public are:
�� Growth Aspects
Go Public provides budgeting alternative for companies to grow their business and as a strategy to survive.
• Expansion
• Refinancing
• Divestation
�� Generalization Aspects
Generalization takes the form of ownership distribution in a company where in general, owned by a family or particular group, therefore by implementing Go Public, the company is owned by many. besides distribution of revenue, Go Public provides benefits in risk distribution.
Before Go Public After Go Public

�� Stability Aspects
A few elements of Go Public provide influence to corporate stability:
• Exposure or transparency; more open, according to rules of regulations in Capital Market
• Management; more professional, monitoring and controlling by the public creates better responsibility
• Corporate status; exposed more to public in general
• Increase compliance towards existing rules of regulations
• Increase compliance towards Business ethical codes
• Increase number of shareholders creates an increase in public attention towards a company.
c. Go Public Process
�� Process in the company
�� Go Public plan, Share Holders General Meeting,
�� Legal audit, financial report audit, asset appraisal, etc.
�� Documentation, preleminary contract with Stock Exchange, agreements.
�� Registration Statement, summary prospectus announcement, book building
�� Process in Bapepam
�� Evaluation of all documents
�� written commentaries on Registration Statement
�� Registration Statement effective statement
�� Process after the effective statement
�� Providing Prospectus for public
�� Offering by Underwrites and Traders
�� Securities submittance
�� Listing or unlisting in Stock Exchange
d. Public Offering by Share Holders (divestment)
�� Process in the company
�� Go Public plan, Share Holders General Meeting,
�� Legal audit, financial report audit, asset appraisal, etc.
�� Documentation, preleminary contract with Stock Exchange, agreements.
�� Registration Statement, summary prospectus announcement, book building
�� Process in Bapepam
�� Evaluation of all documents
�� written commentaries on Registration Statement
�� Registration Statement effective statement
�� Process after the effective statement
�� Providing Prospectus for public
�� Offering by Underwrites and Traders
�� Securities submittance
�� Listing or unlisting in Stock Exchange

Every market has tradable objects; in this case, the Capital Market has its own uniqueness. Objects traded in the Capital Market are called Securities. They are Stocks, Bonds, Derivative Products, Investment Funds, Asset Backed Securities and Government Debt Certificate (with a time length of more than 12 months).
a. Stocks
Definition and Type
• Common Stocks
Common stock is the most known among other securities traded in the capital market. Common stock is the securities most commonly used by issuers to use to acquire funds from the public. Hence it is clear that common stock is most attractive both by investors and issuers. What is the definition of stocks? A stock is basically a sign of ownership by a person or an organization. A stock is in the form of a paper, which states that the owner of the paper has ownership to the company issuing the stock. Hence it’s similar to depositing money in a bank. Each time person deposits money in a bank they receive a receipt that states the person has deposited an amount of money. When a person buys a stock, that person will receive a receipt that states the person has ownership to the company issuing the stock.
• Preferred Stocks
Preferred stock is a stock that has a combined characteristic of both bonds and common stocks because it is a stock that can generate fixed income (such as bond interest) in the form of fixed dividend. Preference stock is similar to common stock because: they both represent equity ownership, which is issued without a written deadline on paper and they both distributes dividends. There are three similarities between preference stock and bonds: the right to claim income and assets, fixed dividend as long as the life of the stock, the right to convert to common stock. This is the reason that preferred stock is traded based on the return offered to the investor. Hence preference stock can basically be viewed as a securities with a fixed income and compete with bonds in the market. However, bonds’ rights lie above preference stock.

Benefits
Basically, there are two benefits for investors who buy and sell stock:
• Dividend
Dividend is the distribution of income of a company that issues stocks. The dividend is distributed after decided by the Shareholders General Meeting. The investor must hold on to the stock for a certain amount of time before he is recognized as the shareholder to receive dividends. Dividend is one attractive element for a shareholder with a long-term orientation, such as an institutional investor or retirement funds, etc. Dividends that are distributed by the company can be in the form of cash dividend or stock dividend. Cash dividend is the distribution of dividends in the form of cash, specifically an amount of Rupiahs for each share. Stock dividend is the distribution of shares to shareholders and therefore increasing the amount of shares owned by that person/organization.
• Capital Gain.
A capital gain is the difference between the selling and the purchasing price. Capital gain exists when there is stock trading activity in the secondary market. For example, an investor buys ABC stock with a piece of Rp 3000 per share and sells it at a price of Rp 3500. That investor earned a capital gain of Rp 500 for each share sold. Short term oriented investors usually hopes to achieve return through capital gain. An example would be a person who buys stock in the morning and sells it in the afternoon if the stock price increases. Stocks are characterized as high risk - high return. This basically means that stocks are securities that offer the opportunity for high returns but at the same time also has a high risk potential. Stock allows investors to receive high return or capital gain at a short amount of time.
�� Risks
What are the risks investors may face?
• No Dividend Received
An issuer will distribute dividends if the company’s operation results in profit. The company may not distribute any dividend if the issuer’s company operation results in a loss. Hence the potential of an investor to receive dividend depends on the company’s performance.
• Capital Loss
In a stock trading activity, not all investors will achieve capital gain or return on the stock sold. There are time when investors has to sell their stock with a price lower than they were bought, therefore the investor experiences capital loss. For example, an investor holding an Indosat (ISAT) stock with a buying price of Rp 9000 and afterwards later sells at a price of Rp 8000 per stock. That investor therefore experiences a capital loss of Rp 1000 for each stock sold. In stock trading, an investor sometimes sells at a low price to diverge an increasing potential loss because of a continuous decrease in stock. This action is called cut loss. In addition to the above risk, a shareholder still faces other risks:
• The company issuing the stock is declared bankrupt or liquidated
A company that goes bankrupt will definitely have a direct affect to its stocks. In reference to the listing regulations of the stock exchange, a bankrupt or liquidated company will automatically have their stocks delisted from the stock exchange. In a condition where the company is liquidated, the shareholder has a position lower than a creditor or a bondholder. This means that after all the company’s assets are sold, cash is paid to the creditors and the bond holder, and when there is still a remainder, then cash will be distributed to shareholders.
• Shares are delisted from Exchange
Another risk faced by the investor is that the stock is delisted from the Stock Exchange, otherwise known as the term "delisted". A stock is usually delisted from the Exchange because of poor performance. An example would be: the stock is not traded in a certain period of time, the company experiences loss for certain years, the company does not distribute dividend for a couple of years, and other conditions that do not conform to the listing regulation of the exchange. A stock delisted from the exchange is no more traded in the stock exchange; however the stock can still be traded out of the exchange with a consequence of an unclear price range, even a price much lower than before.
b. Bonds
�� Definition and Type
A bond is a securities or a certificate containing a contract between the lender (in this case the investor) and the borrower (in this case the issuer). Hence a bond is a piece of paper stating that the owner of the paper has bought an obligation from the company issuing the bond. The issuer pays interest on its bonds periodically and finally passes the threshold of the obligation’s value on the maturity value and pays back the total bond’s value plus interest to the bondholder. This instrument generally pays a fixedamount of interest periodically. If the interest in the economy falls, the bond’s value increases and if the interest in the economy rises, the bond’s value decreases.
• Straight bond
• Serial bond
Acquittance stages
− No. 1-100 (A series) ; paid at the end of the 5th year
− No. 101 - 200 (B series) ; paid at the end of the 6th year, and so on.
• Callable bond
− Issuers have the right to pay in full before the bond is matured, usually in a certain premium value.
• Convertible bond
In a glance, a convertible bond is no different than a usual bond. For example: they both offer a fixed coupon value, have a maturity date and a face value. The difference lies on convertible bond’s uniqueness that is it can be exchanged to a common stock. The requirement of conversion is always stated on a convertible bond. For example, each convertible bond can be exchanged to 3 shares of common stock after January 1st 2005. This requirement of course differs for different convertible bonds. Bondholders have the right to convert to stock in a future time.
• Sinking fund bond
Issuers must store some of their earnings to disburse their bonds. Earnings are stored at a Trustee.
• Secured bond
Firms must store some of their pledge, for example, land, building as warranty. Bond holders have the right to take over and sell the warranty if the firm can not pay the credit + interest.
Secured bond include:
Ø Mortgage bond: guaranteed by real estate
Ø Collateral trust bond: guaranteed by securities (stocks, for example) and stored at a third party (trust company).
Ø Equipment trust certificate: in USA, this is usually released by the Railway Company (paid annually).
• Unsecured bond (Debenture)
Issuers that have good "credit rating" will no need guarantee. In Indonesia, if the guarantee is insufficient, there will be provided a Guarantor, usually a bank besides a trustee.
�� Benefits and Risks
What is the benefit of buying bonds?
Bonds are recognized as fixed income securities, in the form of interest o coupon that is paid in a given fixed amount (for example 16% per year) every given period (for example: every 3 months, 6 months or once a year). Bonds also offer capital gain that is the difference between the selling price and buying price.
What is the risk of buying bonds?
The problem of determining a bond’s return is the unpredictability of interest rates. The bond’s price depends extremely on interest rate. If bank interest rate increases, the bondholder will experience loss since bond price will decrease. In addition to unpredictable interest rates, bondholders face callability risk, which is the completion of payment before maturity date. That is why it is fortunate for a bondholder that receives a fix amount at a time when interest rates are falling. Unfortunately this condition would not last for long. Many bonds issued by the issuer are called upon before maturity date.


c. Derivative Products (rights, warrant, option, etc.)
�� Definition, Benefits and Risks
The nature of Securities derivatives is what is derived from Securities ers to buy ights issue is one effort of issuers to add the number of stock uy stock, if an investor exercises released by an issuer that gives the right to a Securities to other party a number of d. Mutual Fund Unit of Investment d is used to gather funding from the public to be invested in is a /or �� orms of Mutual Fund ual Fund are Issuers that collects and sell stocks and • tual Fund nt type Mutual Funds are contracts the e pe is always an open-ended fund. Base e divided into two categories: is a Mutual Fund that can not buy stocks back after
whether it is debt or equity securities such as option and warrant. Rights issue is the right appointed to a stock that enables its hold
new securities including stock, Securities convertible to stock and warrant, before being offered to other party. The right must be able to be transferred. To exercise r
distributed in public to gain corporate capital. By issuing new stocks, investors must expend more to buy the right; this is an income for the company and adds its capital. Because of the nature of rights, investors are not obliged to buy. This is different from stock bonus and stock dividend which routinely received by stockholders. Buying a right means buying the right to b
his/her right; he/she had bought the stock. At this point the benefit of buying a right is the same as benefits of buying a stock, which are dividend and capital gain. Consequently, there are risks facing investors, whether they had exercised their right or not, which is the decrease of stock price and dividend per share. Warrant is Securities
holder to order stocks from the issuer at a certain price in a 6 months time or more from the date of issuance of the Warrant. Option is the right of an investor to buy or sell
Securities at a certain price and certain time.
�� Definition
Mutual Fun
Securities Portfolio by Investment Managers. In other words, Mutual Fundmedia to collectively invest based on policies of Investment Managers. Investment Fund activity can be put in many Securities, in financial and
capital market. It can also be placed on Securities representing industrial sectors such as, manufacturing, finance, infrastructure, etc. In some countries, Mutual Funds are placed in Securities instrument in anothercountry.
F
• Corporate type Mut
Corporate type Mutual Funds
invest its earnings on several types of Securities traded in Capital and Financial Markets. Contractual type Mu
Contractual collective investme
between Investment Managers and Custodian Banks that represents legality of the unit’s holders or investors. The contract represents the authority of Investment Manager to manage the Collective Investment Portfolio, and the authority of Custodian Bank to act as Custodian for thfund. This ty
d on the characteristics, Mutual Funds ar
• Closed-End Fund
Closed-End Fund
being sold to investors. In other words, stockholders can not buy their shares back to their Investment Managers. If stockholders were to sell back their shares, it must be done through Stock Exchange where the Mutual Fund is listed.
• Open-End Fund
Mutual Funds that can offer and buy stocks back from investors until the same amount of capital invested is achieved.
Share/unit holders can sell back their stock/unit at anytime. Investment Managers are obligated to buy according to NAV per share at that time.
�� Types of Mutual Fund
According to Bapepam Rules No. IV.C.3 Guide on Open-End Mutual Fund Daily Net Asset Value Announcement, Mutual Funds are categorized based on its portfolio differentiation:
• Financial Market Mutual Fund is a Mutual Fund that only invests in debt Securities with less that 1 year of maturity.
• Fixed Income Mutual Fund is a Mutual Fund that invests in at least 80% of assets in debt Securities.
• Stock Mutual Fund is a Mutual Fund that invests in at least 80% of assets in equity-based Securities.
• Combined Mutual Fund is a Mutual Fund that invests in both debt- and equity-based Securities with no smallest amount of percentage as point b or c.
�� Benefits and Risks
Investors can gain benefit in investing in Mutual Fund, such as:
• First, an investor can diversify their investment in securities even if they do not have much fund, hence risk can be reduced. As an example, an investor with limited funds can invest in a portfolio of bonds which is almost impossible to be done without a large amount of funds. Through mutual funds, the fund collected will be significantly large enough that a diversification can be done, both through the money market and capital market, such as in instruments such as stocks, bonds or deposits.
• Second, mutual funds simplify investors to invest in the capital market. Identifying well performing shares that is worth buying is not an easy job. It requires specific knowledge and skills, and not all investors have these capabilities.
• Third is time efficiency. Through mutual fund investment where the funds are managed by professional investment managers, the investors does not need to monitor their investment portfolio’s performance because this is all managed by the investment manager.
As other forms of investment, besides providing profitable opportunity it also contains risks, such as:
• Risk of Decreasing Value of Funds. This is a risk that is determined by the fall of securities prices (shares, bonds, and other securities) that are elements of the mutual funds’ portfolio. Liquidity Risk. This is the risk faced by
• investment managers when a majority of fund holders exercises redemption on the units they hold. Default Risk. This is the worst risk of all which emerges when th
• e insurance company insuring the mutual fund does not pay the full amount expected when default takes place. For example: default from related institutions such as brokers, custodian banks, payment agents, and other conditions that influences the fall of mutual fund’s net asset value.
e. Indonesian Depository Receipt Indonesian Depository Receipt
is a Security providing the right for a Primary Security deposited collectively at a Custodian Bank that has Bapepam’s approval. Public Offering of Indonesian Depository Receipt which main Securities are Indonesian Legal entity Securities must fulfill the requirements of the existing Public Offering.
f. Asset Backed Securities
�� Definition
Securities is a legal document, a debt acknowledgment letter, commercial letter, stock, bond, bank note, collective investment contract unit, other securities and its derivatives.
Asset is a substance owned by an individual which creates value without having to work to earn it (for example: deposits, land, gold, stock, mutual fund, etc).
From those definitions, Asset-Backed Securities is an investment unit from a collective investment contract which portfolio contains financial assets such as billing from commercial letters, lease, termed trade agreement, installment credit agreement, credit card charges, credit grant including housing or apartment, government-guaranteed debt securities, credit enhancement/cash flow, and other related financial asset.
Objectives of Asset-Backed Securities
Objective of Asset-Backed Securities is to transform illiquid assets to securities and tradable in capital market.
�� Benefits and Risks
The benefits of Asset-Backed Securities are:
Originator:
1. Assets are set off balance sheet and replaced with cash. It reduces assets and liabilities in a company that owned the asset credit enhancement. It will result in a larger leverage;
2. Originator do not need to wait until he/she receives payables to run the business and obtain new payables;
3. Asset-Backed Securities issued is rated higher by international rating agency to reduce costs to obtain fund;
4. Winning the competition. Asset securitization reduces assets without selling business ideas and can gain more income from it.
Investors:
1. Asset-Backed Securities gives high rate of return;
2. High credit quality. In general, Asset-Backed Securities has AAA (triple A) from international credit rating agency which makes it the most secured investment. It differs from existing bonds, Asset-Backed Securities has collaterals which ensures payment of interest and principles;
3. Risk diversification. Assets secured includes many business sectors;
4. Predictable cash flow. Asset-Backed Securities has stable and predictable cash flow which assures investors that principles and interest will be paid on time;
5. Least risk in rating decline. Asset-Backed Securities is guaranteed by secured assets so there is less risk in rating drop or decline like those in corporate bonds.
Economy:
1. Capital Market enhancement with high quality Securities in the market;
2. Source of income for banks, this budgeting company can enhance its budgeting activity;
3. Potential source of income for infrastructure projects such as highways.
�� Risks
Credit Risks:
Credit risks may occur if Asset-Backed Securities issuer (distinctive company) cannot pay interest and principles to investors.
Interest Risks:
Price of Asset-Backed Securities changes according to changes of interest rates.
Currency Risks:
It occurs when asset advanced on Securities based on devaluated currency.
Liquidity Risks:
There are possibilities that there is no funding to pay principles and interest on maturity date.
g. Government Debt Securities
�� Definition
Government Debt Securities is a legal document, a debt acknowledgment letter in the currency of Rupiah or other foreign currency guaranteed by payments of interest and principle by the government of the Republic of Indonesia, according to its validation.
�� Benefits and Risks
For the government
1. Pays out for Government Income and Expenditure;
2. Covers short term cash caused by imbalanced income and expenditure cash flow of Government Cash Account in an annual budget;
3. Manages government debt portfolio.
For investors
Government Debt Securities is a Fixed Income Securities or legal document that provides fixed income in interest or coupon payable in a fixed amount at predetermined time, for example, once every 3, 6, 12 months. It also offers capital gain, difference between selling and buying price.
What are its risks?
Investing in Government Debt Securities has very low risks considering its guaranteed interest and principle payment by the Government of the Republic of Indonesia.

Law No. 8, 1995 regarding Capital Market stated clearly that authority and stakeholders of the Capital Market are arranged in an integrated structure.
a. Capital Market Supervisory Agency (BAPEPAM);
Duties
According to the Law of the Republic of Indonesia No. 8 concerning the Capital Market, guidance, regulation, and day-to-day supervision of capital market is provided by Bapepam in order to implement an orderly, fair, and efficient capital market activities and protect the interests of investor and public.
Function
- According to Article 3 Minister of Finance Decree No: 503/KMK.01/1997 concerning Organization of Capital Market Supervisory Agency, the functions of Bapepam are:
- drafting Capital Market rules and regulations;
- guiding and supervising any Person granted business license, approval, registration from Bapepam and other Person related to Capital Market;
- establishing disclosure principles for Issuers and Public Companies;
- settlement of the objection by Person imposed sanction by Stock Exchange, Clearing Guarantee Corporation, and Central Securities Depositary;
- establishing Capital Market accounting standards;
- Securing the technical implementation of Bapepam's main function according to the policy required by Minister of Finance and based on the Law.
Authority
Bapepam has the authority to provide license, approval and registration for all players of Capital Market, process the registration of Initial Public Offering, publish rules of conduct of the regulations in Capital Market, and perform law enforcement from violations of the regulations.
Responsibility
Bepapam is responsible to the Minister of Finance.
Complete Profile
b. Self Regulatory Organization
�� Securities Exchange
�� Definition
Securities Exchange is an entity that provides and organizes the system and facilities that are used to bring together the offering of securities buying and selling.
�� Objective
Stock Exchange was established to operate Securities trading in an orderly, fair and efficient manner.
�� Ownership
Those who are entitled to be stockholders are Securities Companies with business permits to perform as Securities Broker Dealer.
�� Obligations and Responsibilities
- Securities Exchange is obliged to provide supporting facilities and supervise Stock Exchange Member activities.
- Annual Budget Planning and Securities Exchange profit use must be planned according to regulations and reported to Bapepam.
- Securities Exchange are obligated to set rules regarding membership, listing, Securities balance, clearing and depository securities transaction and other related activities.
�� Stock Exchange Profile
- Jakarta Stock Exchange
The Jakarta Stock Exchange (JSX) came into being a privately owned company and operated stock exchange on July 13, 1992, the roots of its establishment can be traced back to the early part of this century. In 1912, under the auspices of the Dutch colonial government, Indonesia’s first stock exchange was set up in Batavia, the colony’s administrative center which then in the future become the city of "Jakarta".
Closed during the First World War and then reopened in 1925, the Batavia exchange operated alongside parallel bourses in Semarang and Surabaya until 1942, when the archipelago’s occupation by Japanese Imperial Forces curtailed further trading. In 1952, seven years after Indonesia declared its independence, the exchange was reopened in Jakarta, trading stocks and bonds issued before the war by Dutch enterprises. A nationalization program launched in 1956, however, brought trading to a halt yet again.
Not until 1977 was the exchange reopened, this time under the management of the newly created Capital Market Executive Agency (Badan Pelaksana Pasar Modal or BAPEPAM), an institution reporting to the Ministry of Finance. While trading activity and market capitalization grew over the years alongside the development of Indonesia’s financial markets and private sector – highlighted by a major bull run in 1990 – it was not until the exchange’s privatization in 1991 under the ownership of Jakarta Stock Exchange, Inc. that the JSX emerged as one of Asia most dynamic securities markets. As the result of the privatization of JSX, BAPEPAM’s function has changed to become the Capital Market Supervisory Agency (Badan Pengawas Pasar Modal).
The year of 1995 marked a new beginning for JSX. As of May 22, JSX has launched the Jakarta Automated Trading System (JATS) to replace the manual trading system. The newly installed automated trading system will facilitate greater frequency of shares trading and ensure fairer and more transparent market practice as opposed to the manual trading system.
In July 2000, JSX launched Scripless Trading aiming to enhance market liquidity and to eliminate the occurrence of lost and forgery of stocks, and to speed up process of transaction settlement.
In 2002, JSX also initiates the implementation of Remote Trading in order to increase market access, market efficiency, speed and frequency of trading.
Complete Profile
- Surabaya Stock Exchange
The Surabaya Stock Exchange (SSX) was officially opened on June 16, 1989 based on the Minister of Finance Decree No. 654/KMK.010/1989 with only thirty-six shareholders. The nature of the SSX establishment at that time was to support the Indonesian government program in the capital market field and the development of the economy in the East Region of Indonesia.
On July 22, 1995 the SSX was successfully merged with the Indonesian Parallel Stock Exchange (IPSX), leaving only two primary exchanges operating in Indonesia.
To provide and maintain facilities for the members regarding the after-trade service, the SSX has also become the shareholder of the Indonesian Central Securities and Depository (ISCD) and the Indonesian Clearing Guarantee Corporation. The SSX has also participated in the Credit Rating Agency as a shareholder.
In 1992, as part of the SSX breakthrough concept of linking the trading floor to many of its members in Jakarta, an Electronic Long Distance Trading System (ELDISTRA) was introduced. Based on the floorless model, a new system called S-MART (Surabaya Market information and Automated Remote Trading) was launched on September 19, 1996 to replace Eldistra for better overall performance.
On August 9, 2002, the SSX initiated the online trading, allowing investor to trade online via internet. In the online trading, every activity of securities trading is integrated, starting from order submission, order validation, order matching and online transaction settlement.
With approximately 95% of bonds issued in Indonesia single-listed on the SSX, in June 1997 the SSX provided information and quotation system for bonds, the OTC-FIS (Over-the-Counter Fixed Income Services). This system gives ease to players to quote bids and asks, negotiate and conduct transaction. Thus, it is expected to create a more structured and transparent market for bonds, in particular and other fixed income instruments, and eventually enhancing the overall market efficiency.
To serve as a one-stop financial service, on August 13, 2001, the SSX introduced a new market to provide investors with a wider range of investment choices, the Derivatives Market. The Derivatives market offers stock index futures, the LQ45 Futures market. LQ45 Futures is a stock index futures using the JSX's index of 45 most liquid stocks traded on the exchange. Trading of LQ45 Futures is carried out
through FATS, Futures Automated Trading System, a remote trading system with auction based.
Complete Profile
�� Stock Exchange Demutualization
�� Remote Trading System
�� On-line trading system
�� Alternate Trading System
�� Clearing Guarantee Corporation
�� Definition
A Clearing Guarantee Corporation is an entity that clears and guarantees the settlement of Securities Exchange Transactions.
�� Objective
Clearing Guarantee Corporation was established to provide services of clearing and guarantees the settlement of Securities Exchange Transactions in an orderly, fair and efficient manner.
�� Ownership
Those who are entitled to be stockholders of Clearing Guarantee Corporation are Stock Exchange, Securities Companies, Securities Administration Bureau, Custodian Bank and other Parties approved by Bapepam. The majority ownership must be held by the Stock Exchange.
�� Obligation and Responsibilities
Clearing Guarantee Corporation is obliged to determine regulations concerning its activities in clearing and guaranteeing the settlement of Securities Exchange Transactions including rules on service costs.
�� Profile
- PT KPEI (PT. Kliring dan Penjaminan Efek Indonesia)
Indonesian Clearing and Guarantee Corporation (KPEI) was founded on the basis of the Capital Market Law of 1995 to provide clearing and guarantee services in the settlement of stock exchange transactions in an orderly, fair and efficient manner.
KPEI was formed as a limited liability company upon the deed of establishment No. 8 dated August 5, 1996 in Jakarta by the Jakarta Stock Exchange and the Surabaya Stock Exchange, with respectively 90% and 10% of the founding share amounting to Rp 15 billion.
KPEI received its confirmation as a legal entity from the Minister of Justice of the Republic of Indonesia on September 24, 1996. Two years later, on June 1, 1998, it received the license to operate as a Clearing and Guarantee Institution based on the Decision Letter No. Kep. 26/PM/1998 of the Capital Market Supervisory Board (Bapepam). As an SRO (Self-Regulatory Organization) within the capital market, KPEI also carries the mission of the Government of Indonesia to enhance the role and participation of the capital market in national development. Although operating as a corporation, KPEI is in fact a non-profit organization that allocates all of its revenues to finance its operations, while its net profit, if any, is fully retained towards the continuity of its mission.
Complete Profile
�� Central Securities Depository

�� Definition
Central Securities Depository is an entity that acts as a central Custodian for Custodian Banks, Securities Companies and others.
�� Objective
Central Securities Depository was established to provide services as a central Custodian for Custodian Banks, Securities Companies and others in an orderly, fair and efficient manner.
�� Ownership
Those who are entitled to be stockholders of Central Securities Depository are Stock Exchange, Securities Companies, Securities Administration Bureau, Custodian Bank and other Parties approved by Bapepam.
�� Obligation and Responsibilities
Central Securities Depository is obliged to determine rules regarding central Custodian and Securities transaction settlement services including its service costs.
�� Profile
- PT KSEI (PT. Kustodian Sentral Efek Indonesia)
PT Kustodian Sentral Efek Indonesia (KSEI) is part of the Indonesian Capital Market community that functions as Central Securities Depository Institution (CSD) in accordance with Law No.8 of the year 1995 on the Capital Market (UUPM – Undang-undang Pasar Modal). The function of a CSD is to provide orderly, appropriate, and efficient central custodian and transaction settlement services. KSEI was established in Jakarta on December 23rd 1997 and obtained its corporate license as a Central Securities Depository Institution on November 12th 1998. In the institutional structure of Indonesia’s Capital Market, KSEI stands among other Self Regulatory Organizations, besides the Stock Exchange and the Clearing and Guarantee Institution (KPEI).
Under UUPM provisions, shareholders of KPEI consist of the Stock Exchange, Securities Companies, Custodian Banks, Securities Administration Bureaus and other relevant parties approved by Bapepam.
KSEI commenced operations on January 9th 1998 by conducting securities transaction settlement in Script environment, having taken over the function from PT Kliring Deposit Efek Indonesia, previously existing as the Clearing, Depository, and Settlement Institution. As of July 17th 2000, KSEI together with the Stock Exchange and KPEI implements scripless trading and Central Depository operations in Indonesia’s Capital Market, by utilizing the latest internet-based technology, afterwards popularly known as The Central Depository and Book-Entry Settlement System (C-BEST). In order to ensure the continuity and security of service delivery, KSEI installed the Disaster Recovery Center (DRC) as a recovery system to anticipate distortion/disturbance toward C-BEST. By June 2002, KSEI has accomplished the task of converting all registered shares in the Stock Exchange.
Fulfilling its total commitment to meet international standard work quality demands, KSEI, in the month of April 2001, for the first time achieved the ISO 9002 Certificate, standardization of which could be maintained in the May of 2002. Converting the 1994 version ISO 9002 into the 2000 version ISO 9001 Certificate, obtained in July 2003 further exerts commitment to quality.
For further expansion in the future, KSEI is preparing the implementation of cross-border settlement with foreign Central Depositories, and the implementation of Straight Through Processing (STP) and Post Trade Processing (PTP).
Complete Profile
�� Government Debt Securities Trade Organizer outside the Stock Exchange
�� Definition
The organizers are those who possess working permit from Bapepam to trade Government Debt Securities outside the Stock Exchange.
�� Objective
These organizers are established with an objective to conduct Government Debt Securities outside the Stock Exchange.
�� Obligation and Responsibilities
The organizers are obligated to:
- Provide system and facilities for trading and supervision,
- Create basic rules and ethical codes for its members,
- Set rules regarding membership, trading and trade supervision,
- Monitor Government Debt Securities activities
- Take actions towards indications of misconduct in Capital Market
- Provide reports to Bapepam
- Administrate Government Debt Securities trade
�� Profile
- Government Debt Securities Traders Associations (Himdasun)
A Self Regulatory Organization (SRO) with working license from Bapepam to perform as organizers of Government Debt Securities outside the Capital Market based on the decree of the Chairman of Bapepam No. Kep-17/PM/2003 dated March 25, 2003.
Complete Profile
c. Securities Companies

Definition
A Securities Company is a Person that engages in the business of Underwriter, Broker-Dealer and/or Investment Manager.
License
Those who are entitled to perform business activities as a Securities Company are Limited Corporation that owned a license from Bapepam.
Obligation and Responsibilities
Securities Companies are responsible toward all activities related to Securities made by directors, employees and other parties working for the company.
Each Securities Company are obliged to have a monitoring system of all activities performed by its Representatives and employees to guarantee the implementation of all regulations in Capital Market.
Functions and Activities
- Underwriter
An Underwriter is an entity that makes an agreement with an Issuer to conduct a Public Offering, with or without the obligation to purchase Securities that are not sold.
- Broker-Dealers



A Broker-dealer is a person who engages in the business of buying and selling securities for the account of others or for his own account.
- Investment Managers
An Investment Manager is a Person other than an insurance Company, pension fund or bank with respect to its own lawful activities that, as a business, manages Securities Portfolios or collective investment Portfolios for clients who are account holders.

Securities Companies Representatives (WPEE, WPPE, WMI and WAPERD)
�� License
Those who are entitled to perform activities as Underwriter Representative, Broker-Dealer Representative, Investment Manager Representative and Investment Fund Trade Agent Representative are individuals who owns license from Bapepam.
�� Profile

d. Investment Advisors
�� Definition
Investment Advisors are entities who provides advice to other parties concerning sales or purchase of Securities and charges the service they provide. Investment Advisors can be professional individuals or companies.
�� License
Those who are entitled to perform as Investment Advisors are those who have the license from Bapepam.
�� Credit Rating Companies
Credit Rating Companies are entities that publish ratings for debt securities like bonds and commercial paper.
�� profile
e. Capital Market Supporting Institutions
�� Custodian
�� Definition
Custodian is a Bank or other financial institution that provides services of safekeeping securities and others related services to securities, such as collecting dividend and interest, the settlement of securities transactions, on behalf of its clients.
�� Approval
Those who can perform the activity as a Custodian are Central Securities Depository, Securities Companies and Public Banks with the approval from Bapepam.
�� Obligation and Responsibilities
- Custodians that perform safekeepings are responsible to keep securities of account holders and fulfill other obligations in accordance to the agreement between them.
- Securities kept must be recorded in a safe manner.
- Custodians are only entitled to issue Securities or funds recorded on the Securities account on written order from the account holder or those who has the authority to act on the holder’s behalf.
- Custodians are obliged to forfeit on every loss caused by their misconduct to the account holder.
�� Profile
�� Securities Administration Bureau
�� Definition

Securities Administration Bureau is an agency responsible for registering all securities ownership and distributes entitlement of such securities.
�� Approval
Those who can perform the activity as Securities Administration Bureau are Limited Corporation that owns a license from Bapepam.
�� Obligation and Responsibilities
Securities Administration Bureau is obliged to administrate, put in safekeeping and maintain record, book, and data and written information in relation to:
- Issuers, which the bureau administers Securities;
- Securities administration services
- Management of the Securities Administration Bureau.
Securities Administration Bureau is obliged to ensure the safekeeping of every Securities and its bookkeeping, and to make a copy of all documents and keep it in a separate and safe place.
�� profile
�� Trustee
�� Definition
Trustee is an organization, usually combined with commercial bank, which act as trustee, or agent who represents all interest of bond or securities credit’s holder.
�� Approval
Trustees can be conducted by:
a. Public Bank; and
b. Others stated by Government Regulation.
To conduct the activity, Public Banks or other participants must be registered by Bapepam.
�� Obligation and Responsibilities
- Trustee shall administer, store and maintain records regarding the Issuer
- Trustee represents Security Holder in debt inside and outside Court of Justice
- Trustee obliged to forfeit loss
- Trustees are forbidden to affiliate with Issuers except those in effect of ownership or Government capital depository
- Trustees are forbidden to have credit relations with Issuers
- Trustees are forbidden to be the bearer of the same Security
�� Profile
f. Supporting Profession
Every Capital Market Supporting Profession must obey ethical codes and profession standards appointed by their associations, law and its rules of conduct.
In its activity within the Capital Market, Capital Market Supporting Profession must provide independent advice or appraisal.
�� Public Accountant
�� Definition
Public Accountant is accountants with license from the Minister of Finance and registered at Bapepam.
�� Registration
Public Accountants working in the field of Capital Market must be registered at Bapepam.
�� Obligations and Responsibilities

- must own expertise in Capital Market and fulfill the requirements of expertise through training programs held by accountant organizations or other entities provided by the association;
- able to audit according to Public Accountant Professional Standards (SPAP) adn Profession Ethical Codes, and must be independent.
Public Accountants registered to Bapepam who audits financial reports of Issuers and Public Companies, Stock Exchange, Clearing and Guarantee Institution, Central Securities Depository, and other entities in the Capital Market are obligated to provide confidential statement to Bapepam at least within 3 (three) working days in view of the fact that:
- there are violations towards rules within law and or its rules of conduct; or
- Matters endangering the situation of the audited financial institution or the importance of its clients.
�� Profile
�� Legal Consultant
�� Definition
Legal Consultants are experts in law who provides lawful opinions to others and registered at Bapepam
�� Registration
Legal Consultant working in the field of Capital Market must be registered at Bapepam.
�� Obligation and Responsibilities
- obliged to be experts in Capital Market and fulfill the requirements of expertise through training programs recognized by Bapepam;
- able to perform according to their professional standards and Profession Ethical Code, and must be independent
�� Profile
�� Appraisal
�� Definition
Appraisals are those who provide valuation on corporate assets and registered at Bapepam
�� Registration
Appraisal working in the field of Capital Market must be registered at Bapepam.
�� Obligation and Responsibilities
Able to perform according to Indonesian Appraisal Standards and Profession Ethical Code, and must be independent;
�� Profile
�� Public Notary
�� Definition
Public Notary is a public officer with authorization to produce authentic documents and registered at Bapepam.
�� Registration
Public Notary working in the field of Capital Market must be registered at Bapepam.
�� Obligations and Responsibilities
�� makes documentations of Stockholders General Assembly
�� creates Document of Article of Association and its amendment


�� prepare agreements
�� perform duties according to Profession Ethical Code and independent
�� Profile
�� Other profession appointed by Government Regulations
g. Issuer, Public Company and Investment Fund
�� Issuer
�� Definition
An Issuer is an entity performing Initial Public Offering, an offering of Securities to the public based on procedures and laws of conduct.
�� Registration Statement
Registration Statement is effective on the 45th day from the acceptance of the completed Registration Statement or earlier if stated by Bapepam.
�� Legal Form
Companies that are entitled to be an Issuer are Limited Corporations.
�� Management, Report and Information Disclosure
Issuers which have filed Registration Statement or as public firm are obligated to:
- provide periodical reports to Bapepam and announce it to the public;
- provide periodical reports to Bapepam and announce publicly events that may have affect on price of Securities at least two days after the event occurred
- Director or board of commissioner of the Issuer or Public Companies must report its their ownership and every detail of change of ownership of stock to Bapepam.
Annual Report of firms that made Public Stock Offering and Public Companies must be submitted to Bapepam in four copies and available for stockholders at least 14 days before the Stockholders Annual General Assembly.
Annual Report of firms that made Public Securities Offering in the form of debt must be submitted to Bapepam in four copies at least five months after the accounting year closes effectively. This obligation is effective until the securities are paid or due.
�� Profile
�� Public Company
�� Definition
Public Companies are corporations with at least 300 shareholders in minimum paid in capital of Rp. 3.000.000.000,00 or regulated by the government.
�� Legal Entity
Companies that are entitled to be Public Companies are limited corporations.
�� Registration Statement
Registration Statement is effective on the 45th day from the acceptance of the completed Registration Statement or earlier if stated by Bapepam.
�� Management, Report and Information Disclosure
Public Companies are obliged to:
- provide periodical reports to Bapepam and announce it to the public;
- provide periodical reports to Bapepam and announce publicly events that may have affect on price of Securities at least two days after the event occurred
- Director or board of commissioner of the Issuer or Public Companies must report its their ownership and every detail of change of ownership to Bapepam.
Annual Report of firms that made Public Stock Offering and Public Companies must be submitted to Bapepam in four copies and available for stockholders at least 14 days before the Stockholders Annual General Assembly.
Every Public Company with effective registration statement must submit periodical financial report to Bapepam.
Profile
�� Investment Fund
�� Definition
Investment Fund is a vehicle used to gather fund form the community to be invested in a Securities Portfolio by Investment Managers.
�� Registration Statement
Companies that are entitled to be a Investment Fund are Limited Corporations with the license from Bapepam.
�� Legal Entity
- Corporation; or
- Collective Investment Contract
Investment Fund in a form of Limited Corporation may be open-end or closed-end.
Investment Manager based on contract can only manage investment Fund in a form of Collective Investment Contract.
�� Management, Report and Information Disclosure
Open-end Investment Fund Investment Manager in a form of a Limited Corporation or Collective Investment Contract must assess fair market price of Securities in a portfolio every exchange day based on regulations set by Bapepam.
Limited corporation open-end Investment Fund stock price and Investment Unit value of Collective Investment Contract are arranged based on net asset value.
Custodian bank of Investment Fund must submit reports stating financial balance of every Investment Fund to Bapepam.
Custodian banks and Investment Managers must assure the availability and accuracy of data submitted in the reports.
�� Profile
h. Investors
�� Domestic (institutions and individuals)
�� Foreign (institutions and individuals)

Orderly, fair and efficient capital market activity, and investors and community protection can only be achieved through firm fundamentals and legal assurance.
a. Rules of Regulation in Capital Market:
i. Law No. 8, 1995 regarding Capital Market
ii. Government Regulations:
�� Government Regulation No. 12, 2004 regarding Amendment of Government Regulation No. 45, 1995 concerning Capital Market Activities
�� Government Regulation No. 46, 1995 regarding Formal Investigation Procedure in the Capital Market
iii. Presidential Decree
iv. Decree of the Minister of Finance
�� No. 179/KMK.010/2003 regarding Stock Ownership and Securities Companies Capital
�� No. 455/KMK.01/1997 regarding Stock Purchasing by Foreign Investor through Capital Market
�� No. 646/KMK.01/1995 regarding Ownership of Stock and Investment Fund by Foreign Investor
�� No. 645/KMK.01/1995 regarding Abrogation of the Decree of Minister of Finance No. 1548/KMK.013/1990 regarding Capital Market as modified by Decree of Minister of Finance No. 284/KMK.010/1995
v. Bapepam Rules
vi. Stock Exchange Regulations
vii. Regulations of Clearing Guarantee Corporation and Central Securities Depository
b. Other related Rules of Regulations in Capital Market:
i. Law No. 1, 1995 regarding Limited Corporations
ii. Law No. 15, 2002 regarding Money Laundering, modified Law No. 25, 2003
iii. Law No. 24, 2002 regarding Government Debt Securities

Indonesia is one of the vast developing, strategically located and most flourished country in Asia, a promising investment.
a. History of Indonesian Capital Market
i. Establishment of the Indonesian Capital Market by Dutch Indies Government
In the history of Indonesian Capital Market, equity transactions had started in the 19th century. According to Effectengids, a book published by Verreniging voor den Effectenhandel in 1939, transactions started since 1880. In December 14, 1912, Amserdamse Effectenbueurs established stock exchange in Batavia. It was reported that the Batavia Stock Exchange was the 4th oldest in Asia following Bombay, Hongkong and Tokyo.
At the beginning of the 19th century, Dutch Indies government began to grow massive-sized plantation in Indonesia. Funding came from depositors who consist of Dutch inhibitors and other European with have much higher income than the native Indonesian. From that time on, the colonial government established the capital market. After prudent preparation, the first Indonesian capital market was set up in Batavia (Jakarta) on December 14, 1912 with the name Vereniging voor de Effectenhandel (Stock Exchange) and started its operation. At the initial transaction, there were 13 members: Fa. Dunlop & Kolf; Fa. Gijselman & Steup; Fa. Monod & Co.; Fa. Adree Witansi & Co.; Fa. A.W. Deeleman; Fa. H. Jul Joostensz; Fa. Jeannette Walen; Fa. Wiekert & V.D. Linden; Fa. Walbrink & Co; Wieckert & V.D. Linden; Fa. Vermeys & Co; Fa. Cruyff dan Fa. Gebroeders. Securities traded in exchanged were stocks and bonds of Dutch companies/plantations operating in Indonesia, bonds published by government (provincial and municipality), stock certificate of American companies published by administration offices in The Netherlands and other Dutch Securities companies.
The development of the capital market was so remarkable that it attracted investors from other cities. To accommodate the demand, two stock exchange were established on January 11, 1925 in Surabaya and August 1, 1925 in Semarang. Members of the stock exhange in Surabaya at that time were: Fa. Dunlop & Koff, Fa. Gijselman & Steup, Fa. V. Van Velsen, Fa. Beaukkerk & Cop, dan N. Koster. And in Semarang were: Fa. Dunlop & Koff, Fa. Gijselman & Steup, Fa. Monad & Co, Fa. Companien & Co, serta Fa. P.H. Soeters & Co. The development of the stock exchanges were impressive as seen on the Securities value reported up to NIF 1.4 billion (if indexed by the price of subsidized rice in 1982, the value was + Rp 7 billion) derived from 250 different Securities.
ii. The closing of Stock Exchange in effect of World War II.
In the beginning of 1939, European political climate was sweltering with the rise of Adolf Hitler’s domination. Overseeing this, the Dutch Indies government took several considerations to focus Securities transactions in Batavia and closed the Surabaya and Semarang stock exchange. However, on May 17, 1940, all activities was seized and Securities must be held in reserve at the banks appointed by the government. The closing of the 3 stock exchange exasperated the liquidity of the Securities, bothered the Securities holders and affected many companies and entities to withdraw and called off their investment in Indonesia. Consequently, the break of.
World War II marked the end of capital market activity during the Dutch colonialization era.
iii. Re-activating-1 era, establishment of government bond and Emergency Law No. 15, 1952 regarding Stock Exchange.
A year after the government of The Netherlands acknowledged the independence of the Republic of Indonesia, precisely in 1950, the government issued bonds of the Republic of Indonesia. This marked the reactivation of Indonesian Capital Market.
Preceded by the establishment of Emergency Law No. 13, September 1, 1951, which soon affirmed as Law No. 15, 1952 regarding Stock Exchange, government of the Republic of Indonesia reopened the Stock Exchange in Jakarta on June 31, 1952 after being suspended for 12 years. Its operation was conducted by Money and Securities Trading Union (PPUE) which consists of 3 state banks and a few traders, and Bank of Indonesia as advisor.
Since then the Stock Exchange grew significantly, although the traded Securities are those offered before the World War II. The trading activity increased since Bank Industri Negara (state-owned industrial bank) issued bonds in 1954, 1955 and 1956. Buyers were mostly Dutch, as individuals and legal entities. All members were allowed to conduct arbitration transaction overseas especially with Amsterdam.
iv. Postponement-2 era, in conclusion of inflation in Indonesia.
The situation remained until 1958 because the trading activities began to break down and drew back. This was caused by political confrontations ran by the Indonesian government towards The Netherlands that created an unbalanced economy between the two countries which made many Dutch nationals left Indonesia.
The development worsened in effect of the dispute over Irian Jaya and the taking-over of all Dutch companies in Indonesia in accordance to Nationalization Law No. 86, 1958.
This disorder was followed by an instruction from the Board of Dutch Company Nationalization (BANAS) in 1960 to prohibit the transaction of all securities owned by Dutch companies in Indonesia including all Dutch-currency-based securities.
The inflation rate at that time was significantly high and created turmoil in the currency and capital market which made the society to loose trust. They also built negative sentiment towards Rupiah which hit its lowest value in 1966.
The decline caused low stock and bond nominal value which made them less interesting to investors. It was certainly the rise and fall of the Indonesian Capital Market during the Old Order regime.

v. Reactivating-2 era, formation of Capital Market Committee through Presidential Decree No. 52,1976.
Further steps were taken by the New Order government to restore society’s trust towards Rupiah. The government prepared the Capital Market and continuously promoted funding through savings and deposits.
In accordance with the decree from the Directors of Bank of Indonesia No. 4/16, July 26, 1968, preparation committee for Financial Market and Capital Market was formed. The result affirmed that the starting point of the Capital Market in Indonesia was designed by the government since 1952 but considering the turmoil and the undermined society, the Stock Exchange of Indonesia since 1958 until 1976 drew itself back.
After concluding their task, the committee was dismissed through a decree of the Minister of Finance No. Kep-25/MK/IV/1/72, January 13, 1972. In 1976, Indonesian Capital Market Supervisory Agency (Bapepam) and PT Danareksa was formed. Bapepam, led by the Governor of the Central Bank, was responsible to assist the Minister of Finance.
With the establishment of Bapepam, integrity to form Financial Market and Capital Market was seen once more. Besides serving as assistant to the Minister of Finance, Bapepam also acted as supervisor and manager to stock exchange.
In August 10, 1977, according to Presidential Decree No. 52, 1976, the Capital Market was reactivated and several companies go public. In the New Order the growth of the Capital Market can be divided into two periods, 1977 to 1987 and 1987 till now.
The growth of the Capital Market between 1977 and 1987 was sluggish although the government provided facilities to corporations to utilize funding from the market such as tax facilities to attract communities to play in the Capital Market.
The sluggishness at that period was caused by several problems which some of them concerned the rigid procedure of stock and bond issuance, and stock fluctuation price limits.
To overcome the problems, the government released deregulations regarding the growth of the capital market including December Policy Package 1987, October Policy Package 1988 and December Policy Package 1988.
vi. Growth Era, Deregulation Packages: December Package 87, October Package 88, December Package 88, Establishment of Surabaya Stock Exchange (SSX) and Jakarta Stock Exchange (JSX), Presidential Decree No. 53, 1990 and Decree of Minister of Finance No. 1548, 1990, Law No. 8, 1995 regarding Capital Market.
December Package 1987
The Package was to simplify stock and bond issuance requirements, cutting costs, which was once collected by Bapepam such as registration cost for securities issuance. It also provided opportunities to foreign investors to purchase securities to a maximum of 49% from the total offering.
The deregulation package removed stock fluctuation price limit from the capital market and introduced parallel exchange as an alternative choice for issuers that have not met the requirements to enter the market.
October Package 88
This package is aimed at banking sector but had certain impact towards the development of capital market. It consists of 3L (Legal, Lending, Limit), and tax charged over deposit interest.
The tax charged had a positive impact over the development of the capital market. It meant that the government provided equal treatment for banking and capital market sectors.
December Package 88
This deregulation package basically provided further drivers for capital market by giving opportunities to private corporations to conduct stock exchange.
The package was able to increase capital market activities. Until 1990 there were 153 companies listed with an investment of Rp 16.29 billion.




Establishment of Surabaya Stock Exchange (SSX) and Jakarta Stock Exchange (JSX)
Surabaya Stock Exchange was officially opened on June 16, 1989 according to Decree of Minister of Finance No. 654/KMK.010/1989 with only 36 stock holders. The establishment was to support the government in capital market and economic growth of eastern Indonesia.
On July 13, 1992, Stock Exchange was changed to Jakarta Stock Exchange (JSX) and started its role in stock market in Indonesia. It was then that Indonesian stock exchange made an increase in its capital and number of transaction.
Presidential Decree No. 53, 1990 & Decree of Minister of Finance
Besides running the operation, Bapepam also provides guidance and supervision. But these doubled tasks was eliminated with the issuance of Presidential Decree No. 53, 1990 and Decree of Minister of Finance No. 1548, 1990 which marked a new era of capital market growth. Bapepam now can focus on its duty to provide supervision on capital market.
This functionality addresses the goal of creating an orderly, fair and efficient capital market and to securing the welfare of investors and community. The task is similar to one done by Securities Exchange Commission (SEC) in the United States. It secures the fairness of capital market for investors and community from misleading activities.
Law No. 8, 1995 regarding Capital Market
Law No. 8, 1995 regarding Capital Market controls Indonesian Capital Market Structure. Bapepam is a government institution under and directly responsible to the Minister of Finance providing guidance, control and supervision on day-to-day basis in the capital market.
vii. 1995 - today
Until today, Indonesian Capital Market made an extraordinary growth. Its activities on number of companies going public in the stock exchange and Securities trading are plentiful. The number of Issuers increased from 145 companies in 1991 to 288 in July 2000 with stock distribution of 1,090.41 billion shares. The Combined Stock Price Index increased to the value of 600 at the beginning of 1994 and once came to 712,61 in February 1997.
After privatizing the Stock Exchange in 1992, Indonesian Capital Market made an increase in market capital and number of transaction. On May 22, 1995, JATS (Jakarta Automated Trading System) was implemented. It was a new system to replace manual trading and facilitated stock trading with larger frequency up to 200,000 transactions per day compared to the old system that traded only 3,800. It guarantees a more fair and transparent market activity.
On September 1996, Surabaya Stock Exchange (SSX) introduced S-MART system (Surabaya Market Information and Automated Remote Trading) that provides the opportunity to make remote transaction.
On July 2000, JSX implemented Scriptless Trading to increase market liquidity and prevent missing stocks and forgery. It also accelerates transaction completion process. In 2002, JSX also implemented Remote Trading System as an effort to increase access to market, efficiency, acceleration and trade frequency.


b. Roles of Capital Market
Besides its important role in the economy of a nation, it plays two roles simultaneously in economic function, which are creating an exchange of excess funds proprietor and one that needs funding and as financial function, providing chances and opportunities to gain capital through investment. Capital market also plays as an indicator of national economic progress and enhance economic growth by providing opportunities for companies to benefit directly from the public without waiting for internal funding from the company.
What are the benefits of the existence of Capital Market?
- Provides sources of budgeting (long term) for business community, and also allocating optimal financial resources
- Provides investment channels for investors and creating diversification possibilities
- Provides leading indicator for national economic trend
- Distribution of ownership to middle class community
- Distribution of ownership, openness and professionalism, creating healthy endeavors
- Creating interesting work fields and professions
- Provides opportunities to own a healthy and prosperous company
- Provides investment alternative in gaining profit with accountable risks through transparency, liquidity and investment diversification
- Guides transparency of the business environment and provides social control access
- Drives professional management benefit through open and good corporate governance.
- Long term budgeting sources for Issuers
c. Capital Market Today;
i. Indonesian Capital Market transaction activities:
�� Trading
�� JSX
�� SSX
�� Himdasun
�� Clearing and Guarantee
�� Central Securities Depository
ii. Indonesian Capital Market Statistics