However, some other indicators such as transaction volume, total number of issuers both for equities and bonds issues as well as investment funds, and total funds managed by investment managers recorded a slight increase. An encouraging growth was also noted on the increasing number of participants and supporting professionals taking part in Indonesian Capital Market.

The slowing down clouding market activities all year long in 2001 did not discourage Bapepam and other market participant from fulfilling their commitments to complete and reorganize the task at hand especially those which already planned in the preceding years or those stated in the Blue Print of Indonesian Capital Market 2000-2004.

One of the commitments was materialized inthe form of launching a new instrument called LQ-45 Future Index in the Surabaya Stock Exchange (SSX) on August 13, 2001. This incoming securities was cheerfully celebrated by investor as proven by its daily transaction value starting from the day it was first traded up to the end of 2001 that averaged out to Rp 6.3 billion per day. This index futures was intended not only as another alternative of investment for investors but also as a reliable hedging instrument for market participants.

With regard to regulation, Bapepam completed revising 4 rules, i.e., rule number III.A.3 concerning Commissioners and Directors of Stock Exchange, rule number IX.A.6 concerning Restriction on Share Issued Prior to a Public Offering, and rule number IX.E.2 concerning Material Transaction and Shifting of Core Business, and Rule number IX.D.1 concerning Pre-emptive Rights. The reason behind the revision was to allow faster and easier access to Indonesian Capital Market for participants especially with regard to providing financing option for small and medium enterprises and facilitating state owned enterprise privatization program. These three rules were expected to promote liquidity of securities transaction in Indonesian Capital Market.

Resuming the effors in the previou years, Bapepam in 2001 aggressively socialized draft amendment to the Capital Market Law which was intended to respond to fundamental shift in global financial services sector and to accommodate the interest of the market participanta a well aa to synchronize points contained in the draft with international capital market practices and standards.

In ddition, Bapepam and other regulatory bodies such as Directorate General of Financial Institution and the Bank of Indonesia discussed the possibility of integrating the supervision of financial services sector into a new institution called Financial Services Supervisory Institution or now known a Financial Services Authority.

The thought of creating such integrated financial services supervisory institution arose as the result of the needs to have an integrated, harmonized, and consistent regulation and policy making reliable enough to reduce the systemic risk across a continuously converged and correlated financial servives indutries.

Bapepam also gave a full support to Self Regulatory Organization (SRO ) on their effort to increase the quality of market infrastructures. The efforts among other things were to implement Securities Lending and Borrowing (SLB) and to develop Disaster Recovery Center (DRC) system. Other efforts were to provide Central Securities Depository (CSD) with Securities Sub-Account Recording System and to shorten the settlement cycle from T+4 (scriples shares) and T+4/T+5 (non scripless shares) to T+3 in order meet International requirement as recommended by G30.

In year 2001, there is an impressive development in transaction settlement of scripless shares through a sytem called Central Depository and Book-Entry Settlement System or C-BEST as the last module (corporate action ) was put to work in August 2001. Currenly, The Jakarta Stock Exchange (JSX) and SSX are also involved in building up remote trading and online trading system that enable to deliver faster and more efficient access by investors to carry out transaction which in turn increase liquidity.

With regard to law enforcement, during the year 2001 Bapepam ha imposed adminitrative sanction and ordered to take certain measurws to 292 parties, 184 of them has been imposed with administrative sanctions in the form of fines and other certain measures resulting to total revenue of Rp 16,573,000,000 payable to state account.

During the same period, Bapepam has also examined 44 cases related to capital market practices , 34 of them has been completed, and 2 others were brought to investigation stage. Therefore, the total number of cases that were brought into investigation stage was 3, one of which was a case related to violation on disclosure principle occurred in the year 2000 involving former management team of PT Dharmala Sakti Sejahtera.

Among completed cases during 2001, the worth noting one were cases relating to suspected market manipulation and insider trading on shares of Bank BCA, suspected violation on transaction of PT HM Sampoerna’s shares in immediate market, and suspected violation on disclosure principle involving 4 public companies or bond issuers under a business group of Sinar Mas.

All along 2001 Bapepam kept on building and improving coordination with SROs , the National Police, and the Attorney Office as well as international capital market regulatory bodies especially Hong Kong and Singapore-in order to do a face lift on Indonesia’s law enforcement practices.

The ever-increasing participation from publicinvestors and market participans, the wider eyes of non-regulatory institution such as the media and NGOs, and the growing scrutiny from the House of Representative in 2001 has given wake up call for Bapepam to march forward with full determination and commitment to give its best to protect investors from illegal and unfair practices in Indonesian Capital Market.

Herwidayatmo,
Chairman