History of Bapepam

New Order Period

New Order Government conducted several measures to recover the public trust on rupiah. Besides the conscription of public fund through savings and deposit, the government extensively made preparation for developing a capital market.

With Central Bank Board of Directors Decree No.4/16 Kep-Dir dated July 26, 1968, within BI a Financial Market and Capital Market Preparation Team was formed. The result of research conducted by the Team uncovered that the seed of Capital Market in Indonesia had been implanted by the government since 1952. However, because of the political situation and the unawareness of the public on the capital market, the movement of the Indonesian Capital Market between 1958 to 1976 was going down.

After successfully completing its task, with the Ministry of Finance Decree No. Kep-25/MK/IV/1/72 dated January 13, 1972 the team was dismissed, and in 1976 Capital Market Supervisory Agency (Bapepam) and PT Danareksa were established. Led by the Governor of Central bank, Bapepam’s function was to assist the Minister of Finance.

With the establishment of Bapepam there was an indication and intensity to re-develop the financial and capital market. Besides assisting the Minister of Finance, Bapepam was also to conduct a double function as a supervisor and organizer of the stock exchange.

On August 10, 1977, based on Presidential Decree No.52 Year 1976, the Indonesian capital market was re-activated, and several Public Offerings were conducted. In this new order period the development of capital market can be divided into two phases, from 1977 to 1987 and from 1987 up to the present.

The development of capital market from 1977 to 1987 experienced a sluggishness although the government had given out facilities to firms using funds from stock exchange. These facilities included taxation facilitates to encourage public to actively invest in capital market.

The slowing down of the development at this period was caused by the several matters including the tight procedures for issuing shares and bonds, limitation on share price fluctuation, etc.

To deal with the condition the government issued some policies relating to the improvement of capital market, i.e. The Package of December 1987, The Package of October 1988, and The Package of December 1988.

The Package of December 1987

This package contained the simplification of share and bond issuing procedures, the elimination of cost imposed by Bapepam such as cost for the stock issuing registration. An opportunity was also given to the foreign investors to own maximum 49% of the total issued share value.

This package also eliminated the currency fluctuation limit and introduced a parallel exchange, as an alternative for the Issuers that had not complied with the requirements to be listed in the stock exchange.

The Package of October 1988

This package was applied to banking sector, but affected the capital market development. This package contained stipulation of 3L (Legal, Lending, Limit), and the imposition of tax and deposit interest.

The imposition of tax positively influenced the capital market development in the way that the government had given a balanced treatment to banking sector and capital market sector.

The Package of December 1988

This package principally gave further support to the capital market by providing opportunity to private sectors to develop stock exchange.

These three policies cause the active capital market development from 1988 to the present.

New Order

New Order Government conducted several measures to recover the public trust on rupiah. Besides the conscription of public fund through savings and deposit, the government extensively made preparation for developing a capital market.

With Central Bank Board of Directors Decree No.4/16 Kep-Dir dated July 26, 1968, within BI a Financial Market and Capital Market Preparation Team was formed. The result of research conducted by the Team uncovered that the seed of Capital Market in Indonesia had been implanted by the government since 1952. However, because of the political situation and the unawareness of the public on the capital market, the movement of the Indonesian Capital Market between 1958 to 1976 was going down.

After successfully completing its task, with the Ministry of Finance Decree No. Kep-25/MK/IV/1/72 dated January 13, 1972 the team was dismissed, and in 1976 Capital Market Supervisory Agency (Bapepam) and PT Danareksa were established. Led by the Governor of Central bank, Bapepam’s function was to assist the Minister of Finance.

With the establishment of Bapepam there was an indication and intensity to re-develop the financial and capital market. Besides assisting the Minister of Finance, Bapepam was also to conduct a double function as a supervisor and organizer of the stock exchange.

On August 10, 1977, based on Presidential Decree No.52 Year 1976, the Indonesian capital market was re-activated, and several Public Offerings were conducted. In this new order period the development of capital market can be divided into two phases, from 1977 to 1987 and from 1987 up to the present.

The development of capital market from 1977 to 1987 experienced a sluggishness although the government had given out facilities to firms using funds from stock exchange. These facilities included taxation facilitates to encourage public to actively invest in capital market.

The slowing down of the development at this period was caused by the several matters including the tight procedures for issuing shares and bonds, limitation on share price fluctuation, etc.

To deal with the condition the government issued some policies relating to the improvement of capital market, i.e. The Package of December 1987, The Package of October 1988, and The Package of December 1988.

The Package of December 1987

This package contained the simplification of share and bond issuing procedures, the elimination of cost imposed by Bapepam such as cost for the stock issuing registration. An opportunity was also given to the foreign investors to own maximum 49% of the total issued share value.

This package also eliminated the currency fluctuation limit and introduced a parallel exchange, as an alternative for the Issuers that had not complied with the requirements to be listed in the stock exchange.

The Package of October 1988

This package was applied to banking sector, but affected the capital market development. This package contained stipulation of 3L (Legal, Lending, Limit), and the imposition of tax and deposit interest.

The imposition of tax positively influenced the capital market development in the way that the government had given a balanced treatment to banking sector and capital market sector.

The Package of December 1988

This package principally gave further support to the capital market by providing opportunity to private sectors to develop stock exchange.

These three policies cause the active capital market development from 1988 to the present.

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