VIVAnews - In the attempt to protect the interests of retail investors, capital market authorities and the Self Regulatory Organizations (SRO) are planning to establish a fund insurance agency. The institution is expected to be formed in 2010.
IDX Executive Director Ito Warsito said the plan was based on the requirement of having a mechanism that could secure the investors’ retail funds.
“KPEI (PT Kliring Penjaminan Efek Indonesia) as a part of SRO could possibly represent the industry (regarding the establishment of the agency),” Warsito said at the IDX building, Jakarta on Tuesday, August 25.
According to him, the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) has analyzed the plan.
“It [the agency] would probably be formed next year. The model would resemble the LPS (Deposit Insurance Agency),” Warsito said. The insured funds would cover the retail investors if there are any cases occur in the capital market.
Warsito mentioned a case dealt by PT Sarijaya Permana Sekuritas. In that particular case, numbers of retail investors suffered from losses.
Meanwhile, there is not any institutional investor who invested their funds in the stock market.
“Insured funds are for retail investors, not for institutional investors or fund managers,” he said.
Warsito presumes it is because institutional investors and fund manager have had a lot of experiences in every investment they sealed.
He also explained the funds could be lent singularly by the government or jointly by stock market members, investors and market authorities. If borrowed from the government, the funds will be taken from the State Budget.
“As for the joint loan, it will depend on each borrower’s capacity in term of the amount. Basically, they are welcoming it’, Warsito said.
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Translated by: Nataya Ermanti
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