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||6 October 2009
Indonesia: Market regulator to tighten rules on transparency
Indonesia’s stock market regulator, Bapepam, is planning to introduce a stricter regulation on transparency and accountability that will require financial services institutions in the capital market to verify data regarding their clients, the Jakarta Post reported.
The regulation, which will be an amendment to the existing one, will oblige securities firms, mutual fund managers and custodian banks to collect and verify all the information about their investors before confirming them as their clients and allowing them to open accounts.
Required data would include the background of the investors, the sources of their funds, and their investment objectives or purposes, which would then need to be substantiated with supporting documents.
Bapepam will be able impose sanctions on those who fail to comply, a point which is absent in the existing regulation. Sanctions will vary from warnings to penalties including fines.
The draft of the regulation, obtained by the Jakarta Post indicates that the amendment aims to prevent the inflow of investment funds possibly related to money laundering practices or terrorism.
It also says that the securities companies and other financial institutions will have six months to adjust their practices to comply with the new system from the time it is introduced, which is planned for November. In the meantime, Bapepam will ask for inputs from the industry players about the new ruling.
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