Margin stock transaction is widely opened

Anticipating the risks

Chief Executive of the Stock Market Supervisory of the Financial Service Authority Nurhaida said, the revised regulation is adapting with the financing trend of the stock exchange members to their customers for the stocks, which are beyond the criteria of margin transaction.

As of 28 December 2016, the outstanding margin financing amounted to Rp 1.8 trillion. About 72% or Rp 1.3 trillion out of the total outstanding financing margin were contributed by 18 stock exchange members, which have adjusted net working capital of more than Rp 250 billion.

In fact, outstanding financing of the stocks, which are beyond the criteria of margin shares margin reached Rp 4.3 trillion. About 77% of the outstanding financing were contributed by 19 stock exchange members adjusted net working capital of more than Rp 250 billion.

IDX is preparing PT Pendanaan Efek Indonesia (PEI) to sustain the adjusted net working capital of securities companies. This securities financing company will disburse loans to securities companies for margin transaction purpose. PEI could lend Rp 100 billion for each securities company.

According to Tito, there are 28 stock exchange members with the adjusted net working capital of more than Rp 250 billion. This number will increase up to 40 stock exchange members so that PEI will prepare Rp 4 trillion funds.

According to Chairman of Association of Indonesian Securities Companies (APEI) Susy Meilina, the relaxation of margin transactions will affect to the volume of stock exchange transactions. Thus, he hopes that all brokers could enjoy this policy. “The brokers will face their own risks. Therefore, no need for the classification of adjusted net working capital,” Susy said.

More than the pursuance of profit and market liquidity, the authority needs to anticipate the risks.

(Muhammad Farid/Translator)