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nvestors in the Indonesian Stock Exchange (IDX) can now check their investment accounts at four local banks, after PT Kustodian Sentral Efek Indonesia (KSEI), the securities depository and settlement institution at the Indonesia Stock Exchange (IDX), separated their accounts from those of securities brokers.

KSEI officially named on Thursday the four banks — Bank Central Asia, Bank CIMB Niaga, Bank Mandiri and Bank Permata — that would handle the independent accounts of local stock market
investors.

Under a new regulation issued by the Capital Markets and Financial Institutions Supervisory Agency (Bapepam-LK) last December that will take effect in February 2012, securities companies are required to separate their funds from their client’s funds to avoid fraud or abuse.

The companies must therefore open accounts for their clients in the appointed banks to allow them to monitor the movements of their investments.

Bapepam-LK chief Nurhaida said that the move was an effort to improve the protection of investors in the Indonesian capital market.

“The fund separation will enhance security because the investors as the clients of the securities companies have their own accounts and can monitor their assets. This will prevent the companies from using the funds to make settlements for other clients,” she said during the agreement signing ceremony.

She added that this would improve the credibility of the securities companies and also increase the transparency of the domestic capital market.

KSEI chief director Ananta Wiyogo said under the new system investors could monitor their funds whenever they wanted.

“This accurate information will create investors’ trust in the market and increase the market credibility,” he said.

Earlier last year, KSEI introduced KSEI AKSes Card (Securities Ownership Reference), a tool which allow investors as clients of the KSEI account holders — the securities companies — to access any information about their securities and fund mutations. The promotion of the card and the fund separation are aimed at supporting the introduction of single investor identity cards, according to KSEI.

As of February, 60,000 investors out of the 300,000 KSEI registered investors were using the cards. (lnd)