Yovanka Angela Siregar

017201800013
Law 2018

Source of Law and Regulation in Capital Market

- Law Number 8 Year 1995 concerning on Capital Market
- Government Regulation in Lieu of Law Number 4 of 2008 concerning Financial System
Safety Nets
- Government Regulation Number 12 of 2004 concerning Implementation of Activities in
the Capital Market Sector
- Government Regulation Number 46 of 1995 concerning Capital Market Investigation
Procedures
- Government Regulation Number 45 of 1995 concerning Conducting Activities in the
Capital Market
- Minister of Finance Regulation Number 153 / KMK.010 / 2010 concerning Share
Ownership and Capital of Securities Companies
- Decree of the Minister of Finance Number 455 / KMK.01 / 1997 concerning Purchase of
Shares by Foreign Investors through the Capital Market
- Decree of the Minister of Finance Number 645 / KMK.01 / 1995
- Decree of the Minister of Finance Number 646 / KMK.01 / 1995 concerning Ownership
of Shares or Mutual Fund Participation Units by Foreign Investors
- BAPEPAM Regulations
- Financial Services Authority (OJK) Regulations and Circular Letters
- Sharia Capital Market

The main regulatory bodies and/or agencies in CapitIndonesian Central Securities Depository
(Kustodian Sentral Efek Indonesia (KSEI))al Market
- Financial Service Authority (Otoritas Jasa Keuangan)
- IDX
- Indonesian Central Securities Depository (Kustodian Sentral Efek Indonesia
(KSEI))
 - Indonesian Clearing and Guarantee Corporation (Kliring Penjaminan Efek
Indonesia (KPEI))
Capital Market Institution
- Financial Service Authority
- Indonesian Stock Exchange
- KPEI
- KSEI
- Securities Company (Broker, Dealer, Underwriter, Investment Company)
- Custodian Bank
- Profession Supporting (Notary, law consultant, accountant, etc)
- Emiten

History and development of capital market in the world

- 12th Century In France
Appeared The World's First Brokerage
- 13th Century In The Bruges Region
The capital and largest city of the province of west flanders in the flemish region of
belgium. venetian bankers began trading in government securities. in 1351 the venetian
government was prohibited from spreading rumors that were aimed at lowering the price
of government funds.
- 14th Century
Securities trading activities also began to be followed by bankers in Pisa, Verona, Genoa,
and Florence
- 17th and 18th centuries
At that time the netherlands was a pioneer in innovating the fundamentals of the modern
financial system. while italian cities still produce the first transferable government bonds,
they do not develop another necessity for the production of a mature capital market,
namely the stock market.
History and development of capital market in Indonesia
- 1912
The capital market has existed since the Dutch colonial era in 1912 in Batavia. The
capital market at that time was established by the Dutch East Indies government for the
benefit of the colonial government or VOC.
- 1914
Stock Exchange was closed during World War I
- 1925– 1942
Stock Exchanges in Jakarta reopened together with Stock Exchanges in Semarang and
Surabaya
- 1939– 1952
Due to political issues (World War II) the Stock Exchanges in Semarang and Surabaya
were closed. 3 years later, the Jakarta Stock Exchange was closed again during World
War II
- 10 Agustus 1977
The Stock Exchange was inaugurated by President Soeharto and managed by BAPEPAM
(Capital Market Implementing Agency). The reactivation of the capital market was also
marked by going public PT Semen Cibinong as the first issuer19 of 2008 concerning
State Sharia Securities
- 1988– 1990
Deregulation packages in Banking and Capital Market were launched. The Jakarta Stock
Exchange is open to foreigners. Exchange activity seems to be increasing rapidly
June 2, 1988
The Indonesian Parallel Exchange (BPI) started operating and is managed by the Money
and Securities Trading Union (PPUE), while the organization consists of brokers and
dealers.
10 November 1995
The government issued Law no. 8 of 1995 concerning the Capital Market. This law came
into effect from January 1996
- 1995 - 2002
 The Indonesian Parallel Exchange merged with the Surabaya Stock Exchange -The
scripless trading system has begun to be applied in the Indonesian capital market - JSX
begins to apply remote trading systems (remote trading)
- 2007
Merger of the Surabaya Stock Exchange (SSE) to the Jakarta Stock Exchange (BEJ) and
changed its name to the Indonesia Stock Exchange (BEI)
- 02 March 2009
Initial Launch of the New Trading System of the Indonesia Stock Exchange:
JATS-NextG

Structure Capital Market Before Law Number 21 Year 2011

Structure Capital Market After Law Number 21 Year 2011

Types Of Capital Market Instruments
- Bonds
Bonds can be described as long-term, transferable, long-term debt which contains the
promise of the issuing party.
- Mutual funds
Mutual Fund is an investment alternative for investors, especially for small investors and
those who have less time and skill to count the risks of their investments.
- Stocks
Shares (stocks) is one of the most popular financial instruments. Issuing stock is one of
the choices for company’s funding. Moreover, stock is investors' most favorite investment
instrument because it offers them an interesting return rate.
Stock can be defined as a sign of capital participation of an individual or institution in a
company or corporation. By investing in a company, the party has the claim for the
company’s income, assets, and right to attend the General Meeting of Shareholders.
- Exchange Traded fund (ETF)
ETF is portfolio investment products that are admitted to listing or trading on a regulated
exchange. An ETF provides investors with exposure to a diversified basket of shares or
other financial products. ETFs aim to replicate the performance of a specific index; this
index can be a blue chip, a regional, or a sector index. ETF is similar with mutual funds,
but we can trade ETF in Stock Exchange
- Derivatives
 Derivative Security is a financial security whose value is derived from the value of
another security (underlying asset) such as equity or debt instrument. It can derive
directly from an underlying asset or from the underlying asset’s derivatives. Derivative
can also be defined as a contract or agreement, which value depends on the performance
of an underlying asset. In a more specific definition, derivative is a traded financial
contract between two or more parties to buy or sold an asset/commodity on an agreed
time and price. The future value of the derivative is highly influenced by its underlying
asset in the Spot Market.

Definition of IPO
IPO is the shares of a company that is first released to be offered or sold to general
investors (the public / public). Companies that make an Initial Public Offering (IPO) are
called Go Public Before offering shares on the market first, the previously listed company
will issue detailed information about the company (also known as a prospectus).

The purpose of the IPO

- Getting cheap funds.
- Better financial performance.
- Potential for faster growth.
- Improve company image.
- Increase the overall company value

Benefits of IPOs Access to funding on the stock market

- Additional trust for access to loans Fostering professionalism Enhancing corporate image
Liquidity
- Possible divestment of profitable founding shareholders Fostering company loyalty
Increasing corporate values Ability to sustain viability Tax incentives

Consequences of going public share ownership

With the entry of public investors, the founding shareholders no longer own a company
with 100% ownership and must share their votes at the General Meeting of Shareholders.
Obligations to comply with applicable capital market regulations The Financial Services
Authority (OJK) and the Indonesian Stock Exchange have rules that apply to companies
whose shares are listed on the stock exchange. Among them are related to transparency
and accountability.

Public Offering Process in Primary Market

Professionals and capital market supporting institutions help issuers prepare a public offering.
Issuers submit a registration statement to BEI Submitting a Registration Statement to OJK so that
the registration statement is declared effective.