Indonesia has cast doubt on the viability of an integrated capital market among ASEAN member states by 2015, citing regulatory differences.
Lack of a common regulatory framework shared between states was among the daunting factors dampening the realization of the plan, chairman of the capital market and financial institution supervisory agency (Bapepam-LK) Fuad Rahmany said during a seminar Tuesday.
Lack of a common regulatory framework shared between states was among the daunting factors dampening the realization of the plan, chairman of the capital market and financial institution supervisory agency (Bapepam-LK) Fuad Rahmany said during a seminar Tuesday.
He added there was so much to be done before being able to realize the dream of having a single integrated capital market in the ASEAN region by the 2015 deadline.
"I don't know whether this can be achieved by 2015; we're still at the discussion stage," he said.
He also said that among the obstacles was a way to synchronize the regulations that were issued by each member country.
This included policies relating to taxation, investor protection and dispute settlements.
Most ASEAN member states have inherited deep-rooted legal systems from their former colonial occupiers, making it difficult to adopt a single regulation to suit all needs.
The Indonesian legal system, for instance, is heavily influenced by that of the Netherlands, while the legal systems of Singapore and Malaysia are closely linked to that on the United Kingdom, and the system in the Philippines resembles that in the United States.
ASEAN has embarked on an ambitious plan to have an integrated capital market under its ASEAN Economic Community (AEC) blueprint.
Under the single integrated capital market system, investors and companies in ASEAN countries can freely trade securities in any market at competitive costs.
There will also be an ASEAN virtual bourse, known as the ASEAN linkage, which will act as a single stock market featuring the region's top 200 companies.
The ASEAN linkage is scheduled for a launch next year.
"It may not be realized. Harmonizing each of the members' regulations will take ages," Fuad said.
However, he said Indonesia would remain committed to forming the capital market integration because such a system was deemed inevitable.
"The globalized market is heading to a more integrated system. And as part of the community, we support it."
Former Hong Kong Securities and Futures Commission chairman and chief adviser to the China Banking Regulatory Commission, Andrew Sheng, said the capital market integration should be prioritized during this time of crisis.
He said ASEAN could use the moment to rise as a new power to possibly replace the Western market system, which was losing credibility.
"By having a combined market force, we will have more liquidity and a bigger scale to be able to compete globally," he said.
"I don't know whether this can be achieved by 2015; we're still at the discussion stage," he said.
He also said that among the obstacles was a way to synchronize the regulations that were issued by each member country.
This included policies relating to taxation, investor protection and dispute settlements.
Most ASEAN member states have inherited deep-rooted legal systems from their former colonial occupiers, making it difficult to adopt a single regulation to suit all needs.
The Indonesian legal system, for instance, is heavily influenced by that of the Netherlands, while the legal systems of Singapore and Malaysia are closely linked to that on the United Kingdom, and the system in the Philippines resembles that in the United States.
ASEAN has embarked on an ambitious plan to have an integrated capital market under its ASEAN Economic Community (AEC) blueprint.
Under the single integrated capital market system, investors and companies in ASEAN countries can freely trade securities in any market at competitive costs.
There will also be an ASEAN virtual bourse, known as the ASEAN linkage, which will act as a single stock market featuring the region's top 200 companies.
The ASEAN linkage is scheduled for a launch next year.
"It may not be realized. Harmonizing each of the members' regulations will take ages," Fuad said.
However, he said Indonesia would remain committed to forming the capital market integration because such a system was deemed inevitable.
"The globalized market is heading to a more integrated system. And as part of the community, we support it."
Former Hong Kong Securities and Futures Commission chairman and chief adviser to the China Banking Regulatory Commission, Andrew Sheng, said the capital market integration should be prioritized during this time of crisis.
He said ASEAN could use the moment to rise as a new power to possibly replace the Western market system, which was losing credibility.
"By having a combined market force, we will have more liquidity and a bigger scale to be able to compete globally," he said.
By: Ika Krismantari , The Jakarta Post , Jakarta | Wed, 03/25/2009 1:09 PM | Business
