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GentaNoN

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Capital market is one of the financial

institutions to raise funds for companies and

alternative investment vehicle for the people(investors) which included a public offering

transactions and trading of securities of

public companies to public investors.

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Started in 1977

Governed through the BAPEPAM that has the

authority to makeCapital Market policybased on Article 4 Capital Market Law No. 8

1995.

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The principle is openness that stands as the

acting ground and the soul of the capital

market. Disclosure of material facts allows the

availability of the consideration for investors,

so that they can rationally make a decision tomake a purchase or sale of shares.

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At least there are three functions of the

principle of openness in capital markets.

The principle of openness serves to maintainpublic confidence in the market.

The principle of openness serves to create anefficient market mechanism.

The principle of openness is important to preventfraud.

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Insider means:1. a commissioner, director or employee of anIssuer or Public Company;

2. a substantial shareholder of an Issuer or PublicCompany;3. an individual, who because of his position or

profession, or because of a business relationshipwith an Issuer or Public Company, has access to

inside information; and4. an individual who within the last six monthswas a Person defined in letters a, b or c, above.

*traditional and temporary

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Article 95

An insider with respect to an Issuer or Public

Company, who is in possession of inside information,

is prohibited from buying or selling securities of:

a) the Issuer or Public Company; or

b) another Company engaged in transactions with the

Issuer or Public Company.

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Article 96

The insider referred to in Article 95 is prohibited from:

a) influencing a Person to buy or sell the Securities in

question; orb) providing inside information to a Person he has

reason to believe may use such information to buy or

sell the Securities in question.

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Article 97

1. A Person that tries to obtain inside information from an

insider in violation of the law and who obtains such

information, is subject to the same prohibitions as theinsiders mentioned in Articles 95 and 96.

2. A Person who tries to obtain inside information and who

obtains it without violating the law, is not subject to the

prohibitions applicable to insiders mentioned in Articles

95 and 96, as long as such information is made

available without restriction by the Issuer or Public

Company.

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Article 98

A Securities Company that has inside information

concerning an Issuer or a Public Company is prohibited

from engaging in Securities transactions of such Issueror Public Company, unless:

a) the transaction is made for the account of and in

accordance with instructions of a client; and

b) the Securities Company makes no recommendation

to the client with respect to such Securities.

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Article 99

BAPEPAM may determine that certain transactions213

are exempted from the prohibitions ofArticles 95 and

96.

Article 104

Any Person who violates the provisions of Articles 90,

91, 92, 93, 95, 96, 97 item (1) and 98, shall be subject to

imprisonment for a maximum of ten years and a

maximum fine of fifteen billion rupiah.

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Mana Dimana SecuritiesCompany has inside informationof the company Disini Aja. Bapak Sayabi Lang wants to

makeS

ecurities transactions that is align with the insideinformation the securities company posses.

Can Mana DimanaSecuritiesCompany execute the

transactions for Bapak Sayabi Langs account as hisBroker-Dealer or should Bapak Sayabi Lang find anotherbroker?

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Bapak Temansa Ya works at Sana Disana SecuritiesCompany that has inside information of the companyDimana Mana. When Bapak Temansa Ya is having

lunch with Bapak Temanan Da, they discuss the insideinformation ofDimana Mana company. Bapak KamuaJa overhears the conversation and decides to use theinformation to make transactions.

If Bapak Kamua Ja is caught doing the transactionsbased on the inside information conversation heoverheard and eavesdropped, can Bapak Kamua Ja beconvicted using the InsiderTrading Articles ?

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