IDX suspends Trimegah

The IDX has sanctioned Trimegah, for causing technical glitches in Thursday's trading, but the market authority says it was not a big problem.

"Why make such a fuss about it. It is not something new in the world....It is purely a human error," The Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) chairman Fuad Rachmany said on Friday.

He referred to a similar incident that recently hit the Malaysia Stock Exchange, whose trading system went down only one month after introducing a new electronic trading system.

The Indonesia Stock Exchange (IDX) halted the second trading session of the day for one hour on Thursday because the new computer system had been overwhelmed by orders booked by PT Trimegah Sekuritas, one of the largest securities companies in the exchange.

Trimegah had said that the overwhelming volume of orders had been caused by an error in its electronic remote trading system.

The incident occurred despite the fact that the IDX had just updated its trading system, dubbed JATS Next Generation worth Rp 45 billion (US$4 million). This system was claimed to have four times more capacity to receive transactions than the system it replaced.

IDX management denied that the new system had problems, passing the blame onto Trimegah.

On Friday, IDX imposed a one-day suspension on Trimegah.

IDX director for listing Eddy Sugito said that his office was considering imposing further sanctions against the company.

"We haven't decided *the further sanctions*. We need to await an audit result," Eddy said.

Bapepam chairman said he would leave the decisions related to the sanctions to the IDX authority.

"It is up to IDX, it is technical matter, they *IDX* know better," said Fuad.

Fuad also brushed aside rumors that the Trimegah suspension related to the heating up of competition between candidates in the upcoming election for new IDX directors.

"No, it's just rumors. It is not true," Fuad said.

IDX is scheduled to replace the existing directors during its annual shareholders' meeting in June.

A number of people have announced their candidacy, including the president commissioner of PT Bahana Sekuritas, Ito Warsito, who secured strong backing from the government and the current IDX management.

It is reported that Trimegah is one of the securities houses that will not vote for Ito, because the company has its own candidate.

Under the existing regulations, IDX directors are those who secure the most votes from securities houses.

Securities houses whose trading is suspended or with trading values less than 0.2 percent of annual trades, cannot nominate candidates.

Meanwhile the IDX strategy is to avoid another similar problem in the trading system. The pre-sident director Erry Firmansyah said that IDX would adjust its system and would try the new system again late Friday in the hopes that it can be running for Monday's trading.