Name : Bima Hamdhani Putra

Nim : 14410307

Subject : Capital Market ( answer book question )

Evaluation Chapter 1 (page 10-11)

1. Capital Market has same definition with common market because the main function of
capital market is same with common market, which is as a place of meeting of will
between seller and buyer to do some transactions.
2. The basic difference between capital market and common market is in the matter of
object of transaction. In common market, anything can be as the object of transaction,
while in capital market there is a limitation of the object of transaction, which is only
securities that can be traded, such as shares, obligation, etc.
3. 3 And number 4. Relation between banking and non-sector banking in capital market is
like a chain, in which related each other, when financial institution is collapsed it will
affect another capital market. Because capital market is also part of subsidiary company
from the bank (parent company), where the bank has more than 50% shares in the
subsidiary company and all director and commissioner from parent company are also
taking part in the subsidiary company.
And for the non-bank institution, in this regard is company, it has impact when the
capital market and banking institution are collapse, it will automatically losses.
The illustration can be seen from an example:
- PT A open their company to stock exchange
- Mandiri as a bank established subsidiary company called as mandiri securities
- Investors are invested in Mandiri securities
4. In some occasion, mandiri securities are having huge losses because of some
inflammation or crisis. Consequently, the bank especially mandiri were effected as
parent company, and also with PT. A and investors
5. In general, there are three fundamental risks that you should know to not get caught in
them, namely capital loss, liquidity risk, and risk of bankruptcy. capital loss is a
condition when you only manage to sell your stock at a lower value than when you
bought it. Of course this means you lose some of the capital due to the sale. But in fact,
the risk is not always present when you are trading and trading in the stock market.
There is the possibility of liquidity risk and bankruptcy that always threatens investors
 who deposit their funds in the company's shares. Liquidity risk makes it hard to sell
your stock at the desired time. Usually this happens because the stock company began
to get no public trust or there is a prediction that the value of its shares will be lower
and will not grow. Meanwhile, the risk of bankruptcy is a condition when the company
where you invested suddenly can not continue its business because it is declared
bankrupt by the court. In these situations, you can not make a profit anymore and the
investment you cultivate may be lost.
6. Activities undertaken by investors can be regarded as a high-risk investment activity.
Because, if the issuer (company) is experiencing collapse, then the issuer (company)
will get the delisting from IDX. And it will affect the legal status of an open company
into a private company. The problems in the company, such as: manipulation of
financial statements, making the wrong report, etc. That would cause the company to
have lots of debt, no benefit, no interest from other investors, and that would result in a
company collapse.
7. Globalization and the increasing integration of the financial services sector both caused
by the development of information technology and the conglomeration of financial
institutions that make the capital market sector more closely linked with other financial
sector so that the collapse of the capital market can lead to a chain effect on other
financial sector. In the capital market sector, strict rules are needed as protection for
investors and the public. The availability of such protection becomes one of the
prerequisites for capital market development which is a trust business of investors and
the public. Legal protection for investors is also very important given the frequent
occurrence of business actions or decisions from shareholders as the company's funding
actually has the potential to harm investors.
8. basically Good Corporate Governance (GCG) is the regulation that act as the guidance
and emphasize the good management of the company's organization. In GCG, there are
4 Principles as the foundation; 1) Fairness, 2) Transparency, 3) Accountability, 4)
Responsibility. One of the purpose of GCG is to protect the Investor and also guarantee
business continuity, stability, and prosperity for Investors. in my opinion, the urgency
of GCG to be implemented is the possibility of misappropriation of investor funds by
the management company for personal gain. Then, the management of investor funds is
also often not able to provide the maximum level of profit because they put first their
personal interest, so it harms the right's of the investors itself.
9. i think im agree with the statement that the law of capital market in indonesia is quite
young because eventhough capital market has been established since decades ago, but
society has not been aware enough about the law for the capital market itself. not only
about the law, but most of the society still not involved in capital market.
10. There are many reasons why Indonesian did not involve actively in capital market:
 The ability of capital from Indonesian people are still not capable
 People were not well informed about how the capital market investment work
 Government itself does not push people to invest in capital market
 People still think investment in capital market like gambling and contain of riba
which is haram
 People still think that foreign is super power who can handle everything
 People just afraid to take the risk and only want to get benefit quickly.

Evaluation Chapter 2 (page 36)

<1> Capital Market Instruments are all securities that are generally traded through the
Capital Market. According to Law Number 8 of 1995 concerning the Capital Market,
securities are any letters of recognition of debt, commercial paper, shares, bonds, credit
securities, debt tokens, any right, warrant, option or derivative of the securities, or any
instrument defined as effect. And many of the Indonesians invest with long-term goals
such as for children's education and maintaining a lifestyle during retirement. And it
turns out, many of them do not understand that for long-term investment, one of the
most suitable instruments used is investment in the capital market. That is one of the
reasons why it is important to study the capital market instrument in law so that we or
others know the juridical review and the security of the capital market itself.

<2> A company will always need additional capital to develop production within the
company. And one way the company to add the company's capital is to transform the
company into an open public or public company. After that the company can sell their
assets to the Indonesia Stock Exchange. That is what will be offered to prospective
investors.

<4> The term of securities in UUPM does not provide a concrete definition of the term
securities itself but rather provide an example only. Because the word "every"
 derivative in the sense of securities is unlimited. However, it can be understood because
the existence of securities as a capital market instrument is growing from time to time.

<6> 2 kinds of equity securities are common stock and preffered stock, while 2 kinds of
debt securities are goverment bond and corporate bond

<9> There are two kinds of securities by their nature, namely equity and debt securities.
equity securities is an equity-participation effect which means that by purchasing the
securities the buyer's status is as a financier or investor that investing his capital into
the issuer or emiten. illustration of equity securities itself one of them can be seen from
Hak Memesan Efek Terlebih Dahulu (HMETD) or subscription rights. here Investors
with a proportional share (which means buying the most shares) which comes first by
the issuer. this is a privilege for them.

Evaluation Chapter 3 (page 68)

<1>. Under article 7 the law number 8 years 1995 point 1 in which (1) the stock exchange
was established with the purpose of organizing the trade effects of reguler, fair, and
efficient. So is the effect that regular, fair, and efficient are:

a) Regular: a) guarantee that the entire capital market participants are obligated to
follow the applicable provisions in accordance with the respective field and
implement them consistently.
b) Fair : all capital market participants do its activities having regard to the
applicable standards and ethics in the business world as well as giving priority to
the interests of society
c) efficient: capital market activities done in a quick and precise with a relatively
inexpensive cost

<3> answer:

 ~Operationally Bapepam is authorized and obliged to nurture, regulate and

supervise any Person performing activities in the Capital Market. Such
supervision may be undertaken by taking preventive measures in the form of
rules, guidelines, guidance and direction as well as repressive in the form of
examination, investigation and imposition of sanctions.
  ~the conduct of Securities Exchange activities may only be executed after
obtaining a business license from Bapepam.
 ~Securities trading on a regular, fair, and efficient basis is a trade organized under
a clear and consistently implemented rule. Thus, the price reflects the market
mechanism based on the strength of demand and supply. Effective Securities
trading is reflected in the fast transaction settlement at a relatively low cost.
 ~the availability of such system and or means enables the Securities Exchange to
exercise more effective oversight of its members.
 ~Stock Exchange Revenues are primarily derived from levies in the form of
membership fees, transaction fees, and Securities listing fees. The use of such
levies shall be permitted to finance the execution of its functions in order that
Securities trading on the Securities Exchange conducted by its members can be
carried out in a regular, reasonable and efficient manner.
 ~Clearing and Guarantee Institution must meet certain technical requirements for
the settlement of Exchange Transaction can be done regularly, fair and efficient.
 ~Clearing Guarantee Institution is authorized to establish binding rules and must
be obeyed by the service user.

<19> Full Commitment

In a firm commitment underwriting, the underwriter guarantees to purchase all of the

shares being offered for sale by the issuer regardless of whether or not they can sell
them to investors. A firm commitment underwriting agreement is the most desirable
for the issuer because it guarantees them all of their money right away. In a firm
commitment, the underwriter puts their own money at risk if they can’t sell the
securities to investors.

Best effort commitment

In a best efforts underwriting, the underwriters will do their best to sell all of the
shares that are being offered by the issuer, but in no way is the underwriter obligated
to purchase the shares for their own account. Any shares or bonds in a best efforts
underwriting that have not been sold will be returned to the issuer.
 SELL

<20>
Underwriter
EMITEN
offering & listing process Underwriter
Full
syndicate
commitment
(do not resend
to Emiten and
should buy all
the stocks)

EMITEN
UNDERWRITER
Sell
Maximally sell the
stock but do not
obligation to buy all
the stocks and can
return to the issuer

<21> What is an 'Underwriter Syndicate'

A temporary group of investment banks and broker-dealers who come together to

sell new offerings of equity or debt securities to investors. The underwriter syndicate
is formed and led by the lead underwriter for a security issue. An underwriter
syndicate is usually formed when an issue is too large for a single firm to handle.