In May 2003, the Indonesian Capital Market Supervisory Board (Bapepam) decreed that all securities companies must increase their adjusted net working capital to at least Rp25 billion ($2.74 million) by December 31 2004. Only companies with an investment manager licence and certain types of broker-dealer were exempt. The announcement was issued by the chairman through Decree 20 of May 8 2003.
As Indonesia's combined shares prices index climbed above 1000, some securities companies, such as Mandiri Securities, Danareksa Securities and Bahana Securities, earned significant adjusted net working capital, more than the amount required by law. However about 80 securities companies were not able to fulfill the requirement by the deadline. Thirteen securities companies have an adjusted net working capital of less than Rp25 billion but more than Rp20 billion, 44 securities companies have less than Rp15 billion but more than Rp11 billion, 10 securities companies have less than Rp11 billion but more than Rp10 billion, and the rest have less than Rp10 billion. Their outstanding balance to achieve the prerequisite amount is not high from a US dollar perspective. Counting from the lowest adjusted net working capital of these securities companies, they only have a shortfall of around $550,000 to $1.65 million maximum.
The less fortunate securities companies have been trying to find alternative fundraising, searching for more capital from their shareholders, inviting new shareholders to join or through various other transactions. The market's recent historical achievement and prospective future makes the position of those securities companies, which are mainly listed members of the Jakarta and Surabaya stock exchanges, attractive for foreign capital and offshore securities companies seeking ownership in the lucrative Indonesian securities companies, which can be acquired for 85% to 99% of the paid-up capital, subject to the status of the acquiror. However, statistics also show that a couple of foreign joint ventures were among the less fortunate securities companies, so these companies might face challenges even after they fulfill the required adjusted net working capital.