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One of the parties involved in investing in the capital market is the securities company. without this Investors and traders will not be able to buy shares on the exchange and private companies will not be able to conduct IPOs.
What is a securities company? And how does this institution play an important role in investing and trading in the Indonesian capital market? Check out the following checks.
What is a securities company?
A securities company is an institution that has been authorized by the Provincial Administrative Organization to open a business as a securities brokerage (Broker-dealer) and business underwriting (insurer). A security is defined as any type of securities such as stocks, bonds, mutual funds or ETFs.
Difference Between Securities Company and Investment Manager
Investment managers can issue mutual funds or ETFs and can legally manage investors’ mutual funds.investment in the pool) while the securities company is not allowed
So be careful if someone claims to be from securities and provides stock management services. Other than mutual funds and ETFs, they must be run by direct investors. Don’t forget to buy from Investment manager with a good track record.
However, investment managers and securities companies are two types of securities companies. Securities companies can open their services as investment managers and securities at the same time.
There are currently more than 124 securities firms operating legally in Indonesia, one of which is still in the recording process, while one is a regional corporation (BUMD).
Here are some examples. Trusted Securities Company Proceeding legally in Indonesia:
- Mirae Asset Sekuritas Indonesia
- Trimegh Securities
- Indo Premier Securities
- independent securities
- BNI Securities
- BRI-Danareksa Seguritas
- The Miracle of Asian Securities
- BCA Securities
- Buana Capital Securities
- CGS-CIMB Securities Indonesia
Activities performed by securities companies
As mentioned above, in general There are two types of securities company business operations:
1. Broker-dealer
In this fair, securities are the link between institutional and individual investors who wish to invest with the Indonesian Stock Exchange. Included in the work details are:
- prepare good stock trading app.
- Providing services to investors who want to invest offline. (not through the application)
- Providing services for creating customer fund accounts and stock accounts, etc.
In addition, this company can also buy shares in its own name, so don’t be surprised if the name of the securities you use as a buyer or seller of shares is included in your trading application.
The movements of this institution as a buyer or seller of stocks are also worth following. because they have a lot of capital So when they open an order or close an order It often directly affects the market price.
2. Become a distribution manager
The second business activity of a securities company is to become an underwriter or a securities company. insurerHis job is to help prepare the private companies they want to do. Initial public offering (IPO). In this infrequent work, companies are required to buy shares of companies that were not sold at the time of the IPO.
Consequently, the main source of income for securities companies comes from the service fees that public companies provide after the company is the underwriter. And it comes from the transaction fees and commissions that investors pay for the services they provide.
You cannot trade securities without the help of this company and go directly to the exchange. Because this company has a trading application that connects you to the IDX system.
How to Choose the Best Securities Company
1. Check the legitimacy
It is undeniable that, combined with the growing public interest in investments, Today, many irresponsible people claim to be from fake securities companies.
to prevent this You must remember that no company will contact you first. In addition, you can view the legality of the company through the following link:
Legality Check 1 / Legality Check2.
2. Check his profile.
To view the security history You can do the following:
- Open the official website of the company.
- View assets managed by the company in the past year through the Financial Services Authority’s official website.
- See the opinions of relevant securities users. Currently, you can find reviews of this company in written form. Video or audio podcasts Please select according to your needs.
- Look at the news on the Internet about rumors. good or bad about the company
3. View Fee Amount and Minimum Deposit
Every company has different minimum transaction and initial deposit fees, so you should look at the minimum deposit required and the transaction fees the company charges. because in the end The transaction fee affects how much profit you can take home.
You can check the securities companies with reasonable transaction fees in the article. lowest cost securities company
4. Check the trading facilities provided.
These trading facilities, such as how to provide trading applications Are existing trading accounts available through the website and desktop? whether the information in the application is correct real time or not
in this review You can read reviews about the company on the Internet or read reviews of the applications the company provides. It is important for investors to choose the best trading application. Because in trading and investing, especially stocks, asset prices change rapidly and it takes sufficient mathematical analysis to be able to create a profitable trading strategy.
5. Check the facilities provided.
In addition to the main trading facilities You’ll also need to check for supported amenities, such as:
- quality customer service
- Delivering quality trading news
- quality analysis of existing stocks Some companies provide additional services in the form of stock analysis for certain investors.
- Learning service facilities are available such as support articles, webinars, and so on. Facilities like these are essential for novice investors.
Conclusion
A securities company is a type of securities company that is responsible for connecting investors with the Indonesian Stock Exchange. and help private companies to be listed on the stock exchange by providing securities underwriting services.
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