JAKARTA-based analysts have welcomed Indonesia's long-awaited stock exchange bill, saying it will lead to greater involvement by small investors and inspire badly needed confidence by tightening rules on insider trading. The bill, approved by the House of Representatives on Monday but awaiting ratification by President Suharto, will for the first time give the nation's Capital Market Supervisory Agency investigatory powers. Starting from January 1 next year, it will allow the operation of open-ended funds, described by the director of Asia Equity Jakarta, David Oxtoby, as 'badly needed' to stimulate local involvement in the exchange. 'Four-fifths of all trading on the Jakarta stock exchange is done by foreigners,' Mr Oxtoby said. 'That's a relatively high figure compared to other markets in the region. 'Foreigners feel more secure when there are a greater number of locals playing the market around them.' Jardine Fleming economist Rizal Prasetijo said that without open-ended funds, small investors previously had to buy stocks directly. Now they would be able to rely on professional fund managers to co-ordinate their investments. 'Liquidity should see a marked improvement, Mr Prasetijo said, adding that although it was too early to give details, Jardine Fleming was already planning to introduce a fund, as was Danareksa, Indonesia's largest investment bank. Another analyst said the growth of Indonesia's middle class in the past five years had led to increasing interest in the stock market by smaller investors. 'I guess it's just the timing. A few years ago open-ended funds were not really needed - no one had much money.'