Indonesia regulator urges brokers to stop poaching

JAKARTA Oct 26 (Reuters) - Bapepam-LK, Indonesia's capital market regulator, has urged new brokerages coming into Southeast Asia's biggest economy to stop "predatory recruitment" practices that could kill local broking houses, its chief said on Wednesday.

Bapepam-LK's chief Nurhaida told reporters that it was hard to regulate such practices but indicated that it may reconsider giving new licences to foreign securities houses.

This could hurt new securities houses looking to tap growing Indonesian markets, including big U.S investment banks Goldman Sachs Inc and Morgan Stanley that sources say are looking to buy local brokerages to expand in Indonesia.

"It's about business ethics -- new broking houses should recruit new people and train them, not just poach them from local brokers," she said.

Nurhaida's comment came after local broker PT Trimegah Securities complained to the regulator and sent out an official protest to PT UOB Kay Hian Securities, a unit of Singapore's UOB Kay Hian Holdings , over its recruitment.

Trimegah CEO Omar S Anwar told Reuters that the firm has no problem with occasional poaching, which is common in the financial industry.

"But if they recruit most of our employees in three branches and only leave the head of the branch in Palembang, it could have a systemic impact on our operations," Anwar said.

Anwar said that UOB has poached at least 25 of Trimegah's employees, including 10 people from Semarang in central Java, and six people from Palembang on the island of Sumatra.

UOB Kay Hian was not immediately available for comment. (Reporting by Fathiya Dahrul; Editing by Neil Chatterjee and Erica Billingham)