Monday October 7 2019

News Source: Global Exchanges

Focus: Stock Exchange Regulation

Type: General

Country: Indonesia


On 2nd October 2019, the Bank Indonesia (BI) published regulation to strengthen financial market infrastructure through the establishment of a Central Counterparty (CCP) for interest rate and exchange rate derivative transactions. The CCP will establish a deep, liquid, efficient, inclusive and safe financial market to strengthen the effectiveness of BI policy transmission and encourage economic financing.

The establishment of CCP is regulated through Bank Indonesia Regulation Number 21/11 / PBI / 2019 concerning the Implementation of Central Counterparty of Interest and Exchange Rates Over the Counter Derivatives effective on 1st June 2020.

The establishment of the CCP displays Indonesia’s commitment to follow up on one of the five G20 agendas and is part of the pillar of Market Infrastructure development in the National Strategy for Financial Market Deepening and Development (SN-PPPK) 2018-2024.  Below are the five G20 agendas:

  1. Standard OTC derivatives should be traded through an exchange or electronic platform (if possible);
  2. Standard OTC derivative transactions must be cleared through a central counterparty (CCP);
  3. All OTC derivative transactions must be reported through a trade repository;
  4. OTC derivative transactions that are not cleared through a CCP must be subject to higher capital requirements;
  5. OTC derivative transactions that are not cleared through CCP must be subject to additional margin.

The principal of arrangement made in this regulation are:

  • CCN SBNT function
  • Requirements for SBNT CCP Provider
  • SBNT CCP Licensing Procedures
  • Approval in Principle
  • Business License
  • Duties, Authorities and Obligations of SBNT CCP
  • Business Segregation
  • SBNT CCP Connectivity
  • Issuance of CCP SBNT (Rule Book) regulations
  • SBNT CCP Members
  • Initial Margin and Variation Margin
  • Types and Transaction Criteria
  • Report
  • Supervision
  • Sanctions

Click on the above link for further information.