KPEI Records Derivative Transaction Value Is Still Small, This Is The Strategy

Photo: (Aris Nurjani/VOI)

JAKARTA - PT Kliring Penjaminan Efek Indonesia (KPEI) revealed that the number of derivative instrument transactions is still below 1 percent on the Indonesia Stock Exchange (IDX).

"We are still very small, want to be below 1 percent or zero by a percentage, very small," said KPEI President Director Iding Pardi after a press conference at the OJK Building, Monday, November 13.

Iding said, KPEI together with OJK will continue to be committed to increasing the frequency of derivative transactions to be more active.

"Because outside of that, derivative transactions are very significant. More than 30 percent of stock transactions are already almost 50 percent of the portion," he said.

One way to encourage this transaction, the Financial Services Authority (OJK) signed a memorandum of understanding with the European Securities and Market Authority (ESMA) on PT Kliring Penjaminan Efek Indonesia (KPEI) received a recognition as the Third Country Central Counterparty (CCP).

However, Iding explained that if there are parties who want to make derivative transactions and do not carry out clearing, they will be subject to a higher capital charge.

"For capital charges in the clearing, not with quality, the margin is approximately 1,250 percent of the transaction value. With a qualified CCP institution of only 3 percent," he explained.

Meanwhile, KPEI as the Third-Country Central Counterparty (CCP) is based on Article 25 of the European Market Infrastructure Regulation (EMIR) and the recognition is based on the Decree of the Board of Supervisors ESMA dated October 19, 2023.

With the ESMA recognition, KPEI can provide clearing services to clearing members and exchanges (trading venues) established in the European Union.

ESMA's confession of KPEI as the Third-Country CCP is valid from December 31, 2023.

Based on the ESMA assessment, KPEI is included in the Tier 1 Third-Country CCP category which means that KPEI has a small (non-systemically imported) risk of financial stability in the European Union or in one or more member states of the European Union.