Bank Indonesia, IDX, KPEI And 8 Banks Agree On Cooperation In Establishing Central Counterparty

JAKARTA - Bank Indonesia together with PT Bursa Efek Indonesia (IDX), PT Kliring Penjaminan Efek Indonesia (KPEI) and 8 banks namely Mandiri, BRI, BNI, BCA, CIMB Niaga, Danamon, Maybank, and Permata agreed on the development of Central Counterparty (CCP) in the Money Market and Foreign Valuta Market (PUVA).

Senior Deputy Governor of Bank Indonesia Destry Damayanti said that the formation of the CCP is a concrete form between BI, OJK, Self Regulatory Organization (SRO), and industry in an effort to develop a modern and advanced money market.

"Not only banking, but Bank Indonesia also shows its commitment as a CCP shareholder in order to increase market confidence," he said in his official statement, Monday, August 12.

Furthermore, the implementation of CCP requires the active role of the Indonesian Foreign Exchange and Money Market Association (APUVINDO) which represents the industry together with the authorities.

Destry said that this synergy is expected to accelerate the implementation of CCP's business development and sustainability as a systemic financial market instrument (IPK).

In line with this, Member of the OJK Board of Commissioners, Dian Ediana Rae stated that OJK strongly supports CCP development because CCP is critical in developing derivative transactions in Indonesia.

"This support includes the granting of permits to banks to invest in CCP," he said.

Furthermore, the Chief Executive of the OJK Capital Market, Derivative Finance and Carbon Exchange Supervisory Agency, Inarno Djajadi, said that OJK's support in the development of CCP was realized in the form of mandated to KPEI to expand its scope of services and services as CCP in the Money Market and Valas Market.

Inarno conveyed that PT KPEI is expected to continue to maintain applicable international standards, in line with the recognition received from the European Securities and Markets Authority (ESMA) as the Third-Country CCP for the Business Line of the Clearing and Guarantee Institution (LKP) in the capital market.

"This is a strategic step that not only strengthens CCP's position in the global market, but also has a positive impact on the credibility of Indonesia's financial markets as a whole," he said.

The next stage of signing the Inter-Shareholder Agreement (PAPS) is the realization of capital participation by Bank Indonesia and 8 banks, which will be carried out after the OJK approval of KPEI.

The total capital of this new shareholder will be part of CCP's capital strengthening in the implementation of default waters management.

CCP plans to be fully operational by the end of this year.

In the future, CCP implementation will be strengthened continuously and follow the best global practice.

Thus, CCP is expected to accelerate efforts to deepen financial markets in Indonesia so that it can contribute to domestic economic growth and compete in the region.

For information, this momentum is marked by the signing of an Inter-Shareholder Agreement (PAPS) on cooperation in the formation and development of CCP at KPEI, which is the organizer of a licensed CCP PuvA from Bank Indonesia.

Meanwhile, CCP development steps as financial market infrastructure (IPK) in Indonesia are the fulfillment of the mandate of the Financial Sector Development and Strengthening Law (UU PPSK), the 2025 Money Market Development Blueprint (BPPU), and the commitment of the G20 OTC Derivatives Market Reform.

The signing of PAPS is a follow-up to the Memorandum of Understanding (NK) which was signed by 11 identical entities on March 18, 2024.

CCP acts as an institution that runs clearing and debt renewal (novation) for its member transactions.

Even so innovating, CCP places itself among the parties conducting transactions to mitigate credit risk against transactions, risk of liquidity, and market risk to price movements in the market.

This signing process was also attended by the Financial Services Authority (OJK) as the competent authority over KPEI in its function as a clearing and guarantee institution in the capital market, as well as the banking sector authority who will become a member of the CCP.