Central Counterparty Launch, New Milestone For KPEI's Role In The Indonesian Financial Market

Photo: Special

JAKARTA - PT Kliring Penjaminan Efek Indonesia (KPEI) has officially expanded its service coverage as a Central Counterparty (CCP) for the Money Market and Foreign Valuta (PUVA) sector. This was marked by the launch of the Central Counterparty (CCP) at Bank Indonesia on September 30, 2024. At the same time, KPEI also received a quality CCP (QCCP) status from Bank Indonesia, which strengthened KPEI's position as CCP PuvA.

"The status of QCCP from Bank Indonesia confirms that the arrangements, procedures, and mechanisms of KPEI are in accordance with the principles and standards that apply globally," said KPEI President Director Iding Pardi, Thursday, October 3.

The implementation of CCP PUVA is also a tangible manifestation of Indonesia's commitment to modernizing and strengthening financial market infrastructure. The steps to develop CCP PUVA are in line with the mandate of the Financial Sector Development and Strengthening Law (UPU PPSK), Blueprint Money Market Development (BPPU) 2025, as well as the commitment of the G20 OTC Derivatives Market Reform.

Iding explained that KPEI, which has so far played a role in carrying out its functions as a Clearing and Guarantee Institution (LKP) for securities transactions in the capital market, will expand its service coverage as a CCP for the money market sector and foreign currencies. Thus, this achievement marks the significant transformation of KPEI to strengthen its role as an important pillar in supporting the integration and deepening of the national financial market.

"KPEI is ready to provide reliable clearing services, guarantees, risk management, and collateral management to support the implementation of the CCP mechanism and the development of foreign markets and currencies," he added.

PUVA's CCP will guarantee that financial transactions will continue to run smoothly despite various risks, such as the risk of default, risk of liquidity, or market risk. Through CCP PUVA, in the future the financial market will be more stable and secure so that it opens up opportunities for more transactions, both domestic and international.

"With the presence of CCP Puva, Indonesia's financial markets are expected to be more protected from systemic risks, especially in the midst of an increasingly dynamic and connected global economy," he added.

As part of the implementation of CCP PuvA, on September 26, 2024, a new KPEI shareholder was inaugurated, namely Bank Indonesia, PT Bank Mandiri (Persero) Tbk., PT Bank Negara Indonesia (Persero) Tbk., PT Bank Rakyat Indonesia (Persero) Tbk., PT Bank Central Asia Tbk., PT Bank Permata Tbk., PT Bank Maybank Indonesia Tbk., PT Bank CIMB Niaga Tbk., and PT Bank Danamon Indonesia Tbk. The eight banks are also members of CCP who will conduct the first transaction of money market transactions. Meanwhile, the first stage is Domestic Non Deliverable Forward (DNDF) transactions with a clearing mechanism through KPEI as CCP PuvA.

"With the joining of Bank Indonesia and the eight banks as KPEI shareholders, we affirm our commitment to synergize in developing the money market and foreign exchange in Indonesia," he concluded.