Using Foreign Index Underlying, OJK Will Develop Effective Derivative Contracts

Chief Executive Of Capital Market Supervisory, Financial Derivative And Carbon Exchange OJK Inarno Djajadi (Photo: Antara)

JAKARTA - The Financial Services Authority (OJK) stated that it together with PT Bursa Efek Indonesia (IDX) are developing a derivative contract for securities with underlying foreign index.

"Currently, OJK and the Exchange are developing a derivative effect contract with foreign underlying index," said OJK's Chief Executive of Capital Market Supervisory, Derivative Finance and Carbon Exchange Inarno Djajadi quoting Antara.

His party is also discussing the development of securities offerings recorded on foreign exchanges by securities actors and standardization of their business processes.

He said that the expansion of OJK's authority in regulating and supervising financial derivative contracts with securities subjects, including foreign stocks and foreign index, was a mandate from Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK).

Inarno said that currently the sale of shares from foreign exchanges in Indonesia is still being carried out based on the framework of the Commodity Futures Trading Supervisory Agency (CoFTRA) which is called the Distribution of Foreign Mandates (PALN).

"It is also a derivative contract. The perpetrators are intermediaries / futures traders who have received a business license from CoFTRA and have received approval as a PALN broker," he said.

In addition to developing derivative contracts with underlying foreign indexes, he said that OJK and IDX are studying and discussing draft recording regulations and structured waran trading.

Currently, the IDX30 has submitted a study on the expansion of the underlying warning structured which was originally only IDX30 to IDX80.

"OJK together with the IDX are still reviewing to evaluate the implementation of structured warrants and strengthen governance, business processes and conduct of securities actors," added Inarno.