Indonesia - Clearstream

Indonesia 

Market infrastructure 

Institutions and organisation 

Indonesia Stock Exchange (IDX) - (www.bei.co.id) 

The Indonesia Stock Exchange began operations in December 2007 and was formed following the 

merger of the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX). Its 125 

shareholders are licensed local brokers. 

JSX started as an Association of Stockholders in 1912 and was reopened as an official stock exchange 

in 1977. 

SSX originally opened in 1925 and was located in East Java. 

Three market types (segments) are available for the scripless trading environment: 

• Regular Market T+3 settlement cycle; 

• Cash Market T = SD; 

• Negotiated Market T+3 settlement cycle. 

Equities and warrants can be traded on all market segments, but fixed income instruments are 

tradable on the negotiated market only. 

Equity trades in physical shares can be executed in the negotiated market only. 

CSD - PT Kustodian Sentral Efek Indonesia (KSEI) 

KSEI was created in December 1997 and obtained a preliminary operating licence at that time. KSEI 

acts as settlements and central depository agent according to the provisions of the Capital Market Law. 

Clearing House - PT Kliring Penjaminan Efek Indonesia (KPEI) 

KPEI was incorporated in August 1996 and became a legal entity in September of that year. 

Central Bank - Bank Indonesia (BI) - (www. bi.go.id) 

The new Central Bank Act, enacted on 17 May 1999, conferred on BI the status and position of an 

independent state institution. BI is a fully autonomous civil legal entity responsible for formulating and 

implementing policies as stipulated in the new Central Bank Act. BI is regulated by its statutes. As a 

public legal entity, BI has the authority to issue policy rules and regulations. 

In its capacity as central bank, BI has the objective of achieving and maintaining the value of the 

Indonesian Rupiah (IDR) and the stability of the exchange rate against other currencies. BI is also the 

regulator of the Indonesian banking sector and operator of the interbank payment system. 

Clearstream Banking 

20 December 2011 

Market Profile Indonesia - 1

Market Profile 

Regulatory structure 

The responsibilities of the regulatory bodies are as follows: 

• Ministry of Finance 

The Ministry of Finance has the ultimate responsibility for regulating the JSX through BAPEPAM. 

• Capital Market and Financial Institution Supervisory Agency (Badan Pengawas Pasar Model dan 

Lembaga Keuangan - BAPEPAM-LK) 

BAPEPAM-LK is the government agency under the Ministry of Finance, supervising the capital 

market and non-bank financial institutions, such as insurance and pension funds. It previously 

had dual roles serving as both executor and supervisory board but currently focuses its activities 

solely on supervisory and regulatory issues. BAPEPAM-LK regulates and monitors all issues 

relating to equity securities and corporate bonds, which are publicly offered or listed in 

Indonesia, including the offering and allocation procedure for Initial Public Offerings (IPOs). 

• Central Bank (Bank Indonesia - BI) 

BI, an independent body reporting directly to the House of Representatives, is responsible for the 

following: 

- achieving and maintaining stabilty of the Rupiah (IDR); 

- formulating and implementing monetary policy; 

- regulating and ensuring a smooth payment system; 

- supervising the national banking system. 

• Financial Services Authority (Otoritas Jasa Keuangan - OJK) 

On 27 October 2011, the Indonesian Parliament approved the establishment of the OJK. This new 

authoritative body, which would be an integration of some of the functions of the BAPEPAM-LK 

and BI, will have full capital market and banking supervisory functions and will govern the 

insurance, pension fund and other financial services industries. 

The expected completion of the integration of the functions of the BAPEPAM-LK with the OJK is 

expected to be completed by 31 December 2012 and that of the banking supervisory functions of 

the BI with the OJK is expected to be completed by the end of 2013. 

• PT Bursa Efek Jakarta (BEJ) 

The BEJ, a private company that took over the day-to-day administration of the JSX in 1992, 

monitors trading, settlement and the compliance of market participants with JSX regulations. 



Indonesia - 2 Market Profile

Investment regulation 

Holding restrictions 

Foreign 

shareholding in 

Indonesian 

companies 

Disclosure requirements 

Threshold Requirement 

None, except in relation 

to banking, broadcasting 

and financing companies 

Buy-Out tenders For all listed securities 

except for shares in 

banking entities which 

are subject to final 

approval from BI 


Banks: 

Banks may only list up to 99% of their share capital, the remaining 1% 

must be owned by resident Indonesian investors. 

Broadcasting companies: 

Broadcasting Law # 32/2002 paragraph 17 states that foreign investors 

cannot invest in private broadcasting companies unless for additional 

capital (issuance of new shares) and with a maximum of only 20% out of 

the total capital and consisting of at least 2 investors. 

Financing companies: 

For financing companies the Foreign Ownership Limit is 85% of the paid-up 

capital. 

Once an investor holds 25% or more of the total outstanding shares 

(known as a "controlling shareholding") in a listed company, it is obliged 

to disclose whether there is an intention to complete a full takeover of the 

listed company. If there is such an intention, a tender offer process to 

acquire the remaining shares must be conducted. A tender offer is not 

required if the Controlling Shareholder can prove that there is no 

intention to execute a full takeover. BI approval is required by investors 

intending to exceed a 25% holding of shares issued by a bank. 

For details of the local domestic disclosure requirements, please refer to the Clearstream Banking 

Guide to Disclosure Requirements, which is an appendix to the Creation Market Guide. 


1 October 2008 



Securities trading 

Key market-tradable securities 

Trading platforms 

Denomination 

currency 

Maturity 

profile 

Interest 

rate 

Interest/Dividend 

payment frequency 

Place of 

settlement 

Jakarta Stock Exchange Automated Trading System (JATS) 

JATS has been retained by the IDX following the merger between the Jakarta and Surabaya Stock 

Exchanges. It facilitates order input and provides opening price information and order matching and 

trade confirmation. Orders are matched first by price priority and then by time priority. Upon execution 

of a trade, JATS generates a trade confirmation online. 

Board lots and odd lots 

Board lots (of 500 shares) are traded in the regular market. Depending on the tradable lot, amounts 

with denominations less than 500 shares may also be traded in the regular market as long as they total 

lots of 500 shares. 

Lots of less than 500 shares are otherwise traded in the odd-lot market. BAPEPAM has appointed oddlot 

dealers, each handling three to five listed stocks. Prices in the odd-lot market are based on those 

prevailing in the regular market but carry a premium of around 7%. Brokerage commission is not 

applicable to these transactions. 

Block trades are permitted for transactions with a minimum quantity of 20,000 shares. Prices are based 

on rates in the regular market. 



Indonesia - 4 Market Profile 

Form 

Commercial Paper IDR Various Discount Various KSEI Physical / 

book-entry 

Corporate bonds 

Ordinary shares / 

Preference shares 

IDR Various Fixed rate, 

floating 

Treasury bills IDR 1 Month, 

3 Months 

Various KSEI Physical / 

book-entry 

IDR - - - KSEI Book-entry 

Various Discount BI Book-entry 

Treasury bonds IDR upcoming Upcoming Upcoming BI Book-entry 

Sertifikat Bank 

Indonesia (SBI) a 

Exchange Traded 

Funds 

IDR 1,3,6,9,12 

Month 

Various - BI Book-entry 

IDR - - - KSEI Book-entry 

Warrants IDR Various - - KSEI Book-entry 

a. These securities are money market instruments that exist in both traditional and sharia compliant forms.

Settlement process 

Settlement cycles 

Equities (scripless): T+3 

Fixed income securities (scripless): Negotiable between buyer and seller, usually T+2 or T+3 

Settlement flow 


Equities and corporate bonds 

Settlement at the KSEI’s Book-Entry Settlement System (C-BEST) is conducted on a real-time basis, 

provided that instructions are matched and sufficient funds and/or securities are available. 

Although same-day turnaround of instructions is an accepted practice, it is not currently possible to link 

the two legs of the transaction in C-BEST and as a consequence, settlement of these types of 

transaction may require the additional support of local custodians. 

KSEI has appointed four payment banks to assist in their cash settlements. A realignment process, 

implemented between the payment banks and run three times a day, “squares off” cash positions 

between the payment banks but is not transparent to KSEI participants. 

T+0: Trades are executed on the JSX and trade confirmations are sent to the investors. 

T+1 - T+2: Settlement instructions are sent to the custodian for pre-matching. Prematching 

is conducted on a 'manual' basis between custodians and is not 

binding. The selling broker also contacts the seller’s custodian to pre-match the 

transaction. 

T+2: For receipt against payment transactions, the buyer must have funds available in 

their account with the custodian to ensure that cash can be transferred to the 

payment bank on the morning of T+3. 

T+3: The buying broker delivers the shares to the buyer’s custodian bank. The selling 

broker receives the shares from the seller’s custodian bank. For against payment 

trades, cash settlement takes place on a net basis at one of four Payment Banks 

and securities settlement takes place in C-BEST at the KSEI. Cash is transferred 

between custodian and KSEI Nostro accounts at the Payment Banks via BI's 

RTGS system. The transfer of securities and then cash for against payment 

transactions is completed by 12:00 for on-exchange trades and by 15:00 for offexchange 

trades. Confirmation of settlement is sent when the trades are 

confirmed as settled by KSEI and subsequently settled in the custodian’s system. 

Government bonds 

Settlement at the BI Scripless Securities Settlement System (BI-SSSS) is conducted on a real-time 

basis. 

T+0: Trade is executed. 

SD-1: Sub-registry receives instructions and these are pre-matched with the 

counterparty. 

SD: Sub-registry inputs trade instructions into BI-SSSS for matching and settlement. 

BI-SSSS checks availability of cash and securities. When matched, securities and 

then cash are transferred immediately on a real-time gross settlement basis. 

While securities are settled via BI-SSSS, payments are effected in BI-RTGS 

system via payment from the buyer’s to the seller’s sub-registry demand deposit 

account with BI. BI-SSSS and BI-RTGS are electronically linked. 





Cash settlement 

Cash management 

Payments in IDR and foreign currencies are restricted. 

Non-resident investors are not permitted to hold overdrafts on their IDR cash accounts in Indonesia. 

The rules for cash and foreign exchange transactions are as follows: 

Parties to transfer Transfer 

allowed? 

Exceptions 

Resident to resident Yes Unless the resident account is with an offshore bank. 

Non-resident to resident Yes Unless the resident account is with an offshore bank. 

Resident to non-resident No Unless: 

• To settle foreign exchange transactions with an onshore bank for the 

non-resident’s account with an onshore bank (subject to restrictions 

on derivative transactions); 

• To settle IDR transfers to a non-resident account with an onshore 

bank related to underlying economic activities in Indonesia a . 

Non-resident to non-resident b 

No Unless: 

• Between two onshore accounts (not necessarily at the same onshore 

bank) of the same non-resident entity; 

• To settle IDR transfers between non-resident accounts with onshore 

banks related to underlying economic activities in Indonesia c . 

• To settle foreign exchange transactions with an onshore bank for a 

non-resident account with an onshore bank. 

a. See “Economic activities for which resident to non-resident transfer of IDR is allowed” on page 6. 

b. See “Economic activities for which non-resident to non-resident transfer of IDR is allowed” on page 6. 

c. See “Documentary proof required for non-resident to non-resident transfer of IDR” on page 7. 

Economic activities for which resident to non-resident transfer of IDR is allowed 

• Payments related to direct participation in investments in Indonesia; 

• Payments related to trades in IDR securities/valuable papers issued by an Indonesian entity; 

• Payments related to offshore borrowings in IDR including debt restructuring; 

• Opening of import letter of credit in IDR with an onshore bank; 

• Opening of local letter of credit; 

• Purchasing of goods and service in Indonesia; 

• Cost of living for foreigners in Indonesia. 

Economic activities for which non-resident to non-resident transfer of IDR is allowed 

• Payments related to acquisition of a direct investment in Indonesia; 

• Payments related to the trades in IDR securities/valuable papers issued by an Indonesian entity; 

• Purchasing of goods and services in Indonesia; 

• Cost of living for foreigners in Indonesia. 





Documentary proof required for non-resident to non-resident transfer of IDR 

• For transactions of value less than or equal to IDR 500 million, no documentation is required but 

a declaration or other information about the type of underlying transactions must be supplied. 

• For transactions of values greater than IDR 500 million, the following documentation is required: 

- Dividend payment: a copy of the results from the shareholders’ meeting; 

- Direct investment: copy of the sales/purchase contract. 

• For sale/purchase of securities, a copy of the sale/purchase confirmation1 of the broker or any 

authorised party is required. 

• For dividend / coupon payments, the following documentation is required: 

- Dividend payment: a copy of the dividend payment confirmation from the issuing company; 

- Interest payment: a copy of the payment notification from the security issuer. 

Foreign exchange restrictions 

The IDR is a managed floating currency for which the central bank intervenes to stabilise the exchange 

rate against the USD. The central bank quotes the USD buy and sell rates on a daily basis. 

Foreign exchange controls require custodian banks report as follows, according to the size of the 

transaction: 

• Transactions of USD 10,000 or over: daily inward and outward remittance transactions by 

customers in IDR and foreign currency and local transactions in foreign currencies between local 

residents. 

• Transactions below USD 10,000: lump sum of movements. 

Foreign exchange transactions prohibited for banks 

• Extending credit in IDR or foreign currencies unless through certain retail consumer loans; 

• Granting overdraft facilities, including temporary overdrafts and intraday overdrafts; 

• Placing IDR with non-residents, including any IDR transfers to offshore banks; 

• Purchasing securities in IDR issued by non-residents; 

• Inter-office transactions in IDR; 

• Equity participation in IDR with non-residents. 

1. Against payment settlement instructions are considered to be supporting documents. 





Summary of foreign exchange regulations 

FX transaction type Regulation 

Outright Buy, value today, TOM Underlying documentation is required, like a buy /receive against payment settlement 

and Spot 

instruction via SWIFT, tested telex, tested fax or Reuters Monitor Dealing System. 

Forward Value and Swap • Minimum term is 3 months, but no longer then the time frame of the investment (no 

overnight Swaps); 

• Underlying documentation is required, like buy/receive against payment settlement 

instructions via SWIFT, tested telex, tested fax or Reuters Monitor Dealing System. 

Outright Sell/Delivery against • The regulation does not govern the sale of IDR against foreign currencies for value 

payment 

today, tomorrow and spot. These transactions can be executed without supporting 

documentation of the underlying transactions. 

Even though the sale of IDR spot is not restricted, it must be proved that the source of 

funds is an economic activity, for example, settlement of a delivery against payment 

instruction. 

According to market practice, the sale of IDR is held off until settlement of the related 

delivery against payment instruction. This is to avoid a situation where the transaction 

fails and no more supporting documentation is available to cover the FX trade. 

• The regulation does not impose any restrictions on repatriation of cumulated IDR 

balances in non-resident accounts. 

Derivative Maximum USD 1 million per bank. 

SBI (Sertifikat BI) as underlying Not allowed. 

transaction to book Forward 

Value and Swap 

Penalty 10% of threshold breached. 

IDR transfers under 

Declaration of underlying transaction is required (for example, related securities 

IDR 500 million 

settlement instruction). 

Payment systems 

• National payment system (SPN) 

BI operates the SPN for the electronic real-time transfer of cash funds in Indonesia on a gross 

basis. The system is open to banks, non-bank financial institutions, other entities that transfer 

funds and switching1 companies. To access SPN, members are required to maintain accounts at 

BI. 

The SPN (RTGS) system is open daily from Monday to Friday between 06:30 and 16:30. 

Cash payments may only be made if funds exist on the payer's account at the central bank. 

Payments are considered final and irreversible upon the book-entry crediting of the receiver’s 

account. Back value payments are not possible via the SPN (RTGS) system. 

• Bank Indonesia National Clearing System (SKN) 

The SKN is a paperless clearing system used to clear funds transfers for amounts up to IDR 

100 Million. Under the SKN, same-day transfers can be executed through the issuance of a 

physical credit note for interbank payments and via check for payments between bank to nonbank 

entities. 

1. Switching is the process of liquidating a position in exchange for other securities with better prospects for growth, yields or capital 

gains. 




Registration 

Fixed income securities 

Most bonds are bearer instruments and registration is not required. 


Equities 

Registration is done automatically by crediting the book-entry/scripless securities to the KSEI account. 

The account holder is considered to be the registered owner. 

Physical securities are registered upon receipt of the investor’s instruction or a standing instruction. 

Certificates must be endorsed under the investor’s name before registration. The registration process 

may take up to 14 business days depending on the number of certificates; during the corporate action 

peak season, this period may be longer. 

Neither a central registrar nor the nominee concept are recognised in Indonesia. Physical shares are 

registered with each individual issuer and the appointed registrar. 

Account structure at KSEI 

The central depository (KSEI) requires direct participants (custodian banks, brokers) to open stock 

accounts for their clients. Such accounts are on account level (that is, Clearstream Banking) and not on 

final beneficiary basis. Clients may open a sub-account showing the name of the final beneficiary in 

order to benefit from any Double Taxation Treaty agreement. 

In the event of KSEI bankruptcy, the assets under custody are considered to be third-party’s assets and 

as such will not be included in KSEI’s own assets but will be distributed as per the KSEI’s records. 

Account structure at BI 

BI, as the central registry, will only deal with banks (for proprietary holdings) and with sub-registries - 

that is, custodians - (for third-party holdings). 

Each sub-registry maintains an omnibus account and a single cash account at BI to facilitate settlement 

of government bonds (GDS) and BI certificates (SBI) and, in turn, investors must open accounts with the 

sub-registries. The accounts at sub-registry level should reflect the owner of the GDS and SBI (that is, 

client’s name “for and behalf of” the owner). 

Stamp duty 

Stamp duty is not applicable in the Indonesian market. 

Penalties (buy-ins etc.) 

All stock exchange trades must settle on T+3. If any shortage of securities is not covered by T+3, KPEI 

will impose a penalty called the “Alternate Cash Settlement” (ACS). 

ACS is 125% of the highest market value between T+0 and T+3. If the broker does not have sufficient 

cash to pay the penalty, KPEI will use the guarantee fund to cover the short cash position and substitute 

the relevant buying broker. The selling broker will be suspended for the day pending investigation by the 

JSX. 

Brokers that are aware of insufficient securities on T+3 have the option to buy them from the cash 

market (T+0 settlement cycle) or via the Securities Borrowing programme. KPEI will net off the broker’s 

position as of SD from the cash market and the regular market. 

Buying brokers with insufficient cash on T+3 will be suspended and KPEI will use the guarantee fund to 

cover the obligations. Before suspending the broker, KPEI checks whether the broker has other 

collateral, including offline collateral such as time deposits or bank guarantees pledged to KPEI. 





Securities administration 

Income collection 


Interest is paid on most debentures on a quarterly basis. 

Equities 

Dividends are paid annually in cash or securities. The peak season is May to September. 

Corporate actions 

Corporate action announcements are usually made by the company or by JSX a few days after the AGM. 

Most common corporate events 

The most common corporate actions in the Indonesian market are cash and stock dividends, rights 

issues (tradable and non-tradable), AGM/EGM and bonus issues. 

Proxy voting 

All registered investors, local and foreign, can vote. Votes can be exercised either in person or by proxy. 

Market compensation rules 

Taxation 


Equities 

Books Close date a 

Corporate debt instruments KSEI notifies the issuers on the 

list of entitled holders 

4 days prior to Payment date. 

Equities b, Warrants, Unit 

trusts 

KSEI notifies issuers on the 

list of entitled holders 

1 day after Record date. 

Government bonds BI notifies issuers on the 

list of entitled holders as of record 

2 days prior to Payment date. 

a. The date on which securities positions are fixed and holders are recorded as eligible to receive entitlements. 

b. Payment date for dividend payments is generally from 3 to 10 working days after Books Close/Record Date. 

Please refer to the Clearstream Banking Customer Tax Guide. 

Basis for entitlement 

Settled position on 

books close date. 





Standard interest 

calculation rule 

360-day basis 

Not applicable 

360-day basis 

Market compensation basis: Settlement date 

Automatic Compensation Managed by Local CSD: No 

Restriction on custody events/transaction types: No restriction 

Additional information: No specific rules for compensation 

Service offered by CBL: Adjustment performed based on information received from 

the depository. 

Market compensation basis: Settlement date 

Automatic Compensation Managed by Local CSD: No 

Restriction on custody events/transaction types: No restriction 

Additional information: No specific rules for compensation 

Service offered by CBL: Adjustment performed based on information received from 

the depository.

Indonesia - Clearstream

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