Indonesia - Clearstream

Registration
Fixed income securities
Most bonds are bearer instruments and registration is not required.
Indonesia
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.
Clearstream Banking
20 December 2011
Market Profile Indonesia - 9