Indonesia: Securities-Related Laws

The Indonesia Stock Exchange is the sole surviving securities market in Indonesia. The main securities traded on the IDX are shares (including rights) and bonds. The securities market is regulated by Financial Services Authority or OJK. Apart from which there are three self-governing bodies: the Indonesia Stock Exchange, Indonesian Central Securities Depository and Indonesian Clearing and Guarantee Corporation. The following legislations are applicable to the equity markets/exchanges: -Indonesian Capital Markets Law (Law No. 8 of 1995 on Capital Markets) -Financial Services Authority Act 2011 (Law No. 21 of 2011 on Financial Services Authority) -OJK rules and regulations (including regulations issued previously by Bapepam-LK) -IDX rules on listing, trading, and membership requirements -KSEI regulations -KPEI regulations

While there is much flux on whether to consider cryptocurrency as a security or a commodity, given that BAPPEBTI in June 2018 announced that it will allow all cryptocurrency trading on futures exchanges as a commodity, it is worth considering commodity exchange laws in Indonesia.

Commodity markets are regulated by the Indonesia Commodity and Derivatives Exchange or ICDX. Trading in ICDX is settled, guarantee and cleared by Indonesia Clearing House (ICH). The English version of Indonesia’s laws governing exchange of commodities, Government Regulation Number 49 of 2014 concerning the Implementation of Commodity Futures Trading provide greater details on how to trade in commodities on the market. As per the law, in granting of a business license of Futures Exchange, the exchange must be established by 11 limited liability companies after granting of license by the Head of Commodity Futures Trading Regulatory Agency (COFTRA) in Indonesia.

In order to get the license, the following items need to be submitted to COFTRA: -Copy of establishment deed of the LLC -List of founders of the Futures Exchange -Taxpayer Identification Number of the LLC -Profiles of the founders of the Futures Exchange -Economic considerations on which the establishment of the Futures Exchange is based, including the description of the exchange to be established -Business plan of 3 years -Financial projection of 3 years -Initial Plan of the LLC which has been audited by a Public Accountant; -List of candidates of Commissioners and Directors -Design of rules and regulations of exchange -Cooperation agreements of the Futures Exchange with the Futures Clearing House -Planned Futures Contracts, Sharia Derivative Contracts, any other such contracts, and/or trades of physical commodities -A written statement on readiness of hardware and software for the Futures Exchange -Copy of establishment deed of the Futures Clearing House


-Government Regulation Number 49 of 2014 concerning the Implementation of Commodity Futures Trading

-Thomson Reuters Practical Law

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