CIRCULAR LETTER
To
ALL PARTICIPANTS OF
BANK INDONESIA – SCRIPLESS SECURITIES SETTLEMENT SYSTEM
IN INDONESIA
Subject : Operation of the Bank Indonesia - Scripless Securities
Settlement System
With regard to the enactment of Bank Indonesia Regulation Number
10/2/PBI/2008 dated February 4, 2008 concerning Bank Indonesia - Scripless
Securities Settlement System (State Gazette of the Republic of Indonesia Number
11 of 2008, Supplement to the State Gazette of the Republic of Indonesia Number
4809), it is necessary to further regulate the Operation of the Bank Indonesia -
Scripless Securities Settlement System.
I. GENERAL PROVISIONS
1. Bank is a commercial bank as referred to in Act Number 7 of 1992
concerning Banking as amended by Act Number 10 of 1998.
2. Open Market Operation, hereinafter to be referred to as OMO, is a
transaction activity in the money market conducted by Bank Indonesia
with Banks and other parties in the effort of monetary control
3. OMO Instrument is an instrument used in purpose of OMO and
administered in the Bank Indonesia - Scripless Securities Settlement
System.
4. Funding Facility is a provision of funds in the form of credit or
financing from Bank Indonesia to Banks and administered through the
Bank Indonesia - Scripless Securities Settlement System.
5. Government Bond, hereinafter to be referred to as SUN, is a securities
in the form of promissory note in the Rupiah issued by the Government
of the Republic of Indonesia as referred to in Act Number 24 of 2002
concerning Government Bond.
6. Government Securities, hereinafter to be referred to as SBN, is a
securities in the form of SUN and/or securities issued by the
Government based on sharia principles.
7. Securities is a securities issued by Bank Indonesia, the Government,
and/or other institutions and administered in the Bank Indonesia -
Scripless Securities Settlement System.
8. Bank Indonesia – Real Time Gross Settlement System, hereinafter to be
referred to as BI-RTGS System, is a system for electronic fund transfer
among BI-RTGS System members in the Rupiah with settlement in real
time and on individual per transaction basis.
9. Bank Indonesia - Scripless Securities Settlement System, hereinafter to
be referred to as BI-SSSS, is a system that provides transaction
facilities with Bank Indonesia including its administration and
electronic securities administration, seamlessly interconnected among
Participants, the Operator and the BI-RTGS System.
10. Transaction with Bank Indonesia is a transaction conducted by Bank
Indonesia in OMO, Funding Facilities, SBN transactions for and on
behalf of the Government, and/or other transactions through the
BI-SSSS.
11. Securities Administration is an activity which covers registration of
ownership, clearing and settlement, and payment of Securities coupon
(interest) and principal/nominal value.
12. BI-SSSS Operator, hereinafter to be referred to as Operator, is a party
that manages the BI-SSSS in conducting Transactions with Bank
Indonesia and its administration and Securities Administration as well.
13. SSSS Participant, hereinafter to be referred to as Participant, is a
BI-SSSS user eligible and/or approved by Bank Indonesia to conduct
Transactions with Bank Indonesia and/or Securities Administration
14. SBN Auction Participant is a Bank and/or other financial institutions
designated by the Minister of Finance of the Republic of Indonesia as
Primary Dealer to be able to participate in SBN auction
15. Central Registry is Bank Indonesia which performs functions as the
Securities administrator on behalf of Participants holding Securities
Account with the BI-SSSS.
16. Sub-Registry is a Bank or an institution conducting custodial activities
which is eligible and approved by Bank Indonesia to perform functions
as Securities administrator on behalf of customers
17. Securities Settlement is a debiting and crediting on Securities Account
through the BI-SSSS in purpose of administration of Transactions with
Bank Indonesia and Securities Administration.
18. Fund Settlement is a debiting and crediting on Demand Deposit
Account and/or other accounts with Bank Indonesia through the
BI-RTGS System in purpose of administration of Transactions with Bank
Indonesia and Securities Administration through the BI-SSSS.
19. Delivery Versus Payment, hereinafter to be referred to as DVP, is a
Securities transaction settlement by conducting Securities Settlement
and Fund Settlement simultaneously.
20. Free of Payment, hereinafter to be referred to as FoP, is a Securities
transaction settlement by Securities Settlement through the BI-SSSS,
while Fund Settlement is not conducted simultaneously with Securities
Settlement or with no Fund Settlement.
21. Securities Account is an account held by a particular Participant in the
BI-SSSS to register ownership of Securities and/or OMO Instruments.
22. Demand Deposit Account is an account in the Rupiah which is
administered in Bank Indonesia and used in the implementation of the
BI-SSSS.
23. Paying Bank is a Bank participating in the BI-RTGS System that is
designated by Participant of no BI-RTGS System Participant as the
Bank to pay and receive funds.
24. Abnormal Condition is a situation or condition occurring due to an
interference or failure of hardware, software, communication network,
BI-SSSS supporting applications or facilities which influences
smoothness of BI-SSSS operations.
25. State of Emergency (force majeure) is a situation or condition occurring
due to incidents which either directly or indirectly influence smoothness
of BI-SSSS operations and occur beyond Operator’s and/or
Participant’s control and ability so that the BI-SSSS may not be
operated properly, among other things, natural disaster, fire, strike,
mass riot, rebellion, sabotage, war, and/or regulation issued by the
Government
26. Guest Bank Facility is a BI-SSSS facility at the Operator’s location
provided for any Participant as a reserve in the event of any Abnormal
and/or Emergency Condition which causes the Participant unable to
apply the BI-SSSS at Participant location.
27. Agreement on the Application of BI-SSSS between Operator and
Participant, hereinafter to be referred to as the Agreement, is a written
agreement between the Operator and a Participant containing terms and
conditions for each party.
28. Authenticator Text is a security facility which functions as a test key
and is valid for a specific period, interconnecting the BI-SSSS between
Participants and the Operator.
29. Administrative Message is a facility used to transmit information from
the Operator to Participants or the other way around or among
Participants.
II. THE OPERATOR
A. BI-SSSS Operational Objectives
The BI-SSSS operational objectives are :
1. to enhance efficiency and effectiveness of the implementation of
Transactions with Bank Indonesia and its administration and
Securities Administration as well.
2. to provide a secure, accurate, reliable, and rapid Securities
transaction settlement facility for Banks and other market players
to reduce settlement risks.
3. to provide information of transactions, Securities transaction
settlements, and other information in effort of supporting the
implementation of monetary policy by Bank Indonesia and SBN
management by the Government.
B. Operator Organization
1. The Operator is Bank Indonesia, c.q. Directorate of Monetary
Management.
2. Directorate of Monetary Management, c.q. Monetary Operation
Bureau (DPM-BOpM), shall conduct Transactions with Bank
Indonesia.
3. Directorate of Monetary Management, c.q. Monetary Management
Transaction Settlement Division (DPM-PTPM), shall manage and
administer BI-SSSS operations.
C. Operator Duties and Authorities
1. BI-SSSS Operational Management
In managing BI-SSSS operations the Operator has duties and
authorities, among other things, to :
a. provide and maintain facilities in effort of smoothness of
BI-SSSS operations;
b. prescribe BI-SSSS operating requirements and procedures in
normal condition;
c. apply a contingency plan in the event of any Abnormal and/or
Emergency Condition (force majeure);
d. determine BI-SSSS operating hours;
e. stipulate, charge, and change fees for the application of the
BI-SSSS;
f. supervise Participants on the application of the BI-SSSS;
g. impose administrative sanctions on Participants; and
h. change membership status.
2. Transactions with Bank Indonesia
In Transactions with Bank Indonesia the Operator has tasks and
authorities to :
a. conduct transactions (auction/no-auction) for and on behalf of
Bank Indonesia and other parties, namely the Government, c.q.
the Ministry of Finance of the Republic of Indonesia, and/or
other institutions as approved by Bank Indonesia.
b. conduct transactions (auction/no-auction) under requirements
and/or provisions stipulated by the parties as referred to in
letter a.
3. Administration Activities
In administration activities which comprise administration of the
Transactions with Bank Indonesia and Securities Administration
the Operator exercises tasks and authorities under the following
requirements.
a. Implementation of Settlements
1) The Operator shall conduct settlement on Transactions
with Bank Indonesia and settlement on Securities
transactions among Participants in secondary markets.
2) The settlements shall be conducted by DVP or FoP.
3) In the settlement activities as referred to in number 1), the
Operator is authorized to debit Demand Deposit Account
and/or Securities Account of Participants.
4) Any settlement may only be conducted if the balance of
Demand Deposit Account and/or Securities Account of
Participant is adequate for the settlement.
5) The settlement which has been conducted in the BI-SSSS
by debiting Demand Deposit Account and/or Securities
Account of Participant as referred to in number 4) shall be
final and irrevocable.
6) The Operator shall impose sanction in the form of
financial penalty on any OMO Participant which fails to
conduct settlement due to inadequate balance in its
Securities Account and/or Demand Deposit Account.
7) The Operator shall apply Securities settlement procedures
in accordance with related provisions concerning OMO,
Funding Facilities, and/or SBN transaction for and on
behalf of the Government.
8) The Operator is authorized to conduct early termination
by discontinuing a second leg transaction settlement on
Securities transaction among Participants in secondary
markets which has two processes of settlement, such as
repo, collateral (pledge), and Securities borrowing and
lending.
9) The early termination by the Operator as referred to in
number 8) shall be based on request of one of Participants
in transaction, decision of the authorized supervisory
institution, sentence of the court and/or arbitration
institution which has a final and binding legal force.
b. Registration of Ownership
The Operator shall register or change registration of
Securities/OMO Instrument ownership and administer Funding
Facility collateral in Securities Account of Participant based on
the implementation of settlement as referred to in letter a.
c. Implementation of Payments
1) The Operator shall conduct payments of coupon (interest)
or yield and redemption of Securities/OMO Instrument
principal/nominal value to Participant holding the
Securities.
2) In the payments as referred to in number 1) the Operator
is authorized to debit Demand Deposit Account of the
Participant issuing the Securities/OMO Instruments.
D. BI-SSSS Operating Time
1. BI-SSSS Operating Days and Hours
a. The Operator shall prescribe BI-SSSS Operating Time
comprising operating days and hours.
b. The Operator shall prescribe BI-SSSS operating time every
working day, except stipulated differently.
c. The SSSS operating hours shall be the same as the
BI-RTGS System operating hours, except for the BI-SSSS cut-off
time which shall be conducted earlier than the BI-RTGS
System cut-off time.
d. The operating hours as referred to in letter c shall be as
follows.
BI-SSSS (western Indonesia
standard time)
BI-RTGS (western Indonesia
standard time)
System opening 6.30 a.m. 6.30 a.m.
Cut-off warning 5.00 p.m. 5.00 p.m.
Pre-cut off 6.00 p.m. 6.00 p.m.
Cut-off 6.30 p.m. 7.00 p.m.
e. The BI-SSSS operating hours as referred to in letter d shall be
applicable in normal condition and may be changed by the
Operator as further stipulated in number 2.
f. If the BI-SSSS operating day is stipulated differently and/or
the BI-SSSS operating hours are changed, the Operator shall
notify all Participants through the BI-SSSS (Administrative
Messages) and/or other information facilities.
2. Change of BI-SSSS Operating Hours
a. The BI-SSSS operating hours may be changed by the Operator
under the following considerations.
1) Based on Operator’s policy
a) The change of operating hours based on Operator’s
policy may be an extension or a reduction of operating
hours.
b) The Operator may change the operating hours
including the transaction window time.
c) The change of operating hours as referred to in letter
a) and letter b) may be based, among other things, on:
(1) an interference on the SSSS and/or the
BI-RTGS System; and/or
(2) an Operator’s policy that brings about a change
of the operating hours.
2) Based on Participant’s Request
a) The change of operating hours based on request of
Participant may only be an extension of operating
hours.
b) The extension of operating hours may be based on
necessary additional operating hours to conduct
Securities Settlement.
c) The extension of operating hours as referred to in
letter b) shall be conducted under the following
procedures.
(1) For Participant as BI-RTGS System Participant
Application shall be submitted in writing to the
BI-RTGS System Operator in accordance with
applicable provisions concerning BI-RTGS
System.
(2) For Sub-Registry Participant
Application shall be submitted by Paying Bank
designated by Sub-Registry Participant to the
BI-RTGS System Operator in accordance with
applicable provisions concerning BI-RTGS
System.
d) Any extension of BI-SSSS operating hours based on
request of Participant shall be charged a fee in
accordance with provisions concerning BI-RTGS
System.
E. Fees for Application of BI-SSSS
The Operator shall charge fees on Participant for the application of the
BI-SSSS under the following stipulations.
1. Types of Fee
Fees for the application of the BI-SSSS comprise :
a. Fee for Transaction with Bank Indonesia, namely fee for
submission of bids of Transaction with Bank Indonesia by
Participant, including submission in the event of a cancellation
and/or amendment.
b. Settlement fee, comprising :
1) settlement fee for Transaction with Bank Indonesia; and
2) settlement fee for Securities transaction among
Participants in secondary markets.
c. Fee for information request to the Operator and transmission of
Administrative Messages.
d. Fee for application of Guest Bank Facilities.
2. Stipulation of Fees for Transaction, Settlement, and Information
Request
The amount of fees for the types of fee as referred to in number 1
letter a, letter b, and letter c, shall be determined as follows.
a. The amount of fee may be based on the operating hours for
submission of transaction, implementation of settlement,
and/or request for information, namely the normal hours and
the peak hours.
b. The allocation of transaction hours and window time shall be
stipulated as follows.
1) The normal hours are from the transaction opening up to
the pre-closing; and
2) The peak hours are from the pre-closing up to the closing.
c. The allocation of operating hours for the implementation of
Securities Settlement and information request shall be
stipulated as follows.
1) The normal hours are from the BI-SSSS opening up to
before 3.00 p.m. (western Indonesia standard time); and
2) The peak hours are from 3.00 p.m. (western Indonesia
standard time) up to the BI-SSSS cut-off.
3. Stipulation of Fee for Guest Bank Facilities
The fee for the application of Guest Bank Facilities as referred to
in number 1 letter d shall be stipulated as follows.
a. The fee for the application of Guest Bank Facilities shall be
based on the duration of the application of Guest Bank
Facilities referring to the system start-up up to system
shut-down time.
b. The duration of the application of Guest Bank Facilities shall
be based on the accumulation of the application of Guest Bank
Facilities in 1 (one) day with a time rounding up of 1 (one)
hour as the example presented in Appendix 1.
c. In the event of any interference in Bank Indonesia internal
network during the application of the Guest Bank Facilities, the
Operator may adjust the duration of the application of Guest
Bank Facilities.
d. In the event of any State of Emergency, the Operator may
exempt Participants from the fee for the application of Guest
Bank Facilities.
4. Fees
The BI-SSSS fees as referred to in number 2 and number 3 shall
be stipulated in accordance with Appendix 1. In the event of a
change of fees, the Operator shall announce such change to
Participants through Administrative Messages and/or other
facilities.
5. Calculation and Charging of Fees
The calculation and charging of fees for the application of the
BI-SSSS by the Operator on Participants shall be stipulated as
follows.
a. The amount of fees for each Participant shall be calculated by
the Operator at the end of each day.
b. The Operator shall charge the fees as referred to in letter a on 1
(one) following working day, by debiting Demand Deposit
Account of Participant or Paying Bank designated by the
Participant.
6. Charging Fees by Participant on Customers
In order to support smoothness of the implementation of
Transactions with Bank Indonesia and Securities Administration
through the BI-SSSS, Participants may charge fees on customers
under the following stipulations.
a. Participants shall charge fees on customers in normal amounts.
b. Participants shall announce the amount of fees for the
application of the BI-SSSS stipulated by the Operator and the
amount of fees for the application of the BI-SSSS which shall
be charged by the Participants on customers.
c. The announcement as referred to in letter b shall be in writing
and displayed at each Participant’s office in an easily visible
place and easily legible by customers.
F. Discharge of Operator’s Responsibility
Participants shall discharge the Operator from claims on any arising
and/or likely arising loss experienced by the Participants or any third
party as the result of a delay or failure of any transaction, Securities
transaction settlement, Securities coupon (interest) or yield and
principal/nominal value payment, and/or other causes which arise. Such
delay or failure of the implementation of transaction, Securities
Settlement, Securities coupon (interest) or yield and principal/nominal
value payment may be resulted, among other things, from :
1. transmission of Transaction with Bank Indonesia and/or Securities
transaction settlement instruction by Participant to the Operator
which is implemented by unauthorized official;
2. incorrect data of Transaction with Bank Indonesia and/or
Securities settlement instruction submitted by Participant to the
Operator;
3. interference on communication network and/or system at
Participant which brings about rejection on Transaction with Bank
Indonesia and delay in Securities transaction settlement;
4. inability or delay in providing funds by Participant as the
Securities issuer in its Demand Deposit Account which brings
about a failure or delay in payment of coupon (interest) or yield
and redemption of principal/nominal value of Securities upon
maturity to Participant as the Securities holder;
5. early termination by the Operator which is conducted through the
BI-SSSS as referred to in point C.3.a.8); and
6. Abnormal Condition and/or State of Emergency either
experienced by the Operator or Participant.
III. PARTICIPATION
A. Types of Participant
1. Parties eligible to become Participants are :
a. Bank Indonesia;
b. the Ministry of Finance of the Republic of Indonesia;
c. Banks;
d. Depository and Settlement Institutions;
e. Rupiah and Foreign Exchange Money Market Brokerage
Companies;
f. Securities Companies; or
g. other institutions approved by Bank Indonesia.
2. By function of Participant, the parties as referred to in number 1
may be categorized as :
a. Securities Issuer, namely Bank Indonesia, the Ministry of
Finance of the Republic of Indonesia, and/or other
institutions approved by Bank Indonesia.
b. OMO Participant, namely Banks, Rupiah and Foreign
Exchange Money Market Brokerage Companies, and/or
Securities Companies.
c. Funding Facility Participant, namely Banks.
d. SBN Auction Participant, namely Banks and Securities
Companies designated by the Minister of Finance of the
Republic of Indonesia as Primary Dealer, Indonesia Deposit
Insurance Corporation, and Bank Indonesia.
e. Holder of Securities Account with the Central Registry, such
as the Ministry of Finance of the Republic of Indonesia,
Banks, Sub-Registries, and other institutions approved by
Bank Indonesia.
3. By participation in the BI-RTGS System, the parties as referred to
in number 2 may be classified as follows.
a. BI-RTGS System Participant
BI-RTGS System Participant is a Participant holding
Demand Deposit Account for the implementation of Fund
Settlement and/or payment for other liabilities related to
Transactions with Bank Indonesia and administration through
the BI-SSSS.
b. No BI-RTGS System Participant
No BI-RTGS System Participant is a Participant which does
not hold Demand Deposit Account and so the
implementation of Fund Settlement and/or payment of other
liabilities shall be conducted through a Paying Bank.
4. By type of participation in the BI-SSSS, Participants may be
classified into :
a. Direct Participant (Principal Member)
Direct Participant (Principal Member) is a Participant which
may make direct connections into the Operator system.
b. Indirect Participant (Subsidiary Member)
Indirect Participant (Subsidiary Member) is an additional
Participant to a Direct Participant which makes connections
into the Operator system through the Direct Participant.
B. Requirements to Become Participant
To become a Participant any party meeting criteria of the type of
Participant as referred to in letter A number 1 and number 2 shall meet
requirements as follows.
1. To possess facilities that meet technical requirements as referred to
in Appendix 2.
2. By type of Participant, any prospective Participant shall meet
requirements :
a. has become a Direct Participant in the BI-RTGS System, if the
prospective Participant is a Bank;
b. has been approved by Bank Indonesia to become a Sub-Registry,
if the prospective Participant is a Sub-Registry; and/or
c. has applied to become an SBN Auction Participant/has been
designated to become a Primary Dealer/stipulated as an SBN
Auction Participant, if the prospective Participant is a Bank,
Securities Company, or other institution eligible to become an
SBN Auction Participant.
3. Any other prospective Participant of no BI-RTGS System
Participant, such as Rupiah and Foreign Exchange Market
Brokerage Company, Securities Company, and/or Sub-Registry, has
to designate Paying Bank under the following requirements.
a. The Paying Bank shall be assigned in :
1) charging of BI-SSSS fees;
2) Fund Settlement on Securities transactions; and/or
3) receiving of payments of coupon (interest) or yield and
principal/nominal value of Securities upon maturity.
b. The designated Paying Bank shall be required to submit a
confirmation on the designation as the Paying Bank as the
example in Appendix 3 to the Operator through the prospective
Participant.
c. The prospective Participant of Rupiah and Foreign Exchange
Market Brokerage Company and Securities Company shall
designate 1 (one) Paying Bank in the charging of BI-SSSS fees
as referred to in letter a number 1).
d. The prospective Sub-Registry Participant shall be required to
designate Paying Banks under the following requirements.
1) The prospective Sub-Registry Participant shall designate 1
(one) Paying Bank in the charging of BI-SSSS fees,
implementation of Fund Settlement on Securities
transactions, and the receiving of payments of coupon
(interest) or yield and principal/nominal value of Securities
upon maturity as referred to in letter a.
2) The prospective Sub-Registry Participant may choose no
more than 9 (nine) other Paying Banks in the Fund
Settlement on Securities transactions of customers as
referred to in letter a number 2).
e. If the Paying Bank is designated to implement the Fund
Settlement as referred to in letter a number 2), such Paying Bank
shall manage a Fund Settlement limit for the Participant that
designates referring to Participant obligations as stipulated in
point D.2.d.2).
C. Procedure of Application to Become Participant
1. BI-RTGS System Participant
a. Any prospective Participant as a BI-RTGS System Participant
which also performs function as an OMO Participant, SBN
Auction Participant, and/or holder of Securities Account with the
Central Registry shall apply, as the example in Appendix 4, to
the Operator under the following address.
Bank Indonesia - Directorate of Monetary Management,
c.q. Monetary Management Transaction Settlement Division
Sjafruddin Prawiranegara Tower, 11th Floor
Jl. M.H. Thamrin No. 2
Jakarta 10350
b. Any prospective Participant which head office is located outside
the working area of Bank Indonesia Head Office shall forward a
copy of the application letter to local Bank Indonesia Regional
Office.
c. The application letter as referred to in letter a must be
comprehensively enclosed with :
1) information of Participant as the example in Appendix 5;
2) photocopy of company Statutes and its amendments;
3) photocopy of notary act which contains the latest company
organization structure; and
4) photocopy of the application letter to become an SBN
Auction Participant or designation as a Primary Dealer by
the Minister of Finance of the Republic of Indonesia for
SBN Auction Participant. If the prospective Participant has
not been able to enclose the letter of designation as a
Primary Dealer by the Minister of Finance of the Republic
of Indonesia, such prospective Participant shall be required
to submit the letter of designation to the Operator
immediately after receiving the letter of designation.
d. The Participant shall submit the supporting documents as
referred to in letter c comprehensively and correctly.
e. If necessary, the Operator may be present at the prospective
Participant location to check the fulfillment of the requirements
as referred to in letter B number 1.
f. Based on the application letter, supporting documents, and
results of the checking at the prospective Participant location, the
Operator shall notify the prospective Participant of approval or
disapproval by letter.
g. In the event of a disapproval, the letter of disapproval sent by the
Operator to the prospective Participant as referred to in letter f
shall be provided with explanations concerning the reasons of
the disapproval on the application of the prospective Participant.
h. Any prospective Participant which has been approved as a
Participant shall submit the Agreement to the Operator as the
example in Appendix 6 which has been signed up by authorized
official in duplicate.
i. If the prospective Participant is a Bank which conducts business
on conventional basis, Sharia Division (UUS), and/or
Sub-Registry, the Agreement as referred to in letter h shall be signed
up separately.
j. The Participant shall receive 1 (one) copy of the Agreement
which has been signed up by authorized Bank Indonesia official.
k. The Operator shall install BI-SSSS applications and provide the
Manual for the Application of BI-SSSS for the Participant.
l. The Operator shall conduct trainings on the application of the
BI-SSSS for Participant officers.
m. If the prospective Participant which has received the letter of
approval, as referred to in letter f, fails to submit the Agreement
in a period of 1 (one) month as of the date of the letter of
approval, the approval as Participant shall be declared abrogated
and the process of application must be repeated.
2. Sub-Registry
a. Any prospective Participant which has been approved by Bank
Indonesia to become a Sub-Registry shall submit an application
letter, as the example in Appendix 4, to the Operator under the
address as referred to in point C.1.a.
b. The application letter as referred to in letter a shall be enclosed
with :
1) information of Participant as the example in Appendix 5;
2) photocopy of amendments to company Statutes and notary
act containing company organization structure in the event
of any amendment after the approval on the application as a
Sub-Registry;
3) the letter of confirmation of a Paying Bank as the example
in Appendix 3; and
4) photocopy of the letter of approval as a Sub-Registry from
Bank Indonesia.
c. The Sub-Registry shall submit the supporting documents as
referred to in letter b comprehensively and correctly.
d. If necessary, the Operator may be present at the Sub-Registry
location to check the fulfillment of the requirements as referred
to in letter B number 1.
e. Based on the application letter, supporting documents, and
results of the checking at the Sub-Registry location, the Operator
shall notify the Sub-Registry of approval or disapproval by
letter.
f. In the event of a disapproval, the letter of disapproval sent by the
Operator as referred to in letter e shall be provided with
explanations concerning the reasons of the disapproval on the
application of the prospective Participant.
g. The Sub-Registry which has been approved as a Participant shall
submit the Agreement to the Operator as the example in
Appendix 6 which has been signed up by authorized official in
duplicate.
h. The Sub-Registry shall receive 1 (one) copy of the Agreement
which has been signed up by authorized Bank Indonesia official.
i. The Sub-Registry which chooses to become a Direct Participant
(Principal Member) and has been approved to become a
Participant shall submit Authenticator Text data to the Operator
under the procedure of Authenticator Text data management as
referred to in Appendix 7.
j. The Operator shall install BI-SSSS applications and provide the
Manual for the Application of BI-SSSS for the Sub-Registry.
k. The Operator shall conduct trainings on the application of the
BI-SSSS for Sub-Registry officers.
l. If the prospective Participant which has received the letter of
approval as referred to in letter e fails to submit the Agreement
in a period of 1 (one) month since the date of the approval letter,
the approval as a Participant shall be declared abrogated and the
process of application must be repeated.
3. Rupiah and Foreign Exchange Market Brokerage Company and
Securities Company
a. Any Rupiah and Foreign Exchange Market Brokerage Company
and Securities Company shall submit an application letter, as the
example in Appendix 4, to the Operator under the address as
referred to in point C.1.a.
b. The application letter as referred to in letter a must be enclosed
with :
1) information of Participant as the example in Appendix 5;
2) photocopy of company Statutes and its amendments;
3) photocopy of notary act which contains the latest company
organization structure;
4) the letter of confirmation as a Paying Bank as the example
in Appendix 3; and/or
5) photocopy of the application letter to become an SBN
Auction Participant or designation as a Primary Dealer by
the Minister of Finance of the Republic of Indonesia for
SBN Auction Participant. If the prospective Participant has
not been able to enclose the letter of designation as a
Primary Dealer by the Minister of Finance of the Republic
of Indonesia, the prospective Participant shall be required
to submit the letter of designation to the Operator
immediately after receiving the letter of designation.
c. The Participant shall be required to submit the supporting
documents as referred to in letter b comprehensively and
correctly.
d. If necessary, the Operator may be present at the prospective
Participant location to check the fulfillment of the requirements
as referred to in letter B number 1.
e. Based on the letter of application, supporting documents, and
results of the checking at the prospective Participant location, the
Operator shall notify the prospective Participant of approval or
disapproval by letter.
f. If the letter of application or approval as referred to in letter b
number 5) is disapproved or revoked by the Minister of Finance
of the Republic of Indonesia, the Operator may abrogate the
letter of approval as referred to in letter e and terminate its
membership in the BI-SSSS.
g. In the event of a disapproval, the letter of disapproval sent by the
Operator as referred to in letter e shall be provided with
explanations concerning the reasons of disapproval on the
application of the prospective Participant.
h. The prospective Participant which has been approved as a
Participant shall submit the Agreement to the Operator as the
example in Appendix 6 which has been signed up by authorized
official in duplicate.
i. The prospective Participant shall receive 1 (one) copy of the
Agreement which has been signed up by authorized Bank
Indonesia official.
j. The prospective Participant as a Direct Participant (Principal
Member) which has been approved to become a Participant shall
submit Authenticator Text data to the Operator under the
procedure of Authenticator Text data management as referred to
in Appendix 7.
k. The Operator shall install BI-SSSS applications and provide the
Manual for the Application of BI-SSSS for the Participant.
l. The Operator shall conduct trainings on the application of the
BI-SSSS for Participant officers.
m. If the prospective Participant which has received the letter of
approval as referred to in letter e fails to submit the Agreement
in a period of 1 (one) month as of the date of the letter of
approval, the approval as a Participant shall be declared
abrogated and the process of application must be repeated.
4. The Ministry of Finance of the Republic of Indonesia
The procedure to become Participant for the Ministry of Finance of
the Republic of Indonesia shall be stipulated in a specific agreement
between Bank Indonesia as the Operator and the Ministry of
Finance of the Republic of Indonesia as a Participant.
5. Other institutions
a. Any other institution willing to become a Participant and
performs functions as a Participant as in point A.2 shall submit
an application letter to the Operator under the address as referred
to in point C.1.a.
b. After obtaining an approval of Bank Indonesia the prospective
Participant shall fulfill requirements as referred to in letter B
number 1 and administration procedures stipulated by the
Operator.
D. Participant Obligations
1. Participants shall :
a. maintain smoothness and security in the application of the
BI-SSSS;
b. be accountable for the validity of transactions, transaction and/or
settlement instructions, and all information transmitted to the
Operator through the BI-SSSS;
c. comply with Bank Indonesia provisions and related provisions;
and
d. fulfill either the Agreement or written agreements among
Participants (bye-laws) continuously referring to this Bank
Indonesia Circular Letter.
2. In order to fulfill the obligations as referred to in number 1, any
Participant shall :
a. maintain BI-SSSS system and security in accordance with the
minimum standard of maintenance and security;
b. provide written BI-SSSS operating procedures;
c. provide a back-up procedure and system to guarantee the
continuity of BI-SSSS operations in any Abnormal Condition or
State of Emergency; and
d. fulfill administration procedure relating to the application of the
BI-SSSS, among other things, by :
1) Data or Information Updating
Participant shall change data or information which has been
transmitted to the Operator under the following procedure.
a) Participant shall submit the change of data or
information by applying the Information of Participant
form as the example in Appendix 5.
b) The change of data or information shall be submitted
to the Operator no later than 1 (one) working day prior
to the effective date of the change.
2) Fund Settlement Limit (Settlement Limit) Data
Management
Any Participant designated as a Paying Bank by a
Sub-Registry shall input and update the settlement limit in the
BI-SSSS.
3) Maximum Nominal Bidding (Broker Bidding Limit)
Management
Any Participant designating other Participant as a broker in
purpose of transaction submission shall input and update
broker bidding limit data in the BI-SSSS.
4) Authenticator Text Data Management
Any Direct Participant and Participant of no BI-RTGS
System Participant shall manage Authenticator Text data in
the BI-SSSS.
The implementation of activities as referred to in number 2 shall
refer to the procedure in the Guidelines for the Operation of
BI-SSSS as referred to in Appendix 7.
E. Status and Procedure of Change of Membership Status
1. Types of Membership Status
a. Membership status in the BI-SSSS comprise :
1) Active
Any Participant with an active status may conduct all
activities according to the type and function of the
Participant.
2) Freeze
Any Participant with a freeze status may not conduct any
Transaction with Bank Indonesia and/or Securities
transaction settlement, except activity to obtain
information contained in the BI-SSSS.
3) Closed
Any Participant with a closed status may not conduct any
activity in BI-SSSS operations.
b. The freeze membership status as referred to in letter a number 2)
shall be made an exception for any Participant as Securities
issuer and Sub-Registry.
2. Correlation between membership status in the BI-SSSS and in the
BI-RTGS System
If a Participant also becomes a Participant in the BI-RTGS System,
the membership status in the BI-SSSS shall be stipulated as follows.
a. A change of membership status to freeze or closed shall not
bring about any change of membership status in the BI-RTGS
System.
b. A change of membership status of the BI-RTGS System to
freeze or closed shall bring about a change of the same
membership status in the BI-SSSS.
c. A change of membership status to suspend in the BI-RTGS
System shall not bring about any change of membership status
in the BI-SSSS.
d. If the membership status in the SSSS is active and in the
BI-RTGS System is suspend, the Participant may not conduct
Securities purchasing settlement by DVP because Fund
settlement may not be conducted through the BI-RTGS System.
3. Procedure of Change of Membership Status
a. Cause of Change of Membership Status
1) Change of membership status by request of the authorized
supervisory institution
a) The institutions authorized in supervision on
Participant are :
(1) Bank Indonesia for the supervision on
Participants comprising Banks, Rupiah and
Foreign Exchange Market Brokerage
Companies, and Sub-Registries;
(2) Indonesia Capital Market and Financial
Institution Supervisory Agency (Bapepam-LK)
for the supervision on Participants comprising
Depository and Settlement Institutions and
Securities Companies;
(3) Other supervisory institutions or supervisory
institutions as referred to in number (1) and
number (2) for the supervision on Participants
which are not included in number (1) and
number (2).
b) Membership status may be changed from :
(1) active to freeze or the other way around;
(2) freeze to closed; or
(3) active to closed.
c) The change of membership status may be requested
by the institution authorized in supervision on
Participant under the following reasons.
(1) Based on the results of the supervision
exercised by the authorized institution; or
(2) Based on a sentence of the court with a final
and binding legal force which may bring about
a change of membership status.
2) Change of membership status by request of Participant
A change of membership status from active to closed may
be requested by a Participant which is under a process of
merger or consolidation or based on other reasons.
3) Change of membership status by Operator
A change of membership status by the Operator may be
implemented from active to closed due to an abrogation of
the letter of approval as Participant as referred to in point
C. 3. f.
b. Requirements for Membership Termination
In the event of a termination of membership, the Participant
shall be required to settle all of its liabilities in advance,
including redemption of Funding Facilities obtained from Bank
Indonesia and second leg transactions before maturity, and to
take all of the balance out of its Securities Account.
c. Request for Change of Membership Status
1) The authorized supervisory institution as referred to in
point a.1) a) or the Participant as referred to in letter a
number 2) shall request for the change of membership
status by letter to :
Bank Indonesia - Directorate of Monetary Management
c.q. Monetary Management Transaction Settlement
Division
Sjafruddin Prawiranegara Tower, 11th Floor
Jl. M.H. Thamrin No. 2
Jakarta 10350
2) The letter as referred to in number 1) shall contain, among
other things :
a) the name of Participant and the type of change
requested;
b) the effective date of the change of membership status;
and
c) the reasons of the change of membership status.
3) The letter as referred to in number 1) shall be enclosed with
supporting documents consistent with the reasons of the
change of membership status as follows.
a) the copy of sentence of the court which may bring
about a change of membership status in the BI-SSSS,
if the membership status is requested under the
reason as referred to in point a.1)c)(2);
b) the permission letter of merger or consolidation of the
authorized institution, if the change is requested due
to a merger or consolidation as referred to in point
a.2); or
c) other related documents for reasons of the change of
membership status based on other reasons.
4) Based on the letter as referred to in number 1), the
Operator shall :
a) change the membership status in the BI-SSSS;
b) notify the concerned Participant on the change of membership status together with its reasons by letter;
and
c) announce the change of membership status to all
Participants through the BI-SSSS (Administrative
Messages) on the day of the applicability of the
change of membership status.
IV. SUPERVISION ON PARTICIPANTS
A. Scope of Supervision
1. The Operator is authorized to conduct supervision on the fulfillment
of Participant obligations as referred to in point III.D.
2. The supervision as referred to in number 1 may be conducted under
the following method.
a. Indirect supervision, by monitoring/analysis on Participant
activities through the Operator system or based on
data/information obtained by the Operator from the Participant
or any other party; and
b. Direct supervision, by exercising examination at the Participant
business location.
B. Indirect Supervision
1. Indirect supervision shall be conducted by the Operator on continual
basis.
2. If necessary, the Operator may require Participant to submit
documents and/or written reports relating to BI-SSSS operations.
3. In the event of any finding that the Participant does not/has not
fulfilled its obligations, the Operator shall submit the finding by
letter to the Participant for further actions.
4. Based on the letter of the Operator as referred to in number 3, the
Participant shall be required to take further actions and report to the
Operator by letter.
5. In the event of any finding which needs a supervision on the
Participant business location, the Operator may conduct a direct
supervision.
C. Direct Supervision
1. The Operator shall exercise a direct supervision/examination on the
Participant business location at any time as necessary.
2. The direct supervision/examination is intended to ensure that the
Participant has fulfilled its obligations as a Participant, for instance :
a. Participant operating system and procedure of BI-SSSS shall
fulfill Operator requirements; and
b. The Participant shall fulfill the Operator Regulation and terms
and conditions of the Agreement.
3. In the direct supervision/examination the Operator may designate
other parties possessing expertise and competence in information
technology audit to conduct direct supervision by continuously
keeping secrecy in accordance with applicable provisions.
4. In effort of direct supervision/examination, the Participant shall be
required to provide for the Operator :
a. all information and explanations concerning BI-SSSS operations,
including electronic data, papers, dispositions, and other written
documents;
b. opportunity to exercise direct supervision/examination on
physical facilities and other supporting applications; and
c. necessary assistance in obtaining validity of documents and
information provided by the Participant.
5. The direct supervision/examination shall be conducted under the
following procedure.
a. The supervisor shall submit a letter of introduction for the
examination to the Participant to be examined.
b. Before the direct supervision/examination ends, the supervisor
shall clarify and confirm the results of the examination to
authorized official of the Participant’s company or management.
c. After the direct supervision/examination ends, the supervisor
shall prepare a report on examination results and submit the
report to the Participant.
d. The Participant shall be required to take further actions on
findings in the indirect supervision/examination and report the
actions to the Operator by letter.
e. If necessary, the Operator may conduct the indirect
supervision/examination to confirm the validity of the report.
V. IMPOSITION OF SANCTIONS
Based on the supervision results, the Operator may impose sanctions on
Participant under the following provisions.
1. The Operator may impose sanction on any Participant violating
provision concerning BI-SSSS and/or failing to fulfill obligation
contained in the Agreement.
2. The imposition of sanction as referred to in number 1 shall be based on
the results of direct/indirect supervision by the Operator as referred to in
number IV.
3. The Operator shall impose administrative sanction by sending a written
warning to the Participant with a copy to related supervisory institution.
VI. CONCLUDING PROVISIONS
By the enactment of this Circular Letter,
1. Bank Indonesia Circular Letter No. 6/1/DPM dated February 16, 2004,
concerning Bank Indonesia - Scripless Securities Settlement System, as
amended for the last time by Bank Indonesia Circular Letter No.
9/19/DPM dated September 6, 2007; and
2. Bank Indonesia Circular Letter No. 6/2/DPM dated February 16, 2004,
concerning Fees for the Application of Bank Indonesia - Scripless
Securities Settlement System,
shall be revoked and declared no longer valid.
Provisions in this Bank Indonesia Circular Letter shall come into force as of
May 23, 2008.
For the public to be informed, it is ordered that this Bank Indonesia Circular
Letter be promulgated in the Official Government Gazette of the Republic of
Indonesia.
Please be informed accordingly.
BANK INDONESIA,
EDDY SULAEMAN YUSUF
DIRECTOR OF MONETARY MANAGEMENT
