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2014-09-17

Bank Indonesia Regulation Number 16/19/PBI/2014 on Amendment to Hedge Swap Transactions Regulation

Bank Indonesia issued Regulation Number 16/19/PBI/2014 to amend PBI No. 15/17/PBI/2013 regarding hedge swap transactions with the central bank. The regulation expands the scope of underlying transactions for banks to include declared business funds and establishes specific rules for extending hedging contracts and hedge swap transactions, including netting settlement options. It also defines sanctions for violations, such as written warnings and financial penalties, to ensure compliance and deepen the domestic foreign exchange market.

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Sumber Data Legal Information Division, Department of Legal Affairs

9/17/2014 9:00 AM

Judul Bank Indonesia Regulation Number 16/ 19 /PBI/2014 Dated 17 September 2014 concerning Amendment to Bank Indonesia Regulation No. 15/17/PBI/2013 on Hedge Swap Transactions to Bank Indonesia

Peraturan Bank Indonesia

Moneter dan Pasar Keuangan

Berlaku

Bank Indonesia Regulation

Monetary

Effective

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Bank Indonesia Regulation Number 16/ 19 /PBI/2014 Dated 17 September 2014 concerning Amendment to Bank Indonesia Regulation No. 15/17/PBI/2013 on Hedge Swap Transactions to Bank Indonesia

Effective

17 September 2014

This regulation of Bank Indonesia is an improvement to PBI No. 15/17/PBI/2013 concerning Hedge Swap Transactions to Bank Indonesia issued in line with the efforts to encourage the growth of derivative transactions at domestic foreign exchange market. The improvement of this regulation aims to enhance the effectiveness of hedge swap transactions implementation to Bank Indonesia, which then is expected to give positive impact on the efforts to accelerate the deepening of domestic foreign exchange market.

II.

Improvement of the regulation includes:

Addition of underlying transactions possessed by Banks in the form of declared business funds, so that the scope of the Banks’ underlying transactions covers:

Foreign loans of banks in the form of credit agreements and/or issuance of debt securities.

Declared business funds .

Bank s may request for the extensions of:

Hedging contract to Bank Indonesia .

Hedge Swap Transactions to Bank Indonesia .

The term of hedging contracts extension to Bank Indonesia shall not exceed the remaining term of the underlying transactions, with a contract extension not exceeding 3 years.

The extension term of hedge swap transactions to Bank Indonesia is 3 months , 6 months , 12 months , or in accordance with the remaining term of the hedging contract, with an extension of 3 months at minimum and 12 months at maximum .

Requirements of hedging contract extensions to B ank Indonesia:

using the same type of underlying transactions in accordance with the underlying specified in the initial hedging contract;

in the event the type of the underlying transaction is possessed by the Bank,

the nominal value of the hedging contract extension to Bank Indonesia shall not exceed the outstanding value of the Bank’s foreign loans or declared business funds; and

the extension term of the hedging contract to Bank Indonesia shall not exceed the remaining term of the underlying transaction, with a contract extension not exceeding 3 years.

Requirements for hedge swap transaction extension to Bank Indonesia:

using valid hedging contracts;

using the same type of underlying transactions in accordance with the reference number specified in the hedging contract;

in the event the underlying transaction type is possessed by the concerned Bank, the nominal value of hedge swap transaction extension to Bank Indonesia shall not exceed the outstanding value of Bank’s foreign loans or its declared business funds; and

The term of the hedging swap transaction extension to Bank Indonesia is 3 months , 6 months , 12 months,

or in accordance with the remaining term of the hedging contract, with an extension of 3 months at minimum or 12 months at maximum.

Settlements of hedge swap transaction extensions to Bank Indonesia can be performed by netting, including at the time of hedging contract extensions, covering :

n etting for the same nominal value at each extension ;

n etting for smaller nominal value at each extension; or

n etting for nominal value in accordance with the outstanding value of the Banks’ foreign loans or declared business funds at each period of extension.

In the event Banks perform hedge swap transactions to Bank Indonesia, the referred hedge swap transactions to Bank Indonesia may be considered as a pass-on of the Banks’ derivative transaction position with the Banks’ related parties.

Regulation on written warnings and/or financial penalties for banks conducting violations ae as follows:

Banks that violate transactions, shall be subject to sanctions in the form of:

a written warning; an d

a financial penalty of 1‰ ( one per mil ) from the value of hedge swap transactions to Bank Indonesia, not to exceed

Rp1 , 000 , 000 , 000 . 00 ( one billion rupiah) per transaction .

Banks that do not fulfill the requirement of reference number inclusion of the hedging contract or the completeness of documents shall be imposed with a written warning.

Bank s that break the settlement obligations shall be imposed sanctions in the form of :

a written warning; and

a financial penalty calculated based on :

average interest rate of Fed Fund

200 basis point

average interest rate of Bank Indonesia policy ( BI rate ) + 200 basis point .

Lampiran Attachments

Lampiran 1 Bank Indonesia Regulation Number 16/ 19 /PBI/2014

Lampiran 2 FAQ - Bank Indonesia Regulation Number 16/ 19 /PBI/2014

Lampiran 3

Lampiran 4

Lampiran 5

Lampiran 6

Lampiran 7

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Lampiran 9

Lampiran 10

Kontak Contact

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Halaman ini terakhir diperbarui 1/27/2021 9:15 PM

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