Regulation of the Commodity Futures Trading Supervisory Agency Number 11 of 2024 Concerning Procedures for the Implementation of Renewable Physical Electricity Trading on the Futures Exchange

REGULATION OF THE COMMODITY FUTURES TRADING SUPERVISORY AGENCY NUMBER 11 OF 2024 CONCERNING PROCEDURES FOR THE IMPLEMENTATION OF RENEWABLE PHYSICAL ELECTRICITY TRADING ON THE FUTURES EXCHANGE BY THE GRACE OF THE ALMIGHTY GOD

HEAD OF THE COMMODITY FUTURES TRADING SUPERVISORY AGENCY,

Considering: a. that in order to realize the implementation of physical electricity trading sourced from renewable energy on the Futures Exchange in an orderly, fair, efficient, effective, and transparent manner, as well as to provide legal certainty by prioritizing customer protection and providing space for the growth of Commodity Futures Contracts on the Futures Exchange, it is necessary to have regulations governing the procedures for the implementation of Renewable Physical Electricity Trading on the Futures Exchange; b. that based on the considerations referred to in letter a, it is necessary to establish a Regulation of the Commodity Futures Trading Supervisory Agency concerning the Procedures for the Implementation of Renewable Physical Electricity Trading on the Futures Exchange;

Recalling:

1. Law Number 32 of 1997 concerning Commodity Futures Trading (State Gazette of the Republic of Indonesia Year 1997 Number 93, Supplement to the State Gazette of the Republic of Indonesia Number 3720) as amended by Law Number 10 of 2011 concerning Amendments to Law Number 32 of 1997 concerning Commodity Futures Trading (State Gazette of the Republic of Indonesia Year 2011 Number 79, Supplement to the State Gazette of the Republic of Indonesia Number 5232);
2. Government Regulation Number 49 of 2014 concerning the Implementation of Commodity Futures Trading (State Gazette of the Republic of Indonesia Year 2014 Number 143, Supplement to the State Gazette of the Republic of Indonesia Number 5548);
3. Presidential Regulation Number 140 of 2024 concerning the Organization of State Ministries (State Gazette of the Republic of Indonesia Year 2024 Number 250);
4. Presidential Regulation Number 168 of 2024 concerning the Ministry of Trade (State Gazette of the Republic of Indonesia Year 2024 Number 364);
5. Minister of Trade Regulation Number 29 of 2022 concerning the Organization and Work Structure of the Ministry of Trade (State News of the Republic of Indonesia Year 2022 Number 492);
6. Commodity Futures Trading Supervisory Agency Regulation Number 3 of 2019 concerning Commodities that can be the Subject of Futures Contracts, Sharia Derivative Contracts, and/or Other Derivative Contracts Traded on the Futures Exchange;
7. Commodity Futures Trading Supervisory Agency Regulation Number 2 of 2019 concerning the Implementation of Physical Commodity Markets on the Futures Exchange as amended by Commodity Futures Trading Supervisory Agency Regulation Number 10 of 2019 concerning Amendments to Commodity Futures Trading Supervisory Agency Regulation Number 2 of 2019 concerning the Implementation of Physical Commodity Markets on the Futures Exchange;

DECIDES:

Establishes: A REGULATION OF THE COMMODITY FUTURES TRADING SUPERVISORY AGENCY CONCERNING PROCEDURES FOR THE IMPLEMENTATION OF RENEWABLE PHYSICAL ELECTRICITY TRADING ON THE FUTURES EXCHANGE.

CHAPTER I GENERAL PROVISIONS

First Section Definitions

Article 1 In this Commodity Futures Trading Supervisory Agency Regulation, the following terms are defined as:

1. Commodity Futures Trading Supervisory Agency, hereinafter referred to as Bappebti, is a government agency whose main duties are to conduct development, regulation, development, and supervision of Futures Trading.
2. Futures Exchange is a business entity that organizes and provides systems and/or facilities for commodity trading activities based on Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts.
3. Futures Exchange Organizing Renewable Physical Electricity Trading, hereinafter referred to as Renewable Electricity Exchange, is a Futures Exchange that has obtained approval from Bappebti to organize Renewable Physical Electricity Trading.
4. Futures Clearing and Guarantee Institution, hereinafter referred to as Futures Clearing Institution, is a business entity that organizes and provides systems and/or facilities for the implementation of clearing and guarantee of settlement of Futures Trading transactions.
5. Renewable New and Renewable Energy Power Plant, hereinafter referred to as EBT Power Plant, is a power plant that utilizes energy sources generated from renewable energy sources, namely energy sources generated from sustainable energy resources, which include, among others, geothermal, wind, bioenergy, sunlight, water flow and waterfalls, and energy derived from the sea.
6. Commodity is all goods, services, rights and other interests, and any derivatives of Commodities, that can be traded and become the subject of Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts.
7. Renewable Energy Certificate or hereinafter abbreviated as REC is a certificate of electricity production generated by EBT Power Plants according to standards recognized nationally and/or internationally.
8. Physical REC Contract is a standard contract form for selling or buying RECs on the Renewable Electricity Exchange.
9. Renewable Physical Electricity Market is an organized physical market for Renewable Electricity trading facilitated and/or organized by the Renewable Electricity Exchange for transactions to buy or sell Physical REC Contracts.
10. REC Registry is a provider of an information technology-based system that conducts the registration process of EBT Power Plants up to issuing RECs for electricity production from EBT Power Plants and conducts REC bookkeeping.
11. Renewable Electricity Transaction Guarantee, hereinafter referred to as Transaction Guarantee, is RECs, money, securities, and/or other guarantees that must be placed and/or handed over by the Buyer and/or Seller to the Futures Clearing Institution as a guarantee for the implementation of Physical REC Trading transactions on the Renewable Electricity Exchange.
12. Participant on the Renewable Electricity Exchange, hereinafter referred to as Participant, is a party that trades Physical REC Contracts that meets the requirements established by the Renewable Electricity Exchange, with the status of being a Participant of the Renewable Electricity Exchange and a Participant of the Futures Clearing Institution.
13. Seller is a Participant acting as a seller of Renewable Electricity on the Renewable Electricity Exchange.
14. Buyer is a Participant acting as a buyer of Renewable Electricity on the Renewable Electricity Exchange.

Second Section Implementation of Renewable Physical Electricity Trading

Article 2 (1) Renewable Physical Electricity Trading must be traded in accordance with the provisions regulated in this Agency Regulation. (2) Renewable Physical Electricity Trading on the Futures Exchange can only be facilitated and/or organized by a Futures Exchange that has obtained approval from the Head of Bappebti as a Renewable Electricity Exchange. (3) Renewable Physical Electricity Trading as referred to in paragraph (2) must pay attention to: a. good corporate governance principles by prioritizing the interests of Sellers and Buyers to obtain fair prices and REC guarantees in accordance with regulations; b. the purpose of establishing a Physical Market as a means of forming transparent prices and providing physical delivery facilities, and being used as a price reference on the Futures Exchange; c. the growth of domestic Renewable Energy (EBT); d. legal certainty for the public and business actors; e. protection for Participants; and f. facilitating innovation, growth, and development of physical market trading activities for Renewable Electricity.

Article 3 Provisions in Bappebti Regulations regulating the implementation of physical commodity markets on the Futures Exchange remain applicable insofar as they are not specifically regulated in this Agency Regulation.

Third Section Requirements for RECs and Physical REC Contracts

Article 4 (1) Renewable Electricity is part of electricity commodities. (2) Renewable Electricity as referred to in paragraph (1) traded on the Renewable Physical Electricity Market is in the form of RECs. (3) RECs traded on the Renewable Physical Electricity Market as referred to in paragraph (2) must have minimum requirements: a. generated from EBT Power Plants registered in the REC Registry, and issued by the REC Registry in the course of issuing RECs; and b. recorded and registered in the REC Registry that has cooperated with the Futures Clearing Institution. (4) RECs that have been retired cannot be transferred and/or sold again on the Renewable Physical Electricity Market.

Article 5 (1) RECs as referred to in Article 4 paragraph (2) can only be traded on the Renewable Physical Electricity Market based on Physical REC Contracts that have obtained approval from Bappebti. (2) Physical REC Contracts as referred to in paragraph (1) have specifications that minimally contain the following information or details: a. REC identity code or serial number; b. name of the REC Registry; c. source of energy origin; d. name of the EBT Power Plant; e. volume of RECs; and f. period of REC production. (3) Specifications of Physical REC Contracts as referred to in paragraph (2), including amendments, must be submitted by the Renewable Electricity Exchange to the Head of Bappebti to obtain approval.

Fourth Section Transaction Guarantees

Article 6 (1) Transaction Guarantees in the implementation of Renewable Physical Electricity Trading can be in the form of: a. RECs; b. money and/or securities placed at the Futures Clearing Institution; and/or c. other guarantees determined further in the regulations and house rules of the Physical Electricity Market of the Futures Clearing Institution. (2) Transaction Guarantees in the form of RECs as referred to in paragraph (1) letter a must be handed over by the Seller, which is subsequently bookkept in a Futures Clearing Institution account specifically used to facilitate trading on the Renewable Physical Electricity Market for the benefit of the Seller. (3) Transaction Guarantees in the form of money as referred to in paragraph (1) letter b must be in Rupiah denomination and stored in a separate account at the Futures Clearing Institution specifically used to facilitate trading on the Renewable Physical Electricity Market for the benefit of the Buyer.

Article 7 (1) The Renewable Electricity Exchange together with the Futures Clearing Institution must ensure the correctness and conformity of Transaction Guarantees placed by Sellers and Buyers with the value and specifications of Physical REC Contracts traded on the Renewable Physical Electricity Market. (2) Further provisions regarding the amount or value, placement mechanism, and use of Transaction Guarantees are regulated further in the regulations and house rules of the Physical Electricity Market of the Futures Clearing Institution.

CHAPTER II INSTITUTIONAL

First Section Renewable Electricity Exchange

Article 8 To obtain approval as a Renewable Electricity Exchange as referred to in Article 2 paragraph (2), in addition to meeting requirements as regulated in Bappebti Regulations governing the implementation of physical commodity trading on the Futures Exchange, the Renewable Electricity Exchange must meet the following requirements: a. have a business license as a Futures Exchange; b. have trading, supervision, and reporting systems to facilitate or organize Renewable Physical Electricity Trading; c. have a mechanism and facilities for dispute resolution; d. have regulations and house rules for the Renewable Physical Electricity Market; e. have a Renewable Physical Electricity Market Committee; f. have a study on the conditions of the Renewable Physical Electricity Market to be formed; and g. have cooperation with the Futures Clearing Institution in accordance with the requirements regulated in this Agency Regulation.

Article 9 (1) Trading, supervision, and reporting systems to facilitate Renewable Physical Electricity Trading as referred to in Article 8 letter b must meet at least the following requirements: a. accurate, current, secure, trusted, online and real-time, and compatible in system and application with the Futures Clearing Institution's system; b. have functions that can protect access to profile, financial, and transaction data in Renewable Physical Electricity Trading; c. have a Business Continuity Plan (BCP) that is always up to date; d. have a Disaster Recovery Centre (DRC):

1. located within the country at a location at least 20 km (twenty kilometers) from the main server location;
2. using adequate servers or cloud servers; and
3. having an official representative office in Indonesia. e. meet database requirements functioning to manage and store transaction data, and supervision and reporting data of Renewable Physical Electricity Trading transactions as follows:
4. store transaction data, and supervision and reporting data for the last 5 (five) consecutive years;
5. maintain transaction price records, transaction quotes, balances, and transactions of Sellers and Buyers for the last 6 (six) months; and
6. after the 6 (six) month period as referred to in item 2, must be copied and stored on data storage media outside the supervision and reporting system database. f. servers or cloud servers used have good technical specifications to facilitate the use of online supervision and reporting systems and/or facilities, namely:
7. servers or cloud servers, including backups (mirroring), must be located within the country;
8. servers or cloud servers must have backup (mirroring) servers; and
9. servers or cloud servers are supported by adequate infrastructure and facilities to ensure operational continuity. g. in the event of using cloud services, the obligations for ISO 27017 (cloud security) and ISO 27018 (cloud privacy) must be fulfilled by the cloud service provider company; and h. have secured open Application Programming Interface (API) with determined procedures, such as encryption-decryption processes, Internet Protocol (IP) whitelisting, tunnels, and certificates. (2) Trading, supervision, and reporting systems to facilitate Renewable Physical Electricity Trading as referred to in paragraph (1), including amendments, must obtain approval from the Head of Bappebti.

Article 10 (1) Regulations and house rules for the Renewable Physical Electricity Market as referred to in Article 8 letter d must at least contain: a. requirements and procedures for acceptance as a Participant in the Renewable Physical Electricity Market, paying attention to provisions regulated in this Agency Regulation; b. rights and obligations of Participants; c. formulation or calculation of membership fees and other costs for services provided to Participants; d. provisions regarding the amount, value, placement mechanism, and use of Transaction Guarantees; e. requirements for RECs traded; f. trading mechanism for the Renewable Physical Electricity Market; g. mechanism for placing buy and sell price quotes, including amendments; h. transaction settlement mechanism; i. mechanism for recording, transfer of REC ownership, and REC retirement mechanism; j. dispute resolution mechanism; k. sanctions for violations of regulations and house rules of the Renewable Physical Electricity Market; and l. supervision and reporting mechanisms for Renewable Physical Electricity Market trading. (2) Regulations and house rules for Physical REC Trading as referred to in paragraph (1), including amendments, must obtain approval from the Head of Bappebti.

Article 11 (1) Applications for approval as a Renewable Electricity Exchange are submitted to the Head of Bappebti accompanied by documents: a. letter of application for approval as a Renewable Electricity Exchange; b. Deed of Establishment of the Limited Liability Company and its amendments approved by the Ministry of Law and Human Rights; c. Company Capital Deed approved by the Ministry of Law and Human Rights; d. business license as a Futures Exchange; e. study of economic considerations and conditions of the Renewable Physical Electricity Market to be formed; f. financial projections and business plan for 3 (three) years, including projections of the number of transactions, number of EBT Power Plants, number of Sellers and Buyers; g. organizational structure containing divisions that handle and have functions in the implementation of Renewable Physical Electricity Trading; h. draft regulations and house rules for the Renewable Physical Electricity Market; i. written statement of readiness for hardware and software systems for trading, supervision, and reporting for the implementation of Renewable Physical Electricity Trading; j. cooperation agreement documents with the Futures Clearing Institution that meet the requirements regulated in this Agency Regulation; k. Standard Operating Procedures regarding:

1. membership of Sellers and/or Buyers;
2. implementation of Renewable Physical Electricity Trading;
3. recording and reporting of Renewable Physical Electricity Market trading; and
4. dispute resolution. (2) Applications for approval as a Renewable Electricity Exchange as referred to in paragraph (1) are submitted to the Head of Bappebti using Form REC I.1 and completed with documents required in Form REC I.2 as contained in the Appendix of this Agency Regulation. (3) Bappebti conducts verification or examination of the authenticity of documents according to the original and assessment of documents as referred to in paragraph (1). (4) If necessary, Bappebti can conduct inspections of physical facilities and infrastructure at the applicant's office and create Inspection Minutes using Form REC I.3 and Form REC I.4 as contained in the Appendix of this Agency Regulation. (5) Within a period of 5 (five) working days after conducting verification or examination of document authenticity as referred to in paragraph (3) and/or inspection as referred to in paragraph (4), Bappebti provides responses or notes to the applicant, namely that the results are in accordance or still need to be completed by the applicant. (6) In the event of responses or notes from verification results, discrepancies in required documents, and/or missing requirements as referred to in paragraph (5), Bappebti provides a period of 5 (five) working days for the applicant to complete and/or adjust requirements calculated from when Bappebti provides responses or notes. (7) If within the 5 (five) working day period as referred to in paragraph (6) the applicant does not complete and/or adjust requirements, Bappebti conveys rejection of the application submitted by the applicant. (8) Bappebti provides approval or rejection of applications as referred to in paragraph (2) at the latest 3 (three) working days after all requirements are declared complete and correct. (9) Bappebti provides approval as a Renewable Electricity Exchange using Form REC I.5 as contained in the Appendix of this Agency Regulation. (10) Bappebti conveys rejection of applications as referred to in paragraph (2) using Form REC I.6 as contained in the Appendix of this Agency Regulation. (11) Fulfillment of Futures Clearing Institution requirements is submitted simultaneously with the fulfillment of requirements for approval applications as a Renewable Electricity Exchange.

Article 12 (1) In the framework of implementing Renewable Physical Electricity Trading, the Renewable Electricity Exchange has the right to: a. accept or reject prospective Participants conducting Renewable Physical Electricity Trading in accordance with membership acceptance requirements and procedures; b. establish and collect membership fees and other costs for services provided to Participants, the amount of which considers efficiency and fairness principles and has been coordinated in advance with the Renewable Physical Electricity Market Committee; c. propose Physical REC Contracts traded through the Renewable Electricity Exchange to obtain Approval from Bappebti; d. take actions deemed necessary to secure the implementation of Renewable Physical Electricity Trading, including preventing possibilities of occurrences that reduce transparency and fairness in Renewable Physical Electricity Trading; e. impose sanctions or specific actions on Participants who violate regulations in the field of Commodity Futures Trading; and f. submit recommendations to the Head of Bappebti for temporary suspension, in the event of conditions threatening the implementation of Renewable Physical Electricity Trading. (2) In the framework of implementing Renewable Physical Electricity Trading, the Renewable Electricity Exchange is obligated to: a. provide reliable system facilities for the orderly, transparent, and fair implementation of trading, reporting, and supervision of the Renewable Physical Electricity Market; b. ensure that RECs traded on the Renewable Physical Electricity Market are in accordance with Physical REC Contract specifications; c. conduct market supervision on the implementation of Renewable Physical Electricity Trading in accordance with the Renewable Physical Electricity Market mechanism approved by Bappebti; d. provide and/or grant system access for trading, supervision, and reporting of Renewable Physical Electricity Market trading to Bappebti for supervision purposes; e. take necessary steps in accordance with regulations in the field of Commodity Futures Trading to ensure the smooth implementation of Renewable Physical Electricity Trading and report to the Head of Bappebti; f. submit reports regarding the implementation of Renewable Physical Electricity Trading to the Head of Bappebti periodically and/or whenever necessary, the procedures, content, and format of which are regulated further in a Circular Letter from the Head of Bappebti; g. implement anti-money laundering, counter-terrorism financing, and counter-proliferation financing programs in accordance with regulations for all Participants, both during the membership acceptance process, while being a Participant, transaction monitoring, and conducting periodic updates of Seller and Buyer risk assessments; and h. submit reports of every violation of regulations in the field of Commodity Futures Trading, regulations and house rules of the Renewable Physical Electricity Market, and/or other applicable regulations.