Regulation of the Commodity Futures Trading Regulatory Agency Number 12 of 2024 Concerning Margin Placement for the Execution of Transactions in the Commodity Futures Trading Sector

REGULATION OF THE COMMODITY FUTURES TRADING REGULATORY AGENCY OF THE REPUBLIC OF INDONESIA NUMBER 12 OF 2024 CONCERNING MARGIN PLACEMENT FOR THE EXECUTION OF TRANSACTIONS IN THE COMMODITY FUTURES TRADING SECTOR BY THE GRACE OF GOD THE ALMIGHTY HEAD OF THE COMMODITY FUTURES TRADING REGULATORY AGENCY OF THE REPUBLIC OF INDONESIA,

Considering:
a. that in order to provide ease, certainty, and legal protection for Clients and business actors in the Commodity Futures Trading sector, specifically in the process of margin placement including the management of Client margins, it is necessary to improve the regulations governing margin placement in the Commodity Futures Trading sector; b. that based on the considerations as referred to in letter a, it is necessary to regulate again the provisions governing margin placement in the Commodity Futures Trading sector;

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 Gazette of the Republic of Indonesia Year 2022 Number 492);

DECIDES:
Establish: REGULATION OF THE COMMODITY FUTURES TRADING REGULATORY AGENCY CONCERNING MARGIN PLACEMENT FOR THE EXECUTION OF MARGIN PLACEMENT FOR THE EXECUTION OF TRANSACTIONS IN THE COMMODITY FUTURES TRADING SECTOR.

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

1. Commodity Futures Trading, hereinafter referred to as Futures Trading, is anything related to the buying and selling of Commodities with the withdrawal of Margin and subsequent settlement based on Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts.
2. The Commodity Futures Trading Regulatory Agency, hereinafter referred to as Bappebti, is a government agency whose main task is to conduct development, regulation, development, and supervision of futures trading.
3. Margin is a sum of money and/or securities that must be placed by the Client with the Futures Broker, the Futures Broker with the Clearing Member, or the Clearing Member with the Clearing Institution to guarantee the execution of Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts.
4. Client is a Party that executes Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts through an account managed by the Futures Broker.
5. Customer is a party that uses the services of a Physical Commodity Trader to buy or sell Commodities traded in the physical market.
6. Alternative Trading System Organizer is a Futures Trader who is a Clearing Member that conducts buying and selling activities of Derivative Contracts other than Futures Contracts and Sharia Derivative Contracts, for and on behalf of itself in the Alternative Trading System.
7. Commodity Futures Trading Broker, hereinafter referred to as Futures Broker, is a business entity that conducts buying and selling activities of Commodities based on Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts on behalf of Clients by withdrawing a certain amount of money and/or securities as Margin to guarantee such transactions.
8. Alternative Trading System is a trading system related to the buying and selling of Derivative Contracts other than Futures Contracts and Sharia Derivative Contracts, conducted outside the Futures Exchange, bilaterally with the withdrawal of Margin registered with the Clearing Institution.

Article 2
(1) Futures Brokers are required to collect Margin from Clients as a guarantee for transactions in Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts.
(2) Margin as referred to in paragraph (1) may consist of:
a. Money; and/or b. Securities.
(3) Margin as referred to in paragraph (2) may originate from:
a. the Client's bank account; or b. the Customer's transaction account in the physical Commodity market at the Futures Exchange.
(4) The Customer's transaction account in the physical Commodity market at the Futures Exchange as referred to in paragraph (3) letter b consists of:
a. transaction accounts in the form of Commodities; or b. transaction accounts in the form of Rupiah.

Article 3
(1) Margin originating from the Client's bank account as referred to in Article 2 paragraph (3) letter a and originating from the Customer's transaction account in the form of Rupiah in the physical Commodity market at the Futures Exchange as referred to in Article 2 paragraph (4) letter b must be stored in a separate account from the Futures Broker's account at a bank approved by the Head of Bappebti. (2) Margin originating from the Customer's transaction account in the form of Commodities in the physical Commodity market at the Futures Exchange as referred to in Article 2 paragraph (4) letter a must first be:
a. withdrawn; and b. placed into the Futures Broker's Commodity account at the Clearing Institution for the benefit of the Clearing Institution to guarantee the execution of transactions for Commodities stored at the Storage Facility Manager. (3) The Clearing Institution and the Storage Facility Manager must facilitate the process of placing Client margin originating from the Customer's transaction account in the form of Commodities in the physical Commodity market at the Futures Exchange. (4) Futures Brokers are required to conduct tracing to obtain validity that margin originating from the Customer's transaction account in the form of Commodities in the physical Commodity market at the Futures Exchange as referred to in Article 2 paragraph (4) letter a, with the condition that the Customer has the same identity as the Client and does not originate from illegal actions or money laundering, terrorism financing, and proliferation of weapons of mass destruction.

Article 4
(1) Margin originating from the Customer's transaction account in the form of Commodities in the physical Commodity market at the Futures Exchange as referred to in Article 2 paragraph (4) letter a may only originate from the Client's transaction account that was previously stored at a company that has obtained a business license from the Head of Bappebti. (2) Margin originating from the Customer's transaction account in the form of Commodities in the physical Commodity market at the Futures Exchange as referred to in Article 2 paragraph (4) letter a must be placed at 100% (one hundred percent) with the Clearing Institution to guarantee the execution of transactions. (3) The Clearing Institution is required to regulate and establish procedures for placement, size, references used, including risk management schemes covering the mechanism for fulfilling margin calls for the value of margin originating from the Customer's transaction account in the form of Commodities in the physical Commodity market at the Futures Exchange. (4) The regulation and establishment of margin values as referred to in paragraph (3) must be further regulated in the regulations, codes of conduct, and circular letters of the Clearing Institution.

Article 5
(1) Futures Brokers are required to place Margin originating from the Client's bank account as referred to in Article 3 paragraph (1) as a guarantee for transactions in Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts with the Clearing Institution at least 70% (seventy percent) of the total Margin management at the Futures Broker. (2) Margin placed by the Futures Broker with the Clearing Institution as referred to in paragraph (1) must be stored in a separate account from the Clearing Institution's account at a bank approved by the Head of Bappebti.

Article 6
(1) Alternative Trading System Organizers are required to place Margin as a guarantee for transactions in Derivative Contracts other than Futures Contracts and Sharia Derivative Contracts with the Clearing Institution.
(2) Margin as referred to in paragraph (1) is upfront paid Margin.
(3) Alternative Trading System Organizers are required to maintain Margin as referred to in paragraph (1) at the Clearing Institution at 200% (two hundred percent) of the Initial Margin value for their open positions.
(4) Margin as referred to in paragraph (1) is at least Rp8,000,000,000.00 (eight billion Rupiah).
(5) Margin as referred to in paragraph (1) must be stored in a separate account from the Clearing Institution's account at a bank approved by the Head of Bappebti.

Article 7
(1) The separate accounts as referred to in Article 5 paragraph (2) and Article 6 paragraph (5) must obtain approval from the Head of Bappebti.
(2) The separate accounts as referred to in paragraph (1) may only be debited by the company's management or permanent employees who have received authorization to debit the aforementioned account.
(3) The company's management or permanent employees who have received authorization to debit as referred to in paragraph (2) must obtain approval from the Head of Bappebti.
(4) The Clearing Institution is required to grant power of attorney to the Head of Bappebti in the form of a Special Power of Attorney to take actions related to the separate accounts as referred to in Article 5 paragraph (2) and Article 6 paragraph (5). (5) The form of the Power of Attorney as referred to in paragraph (4) refers to Appendix I which is an integral part of this Head of the Commodity Futures Trading Regulatory Agency Regulation. (6) The Clearing Institution is fully responsible for the placement of Margin as referred to in Article 5 paragraph (2) and Article 6 paragraph (5).

Article 8
(1) Futures Brokers and/or Alternative Trading System Organizers that violate the provisions regulated in this Regulation are subject to administrative sanctions in accordance with legislation in the field of Commodity Futures Trading. (2) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. administrative fine, namely the obligation to pay a certain amount of money;
c. suspension of business activities;
d. revocation of business license; e. cancellation of approval; and/or f. cancellation of registration certificate.

Article 9
(1) Futures Exchanges, Clearing Institutions, Futures Brokers, and/or Alternative Trading System Organizers are required to adjust to the provisions in this Regulation of the Agency at the latest 6 (six) months from the date of establishment. (2) At the time this Regulation of the Agency takes effect, the Head of the Commodity Futures Trading Regulatory Agency Regulation Number 117/BAPPEBTI/PER/03/2015 concerning Margin Placement for the Execution of Transactions in the Commodity Futures Trading Sector is revoked and declared invalid.

APPENDIX TO THE REGULATION OF THE COMMODITY FUTURES TRADING REGULATORY AGENCY NUMBER 12 OF 2024 CONCERNING MARGIN PLACEMENT FOR THE EXECUTION OF TRANSACTIONS IN THE COMMODITY FUTURES TRADING SECTOR
POWER OF ATTORNEY
The undersigned below:
1. Name :
2. Position :
3. Address :
4. ID Card/Driver's License Number :
who acts on behalf of (...........................................) hereinafter referred to as the PRINCIPAL grants power with substitution to:

---

The Head of the Commodity Futures Trading Regulatory Agency (Bappebti) located at Jalan Kramat Raya Number 172, Jakarta, hereinafter referred to as the AGENT.

----------------------------------------------------------- -----------------------------------------------SPECIFIC--------------------------------------------- for and on behalf of the PRINCIPAL to take actions regarding the separate account number (.................................) at the Bank (Depository Bank) as follows:
1. May obtain all data and information related to supervision of the separate account in any form and through any means available at the bank.
2. Request the blocking of the separate account to an escrow account.
3. Conduct the closure of the separate account if necessary.
4. Conduct the transfer of funds from the separate account to an escrow account upon the closure of the separate account.
For the above purposes, the AGENT is hereby granted the power to sign letters, forms, and/or other documents required and to take all actions to achieve the purpose without any excluded actions as deemed necessary by the AGENT.