Bank Indonesia has sped up the issuances and transactions of commercial securities (SBK) as an alternative short-term nonbank source of funds.
This was achieved through the signing of an administrative agreement to settle SBK transactions between Bank Indonesia and the Indonesian Central Securities Depository (KSEI), on Friday 17th May 2019 in Jakarta.
The move is consistent with efforts to stimulate the domestic demand for funds. The agreement signals the operational preparedness of SBK market infrastructure for SBN issuances and transactions, according to a statement from Bank Indonesia here on Monday.
The Deputy Governor of Bank Indonesia, Dody Budi Waluyo, stated his expectations that the various regulations and supporting infrastructure will enable SBK to play an important role as an alternative short-term funding solution for nonbank corporations, and as an attractive money market instrument for investors.
SBK infrastructure includes regulations (Bank Indonesia Regulations and Board of Governors Regulations) previously issued concerning SBK instruments and supporting institutions.
Currently, a total of 3 arrangers, 2 rating agencies, 46 legal consultants, 84 public accountants, 5 notaries, 4 brokers, 15 custodians and the Indonesian Central Securities Depository (KSEI) as the central custodian are registered with Bank Indonesia.
KSEI was approved by Bank Indonesia as the central custodian, in order to improve governance of SBK issuances and transaction settlements, particularly in terms of recording, administrating and settling scripless SBK transactions.
Moving forward, Bank Indonesia will strive to develop the SBK market by educating potential issuers through an outreach program.
Also, Bank Indonesia will coordinate with the Indonesian Financial Services Authority (OJK) to ensure there are no conflicts in enforcing regulations, specifically regulations for financial services institutions that may utilise SBK as short-term funding or an investment vehicle.