The Bond Market in Indonesia

An ASEAN+3 Bond Market Guide Update

• Publisher: Asian Development Bank
• Year: 2021
• ISBN:
  9789292692001
• Topic: Commerce
• Subtopic: Ingénierie financière

The ASEAN+3 Bond Market Guide series provides member-specific information on the investment climate, rules, laws, opportunities, and characteristics of local bond markets in Asia and the Pacific. It aims to help bond market issues, investors, and financial intermediaries understand the local context and encourage greater participation in the region's rapidly developing bond markets. This edition focuses on updates in the bond market in Indonesia since the publication of the ASEAN+3 Bond Market Guide for Indonesia in 2017.

II

Legal and Regulatory Framework

This chapter reviews the significant changes or updates to rules and regulations, regulatory processes, and other official prescriptions by regulatory authorities and market institutions in the Indonesian bond and capital markets since the publication of the ASEAN+3 Bond Market Guide for Indonesia.

B. English Translation

OJK and market institutions—such as IDX, IDClear, and KSEI—have promulgated and published a large number of new regulations and rules, and revised and augmented existing regulations and rules, since 2017.

OJK and the market institutions continue their work of making available the English translations of all regulations and rules on their websites for the easy reference of market watchers and interested parties. At the same time, law and accounting firms increasingly feature practical English summaries of new regulations and rules on their websites or on portals covering legal subjects.

C. Legislative Structure

Law No. 8 of 1995 on the Capital Market (Capital Market Law) has remained unchanged. To meet market expectations and facilitate market development objectives, OJK addressed subjects not covered in the Capital Market Law through the issuance of new regulations. In addition, OJK has been working toward updating or augmenting rules and regulations originating during the periods of Bapepam and (subsequently) Bapepam-LK supervision.

Table 2.1 has been updated to highlight regulations with a focus or impact on the bond and sukuk market that were introduced since the publication of the ASEAN+3 Bond Market Guide for Indonesia in 2017. Most of these new regulations will be referenced or reviewed in detail in the relevant chapters and sections of this update note, while preexisting regulations are shown in the table if they are also referenced in this document.

Table 2.1: Examples of Securities Market Legislation or Regulations by Legislative Tier

Legislative Tier	Content or Significant Examples
Constitution of Indonesia	Principles, Rights, and Obligations
Laws (key legislation)	• Law No. 11 of 2020 (Omnibus Law on Job Creation) [NEW] • Law No. 21 of 2011 on Otoritas Jasa Keuangan • Law No. 6 of 2009 on Bank Indonesia • Law No. 21 of 2008 on Sharia (Islamic) Banking • Law No. 8 of 1995 on the Capital Market
Regulations	• OJK Regulation No. 16/POJK.04/2021 Concerning Amendment of OJK Regulation No. 57/POJK.04/2020 Concerning Offering of Securities through Crowdfunding Services Based on Information Technology (enacted 25 August 2021, promulgated 26 August 2021) [NEW] • OJK Regulation No. 3/POJK.04/2021 Concerning the Implementation of Activities in the Capital Market (enacted and promulgated 22 February 2021) [NEW] • OJK Regulation No. 57/POJK.04/2020 Concerning Offering of Securities through Crowdfunding Services Based on Information Technology (enacted 10 December 2020, promulgated 11 December 2020) [NEW] • OJK Regulation No. 53/POJK.04/2020 Concerning Securities Account at Custodian (enacted 3 December 2020, promulgated 11 December 2020) [NEW] • OJK Regulation No. 49/POJK.04/2020 Concering Rating of Debt Securities and/or Sukuk (enacted 3 December, promulgated 11 December 2020) [NEW] • OJK Regulation No. 41/POJK.04/2020 Concerning Implementation of Electronic Public Offering Activities of Equity Securities, Debt Securities and/or Sukuk (enacted 1 July 2020, promulgated 2 July 2020) [NEW] • OJK Regulation No. 32/POJK.04/2020 Concerning Securities Derivatives Contracts (enacted 27 April 2020, promulgated 6 May 2020) [NEW] • Minister of Finance Regulation No. 27 of 2020 Concerning the Sale of Retail Government Securities [NEW] • OJK Regulation No. 20/POJK.04/2020 Concerning Trustee Contracts for Debt Securities and/or Sukuk (enacted 22 April 2020, promulgated 23 April 2020) [NEW] • OJK Regulation No. 19/POJK.04/2020 Concerning Commercial Banks Conducting Activities as Trustees (enacted 22 April 2020, promulgated 23 April 2020) [NEW] • OJK Regulation No. 30/POJK.04/2019 Concerning Issuance of Debt Securities and/or Sukuk Not Through a Public Offering (enacted and promulgated on 29 November 2019) [NEW] • OJK Regulation No. 8/POJK.04/2019 Concerning Alternative Market Organizers (enacted 19 February 2019, promulgated 21 February 2021) [NEW] • OJK Regulation No. 11/POJK.04/2018 Concerning Public Offering of Debt Securities and/or Sukuk to Professional Investors (enacted and promulgated 1 August 2018) [NEW] • OJK Regulation No. 7/POJK.04/2018 Concerning Submission of Reports via the Electronic Reporting System for Issuers or Public Companies (enacted and promulgated 25 April 2018) [NEW] • OJK Regulation No. 61/POJK.04/2017 Concerning Registration Statement Documents for Public Offering of Municipal Bonds and/or Municipal Sukuk (enacted 21 December 2017, promulgated 22 December 2017) [NEW] • OJK Regulation No. 60/POJK.04/2017 Concerning the Issuance and the Terms of Green Bond (enacted 21 December 2017, promulgated 22 December 2017) [NEW] • OJK Regulation No. 58/POJK.04/2017 Concerning Electronic Submission of Registration Statement or Electronic Submission of Corporate Action (enacted 6 December 2017, promulgated 8 December 2017) [NEW] • OJK Regulation No. 9/POJK.04/2017 Concerning Prospectus Form and Content and Brief Prospectus for Debt Securities Public Offering (enacted and promulgated 14 March 2017) • OJK Regulation No. 7/POJK.04/2017 Concerning Document of Registration Statement for Equity and Debt/Sukuk Securities Public Offering (enacted and promulgated 14 March 2017) • OJK Regulation No. 36/POJK.04/2014) Concerning Shelf Registration (enacted and promulgated 8 December 2014)
Circular Letters, Decisions, Instructions	• IDX Circular Letter SE-00006/BEI/10-2019 Regarding Procedure for the Submission of Electronic Report by Listed Companies (28 October 2019) [NEW] • Chief Executive of Capital Market Supervisor Decision Number Kep-52/D.04/2019 Regarding Appointment of IDX as a System Provider of Electronic Reporting for Issuer and Public Companies [NEW] • OJK Circular Letter No. 33/SEOJK/04/2015 Concerning Global Master Repurchase Agreement Indonesia (enacted 23 November 2015, effective 1 January 2016)
SRO Regulations	• IDX Rule Number I-G Concerning Sukuk Listing (effective 26 March 2021) [NEW] • IDX Rule Number I-E Concerning Obligation to Submit Information (effective 1 February 2021) [NEW] • IDX Decree SE-00004/BEI/01-2021 on Trading Parameters of Debt Securities and Sukuk in the Alternative Trading Platform (19 January 2021, effective 8 February 2021) [NEW] • IDX Rule Number II-E Concerning Futures Contract Trading (effective 7 December 2020) [NEW] • KPEI Regulation Number III-2 on Clearing and Guarantee of Settlement of Securities Futures Contract Transactions (effective 27 November 2020) [NEW] • IDX Decree KEP-000093/BEI/11-2020 Regarding Securities Trading Regulations through the Alternative Trading Platform (9 November 2020) [NEW] • KSEI Regulation Number II-B Regarding Registration of Debt Securities and/or Sukuk at KSEI (15 October 2020) [NEW] • KSEI Regulation Number V-D Regarding Free of Payment Instruction for the Book-Entry of Securities at KSEI (29 July 2020) [NEW] • IDX Decree KEP-00038/BEI/05-2020 on Amendment to Rule Number I-B Concerning Listing of Debt Securities (20 May 2020) [NEW] • IDX Decree SE-00005/BEI/09-2019 on Procedure for the Submission of Report in the Form of Electronic Document and/or Electronic Data by the Securities Exchange Member (effective 2 September 2019) [NEW] • KPEI Regulation Number X-2 Regarding Triparty Repo Facility (effective 28 February 2019) [NEW] • KSEI Regulation Number I-C Regarding Securities Sub-Account (22 December 2017) [NEW] • KPEI Regulation KEP-013/DIR/KPEI/0517 Regarding Retail State Bond Trading Clearing in Electronic Trading Platform (26 May 2017) [NEW]

IDX = Indonesia Stock Exchange, KPEI = Kliring Penjaminan Efek Indonesia (Indonesia Clearing and Guarantee Corporation), KSEI = Kustodian Sentral Efek Indonesia (Indonesia Central Securities Depository), OJK = Otoritas Jasa Keungan (Financial Services Authority), SRO = self-regulatory organization.

Note: Regulations have been sorted chronologically beginning with the most recent promulgations.

Source: ASEAN+3 Bond Market Forum Sub-Forum 1 team based on publicly available information.

E. Regulatory Framework for Debt Securities

Following the introduction of regulations for the issuance of debt securities and/or sukuk via private placement, effective 1 June 2020, all issuance types of corporate bonds and sukuk, in the bond market in Indonesia, including green and sustainability instruments, are under the purview of OJK.

While issuance via public offerings and public offerings to professional investors are subject to OJK review and approval, issuance via private placement only requires the filing of the prescribed issuance documentation with OJK prior to issuance.

Pursuant to the new regulations, private placements need to be registered and deposited with KSEI, while debt securities or sukuk issued via crowdfunding platforms may be deposited with KSEI (in case of scripless crowdfunded securities) or a custodian. Listings on IDX now include debt instruments issued via either a public offering or a public offering to professional ...