1 February, 2016
Bank Indonesia (“BI”) Regulation No. 17/15/PBI/2015, dated October 7, 2015, regarding the Third Amendment of BI Regulation No. 16/16/PBI/2014 regarding Foreign Exchange Transactions against Rupiah between Banks and Domestic Parties. This Regulation provides further requirements to perform sale/purchase transactions in the form of derivative transactions. This Regulation changes the threshold for conducting a forward transaction in foreign exchange to USD 5 million. It also sets out that the obligation to have an underlying transaction for foreign exchange transactions against rupiah by domestic parties with banks over certain thresholds provided in the Regulation does not apply to initial derivative transactions conducted through: (i) a transaction extension (rollover), so long as the rollover term is for a maximum period that is the same as the term of the initial underlying transaction, (ii) early termination, or (iii) an unwinding. This BI Regulation came into effect on the date of its enactment.
BI Regulation No. 17/16/PBI/2015, dated October 7, 2015, as the third amendment of BI Regulation No. 16/17/PBI/2014, dated September 17, 2014, regarding Foreign Exchange Transactions against Rupiah between Banks and Foreign Parties. This Regulation lists the activities that are or are not regarded as underlying transactions. Similar to the above BI Regulation, this Regulation changes the threshold for conducting a forward transaction in foreign exchange to USD 5 million. It also sets out that the obligation to have an underlying transaction for foreign exchange transactions against rupiah by foreign parties with banks over certain thresholds provided in the Regulation does not apply to the settlement of initial derivative transactions that are conducted through: (i) a transaction extension (rollover) during the rollover term for a maximum period that is the same as the term of the initial underlying transaction, (ii) early termination, or (iii) an unwinding. This BI Regulation came into effect on the date of its enactment.
BI Circular Letter No. 17/24/DSta, dated October 12, 2015, regarding the Amendment of BI Circular Letter No. 17/3/DSta, dated March 6, 2015, regarding Reporting on the Implementation of Prudential Principles in Offshore Loan Management by Non-Bank Corporations. This Circular Letter was issued in relation to BI Regulation No. 17/3/PBI/2015 regarding the Mandatory Use of Rupiah within the Territory of the Republic of Indonesia. It provides that a reporting party (whose foreign exchange asset value takes into account the foreign exchange asset in the form of business receivables toward residents in Indonesia in relation to strategic infrastructure projects) shall submit (a) a statement letter from the competent ministry or government institution, and (b) an approval letter from BI. This Circular Letter came into effect on the date of its stipulation.
BI Circular Letter No. 17/26/DSta, dated October 15, 2015, regarding the Reporting of Foreign Exchange Activities other than Offshore Loans. This Circular Letter revokes BI Circular Letter No. 15/5/DSM, dated March 7, 2013, regarding the same. It applies to non-bank institutions and other institutions as specified in this Circular Letter, and other non-bank institutions that have total assets or annual gross sales of at least IDR 100 billion based on an audited financial statement. There are no changes to the scope of the report/information delivered by reporting parties. The reporting procedure under this Circular Letter will come into effect for the reporting period of May 2016.
BI Circular Letter No. 17/29/DPM, dated October 26, 2015, regarding the Second Amendment of BI Circular Letter No. 16/23/DPM, dated December 24, 2014, regarding Open Market Operations. The stated aim of this Circular Letter is to manage capital flows and to maintain supply and demand stability in the forward market. This Circular Letter adds several definitions pertinent to forward transactions. It also provides a minimum holding period whereby holders of BI Certificates are prohibited to sell their BI Certificates to other parties within seven calendar days as of the date of the purchase settlement. Further procedures for conducting forward transactions are provided under this Circular Letter. This Circular Letter came into effect on the date of its enactment.
For further information, please contact:
Dyah Soewito, Partner, Soewito Suhardiman Eddymurthy Kardono
dyahsoewito@ssek.com
