Indonesia

Posted By Steve On Friday, October 16th, 2009 With 0 Comments

Disclosure Requirements
:
Shareholdings in this market may be required to be disclosed by the beneficial owner, particularly when such shareholdings reach or exceed prescribed disclosure limits. Investors must ensure that they comply in full by reporting such holdings to the appropriate organizations, within the specified time-frame. If you have any questions regarding this issue we encourage you to consult your legal counsel.

Failure to comply with the reporting requirements in this market may lead to penalties and / or other sanctions.

Ownership of a registered holding which reaches or exceeds 5% of the listed capital of a company, must be reported to BAPEPAM-LK within 10 days of the transaction. If 25% or more of the share capital is intended to be purchased, then the purchaser may be required to tender for the remaining equity or receive a waiver from BAPEPAM-LK. For a banking sector stock, prior approval from Bank Indonesia is required before obtaining 25% interests or more.

Buy-Ins
There is no buy-in procedure for physical equities as they can only be traded off the exchange, whereby the settlement of securities and cash is conducted directly between the buying and selling broker.

Under the scripless market environment, KPEI imposes a penalty system called "Alternate Cash Settlement (ACS)" whereby the selling party who fails to deliver stocks on SD is obliged to compensate the buying party with cash on the same day. The ACS amount is 125% of the highest market value of the shares from T+0 toT+3. Failing to meet the above obligation will result in immediate trading suspension by the JSX. KPEI will in turn use the guarantee funds to cover the ‘short’ cash position and substitute the relevant buying broker.

Brokers, who are aware that they will have insufficient stock holdings to meet their obligations on T+3, have the option to try buying the stocks from the cash market in the morning of settlement date (with settlement on T+0). KPEI will net off the broker’s position as of SD from the two markets (regular and cash).

Buying brokers with insufficient cash to meet their obligations on T+3 will be suspended. KPEI will use the guarantee funds (or use credit facilities from bank, as appropriate) to cover the obligations. Before suspending the broker, KPEI will check whether the broker has other collateral including offline collateral, such as time deposits, bank guarantees etc, which are pledges to KPEI. In the event that a broker is continuously unable to settle its obligations, all their assets including offline and online (cash and securities) collaterals will be sold out, and the proceeds will be used to replenish the guarantee funds.

Charges:
For dematerialized shares, the PT KPEI levies a penalty of 125% of the highest market valuation between T and T+3 on the failing broker. Failure to pay this fine results in suspension. KPEI will in turn use the guarantee funds to cover the "short" cash position and substitute the relevant buying broker.

Compensation Fund
PT KPEI provides the Guarantee Fund for scripless equity trades. The Clearing Fund and Guarantee Fund are used to compensate the selling broker in cases where obligations cannot be met by the buying broker.

Anti-Money Laundering
Documents required to open securities and cash accounts for;
Banks:
Clients are required to sign, complete and forward the following documents to the sub-custodian. If these documents are already in place for accounts with other centres, the sub-custodian will provide certified copies of these documents to the branch.

* Custodian agreement
* List of specimen signatures of authorized signatories and details of signing arrangements
* Fee agreement
* Securities and cash account opening forms or an authenticated SWIFT instruction
* An original general power of attorney (PoA) dully notarized and consularized authorizing the sub-custodian in Jakarta to act as an agent of the entity in whose name the shares are registered agent
* An original specific PoA for processing beneficial withholding tax applications (not mandatory, but necessary if the processing of historic tax reclaims is required – recommended to be notarized and consularized)
* A valid certificate of domicile (COD) issued by the relevant tax authority in the client’s country confirming the domicile of the registered entity (this is required to qualify for dual tax treaty rates, if applicable). The COD should be an original – as this is a requirement set by the Indonesian tax office
* Know Your Customer (KYC) statement as requested by Bapepam agent.

Non-banks:
Clients are required to sign, complete and forward the following documents to the sub-custodian. If these documents are already in place for accounts with other centres, the sub-custodian will provide certified copies of these documents to the branch.

* Custodian agreement
* List of specimen signatures and authorized signatories and details of signing arrangement
* Fee agreement
* Securities and cash account opening forms or an authenticated SWIFT instruction
* An original general PoA dully notarized and consularized authorizing the sub-custodian in Jakarta to act as an agent of the entity in whose name the shares are registered
* An original specific PoA for processing beneficial withholding tax applications (not mandatory, but necessary if the processing of historic tax reclaims are required – recommended to be notarized and consularized)
* A valid COD issued by the relevant tax authority in the client’s country confirming the domicile of the registered entity (this is required to qualify for dual tax treaty rates, if applicable). The COD should be an original – as this is the requirement set by the Indonesian tax office
* Director declaration form or Certificate of Incumbency issued by registered agent
* Mandate for accounts of a limited company
* Board resolution authorising the opening of the account and identifying those who have authority to operate the account (optional)
* Memorandum and Articles of Association and any amending resolutions (or any equivalent document, e.g. By-laws)
* Certificate of incorporation and Certificate of Incorporation of Change of Name (if applicable)
* Annual Financial statements of the company (optional)
* Passport copies of the Principal Shareholders, Directors and Authorized Signatories and the corresponding residential address proof (including permanent address is different)
* Know Your Customer (KYC) statement as requested by Bapepam

Broker dealers:
For Broker dealer client, Securities Clearing Agreement (instead of Custodian Agreement) should be completed together with the relevant documents as stated above for non-bank clients.

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