Rabu, November 22, 2023

Framework on Monetary Operations Updated: OPT May Now Be Engaged Through Issuance of SVBI and/or SUBVI

In an attempt to ensure that Regulation of Bank Indonesia ("BI") No. 22/14/PBI/2020 on Monetary Operations, as amended by Regulation of BI No. 9 of 2023 (collectively referred to as "Regulation 14/2020") is in line with current requirements as the basis for the issuance of BI Foreign Exchange Securities (Sekuritas Valuta Asing BI – "SVBI") and BI Foreign Exchange Sukuk (Sukuk Valuta Asing BI – "SUVBI"), BI has decided to adjust various provisions originally set out under Regulation 14/2020 through the issuance of Regulation No. 13 of 2023 on the Second Amendment to Regulation 14/2020 ("Second Amendment"), which has been in force since 16 November 2023.
At its core, the Second Amendment has now incorporated two additional methods for the performance of open-market operations (Operasi Pasar Terbuka – "OPT"). Said methods include: 1) For conventional OPT: issuance of SVBI; and 2) For Sharia OPT: issuance of SUVBI (i.e. issued by BI through the utilization of al-musyarakah al-muntahiyah bi al-tamlik akad). As a result of the inclusion of these new instruments, both SVBI and SUVBI must also now adhere to the applicable administrative and settlement mechanisms that apply to other OPT instruments.
Under the Second Amendment, the abovementioned SVBI and SUVBI are defined as having specific characteristics that include: 1) Utilize underlying assets that take the form of foreign exchange/global sukuk; 2) Valid for periods lasting between one month and 12 months; 3) Issued in foreign exchange; 4) Issued in scripless form; and 5) Transferable and ownable by residents/non-residents through the secondary market.

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*Syarat dan ketentuan berlaku

In an attempt to ensure that Regulation of Bank Indonesia ("BI") No. 22/14/PBI/2020 on Monetary Operations, as amended by Regulation of BI No. 9 of 2023 (collectively referred to as "Regulation 14/2020") is in line with current requirements as the basis for the issuance of BI Foreign Exchange Securities (Sekuritas Valuta Asing BI – "SVBI") and BI Foreign Exchange Sukuk (Sukuk Valuta Asing BI – "SUVBI"), BI has decided to adjust various provisions originally set out under Regulation 14/2020 through the issuance of Regulation No. 13 of 2023 on the Second Amendment to Regulation 14/2020 ("Second Amendment"), which has been in force since 16 November 2023.
At its core, the Second Amendment has now incorporated two additional methods for the performance of open-market operations (Operasi Pasar Terbuka – "OPT"). Said methods include: 1) For conventional OPT: issuance of SVBI; and 2) For Sharia OPT: issuance of SUVBI (i.e. issued by BI through the utilization of al-musyarakah al-muntahiyah bi al-tamlik akad). As a result of the inclusion of these new instruments, both SVBI and SUVBI must also now adhere to the applicable administrative and settlement mechanisms that apply to other OPT instruments.
Under the Second Amendment, the abovementioned SVBI and SUVBI are defined as having specific characteristics that include: 1) Utilize underlying assets that take the form of foreign exchange/global sukuk; 2) Valid for periods lasting between one month and 12 months; 3) Issued in foreign exchange; 4) Issued in scripless form; and 5) Transferable and ownable by residents/non-residents through the secondary market.

......