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KSEI Member Report: ACG General Meeting in Beijing

Read the report on the 11th ACG General Meeting held in Beijing, China. The report includes updates on KSEI's core system status, new services, and more.

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KSEI Member Report: ACG General Meeting in Beijing

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  1. Member ReportThe 11th ACG General Meeting 2 – 4 September 2007Beijing, China PT. KUSTODIAN SENTRAL EFEK INDONESIA

  2. About KSEI Core System Status Report as of July 2007 New Instrument Type New services: Investor Area Securities Pledge Pre Matching OTC turnaround Agenda

  3. PT. Kustodian Sentral Efek Indonesia (KSEI) was established on December 23, 1997, pursuant to the Capital Market Law No. 8 year 1995. KSEI is a Self Regulatory Organization (SRO) within the framework of the Indonesia capital market industry. KSEI received its business license from the Capital Market Supervisory Board and Financial Institution (Bapepam – LK) on November 11, 1998 to provide Central Securities Depository services. About KSEI

  4. About KSEI • Incorporated as a non-profit limited liability company, the shares of KSEI are held by Securities Companies (33.5%), Custodian banks (36%), Registrars (4%), other SROs (16.5%), and Treasury Stocks (10%).

  5. KSEI operates along with others SROs, namely Jakarta Stock Exchange, Surabaya Stock Exchange, Indonesian Clearing and Guarantee Institution, forming part of the comprehensive and integrated system that ensure transparent, efficient and reliable securities transaction in the Indonesian capital market On 17 July 2000, KSEI introduced The Central Depository and Book-Entry Settlement System (C-BEST). C-BEST provides: registration of securities; electronic depository; book-entry settlement system for Securities traded on the Stock Exchange as well as over-the-counter; proceeds from corporate action; securities balance and transfer record; Core System

  6. Status Report as of July 2007 • As of July 2007, a total of 394 Shares, 262 Corporate Bonds, 62 Government Bonds, 41 Warrants, 4 Rights, 15 Medium Term Notes, 5 Promissory Notes, 5 Certificates of Bank Indonesia, 1 Treasury Bills, and 4 Sukuk, with a total value of more than Rp 1.044 trillion have been registered in C-BEST.

  7. Status Report as of July 2007 • Our services users include 142 Securities Company, 22 Custodian Banks, 456 Registered Companies, 10 Registrars, 4 Payment Banks. • Figure below shows the significant increase of total sub account in KSEI by 20% in the last 6 months in 2007 from 142.485 accounts in January 1st to 171.025 accounts in July 31st due to the issuing of 2nd government bonds in March and the investor awareness to open sub account in KSEI Account Holder.

  8. Status Report as of July 2007 • JSX (Jakarta Stock Exchange) composite index during the last 6 months from 1836.52 in January 2nd to 2348.673 in July 31st (a 28% increase) indicates the stable continuity of Indonesian capital market with a positive outlook.

  9. New Instrument in 2007 Treasury Bills Less than 1 year debt instrument issued by Government of Indonesia As of July 2007, there is a 1-year treasury bill registered in KSEI with total value issued Rp 2 trillion however currently there is no treasury bills under KSEI’s custody Certificate of Bank Indonesia (SBI) Less than 1 year debt instrument issued by Indonesia Central Bank As of July 2007, there are 6 SBIs (1-months and 3-month) registered in KSEI with total nominal value issued more than Rp 336 trillion, total asset value in KSEI Rp 4.3 trillion (1%) Sukuk Current issuer: corporate institution As of July 2007, there are 4 Islamic corporate bond registered in KSEI with total nominal value issued more than Rp 1 trillion and 100% under KSEI’s custody New Instrument Type

  10. Coming soon Exchange Traded Fund (ETF) Municipal Bonds REITS New Instrument Type

  11. Background Account holders are required to open Sub Account in C-BEST for benefit of their customers, namely investors. The separate accounts provide greater Securities ownership protection for investor, because Account Holder will no longer be able to use Securities registered to Sub Account for their own purposed. In order to prepare KSEI in facing growing number of investor, KSEI equips itself with a program that give investor’s protection. KSEI will launch a new facility called Investor Area. Investor Area

  12. Description A unique Investor ID will be linked to sub accounts controlled by KSEI Account Holder. It is an optional facility and it will be an authority of Account Holder to give this facility to its client. Client only can access the position of sub account linked to its Investor ID. Client enable to monitor the balance position and securities movement. Using a unique Investor ID, a client can consolidate data in his sub accounts controlled by different Account Holder Investor Area Investor Area Broker / Custodian Bank Investor Management Inquiry and Report Investor Balance Position Position Movement Approval

  13. Securities Pledge State-own Pawn Company monitor the account status, balance position and securities movement • Background • Cooperation among KSEI, KSEI Account Holder and State-Own Pawn Company (Pegadaian) • Position of State-Own Pawn Company • Client of KSEI Account Holder • Facility to State-Own Pawn Company • A single communication platform for State-Own Pawn Company in order to communicate with KSEI’s account holder • Monitoring • Account status • Securities pledged position • Securities price • Securities movement

  14. Background Currently the matching of OTC instruction is included in OTC settlement process; Participant have to allocate cash position for settlement of RVP instruction; Last minute DVP-RVP instruction created by the participant; Current operation such as manual pre matching using telephone, email, fax is a high cost, not efficient and decelerate the settlement process. Solution Automate pre matching activity by separating the matching and settlement process. Pre Matching

  15. Intra day facilities Bank DVP/RVP DVP/RVP Custodian Custodian Broker Turnaround OTC • Background • Current condition, the OTC versus payment instruction can only be settled if there is adequacy of securities and fund position in both site of securities account. • In order to meet the adequacy of fund position for OTCVP settlement, the party who has the obligation to deliver such of fund, can fulfill the obligation by requesting an intra day facility to the Payment Bank.

  16. Objective To provide Account Holder with settlement facility of certain OTC transactions which are combined in a set of transactions. Settlement Approach Calculating the fund and securities obligation by netting and figuring out the result with fund/securities position in concerned accounts. If such fund and securities position is sufficient, the C-BEST system will perform the settlement process upon available transactions in the set of such transaction. Turnaround OTC

  17. Thank You…

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