Institutions and Supporting Professionals

 

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SuppORTING INSTITUTIONS​

Supporting institutions are institutions that support capital market operational activities, functioning to serve professionals and public.

The supporting institutions are comprised of custodian bank, securities administrator, trustee, and rating agency.​

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Custodian bank is a bank that obtains consent from the Financial Services Authority (OJK) to act as a party which offers services such as providing securities deposit and other assets related to securities, and also offers other services that include receiving dividend, interest and other properties, settling securities transaction, as well as representing account holder being the bank’s customer.

Requirements and procedures for a commercial bank to be consented as custodian bank are regulated in government regulation.​

Securities administrator is a company that can organize a contract-based business activities with an issuer in the matter of securities ownership registration and distribution of property related to securities, and it has obtained licence from OJK.

Trustee is a party that represents the interest of debt securities or sukuk holder to do demand prosecution, whether in or out of court, regarding matters related to the interest of the holder without special power of attorney.

Trustee business is performed by commercial bank and other party, which is enacted in government regulation to manage business activities as trustee. Commercial bank and other party must be registered beforehand at OJK. Requirements and procedures of trustee registration are regulated further in government regulation.

Trustee service user is enacted in regulation regarding trustee service employment by an issuer for issuing long term debt securities or sukuk, such as bonds.

  1. Prohibition for Trustee

    Trustee is prohibited from having affiliation with issuer, unless the affiliation is made due to government’s ownership or equity participation. This is to avoid conflict of interest between trustee being the debt securities or sukuk holder and the issuer with whom a trustee is affiliated.

    Trustee is also prohibited from having credit affiliation with issuer, unless the sum is within the range stipulated in OJK provision. This is to avoid conflict between the interest of trustee as debt securities or sukuk holder and the interest of trustee as creditor or debtor of issuer. The purpose of this stipulation is so that trustee can perform its function independently, thus will able to protect the interest of debt securities or sukuk holder at its best.

    Trustee is prohibited from acting concurrently as insurer in the same debt securities or sukuk public offering. The purpose of this prohibition is to avoid conflict between the interest of trustee as debt securities or sukuk holder with the interest of trustee as insurer, which in fact must fulfil its issuer obligation towards debt securities or sukuk holder in case of misconduct committed by issuer.

  2. Trustee Obligation
    1. Trustee is obliged to make trusteeship contract with issuer according to provision stipulated by OJK.
    2. Trustee is obliged to pay compensation to debt securities or sukuk holder to cover the loss due to negligence in performing its duty, as regulated in law and/or its operational regulation and also in trusteeship contract.
    3. After being registered at OJK, trustee is obliged to fulfil obligation as regulated in OJK Chairman Regulation on trustee report and obligation of document keeping by trustee.​​​

Rating agency is limited company acting as investment advisor that performs rating activities and gives ratings. Prior to performing its business, rating agency must obtain business licence from OJK.

Rating agency is obliged to carry out is rating activities independently, free from intervention of other party that uses its services, being objective and accountable in giving ratings. Rating agency can perform rating on rating objects as follow:
  • Debt securities, sukuk, asset-backed securities, or other kinds of securities that can be rated;
  • Party as entity (in company rating), including mutual fund and real estate investment trust in the form of collective investment contract.
To run its business, rating agency must be located and performs its operational activities in Indonesia. Aside from that, rating agency is obliged to have procedures and methodology that are accountable, systematic, have underwent a series of examination, and also implemented in a consistent and transparent manner. Furthermore, rating agency that performs rating based on certain party’s demand is obliged to make rating contract with the party.
  1. Rating Agency Obligation
    Rating agency obligation is stipulated in Capital Market and Financial Institution Supervisory Agency (Bapepam LK) Regulation No. V.H.3 on rating agency manner as follow:
    • Being objective and independent in performing rating activities.
    • Have written procedures and methodology functioning as guidance and basic principle in each step of rating process, including about time period for completion.
    • Conduct periodical review of at least once in three (3) years over rating procedures and methodology and their implementation in order to maintain the quality, consistency and objectivity of rating process. Responsible of every rating released result.
    • Take necessary measures to prevent issuing of rating result that is not reflecting actual capacity of the rated party and/or the party whose securities are rated.
    • Provide openness about rating procedures and methodology with the party being rated, investor, or other market participants and public.
    • Oversee entity (in company rating) and/or securities issued by rated party (in instrument rating) continually according to operational rating standard procedures.
    • Review the released rating result periodically.
    • Expose upgraded result of each released rating result as obligated by applicable regulation, or in the event of material information changes that may cause modification of rating result.
    • Have rating committee and obedience official.
  2. Prohibition for Rating Agency
    Prohibition for rating agency is stipulated in Bapepam LK Regulation No. V.H.3 on rating agency manner as follow:
    • Give recommendation that may influence investor’s decision.
    • Give assurance and/or guarantee explicitly or implicitly on a certain rating result before rating process is complete.
    • Perform business activities that are irrelevant with rating activities, except business activities enacted by OJK.
    • Provide confidential data and/or information to anybody which is used for rating and/or for purposes other than rating activity, unless consented by the owner of confidential data and/information, or in the event of supervisory measure conducted by OJK and/or other party according to applicable law and/or for judicial interest.
    • Define rating result based on things other than factors relevant to object of rating.
    • Give recommendation about structured finance product being rated, such as asset-backed securities and real estate investment trust.
    • Conduct rating on rating object if:
      1. The securities to be rated are issued by a party that has direct or indirect affiliation with rating agency;
      2. Rating agency, commissioners, or directors have interest on the securities and/or entity to be rated within the last six (6) months prior to rating activity and/or for the period when rating agency conducts its task; or
      3. Employee who perform rating analysis has interest on securities and/or entity to be rated.
        1. Determine certain requisition or measure to be performed by the party which has asked to be rated so as to fabricate a certain rating result.
        2. Give compensation to analyst who conducts rating by calculating it based on the amount of rating cost paid by the rated party or the party whose securities are rated.​
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sUPPORTING pROFESSIONS

Supporting professions are registered professionals at the Financial Services Authority (OJK). Terms of registration and requirements are stipulated in government regulation.

These supporting professions are comprised of accountant, legal consultant, appraiser, notary, and other professions.​

Securities administrator is a company that can organize a contract-based business activities with an issuer in the matter of securities ownership registration and distribution of property related to securities, and it has obtained licence from OJK.

Data and information include:

  1. KAP business licence
  2. KAP address
  3. Name of director
  4. Contact/email address
  5. List of associates​

Appraiser is a party who gives assessment on a company’s assets and is registered at OJK.

Data and information include:

  1. STTD registered number
  2. Business licence number
  3. Office address
  4. Type of appraiser’s business

Notary is a public official who has the authority to make authentic deed and is registered at OJK.

Data and information include:

  1. Office address
  2. Working region
  3. STTD registered number
  4. Certification

Other professions include professionals who can offer opinion or view properly according to possible development of capital market in the future, and they are registered at OJK.

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