Bond Market Guide

1 2 ASEAN+3 bond Market Guide | Volume 1 | Part 2. Section 3: Indonesia bond Market Guide i Indonesia bond Market Guide ASEAN+3 bond Market Guide | Volume 1 | Part 2. Section 3: Indonesia bond Market Guide iii Contents vii I. Structure, Types, and Characteristics of the A. Overview .. 1. B. Types of 3. C. Money-Markets 3. D. Listing of Debt 5. E. Methods of Issuing Bonds .. 6. F. Public Offering and Private Placement 9. G. Professional or Wholesale Market and the Retail 10. H. Definition of Professionals and Professional 10.

2 I. Credit Rating 10. J. bond -Related Systems for Investor 11. K. Governing Laws on bond 13. L. Transfer of Interests in 14. M. Definition of Securities and Public Offering .. 14. N. Self-Governing Rules behind the 15. O. Bankruptcy Procedures, Laws and Related Rules .. 16. P. Meetings of Debt Securities 16. Q. Event of 17. R. Established Principles and Standards .. 18. S. Parties Involved in bond Issuance and Their Respective 19. T. Major Players in the 20. II. Primary and Secondary Market Regulatory Frameworks.

3 21. A. Indonesian Market Regulatory 21. B. Disclosure Requirements .. 27. C. Credit Rating Requirements .. 28. D. Exemptions for Private Issuance (Private Placement) .. 28. E. Minimum Lead Time for Registration Approval .. 28. F. Availability of Shelf Registration and Associated Documentation Requirements .. 29. G. Regulated Suspension Period .. 29. H. Other Requirements .. 30. I. Rules and Requirements on Continuous Disclosure .. 31. ASEAN+3 bond Market Guide | Volume 1 | Part 2. iv Section 3: Indonesia bond Market Guide J.

4 Restrictions for Investors .. 31. K. Definition of Qualified Institutional Investors and Professional Investors .. 31. L. Requirements and/or Restrictions for 31. M. Finding a Fair Price .. 31. N. Taxation Framework and Tax 32. O. Other Regulatory Reporting Requirements .. 35. P. Challenges and Expected Changes Policy Initiatives and 36. III. Trading and Trading Market Infrastructure of Debt A. Trading and Reporting 38. B. Debt Securities Trading on 39. C. Over-the-Counter Trading of Debt 39. D. bond Repurchase 39.

5 E. Debt Securities and Sukuk Trading 40. F. Pricing 43. IV. Possible Impediments and A. Taxation .. 45. B. Disclosure and Investor Protection Rules for Issuers .. 46. C. Underwriting Rules for Financial 47. D. Credit Rating System and Its Relation to 47. E. Utilization of Shelf-Registration System .. 47. F. Availability of Information in 48. G. Restrictions in Accounting Standard .. 48. H. Limited Opportunities to Utilize bond Holdings and the Repo 48. J. Currency 48. K. Funding Procedures .. 49. V. Description of the Securities Settlement System.

6 50. A. Securities Settlement 50. B. Definition of Clearing and Settlement .. 53. VI. Cost and Charging Methods ..54. A. Market 54. B. Registration 55. C. Listing Fees Charged by 56. D. Other 57. VII. Market Size and Statistics ..58. A. Debt Securities and Sukuk Trade Reporting Data through PLTE (Indonesia Stock Exchange) .. 58. B. Debt Securities and Sukuk Outstanding Data .. 59. C. Composition of bond Holding as of September 59. D. Type of investors for bonds as of September 59. E. Size of Local Currency bond Market in Percentage of Gross Domestic Product.

7 60. F. Trading 61. VIII. Presence of an Islamic Finance (Islamic bond [Sukuk]) Market ..62. A. 62. B. Shari'a 62. C. 63. ASEAN+3 bond Market Guide | Volume 1 | Part 2. Section 3: Indonesia bond Market Guide v D. Fatwa and the Legal Basis of Islamic Bonds (Sukuk) in Indonesia .. 63. E. Regulations on Domestic and International Issuance of Government Sukuk .. 64. F. Statistics 64. IX. History of Debt Market Development ..68. A. Corporate Debt Securities .. 68. B. Government Debt 68. X. Next Steps ..70. 1. Development 70.

8 2. Market 71. 3. G-30 71. 4. Group of Experts Final Report: Summary of Barriers Market Assessment (April 2010).. 72. Box, Figures, and Tables Box Box Application of Indonesia's Avoidance of Double Taxation Figures Figure Market Infrastructure of Debt Securities in Figure The Indonesian Fixed-Income Figure Over-the-Counter Process Figure bond Settlement Infrastructure Diagram of Figure Business Process Flowchart of the Indonesia Over-the-Counter bond Market on a Delivery-versus-Payment Figures The Development of Sukuk Issuance and Outstanding Sukuk (Shari'a Bonds).

9 65. Figure The Profile of Corporate Sukuk Figure The Development of Shari'a Mutual Tables Table Characteristics of Sertifikat Bank Indonesia, Government Debt Securities, and Corporate Table Profile of Indonesia's Listed Government and Corporate Table Structure of Indonesian Bonds and Commercial Table Schedule of Submission of Declaration Table Stamp Duty Fees for Securities (IDR)..54. Table Listing Fees per Type of Debt Table Listed Bonds (Outstanding), 2008 September 2011 (IDR trillion)..58. Table Debt Securities and Sukuk Outstanding Data, 2008 2010 (IDR billion).

10 59. Table Composition of bond Holdings as of September 2011 (IDR trillion)..59. Table Type of Investors of Bonds as of September 2011 (IDR billion)..59. Table Size of Local Currency bond Market (% GDP)..60. Table Trading Volume of Government and Corporate Bonds (in USD billion)..61. Table Statistics on the Islamic Finance Market in Indonesia (2007 2011)..64. Table Group of Thirty Compliance Table Summary of Barriers Market Assessment Indonesia (April 2010)..72. ASEAN+3 bond Market Guide | Volume 1 | Part 2. Section 3: Indonesia bond Market Guide vii Acknowledgement T.