Indonesia: New 'purpose of settlement' requirement for domestic free of payment instructions in certain security types - update - revision II
Note: This Announcement, first published on 3 November 2014, revised on 7 November 2014 and 14 November 2014, updates and supersedes our Announcement A14085, first published on 17 June 2014 and revised on 18 July 2014 and 13 August 2014.
On 21 July 2014, the Indonesia Central Securities Depository (PT Kustodian Sentral Efek Indonesia – KSEI) implemented new requirements for domestic free of payment (FOP) instructions related to equities and corporate debt instruments, whereby the investor will have to indicate the purpose of the settlement.
17 November 2014
Clearstream Banking will stop using field :70E: for purpose of settlement and reason codes and provide a more automated process by using field :94B: for the purpose of settlement in combination with either fields :20C: or :22F:.
Impact on instructions
Customers of Clearstream Banking1 will be required to indicate the purpose of the domestic FOP instruction in field :94B::TRAD// (Sequence B) in SWIFT (Place of Trade field in CreationOnline) as follows:
- If the domestic FOP instruction is related to an on-exchange transaction (that is, if the transaction involves a local broker): EXCH/XIDX
In the case of on-exchange transactions, the customer must include the internal reference number or exchange trading number in field :20C::TRRF// (in Sequence A1).
- If the domestic FOP instruction is related to an off-exchange transaction: OTCO
In the case of off-exchange transactions, the customer must provide the relevant reason code in field :22F::SETR// (in Sequence E).
Examples: :22F::SETR//TRAD :22F::SETR/KSEI/VERD
and, in addition, submit supporting documentation as indicated in the following table:
|Reason Code||CreationOnline Decode||Settlement Reason||Required supporting documentation|
|Sale and purchase of equities, asset backed securities and/or participation unit|
|Sale and purchase of fixed income instruments|
Barter of securities
|Barter of securities|
Investment Fund Subscription Settlement
|Securities movement related to subscription or redemption of mutual fund’s participation unit traded in the stock exchange (Exchange Traded Fund or ETF)|
Securities Borrowing or Securities Lending
|Securities borrowing and lending (SBL)|
|:22F::SETR/KSEI/GIFT||Gift||Gift, gratification or charity|
Collateral Out or Collateral In
|Securities collateral/pledge (COLO = Collateral out; COLI = Collateral in)|
Management Stock Option
|Securities distribution related to Management Stock Option (MSOP) and/or Employee Stock Options (ESOP)|
|Distribution of securities resulting from initial public offering|
Internal Own Account Transfer or External Own Account Transfer
|Book-entry of securities between securities safekeeping account belonging to the same beneficial owner (NCBO) (OWNI = Internal party; OWNE = External party)|
|Reserved for types other than those defined in this table||Please contact Clearstream Banking Client Services to determine the required supporting documentation.|
It is recommended that customers submit the supporting documents via email to SettlementSingapore@clearstream.com2 at the same time as their FOP instruction, before the FOP deadline. FOP instructions without the required supporting documents will not be able to settle.
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF), and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248 (CBL).
2. This email address is solely for the purpose of submitting the relevant supporting documents in relation to FOP instructions in Indonesia. All communications received at this email address on other matters will not be replied to or forwarded; customers should address such other matters to Clearstream Banking Client Services.