Indonesia: New 'purpose of settlement' requirement for domestic free of payment instructions in certain security types - update - revision II

14.11.2014

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.

Effective

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
    Example: :94B::TRAD//EXCH/XIDX
    In the case of on-exchange transactions, the customer may include the internal reference number or exchange trading number in field :20C::TRRF// (in Sequence A1).
    Example: :20C::TRRF//123456789
  • If the domestic FOP instruction is related to an off-exchange transaction: OTCO
    Example: :94B::TRAD//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 CodeCreationOnline DecodeSettlement ReasonRequired supporting documentation
:22F::SETR//TRAD

Trade Settlement

Sale and purchase of equities, asset backed securities and/or participation unit
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Copy of sale-purchase agreement from the customer.

Sale and purchase of fixed income instruments
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Written confirmation on securities sales and/or purchase from the transacting party (customer).
:22F::SETR/KSEI/GRAN

Grants

Grants
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Copy of grants document with the name of the customer (as reflected in the account title).
:22F::SETR/KSEI/HERI

Heritage

Inheritance/heritage
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Copy of inheritance statement or court decision with the name of the customer (as reflected in the account title).
:22F::SETR/KSEI/BART

Barter of securities

Barter of securities
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Copy of barter document with the name of the customer (as reflected in the account title).
:22F::SETR//SUBS

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)
  •  Instruction from participant’s dealers.

:22F::SETR//SECB or
:22F::SETR//SECL

Securities Borrowing or Securities Lending

Securities borrowing and lending (SBL)
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Copy of SBL document with the name of the customer (as reflected in the account title).
:22F::SETR/KSEI/GIFTGiftGift, gratification or charity
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Statement from the customer as giver or receiver with the name of the customer (as reflected in the account title).
:22F::SETR/KSEI/VERD

Court Decision

Court decision
  • Court’s execution order.

:22F::SETR//COLO or
:22F::SETR//COLI

Collateral Out or Collateral In

Securities collateral/pledge (COLO = Collateral out; COLI = Collateral in)
  • Settlement instruction from customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository); and
  • Copy of pledge agreement or notarised fiduciary agreement or collateral agreement or fiduciary certificate with the name of the customer (as reflected in the account title).
:22F::SETR/KSEI/MSOP

Management Stock Option

Securities distribution related to Management Stock Option (MSOP) and/or Employee Stock Options (ESOP)
  • Report from the listed company/securities registrar.
:22F::SETR//ISSU

Issuance

Distribution of securities resulting from initial public offering
  • Securities allotment document indicating the name of the customer; and
  • Distribution instruction from the selling agent/underwriter with subscription reference number from the customer.

:22F::SETR//OWNI or
:22F::SETR//OWNE

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)
  • Settlement instruction from the customer (customers do not need to submit this as this is already provided for by Clearstream Banking to the depository).
:22F::SETR/KSEI/OTHR

Other

Reserved for types other than those defined in this tablePlease 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.

Further information

For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.

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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.