Circular Letter Number 10/40/DPM - Amendment to Circular Letter Number 10/16/DPM dated March 31, 2008, concerning Procedures of the Issuance of Bank Indonesia Sharia Certificate through Auction - Bank Sentral Republik Indonesia
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October 01, 2020
Summary Bank Indonesia Laws

Regulation : Circular Letter Number 10/40/DPM - Amendment to Circular Letter Number 10/16/DPM dated March 31, 2008, concerning Procedures of the Issuance of Bank Indonesia Sharia Certificate through Auction
Effective date : November 17, 2008
Summary :
I. SBIS Auction Mechanism
  1. Bank Indonesia announces SBIS auction plan no later than 1 (one) business day prior to the SBIS auction including, among other things :
    1. BUS or UUS which may participate in the SBIS auction (FDR > 80% and is not being under imposition of a sanction of temporary termination to participate in SBIS auction; if the BUS bidding for SBIS originates from a change of business activities of conventional commercial bank and its FDR data have not been available, the calculation of FDR employs the Loan to Deposit Ratio (LDR) data of the Bank prior to the change to BUS.
    2. SBIS tenor;
    3. rate of return, with reference to discount rate resulting from the auction of Bank Indonesia Certificate (SBI) of the same maturity which is issued simultaneously with the issuance of the SBIS under the following provisions.
      1. If the SBI auction employs a fixed rate tender method, the SBIS rights will be stipulated the same as the discount rate resulting from the SBI auction
      2. If the SBI auction employs a variable rate tender method, the SBIS rights will be stipulated the same as the weighted average discount rate resulting from the SBI auction
    4. transaction date; and
    5. settlement date.
  2. On the day of SBIS auction (Wednesday, 10.00 a.m. - 12.00 p.m., western Indonesia standard time), BUS, UUS, or Broker bids for SBIS quantity which will be bought to Bank Indonesia, c.q. DPM-BOpM, through the BI-SSSS.
  3. Bank Indonesia, c.q. DPM-BOpM, will announce SBIS auction results after SBIS auction window time closes on the day of auction, individually to auction winners through the BI-SSSS and as a whole through the BI-SSSS and the LHBU System.
  4. Bank Indonesia will determine the quantity of SBIS auction winner based on the number of bids for quantity received or based on calculation of quantity on proportional basis.
  5. Bank Indonesia, c.q. DPM-PTPM, will settle SBIS auction results on the same business day with the day of SBIS auction (same day settlement) by :
    1. debiting demand deposit account of auction winner in fund settlement; and
    2. crediting securities account of auction winner in securities settlement, amounting to nominal value of won SBIS, respectively.
  6. If the BUS or UUS winning the auction does not hold an adequate balance in its demand deposit account to cover the whole liabilities in the fund settlement as referred to in number 5 up to the BI-RTGS System cut-off warning, the SBIS auction results won by the BUS or UUS will be declared cancelled.
  7. Bank Indonesia may also cancel SBIS auction results, among other things, if the incoming bids are considered far beyond the normal liquidity estimation. Such cancellation will be announced by Bank Indonesia after the SBIS auction window time closes, individually to auction winners through the BI-SSSS and as a whole through the BI-SSSS and the LHBU System.
II. Sanctions
  1. On any cancellation of SBIS auction results due to an inadequacy of balance in the demand deposit account the BUS or UUS will be imposed sanctions in the form of written warning and financial penalty of 1‰ (one per one thousand) of the nominal value of the cancelled SBIS or at a maximum amount of Rp1,000,000,000.00 (one billion rupiah) for each cancellation.
  2. If within a period of 6 (six) months a BUS or UUS receives written warning for 3 (three) times, in addition to the written warning and financial penalty, the BUS or UUS will also be imposed a sanction in the form of temporary termination to participate in SBIS auction up to the auction of the following week and prohibition of proposition for Repo SBIS for 5 (five) consecutive business days.
  3. The counting of 3 (three) time written warning will also count Repo SBIS of the BUS or UUS which is declared cancelled.
III. Concluding Provisions
By the enactment of this Circular Letter, Bank Indonesia Circular Letter Number 7/37/DPM dated August 8, 2005 concerning Procedures of Implementation and Settlement of Bank Indonesia Wadiah Certificate is revoked and declared no longer valid Provisions in this Circular Letter come into force as of March 31, 2008.
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