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| Kliring Penjaminan Efek Indonesia (KPEI) | |
|---|---|
| Name | Kliring Penjaminan Efek Indonesia |
| Abbreviation | KPEI |
| Formation | 1996 |
| Type | Clearing House |
| Headquarters | Jakarta |
| Location | Indonesia |
| Services | Clearing and Guarantee of Securities Transactions |
| Parent organization | Indonesia Stock Exchange |
Kliring Penjaminan Efek Indonesia (KPEI) is the central counterparty and clearing house for securities transactions in Jakarta linked to the Indonesia Stock Exchange and integrated with national payment and depository infrastructures. It operates within Indonesia’s post-trade landscape alongside PT Kustodian Sentral Efek Indonesia and interfaces with market participants such as banks, securities companys, and institutional investors including BPJS Ketenagakerjaan and Dana Pensiun. KPEI’s role aligns it with international counterparts like The Depository Trust & Clearing Corporation, LCH Limited, and Euroclear while responding to standards set by organizations such as the International Organization of Securities Commissions and the Bank for International Settlements.
KPEI was established in the aftermath of financial sector reforms influenced by the Asian financial crisis and legislative changes including the Capital Market Law of Indonesia to strengthen market infrastructure. Its early development involved technical cooperation with World Bank consultants, advisory input from International Monetary Fund missions, and coordination with Bank Indonesia on payment system links. Over time KPEI expanded services, adopting standards comparable to Committee on Payment and Settlement Systems recommendations and entering interoperability dialogues with regional entities like ASEAN clearing houses and the Asia-Pacific Economic Cooperation financial initiatives.
KPEI’s governance structure comprises a board and executive management drawn from professionals with backgrounds in bank Negara Indonesia, Bank Mandiri, PT Danareksa Sekuritas, and regulatory experience from the Financial Services Authority (OJK). Its supervisory framework includes stakeholder representation from the Indonesia Stock Exchange, member securities firms, and institutional investor groups such as JP Morgan Asset Management and BlackRock (as market reference examples), while audit oversight aligns with standards used by PricewaterhouseCoopers and Ernst & Young in corporate governance reviews. KPEI’s internal committees mirror practices seen in London Stock Exchange Group and NASDAQ OMX governance models to ensure operational resilience.
KPEI provides central counterparty clearing, trade guarantee, novation services, and settlement coordination for cash market transactions executed on the Indonesia Stock Exchange and related venues. It offers real-time netting, settlement finality, and trade affirmation similar to services by CME Group and Singapore Exchange. KPEI also administers corporate actions processing, default management protocols, and ancillary services such as margining and collateral management used by sovereign wealth funds and pension funds in portfolio operations. Connectivity services include links to the RTGS operated by Bank Indonesia and custodial interfaces with PT Kustodian Sentral Efek Indonesia.
KPEI employs a novation model whereby it becomes the central counterparty to both buyer and seller, implementing netting cycles and delivery-versus-payment arrangements analogous to models at TARGET2 and Fedwire. Settlement cycles reflect local market conventions and coordinate with central securities depository processes managed by PT Kustodian Sentral Efek Indonesia to achieve finality. The infrastructure supports multiple product classes, settlement instructions, and fails management mechanisms comparable to those used by Clearstream and SIX Group, and it integrates messaging standards akin to SWIFT formats for cross-border instructions.
KPEI maintains a layered risk management framework including initial margin models, variation margin procedures, and a guarantee fund structured to absorb member defaults similar to practices at LCH Ltd and CME Clearing. Credit risk, liquidity risk, and operational risk are mitigated through participant collateral requirements, stress testing, and back-up arrangements with central bank facilities and commercial bank counterparties. Business continuity planning references scenarios tested in exercises like those conducted by Committee on Payments and Market Infrastructures members and includes contingency liquidity lines and loss allocation rules reflecting international best practices.
KPEI operates under the supervision of the Financial Services Authority (OJK) and coordinates with Bank Indonesia on payment system interoperability and systemic risk matters. Its statutory basis stems from Indonesian capital market legislation and OJK regulations that define central counterparty obligations, participant rules, and market conduct comparable to regulatory regimes in European Union and United States jurisdictions overseen respectively by European Securities and Markets Authority and the Securities and Exchange Commission (United States). KPEI submits to periodic inspections, compliance audits, and reporting that follow templates recommended by the International Organization of Securities Commissions.
Membership in KPEI includes broker-dealers licensed by the Financial Services Authority (OJK), custodian institutions like PT Kustodian Sentral Efek Indonesia, commercial and central banks, and eligible institutional investors meeting capital adequacy and operational readiness criteria. Prospective participants must satisfy due diligence, risk management capability, and technical connectivity requirements comparable to accession processes at Hong Kong Exchanges and Clearing and Japan Securities Clearing Corporation, and are subject to ongoing reporting, margin posting, and corporate governance obligations enforced by KPEI and the Financial Services Authority (OJK).
Category:Financial market infrastructure Category:Indonesian financial institutions