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Thursday, July 1, 2010

Talk on master repo delayed

Tuesday, 29/06/2010 00:00 WIB
Talk on master repo delayed

Irvin Avriano A.
Bisnis Indonesia

JAKARTA: The scheme of the general master repo agreement (master repo) discussion is delayed from the early year schedule into next year following the resignation of the legal consultant for the scheme discussion here.

The scheme is the new standard reference for repurchase agreement (repo) at the capital market.

"It is delayed due to the resignation of the appointed legal consultant and now we still look for the substitution," said chairman of the Indonesia Securities Companies Association (APEI) Antony Kristanto yesterday.

Some associations of capital market jointly in the working group sill discuss the concept for the master repo of market players here.

The repo scheme formulation has been suggested by capital market players, capital market authority, and self regulatory organization (SRO) early this year.

Not only APEI, the working group of master repo formulation also involved some associations of other capital market players, namely the Government Bonds Traders Association (Himadsun) and Indonesian Custodian Bank Association.

Antony added the framework on the discussion will also become a recommendation from Indonesia in the form of Indonesia Annex'.

The additional is given in the international standard practice in the master repo from International Swaps and Derivatives Association Inc. The repo regulation is internationally applicable.

"For Indonesia, there is certain addition because we also want to include the stock repo in the master repo. Thus we are collecting aspiration from each market player. Meanwhile, for international practice, is applicable only for debt. "

To seek aspiration from market players, the working group has just sent questionnaires to 150 securities and 175 banks.

As from the figure, some 80 percent has sent back their recommendation and already accommodated. The rest is not actively having transaction both conventional or repo way.

Aspiration collection is useful to accommodate hope and seek the best form for applicable repo transaction so as to be adjustable to the master repo.

Director of PT Sarana Multigriya Finansial Yudhi Ismail, the former Himdasun chairman, considered GMRA will not work out well if BI does not apply it in each transaction by the banking authority.

"So far the existing master repo is used by bank because BI does not use alone the deal they are proposing. If master repo is not used, BI will be in vain as there no bank or other players to apply the regulation."

Bapepam-LK, capital market players, and banks plan to call for mandatory stock and bond repo report. (Bisnis/iaa)

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