The Issue and Sale of Syariah-Based State Commercial Paper on the Domestic Primary Market

This Minister of Finance Regulation, No. 11PMK.08/2009, has been issued based on the provisions contained in Articles 18 and 24 of Law No. 19 of 2008. Simply, the Minister of Finance is responsible for the management of all Syariah-based State commercial paper issued either directly by the government or by any other approved issuer.

The Minister will appoint Bank Indonesia (BI) as the auction agent responsible for undertaking the auction of the Syariah-based State Commercial Paper (Surat Berharga Syariah Negara / SBSN). Any party interested in purchasing SBSN can do so on the domestic primary market as participants in the auction. BI can also purchase SBSN, but only for a short term and this must be done in its own name.

Auction participants will need to be approved by the Minister and as such are required to fulfill the following conditions:

The manner in which the auction is to be undertaken is set out in the Regulation. Generally, the auction will be either competitive or non-competitive. The non-competitive auction will use an average price as determined through the competitive auction.

Settlement is dependent on whether the SBSN are short or long term. A short term SBSN is to be settled T + 2 and a long term SBSN is to be settled T + 5.

The Regulation has been in force since 2 February 2009.