New Bank Indonesia Regulation on Foreign Exchange Traders

Bank Indonesia Regulation No. 12/22/PBI/2010 on Foreign Exchange Traders has been issued to ensure responsible business conduct by foreign exchange traders in accordance with the precautionary principle, the Anti Money Laundering Program (APU), and Prevention of Terrorism Financing (PPT) when engaging in the money transfer business and as required by Article 44.

Pursuant to Article 2 there are two kinds of foreign exchange traders (pedagang valuta asing / PVA), non-bank PVA, and bank PVA. Under Article 3, the PVAs’ business is strictly limited to selling and buying foreign currency and the purchase of traveller’s cheques. Under Article 3 (2), non-bank PVAs are also allowed to engage in the money transfer business.

Pursuant to Article 4, PVAs are prohibited from:

Under Article 6 non-bank PVAs have to be formed as limited liability companies, with the shareholders comprising of Indonesian citizens and Indonesian legal entities. The minimum paid-up capital for non-bank PVAs in DKI Jakarta, Denpasar, Badung, and Batam is set at IDR 250 million (which has to be met by existing non-bank PVAs by 5 September 2012 pursuant to Article 58 (1)), and IDR 100 million elsewhere.

Pursuant to Article 11 non-bank PVAs have to obtain an operating licence from Bank Indonesia, and an additional licence to engage in the money transfer business pursuant to Article 14. This licence cannot be transferred to other parties. The requirements and application procedures will be further regulated by a Bank Indonesia Circular Letter. Similarly, Articles 33 through 40 set out the approval and reporting requirements for bank PVAs. Under Article 41 bank PVAs can hold a daily balance of foreign currency assets that amount to a maximum of 20% of their paid-up capital.

Pursuant to Chapter VII, Bank Indonesia can issue sanctions that include: written warnings, monetary penalties (for bank PVAs) and revocation of business licenses (for non-bank PVAs).

The Regulation repeals and replaces Bank Indonesia Regulation No. 9/11/PBI/2007 on Foreign Exchange Traders.

The Regulation has been in force since 22 December 2010.