State Retail Bonds in the Primary Market - Selling Regulation

The sale of State Bond Certificates (SUN) may be sold either at auction or through an accredited selling agent without the use of an auction. The Government is anticipating that Retail Bonds are an emerging and growing basis for investors to acquire SUN and therefore this part of the market needs to be further and explicitly regulated.

The Regulation is explicit with respect to selling agents, either banks or appointed securities companies. The conditions that must be filled prior to appointment by the Minister of Finance as a selling agent are stringent but not onerous. The conditions are designed to ensure the highest levels of transparency and accountability. The selection and appointment process will require prospective selling agents to make a presentation to the selection committee outlining their case for appointment. One of the conditions is that any prospective selling agents have at least 5 offices throughout Indonesia. Furthermore, prospective selling agents must be able to demonstrate expertise and experience in the field, as well as evidence sufficient technological support to operate such a business.