Primary Dealer System - Developing the Market for State Bonds

The Minister for Finance has issued Regulation No.144/PMK.08/2006 with a view to developing and raising the levels of liquidity, efficiency, and transparency in the Secondary Market for State bonds with the establishment of the Primary Dealer System.

Primary Dealers are to be appointed by the Minister after satisfactorily complying with the necessary conditions. This appointment will be with a Ministerial Letter. Those that may be appointed as a Primary Dealer are restricted to General Banks and Securities companies. Nevertheless, there are 2 basic criteria for appointment: the applicant must have participated in a State bonds auction within the previous 12 months and have a capitalization of IDR 1 trillion for banks and IDR 200 billion for securities companies. There are further conditions once the basic conditions noted above have been satisfied including becoming members of the Bank Indonesia Scrip less Securities Settlement System (BI-SSSS).