Bank Indonesia to Issue Commercial Paper Regulation July-End

Bank Indonesia-the central bank.

Jakarta, 11 Shawwal 1438/5 July 2017 (MINA) – Bank Indonesia (BI), Indonesias central bank, will issue a regulation related to the issuance of commercial paper (CP) within two weeks or by the end of July 2017.

This is following the need by various non-bank corporations to publish the paper as short-term funding for working capital.

The Head of BIs Finance Market Development Department, Antara News quoted Nanang Hendarsyah, as saying here, Tuesday, that the regulation would regulate CP issuance and trading.

For technical rules, BI will issue a derivative regulation that will manage the supporting institutions, such as rating agencies and public accounting firms.

Once the supporting institutions are ready, Nanang remarked, BI would issue a technical regulation for non-bank corporations as issuing institutions.

“Technical regulations for supporting institutions will be issued in September 2017, while for issuing agencies they will be issued in December 2017,” Nanang revealed.

The commercial paper issuance is expected to increase this year. The number of non-bank corporations in Indonesia is over 500, and the demand for short-term funds through money market instruments is enormous.

Previously, BI had also issued a regulation on issuance and trading of instruments for Negotiable Certificate Deposit (NCD).

Although it is same as commercial paper, as a one-year short-term instrument, NCD is issued by a banking corporation.

Banks can buy commercial paper in money markets. In addition to banks, investors who can absorb commercial paper include securities companies, individuals, investment managers, pension funds and insurance, through mutual fund products and foreign investors. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)