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The Financial Services Authority (OJK) logo is seen at its headquarters in Jakarta. (kontan.co.id/File)

The Financial Services Authority (OJK) and the Indonesian Effect Companies Association (APEI) have teamed up to launch the standardization of the repurchase agreement (repo), which has been developed in the equity market.

The standardization was in the form of OJK Regulation (OJKP) No. 9/POJK.04/2015 on guidance for repurchase agreement transactions by financial service institutions.

The issuance of the regulation was followed by the enforcement of the Global Master Repurchase Agreement (GMRA) Indonesia, which is a document that should be abided by financial service institutions in Indonesia.

APEI chairman Karman Pamurahardjo said in Jakarta on Tuesday that market standardization was needed to help market players improve their competitiveness in international stock exchanges.

“For that, the APE and OJK arranged the market standardization,” Karman said as quoted by tempo.co, adding that the standardization was also expected to become a guide in the equity market to support stock exchange credibility.

Karman said market standardizing referred to GMRA Indonesia and best practices in the international market. He added the standardization was expected to help market players better understand mechanisms in repo transactions.

“It will help reduce uncertainty and disputes in repo transactions,” he said.

OJK supervisory executive head Hoesen said many repo transactions were not in line with GMRA Indonesia. He called on market players to refer to the existing regulation in conducting transactions.

“Hopefully, the market standardization will improve market players’ understanding because every day we are always tempted by high profits,” Hoesen added. (bbn)

Source“JakartaPost”