OJK Nixes 10 Percent Margin Call Regulation

The Financial Services Authority (OJK) has removed the 10 percent margin call from option contracts that are commonly used for hedging.

OJK chairman Wimboh Santoso said on Thursday that removing the margin call aimed to boost financial transactions in Indonesia.

In other markets like Singapore, the same contract does not require a margin call.

“Some customers prefer to have contracts in Singapore because there is no margin call there. With this removal, we hope the transactions will move to Indonesia,” he said during a press conference at the OJK’s Jakarta headquarters.

Meanwhile, under OJK Regulation No. 7/POJK.03/2016, the transactions are only open to financial companies and other professional customers that have at least Rp 20 billion (US$1.44 million) in equity.

Under the previous regulation, all customers were required to pay a 10 percent margin call, except for customers of four categories: banks, the government, the central bank and multilateral development banks.

The revised OJK Regulation No. 6/POJK.03/2018 frees all customers from the margin call obligation.

“But if the transaction does not carry underlying requirements, such as paying a bond coupon or foreign exchange dividend, it will still be subject to the 10 percent margin call,” Wimboh said.

Courtesy : Thejakartapost
Photo : Liputan6.com

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