20 Aug 2025
BI Issues PADG 13/2025: Consolidating and Specifying Money Market and FX Market

1. Introduction

To support the modernization and deepening of the Money Market and Foreign Exchange Market (“MFEM”), Bank Indonesia (“BI”) has introduced a comprehensive regulatory framework to strengthen financial market infrastructure. This initiative, set out in BI Regulation No. 6 of 2024, provides the legal foundation for MFEM operations. A key objective is to ensure that both systemic and critical market infrastructures operate securely, efficiently, and reliably in line with international standards, while being interoperable, interconnected, and fully integrated within the wider financial system.

Given the growing role of non-central entities in MFEM transactions, BI has now formalized the responsibilities of transaction facilitators and providers (“Organizers”), including Electronic Trading Platform (“ETP”) providers, brokerage firms, and Systematic Internalisers (“SI”). These Organizers, although independent from BI, handle critical market functions and are therefore subject to enhanced regulatory oversight.

To address these developments, BI issued Board of Governors Regulation (“PADG”) No. 13 of 2025 (“PADG 13/2025”), effective 10 June 2025. This regulation consolidates and replaces several earlier provisions, including:

• PADG No. 21/17/PADG/2019 on Money and Foreign Exchange Market Brokerage Companies (“PADG 17/2019”);

• PADG No. 21/19/PADG/2019 on ETP Providers (“PADG 19/2019”);

• PADG No. 21/20/PADG/2019 on SI (“PADG 21/2019”); and

• Relevant provisions of PADG No. 20/14/PADG/2018 on Non-Bank Money Market and Custodian Reports (“PADG 14/2018”).

PADG 13/2025 sets unified criteria and obligations for Organizers, covering the operation of both bilateral and multilateral trading platforms. It also introduces regulatory enhancements in areas such as intermarket ETP operations, human resource development, technology use in financial services, and harmonized oversight across different platform providers.

2. Key Features

PADG 13/2025 covers, among others:

• Key definitions and terminology for Trading Platform Providers.

• Rules on the regulation, development, and supervision of trading facilities and their providers.

• Coverage, functions, and obligations for all provider types.

• ETP Providers: licensing, changes to features or structure, obligations, and prohibitions.

• Intermarket ETP Providers: categories, licensing from BI and/or other authorities, obligations, and prohibitions.

• Brokerage Firms: licensing, changes to features or structure, obligations, and prohibitions.

• Systematic Internalisers (SI): licensing, changes to features, obligations, and prohibitions.

• Licensing and recommendation procedures for all Trading Platform Providers.

• Prudential principles, risk management, and governance requirements.

• Data, information, and reporting obligations.

• Supervision and sanction procedures.

• License revocation (in addition to sanctions).

• Correspondence and other administrative provisions, including BI’s authority to adopt specific policies for regulating and supervising providers.

• Transitional provisions for applications submitted before the regulation took effect.

• Closing provisions, including revocation of previous regulations and the date of entry into force.

3. Provisions to Highlight

Obligations of Organizers

Organizers may operate platforms for bilateral and/or multilateral transactions, and must at least provide:

1. Price and market monitoring (exchange and interest rates);

2. Quote/order display or publication;

3. Transaction processing, confirmation, and execution.

PADG 13/2025 also narrows the range of financial instruments and transactions they can facilitate to four categories:

1. Money market products and transactions;

2. Foreign exchange market products and transactions;

3. BI-issued monetary operation instruments;

4. Other instruments specifically designated by BI.

Based on the above, the category allowing “other instruments and/or transactions in the MFEM, subject to BI’s approval”—previously included in PADG 17/2019, PADG 19/2019, and PADG 20/2019—has been removed under PADG 13/2025, reflecting the regulatory simplification undertaken.

While licensing requirements remain largely the same, Organizers now have added obligations to:

• Prepare operational rules and procedures in consultation with BI;

• Provide infrastructure and facilities suited to their business scope;

• Set objective, risk-based, and transparent user criteria;

• Operate strictly within their licensed scope;

• Maintain IT systems and grant BI supervisory access;

• Ensure platform reliability, availability, and security.

   

Non-compliance may result in administrative sanctions, in the form of a written warning.

Additional Obligations and Sanctions

Licensing for Intermarket ETP Providers

To obtain a license under PADG 13/2025, Organizers must first meet three key criteria: (i) institutional aspects; (ii) the ability to carry out business activities; and/or (iii) other requirements determined by BI. While most licensing requirements from earlier regulations are retained, PADG 13/2025 adds new provisions for Intermarket ETP Providers.

Human Resource Quality Development

There are some updates to the Human Resource Quality Development requirements, shown in the table below. All other periodic reporting obligations for Organizers remain the same as in the previous regulations.

Training budget obligations take effect 1 January 2026; annual HR development reporting obligations from April 2027.

Use of Supporting Financial Sector Professional Services

ETP Providers and brokerage firms may now engage professional services registered with BI. This applies to brokerage firms from 1 April 2026. Non-compliance is subject to a written warning.

Administrative Sanctions

PADG 13/2025 details sanctions for almost all obligations, but retains the same sanction types as before—written warnings, temporary suspensions, and/or license revocations.

4. ABNR Commentary

Bank Indonesia’s issuance of PADG 13/2025 represents a significant step forward in the regulation of the MFEM. This regulation consolidates previous provisions into a single framework while introducing important updates that address the evolving market environment. Key changes include clearer licensing procedures for Intermarket ETP Providers to enhance oversight of cross-market platforms, new requirements for human resource development with mandated training budgets and reporting, and a refined scope of permissible transactions that improves regulatory clarity and prudential control. Also, ETP providers and brokerage firms now can also engage professional services registered with BI. 

Crucially, BI reiterates its commitment to robust supervision by linking non-compliance with administrative sanctions. Overall, PADG 13/2025 aims to strengthen market transparency, governance, and systemic resilience, and market participants—including ETP Providers, brokerage firms, and SI—are encouraged to proactively align with these enhanced requirements.

By partners Ayik C. Gunadi (agunadi@abnrlaw.com), Rully Hidayat (rhidayat@abnrlaw.com), and associate Cinda Sitanggang (rsitanggang@abnrlaw.com)

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.