Technical Procedures for the Issuance of Sharia-Deposit Certificates

As an implementation of Financial Services Authority (Otoritas Jasa Keuangan‑ “OJK”) Regulation No. 10/POJK.03/2015 ^[1]on the Issuance of Sharia-Deposit Certificates, the OJK has issued Circular No. 49/SEOJK.03/2017 on Procedures for the Issuance of Sharia-Deposit Certificates (“Circular 49/2017”).Circular 49/2017 sets out technical procedures relating to the issuance of Sharia-Deposit Certificates (“SDC”), as described below:1.     SDC characteristics;2.     SDC issuance procedures;3.     Proof of SDC issuance;4.     Anti-money laundering and prevention-of-terrorism-financing programs;5.     Risk management;6.     Customer protection; and7.     SDC transaction reports.Due to the broad scope of Circular 49/2017, this edition of Indonesian Legal Brief will confine its discussion to points (1), (2) and (6) above.SDC CharacteristicsSDCs are savings in the form of deposits which are issued based on sharia principles through the implementation ofmudharabah mutlaqahormudharabah muqayyadahagreements. SDCs can be transferred prior to their maturity date through the use of sales-purchase agreements (ba’i), inheritance or grants. In addition, SDCs may also betraded through the secondary market through the use of repurchase agreements (repo) which are based on sharia principles. ^[2] Pursuant to Circular 49/2017, SDCs are associated with several requirements and characteristics, as outlined in the table below: