OJK Revises Standard Deviation for Fair Market Value of Securities

The Financial Services Authority (“OJK”) is currently preparing a Draft Regulation of the Board of Commissioners (“Draft Regulation”) on the Determination of Standard Deviation for the Fair Market Value of Securities by Securities Valuation Institutions (“LPHE”). This regulation will update the use of standard deviation in determining fair market value for debt securities and/or sukuk, which has thus far been based on Circular No. SE-02/PM/2005 and Circular No. SE-03/PM/2005.

“The OJK will certainly continue to be present to maintain public trust and, of course, protect investors in our capital market by ensuring that our capital market and the entire Indonesian financial market will grow in a healthy, ethical, competitive, and sustainable manner,” said Hasan Fawzi, Chief Executive of Capital Market, Derivatives, and Carbon Exchange Supervision at the OJK.

These provisions go hand in hand with transparency obligations. LPHEs must disclose accurate and non-misleading information, including information on the methodology and data sources used. Standard deviation data must also be accessible or clearly disclosed to users.