1. Account Structure in KSEI
ACG Cross Training
Bangkok, June 2006
KSEI – Kustodian Sentral Efek Indonesia
(ICSD – Indonesian Central Securities Depository)

2. Outline Introduction KSEI Participants Collective Custody
KSEI in Indonesian Capital Market
Scripless Implementation Background
KSEI Participants
Collective Custody
Regulation on Accounts and Sub Accounts
Account Type & Structure
Indirect Account  Sub Accounts
Benefit & Advantage of Sub Accounts
Investor Types
Account Details & Maintenance
Transactions in C-Best
Corporate Action (Entitlement & Distribution)
Securities Holder List
Issues
Conclusion

3. Introduction - KSEI in Indonesian Capital Market
Ministry of Finance
Capital Market Supervisory Agency (BAPEPAM)
Stock Exchange :
Jakarta Stock Exchange
Surabaya Stock Exchange
Indonesian Clearing and Guarantee Institution
PT KPEI
Indonesian Central Securities Depository
PT KSEI
Scripless Trading
Clearing-Netting
Book-entry Settlement
SRO (Self Regulatory Organization)

4. Introduction - Scripless Implementation Background
Began in July 2000
Fully Scripless since June 2002
C-Best (Central depository and Book Entry Settlement System)
Stock Exchange settlement performed Electronic-Based
Time Frame Settlement (T+3) : since September 2002
OTC transaction & Settlement
Automatic transfer of securities ownership by book-entry
Automatic Corporate Actions process
Actual Data (as of 31 May 2006) :
Total Participants : 167 entities
(148 Brokers, 19 Bank Custodians)
Total Issuers : 437 entities
Total Securities instruments : 667
(384 shares, 240 corp.bonds, 24 Warrants, 2 Rights, 11 MTN, 6 PN)
Total Asset (value of all securities recorded) : Billion IDR
: Trillion USD

5. KSEI Participants Brokers (Securities Companies)
KSEI Participants are :
Brokers (Securities Companies)
Custodian Banks
Other parties approved by Bapepam (The Capital Market Supervisory Agency);
KPEI for the function of Stock Exchange Transaction Settlement
Foreign CSDs for cross-border settlement
As of 31 May 2006 : 167 Participants
148 Brokers
19 Custodian Banks
Investor opens a securities account in Securities Company or
Custodian Bank

6. Collective Custody ISSUER / REGISTRAR ICSD / KSEI
Scrip
Records
Electronic Records KSEI ASII 10000
ISSUER / REGISTRAR
Merrill Lynch
ASII 2000
ING Baring
ASII 3000
HSBC
CITIBANK
ICSD / KSEI
Morgan
Stanley
ASII 1500
Bankers
Trust
ASII 500
Northern
ASII 3000
Chase
Manhattan
ASII 2000
Goldman
BROKER/
CUSTODIAN BANK

7. Collective Custody Legal Basis Fungible :
Law Number 8 Year 1995 of The Republic of Indonesia regarding Capital Market
Fungible :
Securities In Collective Custody issued by the same Issuer are interchangeable with and equivalent to other Securities of the same type and class
Under the name of CSD :
Securities in Collective Custody at a Central Securities Depository shall be recorded in the Issuer’s registry of Security-holders in the name of the Central Securities Depository as the representative of its account-holders
Segregation of assets :
Securities Companies must comply with BAPEPAM Rules upon accepting clients’ Securities and must :
a. register clients’ Securities in accounts that are separate from own accounts ; and
b. maintain secured facilities for safekeeping clients’ assets, under separate
records for each client.

8. Collective Custody
BAPEPAM Rule No. III.C.7 regarding Sub Account at ICSD :
Client Investor is the recognized holder of securities account at Participant
Participant is a Securities Company or Custodian Bank that has opened a securities
account at KSEI
A sub securities account is the securities account of each client recorded in the Participant’s
security account at KSEI
KSEI Participant is obligated to :
open a sub account in name of each client
record client owned securities in respective sub accounts
assure accuracy of client securities balance (internal vs ICSD data )
assure accuracy of client identity (internal vs ICSD data )
KSEI is obligated to :
hold separate administration for the recording of securities in each sub securities account
deliver daily reports on the position of sub security accounts to respective Participants
KSEI only maintains contact with and is responsible to respective Participants pertaining to the
administering of Sub Securities Accounts
Investor has the right to check the accuracy of the report concerning the balance of securities he owns
(data at Participant vs data at ICSD)

9. Account Type Broker B Broker A delivery account receipt Account
Custodian Bank X
Lending &
borrowing
receipt
Account
Collateral
account
Own Deposit
account
Lending &
borrowing
Own Deposit
account
Client Dep
Account 1
Collateral
account
Client Dep
account X
Own Deposit
account
Client Dep
Account 2
Client Dep
account Y
Client Dep
Account A
Client Dep
account Z
Client Dep
account B

10. Account Structure KSEI Sub Acc Sub Acc Sub Acc Sub Acc Custodian Bank
Broker
KPEI
Issuer
Registrar
Payment Bank
Non Clearing Member
Clearing Member
Depository Acc
Depository Acc
Depository Acc
Nostro Acc
Nostro Acc
Cash
Sec
Cash
Sec
Cash
Sec
Cash
Sec
Cash
Sec
Delivering Acc
Sub Acc
Cash
Sec
Cash
Sec
Receiving Acc
Sub Acc
Cash
Sec
Cash
Sec
Collateral Acc
Cash
Sec
L & B Acc
Cash
Sec
Sub Acc
Cash
Sec
Sub Acc
Cash
Sec

11. There is No Omnibus Account
Indirect Account
Investors own accounts at Brokers / Custodians
Brokers / Custodians possess their own accounts and their clients’ accounts at KSEI
Request &
Docs
Request &
Docs
Brokers/
Custodians
Investors
Verify
Process
Archive
Confirmation
Confirmation
KSEI holds separate administration for the recording of securities in each sub securities account
There is No Omnibus Account

12. Securities Recording on Accounts
Account Holder : Br 1
Account Holder : CB 2
Own
Cust. A
Cust. B
Own
Cust. X
Cust. Y
KSEI
Sec. A
Sec. B
IDR
Sec. A
Sec. D
IDR
Sec. C
Sec. D
IDR
Sec. A
Sec. B
IDR
Sec. A
Sec. D
IDR
Sec. C
Sec. D
IDR
Br 1
CB 2
Brokers /
Custodian
Banks
Br 1
Cust. A
Cust. B
CB 2
Cust. X
Cust. Y
Customer A
Customer B
Customer X
Customer Y
Investors

13. Benefit & Advantage of Sub Accounts
Investor Protection
Assurance of separated bookkeeping for securities owned by the investor and
those owned by the custodian
Assurance of accurate recording of investor securities ownership position
Assurance of rights attached to securities such as dividend; right to attend RUPS
(Shareholder General Meeting), as investor will be listed in the List of Shareholders
issued by KSEI
Availability of real time investor data in KSEI, for the purpose of :
performing corporate action
Issuer’s reporting to Bapepam, Stock Exchange, Central Bank, for among
others: investigation.
Monitoring share ownership of > 5%
investigation by authorities, like: Bapepam, Court of Justice, Police.
producing reports.
Corporate action proceeds distribution efficiency.
Assuring proper tax rate applied upon investor in the occurrence of
Corporate Action

14. Investor Types Individual Investor Institutional Investor : Local
Foreign
Institutional Investor :
Local :
Limited Company
Brokers
Insurance
Bank
Government of Indonesia
Pension Fund
Mutual Fund
Foundation
Jamsostek (Labor Social Security)
Cooperative
Custodian Bank
Taspen (Civil Servant Insurance Savings)
Foreign :
Tax Treaty (each country)

15. Account Details Account Number Correspondent Account Number :
AB001 – XY12 – – 99
Local_Code – Client_Code – Acc_Type – CheckDigit
Correspondent Account Number :
account on PB (mirroring acct) – only for Own Acct and Collat.Acct
Account Description :
name of client
Status :
Available/Blocked/Closed
Tax ID
Blocking Reason (if any; only for Blocked Acct.)
ID number :
KITAS / COR / COD / NPWP
Address
Nationality

16. Account Maintenance Open Account : Modify : Block/Unblock : Close :
Supporting documents will define the investor type and tax rate of the account
No documents  the highest tax rate (20%)
Upload facility (Internal use)
Modify :
Usually to change / to adjust tax rate, address, account description.
Block/Unblock :
To Pledge / unpledge, Lock-up by Stock Exchange, other reasons.
Close :
Account should be zero balance
Can Not be recycled
Account linkage :
Related to Post Trade Processing module.
To link an Investment Manager’s sub account to a custodian bank

17. Data and Supporting Documents
Local Individual : Identity No and address according to Identity Card
Foreign Individual : copy of ID card if residing in Indonesia or copy of Certificate of Tax Residence (COTR) legalized by tax office if otherwise.
Local Institution :
- Foundation, Cooperative, Insurance, Ltd. : copy of Tax Registration
- Pension Fund : copy of State Minister of Finance Decree (SKMK) and Tax Reg.
- Mutual Fund : copy of Effective Letter (from Bapepam) and Tax Registration
- Jamsostek JHT : State Minister of Finance Decree (SKMK)
- Jamsostek Non JHT : copy of Tax Registration
- Taspen : copy of Tax Registration
Foreign institution: copy of Certificate of Tax Residence (COTR) legalized by tax office,
Foreign Institution exempted from income tax: State Minister of Finance Decree No. 574/KMK.04/2000 dated December 26th 2000
Armed Forces (ABRI) : Letter of Acknowledgement from Dir. Gen. of Tax
Indonesia Government: RI State Regulation

18. Transactions in C-Best
Depository Management
Deposit
Withdrawal
Security Transfer (within one Member)
Clearing and Settlement
DFOP/RFOP
DVP/RVP
Cash Management
Book Transfer (cash transfer within one Member)
Wire Transfer (cash withdrawal)
Collateral Deposit
Lendable Deposit
Post Trade Processing
Trade Confirmation
Settlement Instruction

19. Instruction Creation KSEI C-Best Server
Input via C-Best workstation
Instruction
Investor
KSEI
Participant
6-eyes principle (create, check, approve)
4-eyes principle (create direct check, approve)
2-eyes principle (create direct approve)
OTC
SECTRS
BTS WT
DCONF
REC
File upload
Instruction
Investor
Participants are responsible
for the data they input.
Participant

20. Stock Exchange Settlement
Selling broker
K S E I
Buying broker
KPEI
Own
Account
Own
Account
Client
Account
Client
Account
OTC
stock
stock
KPEI Account
Receiving
Account
synchronize
Delivery
Account
Receiving
Account
Delivery
Account
cash
cash
Custodian
Bank
Collateral
Account
Collateral
Account
alignment
L & B
Account
L & B
Account
Stock
Cash
OTC
Payment Bank

21. Over The Counter Transaction
MATCHING
PROCESS
KSEI B A
1. DVP
INSTRUCTION
2. RVP
INSTRUCTION
Brokers /
Cust. Banks
Brokers /
Cust. Banks A B X Z X Z
3. DFOP
INSTRUCTION
4. RFOP
INSTRUCTION
Brokers /
Cust. Banks
Brokers /
Cust. Banks
1. DVP : DELIVERY VERSUS PAYMENT
2. RVP : RECEIVE VERSUS PAYMENT
3. DFOP : DELIVERY FREE OF PAYMENT
4. RFOP : RECEIVER FREE OF PAYMENT

22. Corporate Action Mandatory CA Cash dividend Stock dividend
Mix dividend
Stock bonus
Stock split / reverse split
Merger / acquisition
Interest payment
Principal payment (Redemption)
Right / Warrant distribution
Proxy Voting
Voluntary CA
IPO
Exercise of Right/Warrant
Securities conversion

23. General Process of Mandatory CA
Announcement
Record
Date (AD)
Effective
Date (RD)
date
Reminder Date
(Rem Date)
(1)
(2)
(3)
(4)
Credit Entitlement of CA

24. Member Entitlement
Containing the list of all accounts (including own account and clients’ sub accounts that are entitled to proceeds of Corporate Action)
Generated on Record Date + 1
All KSEI members receive this report via workstation

25. Voluntary CA Process x days *
Start
Exercise
period
Instruction
Deadline
Announcement
date
Effective
date
x days *
Voluntary CA
Instructions
* The Rights/Warrants and cash positions will be debited automatically
in the exercise request amount

26. Distribution of CA proceed
KDPW KDPW
ISSUER
C-Best Back-end system
member 1
Proceeds
Tax
Own Deps a/c
Client a/c 001
Issuer’s account
Central tax
account
Client a/c 002
Payment Bank
(cash proceed)
Registrar
(sec proceed)
Client a/c 003
Client a/c 004
member 2
Own Deps a/c
Client a/c A

27. Security Holder List Issuer / Registrar requirement
On request (Ad hoc report)
Containing the complete data of Security holders :
General Data :
Security Name & Code
Record Date
Total Securities Issued
Security holder list :
Name
ID number
Address
Investor type
Nationality
Tax rate
Member Name & Code (where the investor open the account with)
Securities Amount
Percentage of ownership
Status of account

28. Issues on Sub Accounts Implementation
Still practices physical archiving of COD/COTR and other supporting documents
Uncertainty of investors numbers
Some brokers do not open sub accounts for some of their clients.
Investors may keep several accounts at different brokers/custodians under the same or different names or ID numbers
Rely on the data given by brokers/custodians

29. Conclusion KSEI implements Indirect Account (Sub Account)
Does not need to deal with thousands of investors. KSEI only deals with Participants (Brokers & Custodian)
Reduce operational activities :
No Counter Desk
Participants (Brokers & Custodians) assure the accuracy of client identity. (KYC)
Investor Protection :
Separate bookkeeping
Assurance of rights attached to any CA event.
Corporate Action process efficiency ;
CA Entitlement & Distribution : up to investors’ depository accounts.

30. Thank You