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PART II

CUSTOMER ORDER ROUTING TO

OVERSEAS EXCHANGE

TABLE OF CONTENTS

PART II CUSTOMER ORDER ROUTING TO OVERSEAS EXCHANGE

TABLE OF CONTENTS ……………………………………………………………………………………………………………………………

CHAPTER I DEFINITION AND GENERAL PROVISIONS ………………………………………………………….……….…….I/1

CHAPTER II MEMBERSHIP ……………………………………………………………………………………………………………….II/1

CHAPTER III MANAGEMENT.……………………………………………………………………………………………………….….III/1

CHAPTER IV EXCHANGE LISTS AND CONTRACTS……………………..…..………………………………………….……..IV/1

CHAPTER V TRADING SYSTEM AND MECHANISM…………………………………….………..……………………………V/1

CHAPTER VI RIGHTS AND OBLIGATIONS….……………………….………………………………………………………….…VI/1

CHAPTER VII RULES ENFORCEMENT………………..….…………………………………………….………………………....VII/1

CHAPTER VIII COMPLAINT HANDLING MANAGEMENT……………………………………….…………………….….VIII/1

CHAPTER IX VIOLATIONS AND SANCTIONS……………………………………………………..……….…………………….IX/1

CHAPTER X DISPUTE SETTLEMENT………………………………………………………………………..…..…………………….X/1

CHAPTER XI EVENT OF EMERGENCY AND FORCE MAJEURE…………………………………..…..…………………….X/1

Indonesia Commodity and Derivatives Exchange Rules Part II Customer Order Routing to Overseas Exchange (PALN)

I/1

CHAPTER I DEFINITION AND GENERAL PROVISIONS

100. DEFINITION 1. Unless the context requires otherwise, the capitalized terms in Part II Definitions shall have

the following meanings:

Customer Order Routing to Overseas Exchange (PALN)

is activities in offering PALN Contract and distributing Customer Order through a system utilized in the Exchange.

PALN Contract is contracts which are traded in overseas exchange as determined in the CoFTRA decrees and the Exchange Rules.

PALN Committee is the Exchange committee responsible in overseeing the operation of PALN on the Exchange.

2. Any meanings and terms with capital letters not mentioned in the definition of Part II shall

refer to the terms set forth in Chapter I Part I of the Exchange Rules. 101. GENERAL PROVISIONS 1. In the operation of PALN, the Exchange has the following duties:

a. providing a system capable of distributing the Customer Order through future broker of overseas clearing member;

b. conducting cooperation with overseas future brokers of overseas clearing member; c. making a list of future broker registered in overseas clearing house in order to route

the Customer Order to the overseas exchange and report such list to CoFTRA.

2. The other general provisions as provided in Chapter I Part I of the Exchange Rules shall apply

to Part II of this Exchange Rules.


II/1

CHAPTER II MEMBERSHIP

200. REQUIREMENTS OF PALN MEMBERSHIP 1. PALN transactions can only be carried out by Exchange Member who is Futures Broker.

Futures Broker which carry out PALN shall be subject to any provisions concerning membership, including but not limited to the requirements of rights and obligations provided in Part I of the Exchange Rules, the Clearing Rules, the Exchange Decrees, the Clearing House Decrees and the Prevailing Laws.

2. In addition to complying with the terms of membership for the Futures Broker as regulated

in Chapter II Part I of the Exchange Rules, the Futures Broker carrying out the PALN must adhere to the following requirements: a. became a member of the Exchange and has a cooperation agreement with the Future

Broker which is a member of overseas Clearing; b. issue a statement of willingness to provide daily Open Position reports in overseas

exchange to the Exchange; c. securing approval from CoFTRA to conduct PALN; d. depositing a Guarantee Fund of IDR 500,000,000 (five hundred million Rupiah) to the

Clearing House to be placed in a segregated account from the Clearing House account at the Depositary Bank approved by CoFTRA;

e. using a Margin fund Depositary Bank that provides an online facility to deposit and

withdraw Margin during trading hours with a bank used by a future broker registered as a member of overseas clearing;

f. having at least 1 (one) Futures Broker Representative who masters or understands the

rules of exchange and overseas contracts being traded; and g. using the PALN system to an overseas futures exchange provided by the Exchange with

online connection to the Clearing House.


III/1

CHAPTER III MANAGEMENT

1. The management of the Exchange which oversees the PALN activities is part of the Exchange

organizational structure as referred to in Chapter III of the Exchange Rules. 2. The PALN Committee is a part of the Exchange Committee as referred to in Chapter III Part I of

the Exchange Rules. Further provisions regarding the PALN Committee will be governed by the Exchange Decree.


IV/1

CHAPTER IV CONTRACT AND EXCHANGE LIST

Implementation of PALN transactions to overseas future exchanges can only be conducted in overseas future exchanges and contracts in accordance with the Prevailing Laws.


V/1

CHAPTER V TRADING SYSTEM AND MECHANISM

500. PALN SYSTEM 1. The Exchange Member shall ensure that all of the Customer Order in PALN activities are routed

through the system set by the Exchange. 2. The Exchange is authorized to regulate the functions, connectivity, operation and security

requirements of the PALN system through Exchange Decree. 3. Exchange Members must submit a written confirmation to the Exchange within 2 (two) Trading

Days at the latest in respect of the Exchange Member has a PALN system that meets the requirements of function, connectivity, operation and security requirements with the PALN system provided by the Exchange and the future broker of overseas clearing member.

4. Exchange Member who have met the requirements referred to in item 3 above shall be

responsible for ensuring that the Exchange Member concerned has the control and ability to comply with any provision in this Exchange Rules.

501. CUSTOMER ORDER ROUTING MECHANISM TO OVERSEAS EXCHANGE 1. PALN Recording and Reporting:

a. Exchange shall prepare, maintain and keep records relating to PALN activities in accordance with the Prevailing Laws;

b. Exchange Members shall maintain and keep records relating to PALN activities in accordance with the Prevailing Laws; and

c. The Exchange will report to CoFTRA, Clearing House and to Exchange Member in the event that overseas future exchange and/or future brokers who are members of overseas clearing members suspend the transaction.

2. Trading Day and Hours

Trading Day and hours are the same days and hours as overseas trading contracts are traded on overseas futures exchanges.

3. Settlement Price

The settlement price is derived pursuant to the terms of the overseas contracts being traded on overseas futures exchanges.

4. Margin

The future broker of overseas clearing member deposits Margin into a segregated account from Clearing House account. The Clearing House will deposit Margin into a segregated account of the future broker of the overseas clearing member in the Depositary Bank.


V/2

502. LIMIT OF LIABILITY OF THE EXCHANGE

The Exchange shall not be liable for any losses arising from interruptions in its operations as a consequence of unavailability of the system, riots, acts of war or natural disasters or other events including foreign exchange market rules, policy or action, local and overseas government authorities in accordance with the Prevailing Laws and Exchange Rules.

‘


VI/1

CHAPTER VI RIGHTS AND OBLIGATIONS

600. COOPERATION WITH FUTURE BROKER OF OVERSEAS CLEARING MEMBER 1. Exchange Members conducting PALN shall cooperate with a future broker who is member of

overseas clearing listed in the Exchange. Such cooperation shall be facilitated by the Exchange and shall at least contain: a. rights and obligations of each party;

b. the mechanism of distribution and management of the Customer Order; c. information and reporting systems; d. monitoring system; e. customer protection scheme; f. mechanism of dispute settlement by means of arbitration; and g. Margin deposit and withdrawal mechanism conducted through Clearing House.

2. Such cooperation shall be made in bilingual which are Bahasa Indonesia and English and in the

event of dispute, English shall apply. 3. Copy of such cooperation shall be submitted to the Exchange. 601. PALN CUSTOMER

The Exchange Member shall ensure that the Customer conducting PALN has: a. knowledge of the process of entering the Customer Order in PALN transactions through

the PALN system; b. knowledge of the requirements in this Exchange Rules and terms of PALN in cooperation

with the future brokers who are member of overseas clearing; c. knowledge of the Prevailing Laws in Futures Trading; d. knowledge of Futures Trading risks.


VII/1

CHAPTER VII RULES ENFORCEMENT

Provisions on rules enforcement for PALN transaction is subject to the provisions of rules enforcement in Chapter VII Part I of the Exchange Rules.


VIII/1

CHAPTER VIII COMPLAINT HANDLING

Procedure for Complaint Handling of Customer regarding issues arising from PALN transaction is subject to the provisions on Customer Complaint handling provided in Chapter VIII Part I of the Exchange Rules.

Indonesia Commodity and Derivatives Exchange Rules Part II Customer Order Routing to Overseas Exchange

BAGIAN II PENYALURAN AMANAT NASABAH LUAR NEGERI (PALN) / PART II DISTRIBUTION OF CUSTOMER ORDER TO OVERSEAS EXCHANGE

CHAPTER IX SANCTION AND VIOLATION

900. THE EXCHANGE ACTION AGAINST PALN VIOLATION

1. In addition to those set forth in the violations and sanctions of Chapter IX of Part I of the Exchange Rules, in the event of a violation or the possibility of a violation relating to PALN and PALN transactions, the Exchange is authorized to perform the following actions:

a. imposing administrative sanctions or fines to any Exchange Member committing a violation or an act of default;

b. review or undertake early termination of cooperation agreements with future brokers who are overseas clearing member and exchange members.

2. Any violation or negligence related to PALN is subject to Chapter IX of Part I of the Exchange

Rules, Exchange Decree and Prevailing Laws including but not limited to the use of authority and the imposition of sanctions in respect of such violations.

3. The imposition of sanction and fine by the Exchange to Exchange Member is final and binding.

901. CONSEQUENCE OF ACTION TAKEN BY THE EXCHANGE

1. In the event that the Exchange takes the action referred to in provision 900 then any such action shall also apply to any parties concerned.

2. In the event of termination of the Exchange Member’s activity, the Exchange will appoint

another Exchange Member which will accept the open transfer from the Exchange Member committing the violation. The Exchange is authorized to perform other actions as referred to in the Exchange Rules or the Exchange Decree in the event of a Violation or Default committed by Exchange Member.

3. In the event that the Exchange Member voluntarily resign, the provisions in Chapter II Part I of

the Exchange Rules, the Exchange Decree and the Prevailing Laws shall apply in respect of such voluntary resignation.


X/1

CHAPTER X DISPUTE SETTLEMENT

1. The Exchange provides a venue for dispute settlement that occurs during the

implementation of PALN. 2. Disputes between the Exchange Member and the Customer or among the Exchange

Members shall be settled in accordance with the Prevailing Laws and Dispute Settlement Rules as provided for in Chapter IX of Part I of the Exchange Rules.

3. The dispute between the Exchange Member and the overseas clearing member is settled in

accordance with the provisions applicable in the overseas futures exchange.

Indonesia Commodity and Derivatives Exchange Rules Part II Distribution of Overseas Customer Order (PALN)

XI/1

CHAPTER XI EMERGENCY SITUATIONS AND FORCE MAJEURE

In the event of Emergency Situations or Force Majeure which interrupts the trading of PALN Contract, then the provisions of Chapter XI of Part I of the Exchange Rules shall apply.

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