Emerging Markets Rates and Currencies Handbook

Deal Management Rollover: Permitted for derivatives. Unwinding: Permitted for derivatives. Early Maturity: Permitted for derivatives. Settlement: FX Spot must be settled on gross settlement/ full-fund flow. Net settlement can be done for FX Forward, Option or Swap for the purpose of rollover, early termination, and unwind, except for forward sell transaction up to threshold or for forward sell transaction with the ownership of funds onshore and offshore as underlying. Documentation Requirements Purchase of FCY against IDR: Spot and Derivatives a. For amounts < USD 25,000 per month on FX Spot (including Today and Tom) or amounts < USD 100,000 per month on FX Derivatives (Forward, Option, or Swap): • Indemnity letter (one time only) • FX statement letter (each transaction) b. For amounts > USD 25,000 per month on FX Spot (including value today and tomorrow), amounts > USD 100,000 per month for domestic party, or amounts > USD 1,000,000 per transaction or outstanding per foreign party on FX Derivatives (Forward, Option, or Swap), or any amount per transaction on FX Call Spreads: • Indemnity letter (one time only) • FX statement letter (each transaction) • Underlying documents. The total amount stated in the underlying documents should be the same or exceed the amount of FCY purchased and be valid/not past due. • Documents should be submitted latest 5 days after the trade date or on the maturity date — whichever earlier. Sell of FCY against IDR: Spot No supporting or underlying documents needed. Selling of FCY against IDR: Forward, Option or Swap. a. For amounts < USD 5,000,000 per transaction through FX Forwards or amounts =< USD 1,000,000 per transaction through FX Options or amounts <= USD 25,000 per transaction through Swap: • Indemnity letter (one time only) b. For amounts >USD 5,000,000 per transaction through FX Forwards, amounts >USD 1,000,000 per transaction through FX Options or amounts >USD 25,000 per transaction through Swaps: • Indemnity letter (one time only) • FX statement letter (each transaction) • Underlying documents. The total amount stated in the underlying documents should be the same or exceed the amount of FCY purchased and be valid/not past due. • Documents should be submitted latest 5 days after the trade date or on the maturity date – whichever earlier. Netting: Settlement of Spot transactions has to be done on full fund flow basis. Netting is not allowed for FX Forwards selling foreign currencies using underlying documents of foreign currency ownership onshore or offshore. Netting is allowed for derivative transactions for the purpose of: roll overs, early terminations and unwinds that are supported with underlying documents for the initial trade. Additional Conditions: Loans and credit are not allowed to be used for the purpose of derivatives settlement. Overdrafts are not allowed to be used for the purpose of FX settlement against IDR. Trade Flows Underlying documents which are final in nature: • Loan agreement with proof of disbursement (account statement or MT103 proof of transfer). Intercompany loan as underlying transaction must be based on the actual amount being withdrawn and has minimum tenor of repayment by 1 month. • Royalty agreement • Letter of credit • Invoice or commercial invoice that has not passed due date and has not been paid. • Invoice or commercial invoice that has not passed 3 months after due date (or invoice date if no due date) and has not been paid accompanied with MT103 with information of payment of the relevant invoice and statement from client that the invoice has not been paid. In the case of Import, the document must show that the goods are intended to enter and will be received within the territory of Indonesia. • List of invoices • Debit note • Sales Contract