Developments in Indonesia and India
“Bank Indonesia Considers Redenomination of the Rupiah”
Bank Indonesia Considers Redenomination of the Rupiah
• Bank Indonesia ("BI") recently unveiled a plan to redenominate the rupiah.
• According to press reports, the BI Governor has indicated that the proposed redenomination will be carried out in four stages over 10 years.
• In a press release that was posted on the BI website, the proposed redenomination exercise will involve the elimination of a certain number of zeroes from the current denomination to simplify written forms of monetary payments. The press release further clarified that the redenomination "will not affect the value of money against goods".
• It is anticipated that the "new" rupiah will be introduced between 2019 and 2020.
Publication of KPPU Regulation on Criteria Applicable to Cartels
• The Commission for the Supervision of Business Competition ("KPPU") recently issued Regulation No. 4 of 2010 ("Regulation 4") which contains guidelines and provisions on cartels.
• Cartels are referred to generally in Article 11 of Law No. 5 of 1999 (the "Anti-Monopoly Law") which prohibits business actors from entering into agreements with their competitors with the intention of influencing prices or marketing goods in a way that would result in monopolistic practices or unfair business competition. Apart from Article 11, the Anti-Monopoly Law does not contain specific references to cartels.
• Regulation 4 sets out a number of indicators that can be used to support a charge of cartel activity, some of which have been set out below:
I. Inter-relation of ownership between competing companies;
II. Significant barriers to entry for new businesses in respect of a particular market; and/or
III. Uniformity of prices for goods or services which in certain circumstances may be an indication that there is a consensus in relation to price fixing among competing companies.
• Regulation 4 further provides that evidence must be provided to support a charge of cartel activity. Such evidence may take the form of documentary evidence and/or oral statements by relevant persons including present or former employees and customers.
• If cartel activity is found to have taken place, Regulation 4 provides that sanctions will be applied. The sanctions are consistent with those generally set out in the Anti-Monopoly Law and include a revocation of the relevant agreement, fines, imprisonment and a temporary prohibition from holding office within a particular company.
• Regulation 4 has been in force since 9 April 2010.
Federal Government Introduces Securities and Insurance Laws (Amendment and Validation) Bill 2010
• India's Federal Government recently introduced the Securities and Insurance Laws (Amendment and Validation) Bill 2010 (the "Bill") under which a new panel will be established as the final decision-making authority for any disputes that arise between the financial regulators of the country.
• The panel will be headed by the finance minister while the vice-chairman of the panel will be the governor of the Reserve Bank of India ("RBI"). Other panel members will include the Economic Affairs Secretary, the Securities and Exchange Board of India ("SEBI") and the Pension Fund Regulatory and Development Authority.
• Disputes between financial regulators are currently dealt with through the applicable tribunals, the court system or backroom resolutions.
• According to press reports, the Bill was introduced partly in response to the recent dispute between India's insurance regulator and capital markets regulators over certain unit-linked insurance policies ("ULIPs").
• The Bill is expected to clarify that ULIPs will be a part of the life insurance business by introducing the relevant amendments to the Insurance Act 1938, the Securities Contract (Regulation) Act 1956 and the SEBI Act 1992.
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