Broker To Broker Agreement Template for Indonesia

A Broker To Broker Agreement is a legally binding contract that establishes the terms of collaboration between two or more brokerage firms operating in Indonesia. This document creates a structured framework for business relationships, ensuring both parties understand their rights, obligations, and compensation arrangements while maintaining compliance with Indonesian financial regulations.

When do you need this document?

You need a Broker To Broker Agreement when establishing any formal business relationship with another brokerage firm in Indonesia. This includes situations where you're creating client referral programs, sharing commissions on transactions, forming strategic partnerships for market expansion, or collaborating on specialized services. Securities brokers require this agreement when cross-referring clients for different investment products, while real estate brokers use it when partnering across different geographical markets. Insurance brokers often need these agreements when collaborating with specialized brokers who handle specific types of coverage, and commodity or foreign exchange brokers use them when expanding their service offerings through partnerships.

Key legal considerations

Your agreement must clearly define the scope of collaboration, including specific services covered and exclusions. Commission structures require detailed specification, covering calculation methods, payment timing, and dispute resolution procedures. Client confidentiality clauses are essential to protect sensitive information shared between brokers. You must include regulatory compliance provisions ensuring both parties maintain their required licenses and follow applicable regulations. Termination clauses should address how existing client relationships and pending transactions will be handled upon agreement termination. Liability limitations and indemnification provisions protect both parties from potential legal claims arising from the collaboration.

Legal requirements in Indonesia

Under Indonesian law, your Broker To Broker Agreement must comply with the Indonesian Civil Code governing contract formation and validity. Securities brokers must adhere to Law No. 8 of 1995 on Capital Markets and OJK Regulation No. 50/POJK.04/2016, which establish licensing requirements and operational standards. All brokers must ensure compliance with Law No. 7 of 2014 on Trade for commercial intermediary activities and Law No. 5 of 1999 on Competition to avoid monopolistic practices. Consumer protection under Law No. 8 of 1999 requires specific safeguards for client interests. Your agreement should include provisions confirming each party's valid licensing status and ongoing compliance obligations. Documentation must be in Bahasa Indonesia or accompanied by certified translations, and certain agreements may require registration with relevant authorities depending on the nature and scope of the collaboration.