Securities Account Control Agreement Template for Indonesia

When you enter into secured financing arrangements involving securities accounts in Indonesia, you need a Securities Account Control Agreement to establish and maintain proper control rights. This legal document creates a three-party relationship between you as the account holder, your secured party (typically a bank or financial institution), and the securities intermediary (usually a custodian bank). The agreement ensures that your secured party can exercise control over the securities account while you retain certain operational capabilities necessary for your business.

When do you need this document?

You require a Securities Account Control Agreement when pledging securities accounts as collateral for loans or credit facilities in Indonesia. This document becomes essential in syndicated lending arrangements where multiple lenders need coordinated access to collateral, structured finance transactions involving complex security packages, and cross-border financing where Indonesian securities serve as security. You also need this agreement when establishing master security arrangements that cover multiple accounts or when regulatory requirements mandate specific control mechanisms over pledged securities.

Key legal considerations

Your agreement must clearly define the control rights granted to the secured party and specify the circumstances under which these rights can be exercised. You need to address the allocation of voting rights on securities held in the account and establish procedures for dividend and interest payments. The document should outline default scenarios and enforcement mechanisms while protecting your legitimate operational needs. Consider including provisions for account substitution, partial releases of control, and coordination mechanisms in multi-creditor arrangements. You must also address confidentiality obligations and ensure compliance with anti-money laundering requirements that apply to all parties involved.

Legal requirements in Indonesia

Your Securities Account Control Agreement must comply with Law No. 8 of 1995 on Capital Markets, which governs securities market operations and custody arrangements. You must adhere to OJK Regulation No. 20/POJK.04/2013 on Securities Account Management, which details specific requirements for securities account operations and control mechanisms. The agreement must recognize the authority of the Indonesian Financial Services Authority (OJK) and ensure compliance with Indonesian Central Securities Depository (KSEI) rules for settlement and clearing. You need to consider foreign exchange regulations under Law No. 24 of 1999 if the arrangement involves cross-border elements. Additionally, your agreement must include proper Indonesian governing law clauses and specify jurisdiction for dispute resolution in Indonesian courts.