|Progress Toward Outcome
The outcome has two stated performance targets;
1) OJK initiates operations and completes absorption of bank supervision
2) The Capital Market and Nonbank master Plan is at least 50% complete, including key objectives as follows; procedures for public offerings streamlined, GMRA launched, IPF established, corporate governance standards strengthened, convergence with IAS and launch of straight-through processing.
Progress is satisfactory. OJK has been launched and has absorbed banking supervision from Bank Indonesia. Efforts to launch the Global Master Repurchase Agreement have resumed and are expected to be completed by year-end 2014. Straight-through-processing has been acheived and initiatives to streamline procedures for public offerings and to imporve corporate governance are progressing under the Asian Capital Markets Forum. An Investor Protection Fund has been established.
|Status of Implementation Progress (Outputs, Activities, and Issues)
Awaiting OCO approval of extension of services of the Capital Market Expert to provide continued support to OJK til end 2015.
Initially, TA implementation was delayed due to transition issues associate with the migration of financial sector supervisory responsibilities to OJK, the newly created unified regulator, from Bapepam-LK, the previous nonbank financial sector regulator. In the interim, the TA's Executing Agency, the Ministry of Finance's Fiscal Policy Office, requested and received support for a variety of workshops and focus group discussions which were undertaken to strengthen financial sector stability and to provide for sustainable economic growth. In effect, the TA provided the Fiscal Policy Office with technical advice, capacity development, and enhancements to staff as the agency developed national economic policy.
OJK became operational in 2012 and absorbed banking supervision on 1 January 2014. Since that time, OJK has begun to prioritize improvements in the agency's internal infrastructure and operating capability. Utilizing a minor change in implementation, ADB has supported a number of IT projects. One project provided a team of individual experts to transition financial sector reporting to XBRL format. A second project, which is undergoing consultant recruitment, will provide an IT firm to develop e-licensing and e-reporting across the financial sector.
In addition, the TA has provided support to the government's continuing efforts to introduce the Global Master Repurchase Agreement (GMRA) as the standard repo documentation for Indonesia. This engagement provided an international and national law firm to provide legal advice, drafting and translation services, and market education. Finally, the TA has supported the government's efforts to encourage municipal finance to support infrastructure projects. Specifically, a local investment bank was retained and provided a shadow issuance including the completion of a prospectus. The output of this engagement provided substantial levels of knowledge transfer and established a base through which a live issuance could proceed.
In a continuation of prior engagements, ADB supported the placement of a long-term resident advisor to the Office of the Chairman who provided assistance with project management and capacity development. Currently, the advisor is focusing on the creation of a coordinated financial sector development plan. A second long-term resident advisor remains in place at OJK to act as a project manager in support of the IT master plan. Various additional TA projects have been organized around these two resident advisors.