Developments in the world of commodity trading in Indonesia are currently taking place very rapidly.
Therefore, of course, an institution that is able to regulate this is needed, namely the Commodity Futures Trading Regulatory Agency (Bappebti).
CoFTRA is a trade supervisory body whose job is to assist, supervise and regulate the course of commodity futures transactions so as not to cause losses to the parties involved in the future.
Apart from CoFTRA, there are also other financial institutions that are also often heard of, namely the Financial Services Authority (OJK).
So, to better understand what CoFTRA is, its roles, functions, and differences in roles between CoFTRA and OJK, see the following review.
Definition of BAPPEBTI
The Commodity Futures Trading Supervisory Agency, commonly abbreviated as CoFTRA, is an institution belonging to the Ministry of Trade.
CoFTRA was established to help supervise and formulate regulations regarding trading in commodities, foreign exchange (forex), and the futures market.
The position of CoFTRA is regulated in Law Number 32 of 1997 concerning Commodity Futures Trading.
CoFTRA is important in the world of commodity futures trading in Indonesia because of its role in determining regulations regarding activities in the futures market.
Please note this is intended for the client’s benefit to obtain the desired profit.
Certain regulations will usually be made so that the stability of the futures market can occur optimally.
Then this is also done to avoid the high risk of loss that may arise in the future.
BAPPEBTI Roles and Responsibilities
It is important to note that CoFTRA is an official institution under the auspices of the Minister of Trade.
This institution is also directly related to the Capital Market Supervisory Agency (BAPEPAM), Bank Indonesia (BI), the Attorney General’s Office, and the Indonesian National Police.
CoFTRA’s main role in supervising and managing commodity futures trading is related to this position.
That means CoFTRA plays an important role related to supervision, both directly and indirectly, over the course of transactions in the futures market.
In this case, all valid transactions must occur according to regulations approved and stipulated by CoFTRA.
In addition, CoFTRA also plays a role in granting licenses and supervising and regulating commodity and crypto futures trading activities.
Related to this, CoFTRA plays a role in making and establishing regulations regarding futures trading.
This institution also oversees and monitors all future clearing house and exchange activities.
Then, CoFTRA also takes care of issuing businesses in the field of futures trading according to the terms and conditions that have been set.
Furthermore, CoFTRA also protects the interests of business actors and the general public in commodity and crypto futures trading.
CoFTRA carries out this role by entering into financial regulation and overseeing the circulation of money generated from futures market transactions.
This authority is carried out by CoFTRA together with BI to prevent financial crimes in financial transactions.
BAPPEBTI function
Apart from its important role in supervising commodity and crypto transactions, CoFTRA also has several functions.
The function of CoFTRA is certainly important for business people and society to know in general.
Following are some of the functions of the CoFTRA or the Commodity Futures Trading Regulatory Agency, including:
1. Establish Futures Market Transaction Regulations
CoFTRA has the main function as a party that will regulate transactions on the futures market, including commodity futures market transactions.
Later, these regulations (regulations) must be complied with by all market players, especially by business actors under this institution’s auspices.
2. Become a Futures Market Transaction Supervisor
Another function of CoFTRA is to supervise futures market transactions. The goal is to avoid unwanted things that could arise from transactions.
This is because the futures market or commodity futures market is a very profitable business system, but it is also full of risks, including the risk of fraudulent transactions.
3. Issuing business licenses
Issuing business licenses is also another function of CoFTRA. Issuing this business license is for individuals and companies wishing to do business in the commodity futures market.
Market players will have the legality to run a business if they have obtained the permit.
Conversely, unlicensed market participants will be considered illegal and deserve legal action.
4. Become a Membership Verification Checker
Next, CoFTRA also functions as a membership verification examiner. This was done after Bappebti granted permission.
In this case, the supervision carried out includes conducting inspections as a form of verification and validation of the business licenses that have been issued.
The goal is to determine which permits are legal, have expired, or have not been extended.
Differences in the Roles of BAPPEBTI and OJK
Bappebti and OJK are two institutions in the realm of financial transactions.
However, between CoFTRA and OJK, of course, some differences need to be known, including by the wider community.
Following are some of the different roles between CoFTRA and OJK that need to be known, including:
The first difference between BAPPEBTI and OJK, related to financial regulations, is quite striking.
As for BAPPEBTI, as its name implies, it is known that it will regulate financial regulations in the futures trading sector.
Meanwhile, as the name implies, OJK is known to regulate financial regulations in the financial services sector.
Another difference is that CoFTRA focuses/has priority on supervising and regulating futures trading activities.
In this case, several commodities are under the supervision of CoFTRA, for example, primary non-financial products (mining, energy, and agricultural products) and non-primary financial products (bonds, foreign exchange, crypto assets, and interest rates).
Another difference is in the scope of the OJK financial services authority, which includes non-bank financial institutions, banking, capital markets, and insurance; even in the future, the OJK will also start overseeing crypto.
For information, OJK has also been confirmed to take on a new task: to become a regulator and supervisor of crypto assets.
This happened in line with the ratification of the Financial Sector Development and Strengthening Law (RUU PPSK) some time ago.
However, regarding regulations, it is known that the OJK will only target stable coins (crypto with a value associated with certain currencies/commodities).
Apart from that, OJK is also known to carry out supervision of crypto with real underlying assets.
Referring to Article 6 Paragraph 1 e of the PPSK Law, OJK is said to carry out regulatory and supervisory duties on activities in the technological innovation sector of the financial sector, digital financial assets, and crypto assets.
It should also be noted that previously when this regulation had not been ratified, the regulation and supervision of crypto assets were still under the auspices of CoFTRA.
Conclusion
Summary of the roles, functions, and responsibilities of BAPPEBTI in regulating commodity futures trading.
In conclusion, CoFTRA plays an important role in directly and indirectly monitoring transactions in the futures market.
In addition, CoFTRA also plays a role in granting licenses and supervising and regulating commodity and crypto futures trading activities.
Furthermore, CoFTRA also protects the interests of business actors and the general public in commodity and crypto futures trading.
With these roles and responsibilities, CoFTRA is very important to maintain the integrity and fairness of Indonesia’s commodity futures trading market.
CoFTRA performs this by carrying out several functions, starting from making regulations related to futures market transactions, supervising transactions on the futures market, issuing business licenses, to becoming membership verification examiners.
So, that was the complete discussion regarding the role of BAPPEBTI, starting from the definition, and functions to the differences with OJK.
For information, the INDODAX digital asset platform has been registered with BAPPEBTI, and you can check it at this link: https://bappebti.go.id/calon_pedagang_aset_kripto.
After reading the article about Bappebti, you can also learn about crypto investment at INDODAX Academy.
