Automated Risk Monitoring System
KPEI, as a guarantor in Indonesian stock exchange transactions, absorbs risks that may arise in settlement. The worst risk exposed to KPEI is the case of bankruptcy of CM, in this case a CM is failed to deliver all of its settlement obligations to KPEI.
So It is important for KPEI to maintain information on risk exposed by every CM, this information is known as CM Risk Profile. All activities including: capital adequacy, financial strength, transaction settlement, and collateral adequacy are included in this CM Risk Profile.
KPEI, besides monitoring CM Risk Profiles, also enforces Risk Based Collateral principle in its settlement guarantee scheme. Risk based collateral require CM to be backed up by sufficient collaterals in its activities in the stock exchage.
A comprehensive risk monitoring and implementation of risk based collateral needs a reliable information management system. In order to support such functions, KPEI developed an integrated system called Automated Risk Management System (ARMS)
The aim of developing ARMS is to maintain relevant information and administer it to create reports that enable KPEI to perform its guarantee scheme in an optimum level.
ARMS modules include:
Nett Adjusted Working Capital (NAWC) Module
KPEI executes daily monitoring on CM’s compliance to Bapepam V.D.5 rules about NAWC maintenance and reporting. Besides NAWC daily reporting, KPEI also monitor adjustment in NAWC value from time to time. Financial ratios in NAWC are analyzed as well, based on those ratios KPEI scores each CM and put them into several categories.
Historical Analysis Module
Historical analysis module acts as data warehouse for all CM historical transactions and settlement activities. This module present reliable data for generating indicators that represent condition every CM.
Historical data includes:
- Transaction data
- Netting Data
- Settlement Data
- Account Balance Data
- Collateral Data
Financial Reports Module
Mid year and end of year audited financial reports, which include: Balance sheet, profit and loss report, and cash flow report, are maintained within this module. Those data are examined to produce financial ratios that describes the financial condition of each member and also the whole industry.
Executive Information System Module (EIS)
EIS is an ARMS module, which has direct interaction with ARMS database for data query purposes and report making purposes. EIS is developed to present all information available in KPEI database, to support KPEI risk monitoring and to support decision making related to KPEI functions as clearing and guarantee institution.