Risk Monitoring

      1. Trading Limit Monitoring

KPEI monitors the Trading Limit value sufficiency based on Clearing Members’ (AK) collateral and the exchange transactions’ risk until the transactions’ settlement date. If AK risk value exceeds AK’s collateral value, KPEI will request AK to submit additional collateral (margin call) until it can cover AK risks’ value.
KPEI monitors AK Trading Limit through the RAZOR and Member Interface systems. Razor system helps KPEI observe the AK Trading Limit value that moves in accordance with the collateral and risk valuation after post-trade processes. While Member Interface helps KPEI observe the AK’s limit value that can still be used (available limit) to trade on the Stock Exchange

      2. Data warehouse Early Warning System (EWS) Monitoring 

One of the tools used by KPEI to monitor the risks is Data warehouse system. Through the data warehouse system, KPEI produces daily reports that are used as EWS. These reports are monitored and used as supporting data in determining AK and securities’ risk profile.

a. AK Transaction Report

KPEI monitors AK transaction through foreign AK transaction report, AK transaction with risk charge 0% report, and AK transaction with risk charge >0% to ensure that AK collateral will be able to cover exchange transactions’ risks.  

b. Stock Transactions Report

KPEI monitors stock transactions based on haircut value and transaction value to ensure that the transaction is fair and not highly risky. 

c. Collateral Report

KPEI monitors collateral through viewing the highest negative free collateral value of AK’s clients. Collateral monitoring aims to ensure that AK collateral pledged to KPEI are not excessive (according to the risk calculation) and can cover the risk of the client.

d. Net Adjusted Working Capital  (MKBD) Sufficiency Report

KPEI monitors AK’s MKBD value adequacy and views excesses or lack of AK MKBD value every day to ensure that AK MKBD value is not below the limit and still be able to cover the transactions.

e. Portfolio Matching Reports

KPEI monitors the portfolio congruence between the portfolio reported by AK at the Reporting Center Site (SPP) for Trading Member Portfolio with AK reported portfolio value through the SPP MKBD. The monitoring process aims to ensure that the Portfolio Report reported via SPP AB with reported portfolio value through the SPP MKBD have no difference in value.

      3. Designated Stocks Monitoring (ETD)

Every month, KPEI and BEI set ETD stocks based on specific requirements. ETD stocks transaction settlement are not guaranteed. If there is a stock that qualifies as ETD although there were no ETD listing on that month, KPEI still monitors the ETD stocks to avoid the occurrence of unusual and high-risk transactions, and/or transactions that may jeopardize the integrity of the market through ETD Monitoring Report.