The Repurchase Agreement Under Indonesian Law: Preserving Title Transfer Structure and Rethinking Margin Transfer

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Published Sep 23, 2026
https://doi.org/10.21098/jcli.v5i3.303

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Vol. 5 No. 3 (2026)

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Iwan Chandra
Bank Indonesia
Jeremy Fritz Asido
Bank Indonesia
Wagiman
Universitas 17 Agustus 1945

Abstract

Repurchase agreements play an important role in modern financial markets by providing shortterm liquidity through the transfer of securities coupled with an obligation to repurchase equivalent securities at a later date. In Indonesia, however, legal uncertainty remains in two closely connected respects. First, a repurchase agreement may be recharacterised as a collateralised loan rather than a true sale and repurchase transaction, with significant consequences for the legal status of the securities, the parties’ rights, and enforcement. Second, margin transfers in repurchase agreements raise a distinct doctrinal question under Indonesian law, particularly regarding how such transfers can be accommodated without undermining the transaction’s title-transfer structure. This study employs normative legal research, drawing on statutory, conceptual, and comparative approaches. It examines the Indonesian regulatory framework governing repurchase agreements, relevant principles of Indonesian private law on transfer of rights and security interests, and comparative developments in financial collateral law. This article argues that the risk of recharacterisation may be reduced through clearer contractual drafting, conceptual consistency, and appropriate dispute resolution mechanisms. It further argues that although classical pledges may appear to offer a familiar analogy for margin transfers, relying on pledges as the legal basis for repurchase agreement margining risks blurring the distinction between repurchase agreements and collateralised loans and may therefore increase recharacterisation risk. The preferable approach is to preserve the titletransfer logic of repurchase agreement documentation by relying, in the short term, on selland-buyback mechanisms available within the repurchase agreement framework, while, in the longer term, Indonesia would benefit from a regulatory framework dedicated to financial collateral.

Keywords: financial collateral, legal basis, margin transfer, recharacterisation risk, repurchase agreement

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How to Cite
Chandra, I., Fritz Asido, J., & Wagiman. (2026). The Repurchase Agreement Under Indonesian Law: Preserving Title Transfer Structure and Rethinking Margin Transfer. Journal of Central Banking Law and Institutions, 5(3), 471–496. https://doi.org/10.21098/jcli.v5i3.303

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