RHB Indonesia received in early September a letter from the financial services authority granting permission for the first issuance of structured warrants in Indonesia. Dentons HPRP provides an overview of the new regulation and the advantages of the new products.

Structured warrants were first introduced in Indonesia by the issuance of the long-awaited regulation on structured warrants ie Indonesian Financial Services Authority (or Otoritas Jasa Keuangan – OJK) Regulation No. 8/POJK/04/2021 on Structured Warrants, which came into effect on 19 March 2021.

In southeast Asia, structured warrants are not new. The Commerce International Merchant Bankers in Malaysia issued the first structured call warrant in 1995, using Maybank shares as the underlying. In 2003, Singapore also issued their first structured warrant, followed by Thailand in 2009.

Structured warrants are an alternative investment and hedging instrument in the capital markets. Indonesian investors now have an alternative investment instrument besides existing ones such as investing in a public company’s shares, mutual funds, REITs etc.

According to PT RHB Sekuritas Indonesia, investing in structured warrants compared to other existing capital market products in Indonesia means:

High liquidity

Structured warrants have high liquidity, as their issuance requires the issuing company to be a liquidity provider.


Investors can buy stock at a very minimum purchase price while the share price increases, meaning that investors can buy a lower premium than the original stock price.


A structured warrant product has the advantage of protecting the initial deposited capital since the investors will only lose the investment for premium that has been paid, when the stock price drops. If the original price is lower, the loss is only limited to the amount of the investment and not based on the current stock price.

In line with this advantage, Kenneth Zao, head of equity derivatives of RHB Indonesia, says structured warrants are more suitable for investors with a high risk-reward appetite who may not be satisfied with the returns from the existing underlying shares.

“At the same time, for structured warrants investors, while losses are capped at their initial investment outlay, the potential upside of structured warrants trader/investors is unlimited, making it attractive to this particular segment of investors,” says Zao.

Potential of unlimited returns

Last but not least, the advantage of investing in structured warrants is that the potential return that investors can gain is unlimited. The results of the investment will be automated at the end of the investment period, depending on the fluctuation in the underlying stock price.

On 1 September 2022, RHB Indonesia received a letter from OJK for the issuance of structured warrants. This letter marks the first issuance of structured warrant in Indonesia, with a total value of IDR20 trillion (£1.2 billion). For this issuance of the first ever structured warrant in Indonesia, Dentons HPRP actively assisted RHB Indonesia in the drafting of the base prospectus and term sheet used for the offering of the structured warrant.

In addition, Dentons HPRP also issued a legal opinion and a legal due diligence report as required under the Structured Warrant Regulation. This is the first time in the history of the Indonesian capital market instrument issuance where legal counsel actively holds the pen on the prospectus.

The article was prepared by Fabiola Hutagalung (pictured), partner, Rio Fabrianus Pasaribu, senior associate and Aletheia Christy Hutabarat, associate at Dentons HPRP. 

Click the link to view the original article published by Dentons HPRP on 3 October.