FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 3 /POJK.04/2018

CONCERNING

AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER

18/POJK.04/2015 ON THE ISSUANCE AND REQUIREMENTS OF SUKUK

BY THE GRACE OF THE ALMIGHTY GOD,

THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to encourage the development of the Islamic capital market industry in Indonesia and to align with international standards regarding sukuk information disclosure, it is necessary to refine the Financial Services Authority Regulation Number 18/POJK.04/2015 on the Issuance and Requirements of Sukuk; b. that based on the considerations referred to in letter a, it is necessary to establish a Financial Services Authority Regulation concerning the Amendment to Financial Services Authority Regulation Number 18/POJK.04/2015 on the Issuance and Requirements of Sukuk;

Recalling:

1. Law Number 8 of 1995 concerning Capital Markets (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
3. Financial Services Authority Regulation Number 18/POJK.04/2015 on the Issuance and Requirements of Sukuk (State Gazette of the Republic of Indonesia Year 2015 Number 269, Supplement to the State Gazette of the Republic of Indonesia Number 5758);

DECIDING:

To establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 18/POJK.04/2015 ON THE ISSUANCE AND REQUIREMENTS OF SUKUK.

Article I

Several provisions in the Financial Services Authority Regulation Number 18/POJK.04/2015 on the Issuance and Requirements of Sukuk (State Gazette of the Republic of Indonesia Year 2015 Number 269, Supplement to the State Gazette of the Republic of Indonesia Number 5758) are amended as follows:

1. The provisions of Article 1 are supplemented with 8 (eight) items, namely item 7, item 8, item 9, item 10, item 11, item 12, item 13, and item 14, so that Article 1 reads as follows:

Article 1

In this Financial Services Authority Regulation:

1. Sukuk is a Sharia-compliant security in the form of a certificate or proof of ownership with equal value representing an inseparable or undivided share (syuyu’/undivided share) of the underlying assets.

2. Sharia Expert Team is a team responsible for the Sharia compliance of Sharia products or services in the capital market issued or issued by the company.

3. Sharia Principles in the Capital Market are Islamic legal principles in Sharia activities in the capital market based on the fatwa of the National Sharia Board - Indonesian Ulema Council, provided that such fatwa does not conflict with Financial Services Authority Regulations regarding the application of Sharia principles in the capital market and/or other Financial Services Authority Regulations based on the fatwa of the National Sharia Board - Indonesian Ulema Council.

4. Sharia Supervisory Board is a board responsible for providing advice and suggestions and supervising the fulfillment of Sharia Principles in the Capital Market towards Parties conducting Sharia activities in the capital market.

5. Sharia Contract is a written agreement or contract between parties containing the rights and obligations of each party that does not conflict with Sharia Principles in the Capital Market.

6. Capital Market Sharia Expert hereinafter abbreviated as ASPM is:
   a. an individual who has knowledge and experience in the field of Sharia; or b. a business entity whose management and employees have knowledge and experience in the field of Sharia, which provides advice and/or supervises the implementation of the application of Sharia Principles in the Capital Market in the company's business activities and/or provides a statement of Sharia compliance for Sharia products or services in the capital market.

7. Security is a negotiable instrument, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, Investment Unit Units of collective investment contracts, futures contracts over Securities, and every derivative of Securities.

8. Sharia Security is Securities as referred to in the Capital Markets Law and its implementing regulations that:
   a. the contract, management method, and business activities; b. the assets that form the basis of the contract, management method, and business activities; and/or
   c. assets related to the aforementioned Securities and the issuer,
   do not conflict with Sharia Principles in the Capital Market.

9. Sharia Activities in the Capital Market are activities related to the Public Offering of Sharia Securities, trading of Sharia Securities, management of Sharia investments in the capital market, and Issuers or Public Companies related to the Sharia Securities they issue, Securities Companies whose business is wholly or partly based on Sharia principles, as well as institutions and professions related to Sharia Securities.

10. Issuer is a Party conducting a public offering.

11. Public Offering is the activity of offering Securities conducted by the Issuer to sell Securities to the public based on procedures regulated in Law Number 8 of 1995 concerning Capital Markets and its implementing regulations.

12. Continuous Sukuk Offering hereinafter referred to as PUB Sukuk is the activity of offering Sukuk conducted in stages.

13. Public Company is a Corporation whose shares are owned by at least 300 (three hundred) shareholders and have paid-up capital of at least Rp3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid-up capital determined by Government Regulation.

14. Prospectus is any written information concerning a Public Offering with the aim that other Parties purchase Securities.

15. Between CHAPTER II and CHAPTER III, 1 (one) chapter is inserted, namely CHAPTER IIA, so that it reads as follows:

CHAPTER IIA

CONTINUOUS SUKUK OFFERING (PUB SUKUK)

3. Between Article 9 and Article 10, 5 (five) articles are inserted, namely Article 9A, Article 9B, Article 9C, Article 9D, and Article 9E, so that they read as follows:

Article 9A

Parties conducting PUB Sukuk must follow the provisions regulated in Financial Services Authority Regulations regarding Continuous Offering of Debt-like Securities and/or Sukuk, unless otherwise specifically regulated in this Financial Services Authority Regulation.

Article 9B

(1) In the event that PUB Sukuk is conducted not simultaneously with the Public Offering of Debt-like Securities, PUB Sukuk may be conducted by parties that have become Issuers or Public Companies for a minimum period of 1 (one) year.

(2) Parties as referred to in paragraph (1) must never have experienced default during the last 2 (two) years or since establishment if less than 2 (two) years prior to the submission of the Registration Statement for the purpose of PUB Sukuk.

Article 9C

PUB Sukuk as referred to in Article 9B paragraph (1) may be implemented within a 3 (three) year period with the provision that the notification of the implementation of the final PUB Sukuk is submitted to the Financial Services Authority no later than on the third anniversary since the effectiveness of the Registration Statement for the purpose of PUB Sukuk.

Article 9D

In the event of changes in the type of Sharia Contract, content of the Sharia Contract, and/or assets that form the basis of Sukuk in the subsequent stages of Sukuk issuance within the framework of PUB Sukuk, the Issuer must submit a statement of Sharia compliance for such Sukuk.

Article 9E

(1) In the event that PUB Sukuk and Public Offering of Debt-like Securities are conducted simultaneously, the outer cover of the prospectus must state:
a. the total amount of funds to be raised from the types of Sukuk and Debt-like Securities; and b. the total amount of funds or indication of the total amount of funds to be raised from each type of Security.

(2) Issuers may determine the issuance value of each Sukuk and Debt-like Security in each stage of PUB.

4. Between CHAPTER V and CHAPTER VI, 1 (one) chapter is inserted, namely CHAPTER VA, so that it reads as follows:

CHAPTER VA

INFORMATION DISCLOSURE RELATED TO ZAKAT

5. Between Article 13 and Article 14, 2 (two) articles are inserted, namely Article 13A and Article 13B, so that they read as follows:

Article 13A

(1) Issuers may deduct zakat from profit shares, margins, or remuneration of Sukuk according to the characteristics of the Sharia Contract.

(2) Issuers must disclose on the outer cover of the Prospectus information regarding the existence or non-existence of zakat deductions on profit shares, margins, or remuneration of Sukuk.

(3) In the event that Issuers deduct zakat, the information disclosed on the outer cover of the Prospectus as referred to in paragraph (2) must contain at least the amount of zakat deduction, the method of zakat collection, and the party that will distribute the zakat.

(4) The implementation of zakat deduction as referred to in paragraph (3) must be carried out in accordance with applicable laws and regulations regarding zakat.

Article 13B

(1) In the event that Issuers deduct zakat, Issuers must include information disclosure regarding the implementation of zakat deduction in the Issuer's or Public Company's annual report.

(2) The obligation to include information disclosure as referred to in paragraph (1) must be carried out throughout the period of the Sukuk.

6. The provisions of Article 12 remain unchanged with an amendment to the explanation of paragraph (3) letter b, so that the explanation of Article 12 becomes as determined in the article-by-article explanation of this Financial Services Authority Regulation.

Article II

This Financial Services Authority Regulation takes effect on the date of enactment.

This copy is consistent with the original.

Director of Law 1
Department of Law signed
Yuliana

To ensure that everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 26 March 2018

CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signed
WIMBOH SANTOSO

Enacted in Jakarta on 26 March 2018

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2018 NUMBER 36

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 3 /POJK.04/2018

CONCERNING

AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 18/POJK.04/2015 ON THE ISSUANCE AND REQUIREMENTS OF SUKUK

I. GENERAL

The dynamic development of the Islamic capital market requires a revision of Financial Services Authority Regulation Number 18/POJK.04/2015 on the Issuance and Requirements of Sukuk. In addition to existing tax incentives, new policy breakthroughs are needed that are expected to provide ease for Sukuk issuing companies. Furthermore, the revision of the regulation is based on new international standards regarding sukuk information disclosure issued by the Islamic Financial Services Board (IFSB).

The main points of the revision of the sukuk issuance regulation include the addition of provisions related to Continuous Offering (PUB) and information disclosure regarding zakat.

II. ARTICLE-BY-ARTICLE EXPLANATION

Article I

Item 1
Clear enough.

Item 2
Clear enough.

Item 3

Article 9A
Clear enough.

Article 9B

Paragraph (1)
Clear enough.

Paragraph (2)
What is meant by "default" is a condition where the Issuer or Public Company is unable to fulfill financial obligations to creditors at maturity which exceeds 0.5% (zero point five percent) of the paid-up capital.

Article 9C
Clear enough.

Article 9D
Clear enough.

Article 9E

Paragraph (1)
Example of stating the total amount of funds to be raised from the types of Sukuk and Debt-like Securities and the indication of the total amount of funds to be raised based on each type of Security on the outer cover of the Prospectus:

Continuous Offering of Continuous Bonds of PT. XYZ and Continuous Sukuk of PT. XYZ amounting to Rp1,000,000,000,000.00, with an indication of the total amount of funds to be raised from Bonds amounting to Rp700,000,000,000.00 and Sukuk amounting to Rp300,000,000,000.00.

"For the first stage, Continuous Bonds of PT. XYZ Stage I Year 2017 amounting to Rp300,000,000,000.00 and Continuous Ijarah Sukuk of PT. XYZ Stage I Year 2017 amounting to Rp50,000,000,000.00 are issued."

Example for subsequent PUB Sukuk and/or Debt-like Securities:

1. Continuous Offering of Continuous Bonds of PT. XYZ and Continuous Sukuk of PT. XYZ amounting to Rp1,000,000,000,000.00, with an indication of the total amount of funds to be raised from Bonds amounting to Rp700,000,000,000.00 and Sukuk amounting to Rp300,000,000,000.00.
   "For the second stage, Continuous Bonds of PT. XYZ Stage II Year 2017 amounting to Rp200,000,000,000.00 and Continuous Ijarah Sukuk of PT. XYZ Stage II Year 2017 amounting to Rp150,000,000,000.00 are issued."

2. Continuous Offering of Continuous Bonds of PT. XYZ and Continuous Sukuk of PT. XYZ amounting to Rp1,000,000,000,000.00, with an indication of the total amount of funds to be raised from Bonds amounting to Rp700,000,000,000.00 and Sukuk amounting to Rp300,000,000,000.00.
   "For the third stage, Continuous Bonds of PT. XYZ Stage III Year 2017 amounting to Rp100,000,000,000.00 and Continuous Ijarah Sukuk of PT. XYZ Stage III Year 2017 amounting to Rp200,000,000,000.00 are issued."

Paragraph (2)
Clear enough.

Item 4
Clear enough.

Item 5

Article 13A
Clear enough.

Article 13B
Clear enough.

Item 6

Article 12

Paragraph (1)
Clear enough.

Paragraph (2)
At the time of the enactment of this Financial Services Authority Regulation, the laws and regulations in the Capital Market sector regulating general provisions and debt-like security trust contracts are Regulation Number VI.C.4, Attachment of the Decision of the Chairman of the Capital Market Supervisory Board Number Kep-412/BL/2010 dated September 6, 2010 concerning General Provisions and Debt-like Security Trust Contracts.

Paragraph (3)

Letter a
Clear enough.

Letter b
Example of the description of assets that form the basis of Sukuk, including descriptions of the type/form of assets, location of assets, asset ownership status, asset status (as collateral or not) and the legal and economic implications accompanying them (if any), as well as the value of assets based on financial report values or appraisal results from Appraisers.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Clear enough.

Letter f
Clear enough.

Letter g
Clear enough.

Letter h

Item 1
Clear enough.

Item 2
Clear enough.

Item 3
What is meant by "violation of compliance with the application of Sharia Principles in the Capital Market" includes violations of Sharia Contracts and/or assets that form the basis of Sukuk. What is meant by "violation of obligations in Sharia Contracts and/or trust agreements (breach of contract)" includes Issuers not paying profit shares, margins, remuneration, or the principal value of Sukuk according to the agreement.

Item 4
Clear enough.

Letter i
Clear enough.

Letter j
Clear enough.

Letter k
What is meant by "value no longer matches the value of the issued Sukuk" is that the value of the object forming the basis of the Sukuk has changed and is no longer sufficient to be used as a basis for paying profit shares, margins, remuneration (fee), or the principal value of Sukuk.

Letter l

Item 1
Clear enough.

Item 2
Example of the mechanism for fulfilling the rights of Sukuk holders who do not agree with the aforementioned changes is the repurchase of Sukuk or cancellation of the aforementioned changes.

Item 3
A statement of Sharia compliance from the Issuer's Sharia Supervisory Board or Sharia Expert Team is obtained before the General Meeting of Sukuk Holders (RUP Sukuk) is held.

Letter m
What is meant by "failure to fulfill obligations" is failing to fulfill financial obligations and/or compliance with Sharia Principles in the Capital Market.

Letter n
Clear enough.

Letter o
Clear enough.

Article II

Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6191