Amendment to Financial Services Authority Regulation Number 34/POJK.03/2018 Regarding Reassessment of Key Parties of Financial Service Institutions

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 14 /POJK.03/2021
CONCERNING
AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 34/POJK.03/2018 ON REASSESSMENT OF KEY PARTIES OF FINANCIAL SERVICE INSTITUTIONS BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that with the increasing complexity of financial service institution activities, handling various problems in financial service institutions requires adjustments to the reassessment procedures for parties who own and manage financial service institutions; b. that reassessment, which is part of the regulation and supervision of the financial services sector, is necessary to ensure that financial service institutions are always owned and managed by parties who meet the requirements of capability and propriety;
c. that there is a need to accelerate the process of handling financial service institution problems, particularly regarding parties who own and manage financial service institutions, which also requires anticipatory efforts, thus necessitating adjustments to the scope, criteria, procedures, and consequences of the final results of reassessment as regulated in Financial Services Authority Regulation Number 34/POJK.03/2018 on Reassessment of Key Parties of Financial Service Institutions;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation on Amendment to Financial Services Authority Regulation Number 34/POJK.03/2018 on Reassessment of Key Parties of Financial Service Institutions; Recalling:
1. Law Number 7 of 1992 on Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 on Amendment to Law Number 7 of 1992 on Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 11 of 1992 on Pension Funds (State Gazette of the Republic of Indonesia Year 1992 Number 37, Supplement to the State Gazette of the Republic of Indonesia Number 3477);
3. Law Number 8 of 1995 on 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);
4. Law Number 21 of 2008 on Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
5. Law Number 21 of 2011 on 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);
6. Law Number 40 of 2014 on Insurance (State Gazette of the Republic of Indonesia Year 2014 Number 337, Supplement to the State Gazette of the Republic of Indonesia Number 5618);
7. Law Number 1 of 2016 on Guarantee (State Gazette of the Republic of Indonesia Year 2016 Number 9, Supplement to the State Gazette of the Republic of Indonesia Number 5835);
8. Financial Services Authority Regulation Number 34/POJK.03/2018 on Reassessment of Key Parties of Financial Service Institutions (State Gazette of the Republic of Indonesia Year 2018 Number 259, Supplement to the State Gazette of the Republic of Indonesia Number 6285);
DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION ON AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 34/POJK.03/2018 ON REASSESSMENT OF KEY PARTIES OF FINANCIAL SERVICE INSTITUTIONS.
Article I
Several provisions in Financial Services Authority Regulation Number 34/POJK.03/2018 on Reassessment of Key Parties of Financial Service Institutions (State Gazette of the Republic of Indonesia Year 2018 Number 259, Supplement to the State Gazette of the Republic of Indonesia Number 6285) are amended as follows:
1. The provision of Article 1 number 8 is amended and Article 1 number 1 is added with 2 (two) letters, namely letter j and letter k, so that Article 1 reads as follows:

Article 1
In this Financial Services Authority Regulation, the following terms are meant:

1. Financial Service Institution, hereinafter abbreviated as FSI, is an institution that carries out activities in the Banking, Capital Market, Insurance, Pension Fund, Financing Institution, and Other Financial Service Institutions sectors, which include:
   a. Bank is a business entity that collects funds from the public in the form of deposits and distributes them to the public in the form of loans and/or other forms to improve the living standards of the people, which consists of:
   1) Conventional General Bank is a conventional bank and branch offices of banks located abroad that in their activities provide services in payment transactions, and representative offices of banks located abroad;
   2) Sharia General Bank is a sharia bank that in its activities provides services in payment transactions, and representative offices of banks located abroad;
   3) Rural Credit Bank is a conventional bank that in its activities does not provide services in payment transactions; and
   4) Sharia People's Financing Bank is a sharia bank that in its activities does not provide services in payment transactions;

b. Securities Company is a party that carries out business activities as an underwriter of securities issuance, securities trading intermediary, and/or investment manager;
c. Investment Advisor is a company that provides advice to other parties regarding the sale or purchase of securities by receiving service fees;
d. Insurance Company is an insurance company, sharia insurance company, reinsurance company, sharia reinsurance company, insurance broker company, reinsurance broker company, and insurance loss assessor company; e. Pension Fund is a legal entity that manages and runs programs that promise pension benefits, including those that carry out all business activities based on sharia principles; f. Financing Company is a business entity that carries out financing activities for the procurement of goods and/or services, including those that carry out all business activities based on sharia principles; g. Guarantee Institution is a guarantee company, sharia guarantee company, re-guarantee company, and sharia re-guarantee company that carry out guarantee activities; h. Venture Capital Company, hereinafter abbreviated as VCC, is a business entity that carries out venture capital business activities, venture fund management activities, fee-based service activities, and other business activities with the approval of the Financial Services Authority, including those that carry out all business activities based on sharia principles;

i. Pawnshop Company is a private pawnshop company and government pawnshop company, including those that carry out business activities based on sharia principles;
j. Infrastructure Financing Company is a business entity specifically established to carry out financing on infrastructure projects and/or the implementation of other activities or facilities in order to support infrastructure financing, including infrastructure financing companies that carry out all or part of their business activities based on sharia principles; and k. PT Permodalan Nasional Madani (Persero) is a company established based on Government Regulation of the Republic of Indonesia Number 38 of 1999 on State Capital Participation for the Establishment of Limited Liability Companies (Persero) in the context of the Development of Cooperatives, Small and Medium Enterprises.
2. Key Party is a party that owns, manages, supervises, and/or has significant influence on the FSI, including those who no longer own, manage, supervise, and/or have influence at the time of reassessment.
3. Controlling Shareholder, hereinafter abbreviated as CS, is a legal entity, individual, and/or business group that owns shares or shares equivalent to those of the FSI and has the ability to exercise control over the FSI.
4. Control is an action aimed at influencing the management and/or policy of a company, including the FSI, in any way, either directly or indirectly.
5. General Meeting of Shareholders, hereinafter abbreviated as GMS, is:
a. a company organ that has authority not granted to the Board of Directors or Board of Commissioners within the limits determined by laws regarding limited liability companies and/or the articles of association for FSIs with the legal status of a limited liability company; or b. an organ or party equivalent to letter a, for FSIs with legal status or business status other than a limited liability company.
6. Board of Directors is:
a. a company organ authorized and fully responsible for management for the interests of the company, in accordance with the purpose and objectives of the company and representing the company, both inside and outside the court, in accordance with the provisions of the articles of association for FSIs with the legal status of a limited liability company; b. an organ or party equivalent to letter a, for FSIs with legal status or business status other than a limited liability company;
c. the head of a branch office and officials one level below the head of a branch office for branch offices of banks located abroad; or
d. the head of a representative office for representative offices of banks located abroad.

7. Board of Commissioners is:
a. a company organ tasked with general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors for FSIs with the legal status of a limited liability company; or b. an organ or party equivalent to letter a, for FSIs with legal status or business status other than a limited liability company.
8. Sharia Supervisory Board is a part of the organ of Insurance Companies, employer pension funds, financial institution pension funds, Financing Companies, Infrastructure Financing Companies, PT Permodalan Nasional Madani (Persero), Guarantee Institutions, VCCs, or Pawnshop Companies that has the task and supervision over the implementation of business activities to ensure compliance with sharia principles.
9. Controlling Party of an Insurance Company is a party that directly or indirectly has the ability to determine the Board of Directors and Board of Commissioners and/or influence the actions of the Board of Directors and/or Board of Commissioners in an Insurance Company.
10. Internal Auditor is an official in an Insurance Company responsible for evaluating and improving the effectiveness of risk management, controls, and corporate governance processes, working independently and in accordance with practice standards.
11. Company Actuary is an official in insurance companies, sharia insurance companies, reinsurance companies, and sharia reinsurance companies, who are appointed and responsible for managing the financial impact of risks faced by the company, working independently and in accordance with practice standards.
12. Executive Official is a Bank official who is directly responsible to members of the Board of Directors or has significant influence on the policy and/or operations of the Bank.
13. Controlling Key Party is the CS and/or Controlling Party of an Insurance Company.
14. Executive Key Party is members of the Board of Directors, acting managers of Financial Institution Pension Funds, members of the Board of Commissioners, or members of the Sharia Supervisory Board.
15. Official Key Party is Internal Auditors, Company Actuaries, or Executive Officials.
2. The provision of Article 2 letter g is amended and the explanation of Article 2 number 4) letter a is amended as stated in the article-by-article explanation, so that Article 2 reads as follows:
Article 2
Key Parties subject to the provisions of this Financial Services Authority Regulation include:
a. for Banks:
1) CS;
2) members of the Board of Directors;
3) members of the Board of Commissioners; and
4) Executive Officials;
b. for Securities Companies:
1) CS;
2) members of the Board of Directors; and
3) members of the Board of Commissioners;
c. for Investment Advisors:
1) CS;
2) members of the Board of Directors; and
3) members of the Board of Commissioners;

d. for Insurance Companies:
1) Controlling Party of an Insurance Company;
2) members of the Board of Directors;
3) members of the Board of Commissioners;
4) members of the Sharia Supervisory Board;
5) Internal Auditors; and
6) Company Actuaries;
e. for Employer Pension Funds:
1) members of the Board of Directors;
2) members of the Board of Commissioners; and
3) members of the Sharia Supervisory Board;
f. for Financial Institution Pension Funds:
1) acting managers; and
2) members of the Sharia Supervisory Board; and
g. for Financing Companies, Infrastructure Financing Companies, PT Permodalan Nasional Madani (Persero), Guarantee Institutions, VCCs, and Pawnshop Companies:
1) CS;
2) members of the Board of Directors;
3) members of the Board of Commissioners; and
4) members of the Sharia Supervisory Board.
3. The provision of Article 4 is amended and the explanation of Article 4 letters f and g is amended as stated in the article-by-article explanation, so that Article 4 reads as follows:
Article 4
Reassessment of Controlling Key Parties is conducted when there are indications of involvement and/or responsibility for integrity and/or financial capability or financial reputation problems for Controlling Parties of Insurance Companies who are not shareholders, including:

a. actions, either directly or indirectly, consisting of:
1) influencing and/or ordering Executive Key Parties, Official Key Parties, and/or FSI employees to conceal and/or obscure violations of certain regulations or actual financial conditions and/or transactions;
2) influencing and/or ordering Executive Key Parties, Official Key Parties, FSI employees, and/or other parties to provide undue benefits to shareholders, Key Parties, FSI employees, and/or other parties that can harm or reduce FSI profits;
3) influencing and/or ordering Executive Key Parties, Official Key Parties, and/or FSI employees to commit acts violating prudential principles in the financial services sector and/or good FSI management principles; and/or
4) influencing and/or ordering Executive Key Parties, Official Key Parties, and/or FSI employees carrying out business activities based on sharia principles to commit acts violating sharia principles in the sharia financial services sector;
b. proven to have committed criminal offenses that have been decided by the court and have permanent legal force as referred to in Financial Services Authority Regulations regarding the assessment of capability and propriety of key parties of financial service institutions;

c. causing the FSI to experience difficulties that endanger the continuity of the FSI's business and/or can endanger the financial services industry;
d. not executing orders of the Financial Services Authority to take and/or not take certain actions; e. having non-performing loans and/or financing at the FSI and/or becoming a controlling party, member of the Board of Directors, member of the Board of Commissioners, or equivalent of a company that has non-performing loans and/or financing; f. proven to be declared bankrupt and/or becoming a shareholder, member of the Board of Directors, member of the Board of Commissioners, or equivalent, who is declared guilty causing a company to be declared bankrupt or have its business license revoked; g. not taking necessary measures when the FSI faces solvency and/or liquidity difficulties; and/or h. refusing to provide commitments and/or not fulfilling commitments agreed upon with the Financial Services Authority and/or the government;
i. hindering or interfering with:
1) efforts and implementation of the authority of the Financial Services Authority; and/or
2) efforts by Key Parties of the FSI and/or other parties,
in handling solvency and/or liquidity problems of the FSI; and/or j. integrity and/or financial capability or financial reputation problems for Controlling Parties of Insurance Companies who are not shareholders other than letters a to i that contradict regulations.

4. The provision of Article 5 letter f is amended and Article 5 is added with 2 (two) letters, namely letter j and letter k, so that Article 5 reads as follows:
   Article 5
   Reassessment of Executive Key Parties and/or Official Key Parties is conducted when there are indications of involvement and/or responsibility for integrity, financial reputation, and/or competence problems, including:
   a. actions, either directly or indirectly, consisting of:
   1) concealing and/or obscuring violations of certain regulations or actual financial conditions and/or transactions;
   2) providing undue benefits to shareholders, Key Parties, FSI employees, and/or other parties that can harm or reduce FSI profits;
   3) committing acts violating prudential principles in the financial services sector and/or good FSI management principles; and/or
   4) violating sharia principles in the sharia financial services sector;
   b. proven to have committed criminal offenses that have been decided by the court and have permanent legal force as referred to in Financial Services Authority Regulations regarding the assessment of capability and propriety of key parties of financial service institutions;
   c. causing the FSI to experience difficulties that endanger the continuity of the FSI's business and/or can endanger the financial services industry;

d. not executing orders of the Financial Services Authority to take and/or not take certain actions; e. having non-performing loans and/or financing at the FSI and/or becoming a controlling party, member of the Board of Directors, member of the Board of Commissioners, or equivalent of a company that has non-performing loans and/or financing; f. proven to be declared bankrupt and/or becoming a shareholder, member of the Board of Directors, member of the Board of Commissioners, or equivalent, who is declared guilty causing a company to be declared bankrupt or have its business license revoked; g. not carrying out strategic management in the context of developing a healthy FSI; h. refusing to provide commitments and/or not fulfilling commitments agreed upon with the Financial Services Authority and/or the government;
i. committing or playing a role in violations or deviations of activities of representative offices of banks located abroad, for the heads of representative offices of banks located abroad;
j. hindering or interfering with:
1) efforts and implementation of the authority of the Financial Services Authority; and/or
2) efforts by Key Parties of the FSI and/or other parties,
in handling solvency and/or liquidity problems of the FSI; and/or k. integrity, financial reputation, and/or competence problems other than letters a to j that contradict regulations.

5. Between Article 7 and Article 8, 1 (one) article is inserted, namely Article 7A, so that it reads as follows:
   Article 7A
   (1) The Financial Services Authority may determine the final result of reassessment without following all the steps of reassessment as referred to in Article 6 paragraph (2) with certain considerations. (2) The Financial Services Authority may determine the submission period for responses from Key Parties to be less than 10 (ten) working days as referred to in Article 6 paragraph (3) and paragraph (5), with certain considerations.
6. The provision of Article 10 paragraph (2) letter b is amended and Article 10 is added with 2 (two) paragraphs, namely paragraph (4) and paragraph (5), so that Article 10 reads as follows:
   Article 10
   (1) Key Parties who are still in office and are determined with the predicate "Passed" are declared to meet the requirements to remain as Key Parties.
   (2) Controlling Key Parties determined with the predicate "Failed" because:
   a. integrity problems, are prohibited from becoming:
   1) Controlling Key Parties or owning shares in the FSI; and/or
   2) Executive Key Parties and/or Official Key Parties in the FSI; and/or
   b. financial capability or financial reputation problems for Controlling Parties of Insurance Companies who are not shareholders, are prohibited from becoming:

1) Controlling Key Parties or owning shares in the financial services industry where the Key Party undergoes reassessment; and/or
2) Executive Key Parties and/or Official Key Parties in the financial services industry where the Key Party undergoes reassessment in the case of financial capability problems involving financial reputation.
(3) Executive Key Parties or Official Key Parties determined with the predicate "Failed" because:
a. integrity problems, are prohibited from becoming:
1) Controlling Key Parties or owning shares in the FSI; and/or
2) Executive Key Parties and/or Official Key Parties in the FSI;
b. financial reputation problems, are prohibited from becoming:
1) Controlling Key Parties or owning shares in the financial services industry where the Key Party undergoes reassessment; and/or
2) Executive Key Parties and/or Official Key Parties in the financial services industry where the Key Party undergoes reassessment; and/or
c. competence problems, are prohibited from becoming Executive Key Parties and/or Official Key Parties in the financial services industry where the Key Party undergoes reassessment.
(4) Key Parties determined with the predicate "Failed" are treated as related parties of the FSI in accordance with the provisions of applicable regulations.

(5) The duration of treatment of Key Parties determined with the predicate "Failed" as related parties of the FSI as referred to in paragraph (4) is in accordance with the duration of the prohibition against Key Parties determined with the predicate "Failed" as referred to in this Financial Services Authority Regulation.
7. The provision of Article 11 paragraph (1) is amended, so that Article 11 reads as follows:
Article 11
(1) The imposition of prohibition periods against Key Parties determined with the predicate "Failed" as referred to in Article 10 paragraph (2), paragraph (3), and/or paragraph (4) is established:
a. for a period of 3 (three) years:
1) for Controlling Key Parties in cases proven to have committed actions as referred to in Article 4 letter a number 3), letter a number 4), letter d, letter e, letter g, letter h, letter i, or letter j;
2) for Executive Key Parties or Official Key Parties in cases proven to have committed actions as referred to in Article 5 letter a number 3), letter a number 4), letter d, letter e, letter g, letter h, letter j, or letter k;
b. for a period of 5 (five) years:
1) for Controlling Key Parties in cases:
a) proven to have committed actions as referred to in Article 4 letter a number 1) or letter a number 2); or

b) proven to have committed actions as referred to in Article 4 letter a number 3), letter a number 4), letter d, letter e, letter g, letter h, letter i, or letter j, and the acts:
i. are committed repeatedly;
ii. are committed cumulatively; and/or
iii. are proven to benefit oneself or other parties;
2) for members of Executive Key Parties or Official Key Parties in cases:
a) proven to have committed actions as referred to in Article 5 letter a number 1), letter a number 2), or letter i; or b) proven to have committed actions as referred to in Article 5 letter a number 3), letter a number 4), letter d, letter e, letter g, letter h, letter j, or letter k, and the acts:
i. are committed repeatedly;
ii. are committed cumulatively; and/or
iii. are proven to benefit oneself or other parties;
or
c. for a period of 20 (twenty) years:
1) for Controlling Key Parties if proven to have committed actions as referred to in Article 4 letter b, letter c, or letter f;
2) for Executive Key Parties or Official Key Parties if proven to have committed actions as referred to in

Article 5 letter b, letter c, or letter f.

as referred to in Article 5 letter b, letter c, or letter f.
(2) The prohibition period as referred to in paragraph (1) is calculated from:
a. the date of the Financial Services Authority's establishment letter as referred to in
Article 6 paragraph (2) letter d, in the event it is
the final result of the Financial Services Authority's reassessment; or b. the date of the court decision that has permanent legal force stating that the Reassessed Key Party is proven to have committed a criminal offense as referred to in Article 4 letter b and Article 5 letter b or is proven to be declared bankrupt and/or cause bankruptcy as referred to in Article 4 letter f and Article 5 letter f.

Article II

1. With the enactment of this Financial Services Authority Regulation, the provisions as referred to in this Financial Services Authority Regulation are applied to the reassessment process currently being carried out against Key Parties based on Financial Services Authority Regulation Number 34/POJK.03/2018 regarding Reassessment of Key Parties of Financial Service Institutions.
2. Parties included in the list of parties prohibited from becoming Key Parties or Key Parties established with the 'Failed' predicate based on:
   a. Bank Indonesia Regulation Number 12/23/PBI/2010 regarding Fit and Proper Test (Government Gazette of the Republic of Indonesia Year 2010 Number 155, Supplement to the Government Gazette of the Republic of Indonesia Number 5180);

b. Bank Indonesia Regulation Number 14/6/PBI/2012 regarding Fit and Proper Test for Sharia Banks and Sharia Business Units (Government Gazette of the Republic of Indonesia Year 2012 Number 136, Supplement to the Government Gazette of the Republic of Indonesia Number 5322);
c. Bank Indonesia Regulation Number 14/9/PBI/2012 regarding Fit and Proper Test for People's Credit Banks (Government Gazette of the Republic of Indonesia Year 2012 Number 150, Supplement to the Government Gazette of the Republic of Indonesia Number 5331); or
d. Financial Services Authority Regulation Number 34/POJK.03/2018 regarding Reassessment of Key Parties of Financial Service Institutions (Government Gazette of the Republic of Indonesia Year 2018 Number 259, Supplement to the Government Gazette of the Republic of Indonesia Number 6285), are treated as related parties of FSIs as referred to in Article 10 paragraph (4) until the prohibition period against the Key Party ends.
3. This Financial Services Authority Regulation takes effect on the date of enactment.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja

To be known by everyone, ordering the enactment of this Financial Services Authority Regulation by placing it in the Government Gazette of the Republic of Indonesia.
Established in Jakarta on 30 July 2021

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO
Enacted in Jakarta on 30 July 2021
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
SUPPLEMENT TO THE GOVERNMENT GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 165

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 14 /POJK.03/2021
REGARDING
AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 34/POJK.03/2018 REGARDING REASSESSMENT OF KEY PARTIES OF FINANCIAL SERVICE INSTITUTIONS

I. GENERAL
The rapid development of external and internal environments in the financial services industry along with advances in information technology, has the potential to cause increased risks faced by FSIs and can cause problems for FSIs. As part of the regulation and supervision of the financial services sector, reassessment of FSI Key Parties is conducted when there are indications of involvement and/or responsibility for integrity, financial feasibility, financial reputation, and/or competence problems occurring in FSIs, so that FSIs are always owned and managed by parties who meet the requirements of capability and propriety. To strengthen the regulation of reassessment of Key Parties, handling problems in FSIs needs to be responded to with anticipatory efforts and steps through re-identification of the scope of Key Party violation criteria that cause problems in FSIs, followed by adjustments to the imposition of prohibition periods as a consequence of the final result of reassessment for Key Parties established with the 'Failed' predicate, as well as accelerating the process of handling problems, particularly regarding parties who own and manage FSIs, considering that FSI problems have the potential to endanger the continuity of FSI business and/or threaten financial system stability, so that FSIs are always owned and managed by parties who meet the requirements of capability and propriety. Thus, FSIs can contribute optimally and prudently in maintaining financial system stability and supporting economic growth. In this regard, it is necessary to adjust Financial Services Authority Regulation Number 34/POJK.03/2018 regarding Reassessment of Key Parties of Financial Service Institutions, including adjustments to regulations regarding the scope of reassessment including consequences of the final result of reassessment and adjustments to the method of reassessment.

II. ARTICLE BY ARTICLE
Article I
Number 1
Article 1
Sufficiently clear.
Number 2
Article 2
Letter a
Number 1)
Sufficiently clear.
Number 2)
Sufficiently clear.
Number 3)
Sufficiently clear.
Number 4)
Included in the definition of Executive Officials include division heads including officials above division heads other than the Board of Directors, regional office heads, branch office heads, functional office heads with the lowest position equivalent to branch office heads, heads of risk management operational units, heads of compliance operational units, and heads of internal audit operational units, and/or other equivalent officials, including section heads and managers and officials appointed responsible for implementing risk management, compliance, and internal audit functions for People's Credit Banks and Sharia People's Financing Banks. Letter b Sufficiently clear. Letter c Sufficiently clear. Letter d Sufficiently clear. Letter e Sufficiently clear. Letter f Sufficiently clear. Letter g Sufficiently clear. Number 3
Article 4
Letter a
Number 1)
FSI Employees, namely every person recorded in the FSI's personnel administration, honorary employees, and/or outsourcing employees working at the relevant FSI.
Number 2)
Harming or reducing FSI profits, namely harming or reducing profits in the form of finances.
Number 3)
Good FSI management principles in the banking sector refer to Financial Services Authority regulations regarding the governance of commercial banks, people's credit banks, and sharia banks. Good FSI management principles in the capital market sector refer to regulations regarding the governance of securities companies. Good FSI management principles in the non-bank financial services sector refer to regulations regarding the governance of insurance companies, financing companies, or regulations regarding the governance of Asset Management Companies (PMV). Number 4) Sufficiently clear. Letter b Sufficiently clear. Letter c Causing the FSI to experience difficulties that endanger the continuity of the FSI's business or can endanger the financial industry, including in the banking sector:
1) utilizing the Bank to finance own interests or business groups; and/or
2) violating regulations and/or commitments to the Financial Services Authority or the government,
which causes the Bank to be placed under intensive or special supervision, taken over by the government or the Deposit Insurance Agency, business activities are frozen, and/or business licenses are revoked.

Letter d
The term 'doing and/or not doing certain actions' includes actions in the context of FSI rehabilitation and/or recovery.
Letter e
Non-performing loans and/or financing, namely:
1) non-performing loans and/or financing recorded in the debtor data information system; and/or
2) non-performing loans and/or financing not yet reported by the FSI in the debtor data information system or already reported by the FSI in the debtor data information system but not yet classified as non-performing, but based on research conducted by the Financial Services Authority, such loans and/or financing meet the criteria for being classified as non-performing according to regulations governing asset quality.
Letter f
Shareholders, namely controlling shareholders of both FSIs and non-FSIs, and including Insurance Company Controllers who are not shareholders of the Insurance Company.
Letter g
Solvency for:
1) Banks, Securities Companies, Investment Advisors, Financing Companies, Infrastructure Financing Companies, PT Permodalan Nasional Madani (Persero), Guarantee Institutions, PMVs, and Pawnshops, namely capital adequacy;
2) Employer Pension Funds and Financial Institution Pension Funds, namely funding adequacy; or

3) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessors, namely minimum equity.
Letter h
Sufficiently clear.
Letter i
Number 1)
Efforts and implementation of Financial Services Authority authority include:
a. written orders given by the Financial Services Authority to FSIs and/or Key Parties in handling FSI problems; and/or b. follow-up handling of FSI problems in relation to violations of other authority regulations by the FSI. Other authorities include Bank Indonesia or the Deposit Insurance Agency. Number 2) Efforts by Key Parties, namely efforts by one or more Key Parties, namely Controlling Key Parties, Management Key Parties, and/or Official Key Parties at FSIs, and/or other parties. Other parties include prospective FSI Key Parties who will undertake efforts to handle FSI problems. Letter j Regulatory provisions include primarily regulations in the financial services sector or regulations outside the financial services sector but impacting the financial services sector. Number 4
Article 5
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.
Letter c
Sufficiently clear.
Letter d
Sufficiently clear.
Letter e
Sufficiently clear.
Letter f
Sufficiently clear.
Letter g
Assessment is based on the duties and responsibilities of each Management Key Party, according to the duty descriptions existing at the relevant FSI.
The term 'ability to conduct strategic management' includes the ability to interpret the vision and mission of the FSI, anticipate economic and financial developments, and analyze the financial industry situation and the industrial sectors financed. Letter h Sufficiently clear. Letter i Sufficiently clear. Letter j Sufficiently clear. Letter k Sufficiently clear. Number 5
Article 7A
Paragraph (1)
Specific considerations include conditions assessed to potentially cause the FSI to experience difficulties that may endanger the continuity of the FSI's business and/or threaten financial system stability. Paragraph (2) Specific considerations include conditions where the Financial Services Authority needs to obtain immediate responses from parties undergoing reassessment in relation to the need to accelerate the handling of FSI problems, where the response request period from the Key Party is declared by the Financial Services Authority at the time:
a. requesting clarification of evidence, data, and/or information from the Reassessed Key Party; and/or b. submitting the interim result of the reassessment to the Reassessed Key Party. Number 6
Article 10
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Letter a
Sufficiently clear.
Letter b
Financial services industry, namely:

1. banking industry;
2. capital market industry; and
3. non-bank financial services industry.
   Paragraph (3)
   Sufficiently clear.
   Paragraph (4)
   Related parties include as referred to in:
   a. Financial Services Authority Regulations regarding maximum credit limits and large fund provision for commercial banks;

b. Financial Services Authority Regulations regarding maximum credit limits for people's credit banks;
c. Financial Services Authority Regulations governing business operations or health levels of the non-bank financial services industry;
d. regulatory provisions regarding maximum credit limits for commercial banks; or e. regulatory provisions regarding maximum fund distribution limits for sharia people's financing banks. By being treated as related parties, Key Parties established with the 'Failed' predicate are subject to regulations regarding fund provision by FSIs to related parties, including as referred to in:
a. Financial Services Authority Regulations regarding maximum credit limits and large fund provision for commercial banks; b. Financial Services Authority Regulations regarding maximum credit limits for people's credit banks;
c. Financial Services Authority Regulations governing business operations or health levels of the non-bank financial services industry;
d. regulatory provisions regarding maximum credit limits for commercial banks; or e. regulatory provisions regarding maximum fund distribution limits for sharia people's financing banks. Paragraph (5) Sufficiently clear.

Number 7
Article 11
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
Number 1)
Letter a)
Sufficiently clear.
Letter b)
Item i
The term 'repeatedly' includes performing actions after being subject to consequences for actions as referred to in this Financial Services Authority Regulation, whether due to the same action or different actions. Item ii The term 'cumulatively' includes a combination of at least 2 (two) actions from the actions as referred to in Article 4 letter a number 3), letter a number 4), letter d, letter e, letter g, letter h, letter i, and/or letter j. Item iii Sufficiently clear. Number 2) Letter a) Sufficiently clear. Letter b) Item i Sufficiently clear.

Item ii
The term 'cumulatively' includes a combination of at least 2 (two) actions from the actions as referred to in Article 5 letter a number 3), letter a number 4), letter d, letter e, letter g, letter h, letter j, and/or letter k. Item iii Sufficiently clear. Letter c Sufficiently Clear. Paragraph (2) Sufficiently clear.
Article II
Sufficiently clear.
SUPPLEMENT TO THE GOVERNMENT GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6701