Circular Letter of the Financial Services Authority Number 1/SEOJK.07/2014 Regarding the Implementation of Education to Enhance Financial Literacy for Consumers and/or the Public

To:
Directors/Managers of Financial Service Business Actors, both those conducting conventional and Sharia business activities, At Location.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 1/SEOJK.07/2014

IMPLEMENTATION OF EDUCATION TO ENHANCE FINANCIAL LITERACY FOR CONSUMERS AND/OR THE PUBLIC

In connection with Financial Services Authority Regulation Number 01/POJK.07/2013 concerning Consumer Protection in the Financial Services Sector, it is necessary to regulate provisions regarding the implementation of Education to enhance financial literacy for Consumers and/or the public in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

In this Financial Services Authority Circular Letter, the following terms are defined:

1. Education is the addition of a person's knowledge and abilities through practical learning techniques or instruction, with the goal of remembering facts or real conditions, by providing encouragement for self-direction, actively providing information or new ideas.

2. Financial Literacy is the ability to understand knowledge and skills to manage financial resources to achieve well-being.

3. Financial Service Business Actors, hereinafter abbreviated as PUJK, are Commercial Banks, Rural Banks, Securities Companies, Investment Advisors, Custodian Banks, Pension Funds, Insurance Companies, Reinsurance Companies, Financing Companies, Pawnshops, and Guarantee Companies, both those conducting conventional and Sharia business activities.

4. Business Plan is a written document describing the short-term (one year) business activity plan of the PUJK, including plans to improve business performance, as well as strategies to realize these plans according to established targets and timelines, while still paying attention to the fulfillment of prudential regulations and the application of risk management.

5. Directors:
   a. for PUJK that are legal entities in the form of Limited Liability Companies (Perseroan Terbatas), are the directors as referred to in the laws concerning limited liability companies; b. for PUJK that are legal entities in the form of Regional Enterprises, are the directors as referred to in the laws concerning regional enterprises;
   c. for PUJK that are legal entities in the form of Cooperatives, are the managers as referred to in the laws concerning cooperatives; and
   d. for PUJK that are legal entities in the form of Pension Funds, are the managers as referred to in the laws concerning pension funds; e. for branches of foreign banks, are the branch managers of foreign banks.

6. Consumer refers to parties who place their funds and/or utilize available services at Financial Service Institutions, including customers in Banking, investors in the Capital Market, policyholders in Insurance, and participants in Pension Funds, based on legislation in the financial services sector.

II. SCOPE OF EDUCATION PLANS

1. PUJK are required to conduct Education to enhance financial literacy for Consumers and/or the public.

2. The implementation plan referred to in item 1 must be formulated in an annual program reported to the Financial Services Authority.

3. Education Plans must at least include:
   a. the establishment of Education work programs according to the targets, strategies, and policies of the PUJK; b. an evaluation of the implementation of the previous Education plan period;
   c. the determination of cost requirements and assumptions used in the preparation of the Education plan.

4. The establishment of Education work programs as referred to in item 3 letter a refers to the implementation program of the Indonesia National Strategy for Financial Literacy, which will be jointly prepared by the Education and Consumer Protection Division of the Financial Services Authority with PUJK every year.

5. The evaluation of the implementation of the previous Education plan period as referred to in item 3 letter b must at least contain:
   a. a comparison of the previous Education plan with realization in each year; b. the achievement of established goals and unachieved matters (if any), including explanations;
   c. the implementation of established strategies and policies; and
   d. obstacles faced and efforts made to solve problems.

6. The assumptions used in the preparation of the PUJK Education plan as referred to in item 3 letter c must at least contain:
   a. macro assumptions, including among others average business growth in each sector and the level of Financial Literacy in each relevant sector; and b. micro assumptions, including factors affecting the operational activities of the PUJK originating from internal sources, including cost allocation and the implementation of corporate social responsibility (Corporate Social Responsibility/CSR).

III. IMPLEMENTATION OF EDUCATION

1. The implementation of Education is based on the following principles:
   a. Inclusive
   What is meant by inclusive is that Financial Literacy must cover all groups of society. b. Systematic and Measurable What is meant by systematic and measurable is that Financial Literacy is delivered in a programmed manner, easy to understand, simple, and its achievement can be measured.
   c. Ease of Access
   What is meant by ease of access is that financial services and information are widely distributed throughout the territory of Indonesia and are easily accessible. d. Collaboration What is meant by collaboration is involving all stakeholders together in implementing Financial Literacy.

2. The implementation of Education conducted in a systematic and measurable manner as referred to in item 1 letter b is planned Education activities whose impact can be measured from the activities conducted. The measurement of activity impact can be done, for example, by conducting surveys on understanding of the Education delivered.

3. Ease of access to the materials and substance of Education conducted by PUJK as referred to in item 1 letter c is the use of Education facilities that can reach the general public, for example, the availability of Education information and simulations regarding benefits and cost calculations accessed via websites or printed materials available at each branch office of the PUJK.

4. The implementation of Education to Consumers and/or the public is adjusted to the capabilities of the PUJK. The implementation of the Education plan can be conducted independently or jointly as referred to in item 1 letter d.

5. The implementation of Education does not include the marketing of financial products and/or financial services offered by the PUJK. Education focuses on informing the basic features of financial products and/or financial services, including providing knowledge and skills related to benefits, costs, and risks.

6. Activities in the form of charitable social assistance can constitute the implementation of Education if the activity is conducted continuously and monitoring is carried out periodically.

IV. PREPARATION, SUBMISSION, AND AMENDMENT OF EDUCATION PLANS

1. The submission of the Education plan is combined with the submission of the PUJK Business Plan.

2. In the event that the PUJK does not have a Business Plan, the Education plan may be submitted separately.

3. The Directors are required to submit the Education plan to the Financial Services Authority, c.q. the Supervision Division, with a copy to the Education and Consumer Protection Division, no later than November 30 before the Business Plan year begins.

4. The Financial Services Authority may request the PUJK to adjust the submitted Education plan if the Education plan does not yet meet the provisions in this Financial Services Authority Circular Letter.

5. The submission of adjustments to the Education plan as referred to in item 4 is done within a maximum of 15 (fifteen) working days after the date of the Financial Services Authority letter.

6. PUJK may only make changes to the Education plan once for one reporting period, no later than the end of June of the current year.

7. Changes to the Education plan as referred to in item 6 can be made separately from the adjustment of the Business Plan.

8. Changes to the Education plan must be submitted no later than 30 (thirty) working days before the implementation of the changed Education plan.

V. REPORTS ON THE IMPLEMENTATION OF EDUCATION

1. The Directors are required to submit reports on the implementation of Education to the Financial Services Authority, no later than January 30 of the following year.

2. The report is submitted to the Education and Consumer Protection Division of the Financial Services Authority, with a copy to the Supervision Division according to the respective industry.

3. The Education implementation report must at least contain:
   a. Targets; b. Financial Literacy Programs;
   c. Goals;
   d. Forms of activities; e. Frequency; and f. City.

4. The Education implementation report and the instructions for filling out the Education implementation report are in accordance with the format in the Appendix, which is an integral part of this Financial Services Authority Circular Letter.

VI. TRANSITIONAL PROVISIONS

PUJK are required to submit their Education plan for the first time no later than August 31, 2014, which covers the implementation of Education activities starting from January 1, 2014, to December 31, 2014.

VII. CLOSING PROVISIONS

The provisions in this Financial Services Authority Circular Letter shall take effect on August 6, 2014.

To ensure everyone is aware, the publication of this Financial Services Authority Circular Letter is ordered through its placement in the State Gazette of the Republic of Indonesia.

Established in Jakarta
On February 14, 2014

MEMBER OF THE BOARD OF COMMISSIONERS
EDUCATION AND CONSUMER PROTECTION FIELD,
Signed,

KUSUMANINGTUTI S.

Copy in accordance with the original
Head of Legal Assistance Division
Legal Directorate,
Signed,

Mufli Asmawidjaja

APPENDIX

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 1/SEOJK.07/2014

CONCERNING

IMPLEMENTATION OF EDUCATION TO ENHANCE FINANCIAL LITERACY FOR CONSUMERS AND/OR THE PUBLIC

INSTRUCTIONS FOR FILLING OUT THE REPORT
EDUCATION TO ENHANCE FINANCIAL LITERACY FOR CONSUMERS AND/OR THE PUBLIC

The Education report to enhance financial literacy for Consumers and/or the public is filled out with Education activities conducted by Financial Service Business Actors (PUJK).

PUJK fills in columns (a) to (f) with Education activities to enhance financial literacy that have been conducted during the reporting period.

Part A. Targets

What is meant by targets here is the priority targets to be achieved for the program to be conducted. The target targets mentioned include, among others, housewives, formal workers, informal workers, students, university students, or retirees.

Part B. Financial Literacy Programs

Financial literacy programs are filled out with various activities conducted by PUJK, including financial planning, business empowerment, financial quizzes, financial olympiads, preparation of introductions to financial institution products and services, for example, the introduction of Mutual Funds, term life insurance, stocks, or other products.

Part C. Goals

PUJK in implementing financial literacy programs for Consumers and/or the public must explain the goals of the implementation of the program, for example, the target of housewives has the goal of increasing the knowledge and skills of housewives in managing family finances, the target of informal workers has the goal of increasing the knowledge and skills of formal workers about financial products and/or services.

Part D. Activities

PUJK in implementing financial literacy programs for Consumers and/or the public have activity activities, including among others family financial planning Education activities in public areas, campaigns on the benefits of health insurance, financial Education through housewife arisan gatherings, or Education through sports.

Part E. Frequency

Frequency is filled in with the number of Education program activities conducted by PUJK during each Education reporting period to enhance financial literacy for Consumers and/or the public.

Part F. City

City is filled in with the city where the PUJK conducts Education programs to enhance financial literacy for Consumers and/or the public.

EDUCATION REPORT TO ENHANCE FINANCIAL LITERACY FOR CONSUMERS AND/OR THE PUBLIC

PERIOD: ........................... to ....................... Year ...............
NAME OF FINANCIAL SERVICE BUSINESS ACTOR : .............................................

No.
(a) Target
(b) Financial Literacy Program
(c) Goal
(d) Activity
(e) Frequency
(f) City

Established in Jakarta
On February 14, 2014

MEMBER OF THE BOARD OF COMMISSIONERS
EDUCATION AND CONSUMER PROTECTION FIELD,
Signed,

KUSUMANINGTUTI S.

Copy in accordance with the original
Head of Legal Assistance Division
Legal Directorate,
Signed,

Mufli Asmawidjaja