Circular Letter of the Financial Services Authority Number 17/SEOJK.04/2016 Regarding Recognition of Associations of Emission Underwriter Representatives and Securities Brokerage Intermediary Representatives

To:
Representatives of Emission Underwriters and Representatives of Securities Brokerage Intermediaries

Attn.

COPIES

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 17 /SEOJK.04/2016

REGARDING
RECOGNITION OF ASSOCIATIONS OF EMISSION UNDERWRITER REPRESENTATIVES AND REPRESENTATIVES OF SECURITIES BROKERAGE INTERMEDIARIES

In order to implement the provisions of Article 19 paragraph (3) of Financial Services Authority Regulation Number 27/POJK.04/2014 concerning Licensing of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries (State Gazette of the Republic of Indonesia Year 2014 Number 362, Supplement to the State Gazette of the Republic of Indonesia Number 5636), it is necessary to regulate regarding recognition of associations of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

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

1. Emission Underwriter Representative is an individual who acts on behalf of the interests of a Securities Company conducting business activities as an Emission Underwriter.

2. Representative of Securities Brokerage Intermediary is an individual who acts on behalf of the interests of a Securities Company conducting business activities as a Securities Brokerage Intermediary.

3. Individual license as an Emission Underwriter Representative, hereinafter referred to as Emission Underwriter Representative License, is a license granted by the Financial Services Authority to an individual to act on behalf of the interests of a Securities Company conducting business activities as an Emission Underwriter.

4. Individual license as a Representative of Securities Brokerage Intermediary, hereinafter referred to as Representative of Securities Brokerage Intermediary License, is a license granted by the Financial Services Authority to an individual to act on behalf of the interests of a Securities Company conducting business activities as a Securities Brokerage Intermediary.

5. Association of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries, hereinafter referred to as the Association, is a legal entity in the form of an association consisting of holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses.

6. Association Member, hereinafter referred to as Member, is an individual who holds an Emission Underwriter Representative License and/or Representative of Securities Brokerage Intermediary License from the Financial Services Authority and has rights and obligations in accordance with the articles of association, house rules, and internal regulations of the Association.

II. REQUIREMENTS FOR THE ASSOCIATION TO RECEIVE RECOGNITION FROM THE FINANCIAL SERVICES AUTHORITY

To receive recognition from the Financial Services Authority, the Association must meet the following requirements:

1. has received approval as a legal entity in the form of an association from the competent Government agency;

2. has at least 500 (five hundred) Members at the time of submission to the Financial Services Authority;

3. has an Association Code of Ethics;

4. has an Association organizational structure;

5. has a management board consisting of holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses, consisting of at least a chairman or other title, secretary or other title, and treasurer or other title;

6. has working committees responsible for at least the following functions:
   a. study and development; b. ethical supervision; and
   c. implementation of Association activities;

7. has standard operating procedures for the implementation of Association activities, at least covering:
   a. the implementation of continuing education for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses; and b. the implementation of other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;

8. has membership regulations at least containing:
   a. requirements and procedures for accepting Members; b. membership limitations in similar Associations where Members can only become members of 1 (one) Association;
   c. rights and obligations of Members;
   d. Association management and membership; e. funding of Association activities; f. membership fees; and g. sanctions;

9. has an Association activity plan, at least:
   a. continuing education programs for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses; and b. plans for organizing other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;

10. has an adequate internal control system, at least:
    a. a supervision system regarding conflict of interest risks in the implementation of duties and functions of the Association; b. a supervision system regarding Members in implementing the code of ethics; and
    c. a supervision system in the implementation of periodic and continuous evaluations of the implementation of Association activities;

11. has a Member database at least containing:
    a. name; b. address;
    c. Emission Underwriter Representative License and/or Representative of Securities Brokerage Intermediary License number;
    d. place of work (if any); and e. telephone number; and

12. has or controls adequate facilities and infrastructure, at least consisting of:
    a. a building or room as the location of the Association office; and b. other supporting facilities such as computers, telephones, and fax machines.

III. PROCEDURE FOR APPLICATION FOR ASSOCIATION RECOGNITION

1. The application for recognition as an Association is submitted by the applicant in the form of printed documents to the Financial Services Authority in accordance with the format of the Application for Recognition of Emission Underwriter Representative and Representative of Securities Brokerage Intermediary Association as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter.

2. In the event that the Financial Services Authority has provided an electronic system, the application for recognition as an Association can be submitted through that electronic system.

3. The application for recognition as an Association as referred to in item 1 and item 2 must be accompanied by complete documents as follows:
   a. photocopy of the document approving the Association as a legal entity in the form of an association from the competent Government agency;

   b. data of holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses as Members at least 500 (five hundred) people at the time of submission to the Financial Services Authority in accordance with the format of Data of Holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses as Members of the Emission Underwriter Representative and Representative of Securities Brokerage Intermediary Association as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter;

   c. copy of the Association Code of Ethics;

   d. Association organizational structure as well as the composition of the management board and working committees of the Association accompanied by documents:
   1) latest signed curriculum vitae;
   2) photocopy of valid Identity Card or Passport;
   3) photocopy of valid Emission Underwriter Representative License and/or Representative of Securities Brokerage Intermediary License;
   4) latest color photograph size 4x6 cm with a red background amounting to 1 (one) sheet; and
   5) integrity statement in accordance with the format of the Integrity Statement as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter,
   for each member of the management board and leaders of the working committees of the Association;

   e. standard operating procedures for the implementation of Association activities, at least covering:
   1) the implementation of continuing education for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses; and
   2) the implementation of other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;

   f. copy of the Association membership regulations;

   g. Association activity plan, at least:
   1) continuing education programs for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses; and
   2) plans for organizing other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;

   h. documents related to the adequate internal control system, at least:
   1) supervision system regarding conflict of interest risks in the implementation of duties and functions of the Association;
   2) supervision system regarding Members in implementing the code of ethics; and
   3) supervision system in the implementation of periodic and continuous evaluations of the implementation of Association activities;

   i. documents related to the Member database;

   j. domicile letter from the building manager or competent agency; and

   k. photocopy of proof of ownership or lease agreement for the Association office.

4. In the event that the application for recognition is submitted by the applicant in the form of printed documents to the Financial Services Authority as referred to in item 1, the application documents for recognition as an Association as referred to in item 3 must also be prepared in digital format and submitted to the Financial Services Authority using digital media such as compact disc or others.

5. In order to process the application for recognition as an Association, the Financial Services Authority reviews the completeness of the application documents.

6. In order to assess the readiness of the applicant as an Association, the Financial Services Authority is authorized to:
   a. conduct inspections at the Association office; b. request the Association to present the Association activity plan; and/or
   c. request data and information needed.

7. Recognition of the Association is granted by the Financial Services Authority at the latest 20 (twenty) working days since the receipt of the application for recognition of the Association that meets the requirements.

8. In the event that the application for recognition as an Association does not meet the requirements at the time of receipt, at the latest 20 (twenty) working days since the receipt of the application, the Financial Services Authority provides a notification letter to the applicant stating:
   a. the application does not yet meet the requirements; or b. the application is rejected because it does not meet the requirements.

9. In the event that the application for recognition as an Association does not yet meet the requirements, the applicant must complete the deficiencies required in the notification letter as referred to in item 8 letter a at the latest 20 (twenty) working days after the date of the notification letter.

10. The submission of document changes, additional information, and/or completion of requirement deficiencies as referred to in item 9 is considered to have been received by the Financial Services Authority on the date of receipt of the document changes, additional information, and/or completion of requirement deficiencies.

11. Since the receipt of document changes, additional information, and/or completion of requirement deficiencies as referred to in item 10, the application for recognition as an Association is considered newly received by the Financial Services Authority and processed as referred to in item 7.

12. Applicants who do not complete the deficiencies required within the time frame as referred to in item 9 are considered to have cancelled the application for recognition as an Association that has been submitted to the Financial Services Authority.

IV. DUTIES, AUTHORITIES, AND PROHIBITIONS OF THE ASSOCIATION

1. Associations that have received recognition from the Financial Services Authority have the following duties and authorities:
   a. organize continuing education for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses in accordance with the established curriculum; b. organize other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;
   c. establish Association membership regulations;
   d. enforce the code of ethics for Members; e. supervise Members in practicing their profession as Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries and ensure Members comply with Association membership regulations and the Member Code of Ethics; f. conduct monitoring and evaluation periodically every 6 (six) months regarding the implementation of Association activities; g. update the Member database periodically every 1 (one) month; h. have a website with an Indonesian domain name containing general information about the Association that can be accessed by the public; and
   i. establish other matters that support Association activities.

2. The implementation of education as referred to in item 1 letter a and letter b can be conducted by the Association itself or in cooperation with other parties.

3. The Association is fully responsible for the implementation of education for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses and other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries conducted by other parties cooperating with the Association.

4. Associations that have received recognition from the Financial Services Authority are prohibited from:
   a. giving different treatment to their members; and/or b. taking actions outside their duties and authorities as referred to in this Financial Services Authority Circular Letter, the articles of association, house rules, and internal regulations of the Association.

V. FUNDING SOURCES

1. In order to support its activities, the Association can obtain funding from:
   a. registration fees and regular membership dues; b. continuing education fees for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses;
   c. fees for organizing other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries, such as workshops, seminars, and/or training related to emission underwriting and securities brokerage intermediary services; and
   d. other sources as long as established in the articles of association/house rules or agreed upon by Members.

2. The Association must prepare financial accountability reports to Members at least once every 1 (one) year.

VI. REPORTING

1. Associations that have received recognition from the Financial Services Authority must submit reports to the Financial Services Authority:
   a. annual activity and budget plan report, at the latest on every December 15 of the previous year in accordance with the format of the Annual Activity and Budget Plan Report as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter; b. mid-year activity implementation realization report, at the latest on every January 12 and July 12 in accordance with the format of the Mid-Year Activity Implementation Realization Report as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter;
   c. report on admission and/or termination of Members, at the latest on every January 12 and July 12 in accordance with the format of the Mid-Year Report on Admission and/or Termination of Members of the Emission Underwriter Representative and Representative of Securities Brokerage Intermediary Association as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter; and
   d. report on changes to the articles of association and/or Association management composition, at the latest 30 (thirty) days since the occurrence of the change (if any).

2. In the event that the deadline for submitting reports as referred to in item 1 letter a, letter b, and letter c falls on a holiday, the report must be submitted at the latest on the next 1 (one) working day.

VII. REVOCATION OF ASSOCIATION RECOGNITION

1. The Letter of Recognition as an Association becomes invalid if:
   a. the legal entity of the party conducting activities as an Association accommodating Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries is dissolved; and/or b. the legal entity status of the Association is revoked by the competent agency.

2. The Financial Services Authority may revoke the Association recognition letter if there are the following circumstances:
   a. the Association returns the Association recognition letter it holds; b. the Association office cannot be found;
   c. the Association violates Financial Services Authority Regulation Number 27/POJK.04/2014 concerning Licensing of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries and this Financial Services Authority Circular Letter;
   d. the Association does not carry out its duties for 12 (twelve) consecutive months; e. the Association has received 3 (three) warning letters but within 1 (one) month since the issuance of the third warning letter does not comply with the provisions contained in the content of the warning letter; and/or f. does not meet the requirements as referred to in item II.

3. In the event that the revocation of the Association recognition letter is caused by the Association returning the recognition letter as referred to in item 2 letter a, the Association must submit a letter requesting the return of the Association recognition letter to the Financial Services Authority accompanied by documents as follows:
   a. information regarding the reasons for returning the recognition letter; b. the Association recognition letter from the Financial Services Authority; and
   c. Statement of Accountability from the Association management regarding the Association's obligations to third parties and/or Members.

4. In the event that the revocation of the Association recognition letter is caused by the provisions as referred to in item 2 letter b, letter c, letter d, letter e, and letter f, the Association must settle its obligations to Members and/or third parties.

5. The invalidity of the Association recognition letter as referred to in item 1 and the revocation of the Association recognition letter as referred to in item 2 can be announced by the Financial Services Authority through the mass media.

VIII. TRANSITIONAL PROVISIONS

Holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses whose license validity period will end less than 3 (three) months after the existence of an Association that has received recognition from the Financial Services Authority are exempted from the obligation to submit photocopies of Association Membership Cards accommodating Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries as referred to in Article 19 paragraph (3) letter g of Financial Services Authority Regulation Number 27/POJK.04/2014 concerning Licensing of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries.

IX. CLOSING PROVISIONS

This Financial Services Authority Circular Letter takes effect on the date of establishment.

Established in Jakarta on May 26, 2016

EXECUTIVE HEAD
CAPITAL MARKET SUPERVISOR,

signed

NURHAIDA

Copy in accordance with the original

Legal Director 1
Legal Department

signed

Yuliana

APPENDIX

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 17 /SEOJK.04/20

REGARDING
RECOGNITION OF ASSOCIATIONS OF EMISSION UNDERWRITER REPRESENTATIVES AND REPRESENTATIVES OF SECURITIES BROKERAGE INTERMEDIARIES

APPLICATION FOR RECOGNITION
OF ASSOCIATIONS OF EMISSION UNDERWRITER REPRESENTATIVES AND REPRESENTATIVES OF SECURITIES BROKERAGE INTERMEDIARIES

Number : ..................... ...., ................ 20....
Attachments : .....................
Subject : Application for Recognition
Association of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries

To

The Executive Head
Capital Market Supervisor
Financial Services Authority in Jakarta

Hereby we submit an application for recognition of the Association of Emission Underwriter Representatives and Representatives of Securities Brokerage Intermediaries. As consideration material, we submit the following data:

1. Association Name : ................................................................
2. Full Address : ................................................................
   ................................................................
   (Street Name and Number)
   ....................................... - □□□□□ (City and Postal Code)
3. Telephone Number : ................................................................
4. Number and date of establishment deed
   including amendments to the articles of association : ................................................................
5. Number and date of approval /
   consent /notification from the minister in charge of government affairs in the field of
   law and human rights : ................................................................

To complete this application, we attach the following documents:

a. photocopy of the document approving the Association as a legal entity in the form of an association from the competent Government agency;

b. data of holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses as Association Members;

c. copy of the Association Code of Ethics;

d. Association organizational structure as well as the composition of the management board and working committees of the Association containing:
1. latest signed curriculum vitae;
2. photocopy of valid Identity Card or Passport;
3. photocopy of valid Emission Underwriter Representative License and/or Representative of Securities Brokerage Intermediary License;
4. latest color photograph size 4x6 cm with a red background amounting to 1 (one) sheet; and
5. integrity statement;
for each member of the management board and leaders of the working committees of the Association.

e. standard operating procedures for the implementation of Association activities, covering:
1. the implementation of continuing education for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses; and
2. the implementation of other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;

f. copy of the Association membership regulations;

g. Association activity plan, covering:
1. continuing education programs for holders of Emission Underwriter Representative Licenses and/or Representatives of Securities Brokerage Intermediary Licenses; and
2. plans for organizing other education and/or training to enhance the competence of Emission Underwriter Representatives and/or Representatives of Securities Brokerage Intermediaries;

h. documents related to the internal control system, covering:
1. supervision system regarding conflict of interest risks in the implementation of duties and functions of the Association;
2. supervision system regarding Members in implementing the code of ethics; and
3. supervision system in the implementation of periodic and continuous evaluations of the implementation of Association activities;

i. documents related to the Member database;

j. domicile letter from the building manager or competent agency; and

k. photocopy of proof of ownership or lease agreement for the Association office.

Thus this application is submitted and we thank you for your attention.

Stamp Duty

DATA OF HOLDERS OF EMISSION UNDERWRITER REPRESENTATIVE LICENSES AND/OR REPRESENTATIVES OF SECURITIES BROKERAGE INTERMEDIARY LICENSES AS MEMBERS OF THE ASSOCIATION OF EMISSION UNDERWRITER REPRESENTATIVES AND REPRESENTATIVES OF SECURITIES BROKERAGE INTERMEDIARIES

Per: date/month/year

No.
Name
Holder of Emission Underwriter Representative License and/or Representative of Securities Brokerage Intermediary License Emission Underwriter Representative License and/or Representative of Securities Brokerage Intermediary License Company Place of Work*) Decision Letter Number Decision Letter Date

*) if any

.........., ...................... 20.....

INTEGRITY STATEMENT LETTER
I, the undersigned below:
Name : .................................................................................
Position :..................................................................................
Full Address : .................................................................................
(street name and number)
......................... -
(city and postal code)
Telephone Number : .................................................................................
hereby declare that I:
a. have good character and morality; b. are competent/incompetent*) to perform legal acts;
c. have/have not*) committed disgraceful acts and/or been punished for proven criminal offenses in the financial services sector;
d. have/have not*) been subject to license revocation, approval cancellation, and/or registration cancellation sanctions by the Financial Services Authority during the last 3 (three) years; e. have/have not*) been declared bankrupt or served as a manager whose fault caused a company to be declared bankrupt; and f. have a high commitment to comply with laws and regulations. This statement is made truthfully for use as appropriate.
.........., ...................... 20.....
Applicant,
Stamp Duty
Note:
*) strike out what is not needed

ANNUAL ACTIVITY AND BUDGET PLAN REPORT
YEAR....
Number : .................... (Place), (Date, Month) 20...
Attachment : ....................
Subject : Annual Activity and Budget Plan Report for Year.......
TO
The Executive Head of
Capital Market Supervision in Jakarta
Attention: Director of Securities Institution Supervision
Association Name : ................................
The annual activity and budget plan for year .......... is as follows:
No. Activity Plan Implementation Period Budget
.........., ...................... 20.....

MID-YEAR ACTIVITY REALIZATION REPORT
Number : .................... (Place), (Date, Month) 20...
Attachment : ....................
Subject : Mid-Year Activity Realization Report for Period
.......
TO
The Executive Head of
Capital Market Supervision in Jakarta
Attention: Director of Securities Institution Supervision
Association Name : ................................
The mid-year activity realization for period .......... is as follows:
No. Activity Plan
Mid-Year Activity Realization
(Completed/Not Completed)
Notes
.........., ...................... 20.....

MID-YEAR REPORT ON ADMISSION AND/OR TERMINATION OF MEMBERS OF THE ASSOCIATION OF EMISSION UNDERWRITER REPRESENTATIVES AND SECURITIES BROKERAGE REPRESENTATIVES Association Name :
Period :
Admission of Members
Association of Emission Underwriter Representatives and Securities Brokerage Representatives Termination of Members Association of Emission Underwriter Representatives and Securities Brokerage Representatives No. Name Emission Underwriter Representative and/or Securities Brokerage Representative License Date of Membership No. Name Emission Underwriter Representative and/or Securities Brokerage Representative License Date of Termination Decision Letter Number Decision Letter Date Decision Letter Number Decision Letter Date Total members holding Emission Underwriter Representative and/or Securities Brokerage Representative Licenses: ...
.........., ...................... 20.....
Determined in Jakarta on 26 May 2016
EXECUTIVE HEAD OF
CAPITAL MARKET SUPERVISION, signature
NURHAIDA
Copy matches the original
Legal Director 1
Legal Department
Sudarmaji
Copy matches the original
Legal Director 1
Legal Department signature
Yuliana