Financial Report Preparation for Collective Investment Contract Investment Products

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 33 /POJK.04/2020
CONCERNING
FINANCIAL REPORT PREPARATION FOR COLLECTIVE INVESTMENT CONTRACT INVESTMENT PRODUCTS BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS' COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that it is necessary to improve the quality of transparency, openness, uniformity of preparation, and comparability of financial reports for collective investment contract investment products; b. that it is necessary to protect investor interests in obtaining reliable information from the financial reports of collective investment contract investment products;
c. that in line with the convergence program of Financial Accounting Standards (SAK) to International Financial Reporting Standard (IFRS);
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning the Preparation of Financial Reports for Collective Investment Contract Investment Products;

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);

DECIDES:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE PREPARATION OF FINANCIAL REPORTS FOR COLLECTIVE INVESTMENT CONTRACT INVESTMENT PRODUCTS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are meant:

1. Investment Manager is a Party whose business activities manage a Portfolio of Securities for clients or manage a collective investment portfolio for a group of clients, except insurance companies, pension funds, and banks that conduct their own business activities based on legislation.
2. Custodian Bank is a general bank that has obtained approval from the Financial Services Authority to conduct business activities as a Custodian.
3. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial papers, shares, bonds, debt certificates, Units of Participation in collective investment contracts, futures contracts on Securities, and any derivatives of Securities.
4. Mutual Fund is a vehicle used to gather funds from public investors to be subsequently invested in a Portfolio of Securities by an Investment Manager.
5. Asset-Backed Securities Collective Investment Contract, hereinafter abbreviated as KIK-EBA, is a contract between an Investment Manager and a Custodian Bank that binds holders of asset-backed securities, wherein the Investment Manager is authorized to manage a collective investment portfolio and the Custodian Bank is authorized to execute collective custody.
6. Real Estate Investment Fund is a vehicle used to gather funds from public investors to be subsequently invested in real estate assets, assets related to real estate, and/or cash and cash equivalents.
7. Multi-Asset Investment Fund in the form of a Collective Investment Contract, hereinafter called Multi-Asset Investment Fund, is a vehicle used to gather funds from specific Investors to be subsequently invested by an Investment Manager in a Portfolio of Securities and/or investment portfolios other than Securities.
8. Infrastructure Investment Fund in the form of a Collective Investment Contract, hereinafter called DINFRA, is a collective investment contract vehicle used to gather funds from public investors to be subsequently mostly invested in infrastructure assets by an Investment Manager.
9. Collective Investment Contract, hereinafter abbreviated as KIK, is a contract between an Investment Manager and a Custodian Bank that binds unit holders, wherein the Investment Manager is authorized to manage a collective investment portfolio and the Custodian Bank is authorized to execute collective custody.
10. Consolidated Financial Report is a business group financial report consisting of assets, liabilities, equity, income, expenses, and cash flows of the parent entity and subsidiary entities presented as a single economic entity.
11. Control is a condition where an investor is exposed to or has rights to variable returns from its involvement with the investee Party and has the ability to influence those returns through its power over the investee Party.
12. Financial Accounting Standards, hereinafter called SAK, are statements and interpretations issued by the Financial Accounting Standards Board of the Indonesian Accountants Association and the Sharia Financial Accounting Standards Board of the Indonesian Accountants Association, as well as regulations in the capital market field for entities conducting activities in the capital market.

CHAPTER II
PREPARATION OF FINANCIAL REPORTS
Article 2
Collective Investment Contract (KIK) investment products consist of:
a. Mutual Funds in the form of KIK; b. KIK-EBA;
c. Real Estate Investment Funds in the form of KIK;
d. Multi-Asset Investment Funds; e. DINFRA; and f. other investment products in the form of KIK established by the Financial Services Authority.

Article 3
Financial reports of KIK Investment Products as referred to in Article 2, both single-entity financial reports and Consolidated Financial Reports, must be prepared based on SAK.

Article 4
(1) In the event that a KIK Investment Product has Control over other entities, the KIK Investment Product must consolidate the financial reports of those other entities in the Consolidated Financial Report. (2) A KIK Investment Product is considered to have Control over other entities if the KIK Investment Product has the following:
a. power over the investee Party; b. exposure or rights to variable returns from its involvement with the investee Party; and
c. the ability to use its power over the investee Party to affect the amount of investor returns.
(3) In the event that a KIK Investment Product is an investment entity, the KIK Investment Product must not consolidate the financial reports of subsidiary entities as referred to in paragraph (1), except if such subsidiary entities are not investment entities and their main purpose and activities provide services related to the investment activities of the Investment Entity.

Article 5
Investment Managers and Custodian Banks are responsible for the preparation of financial reports for KIK Investment Products.

Article 6
(1) In the preparation of financial reports as referred to in Article 3, KIK Investment Products must prepare financial reports based on the accounting treatment guidelines for KIK Investment Products. (2) The accounting treatment guidelines for KIK Investment Products as referred to in paragraph (1) are one of the capital market accounting regulations established by the Financial Services Authority. (3) The accounting treatment guidelines for KIK Investment Products as referred to in paragraph (1) are established by the Financial Services Authority.

Article 7
In the event that there are accounting treatments not regulated in the accounting treatment guidelines for KIK Investment Products as referred to in Article 6, such unregulated accounting treatments must follow SAK.

Article 8
(1) In the event that there are changes to SAK after the implementation of regulations established by the Financial Services Authority as referred to in Article 6 paragraph (3), the accounting treatment for KIK Investment Products must follow the latest SAK regulations, unless otherwise stated by the Financial Services Authority. (2) Other statements by the Financial Services Authority as referred to in paragraph (1) to fulfill the principle of openness and protect public interests are regulated by a Financial Services Authority Regulation.

Article 9
The preparation of financial reports for collective investment contract investment products as referred to in Article 3 through Article 8 applies to book year periods starting on or after January 1, 2020.

CHAPTER III
ADMINISTRATIVE SANCTIONS
Article 10
(1) Any party violating the provisions as referred to in Article 3, Article 4, Article 5, Article 6 paragraph (1), Article 7, and Article 8 shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) shall also be imposed on parties causing the violation as referred to in paragraph (1). (3) Sanctions as referred to in paragraph (1) and paragraph (2) are imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warnings; b. fines, namely the obligation to pay a certain amount of money;
c. business activity restrictions;
d. business activity suspension; e. business license revocation; f. approval cancellation; and/or g. registration cancellation.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of fines as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, f, or g. (7) The procedure for imposing sanctions as referred to in paragraph (3) is carried out in accordance with applicable legislation.

Article 11
In addition to administrative sanctions as referred to in Article 10 paragraph (4), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 12
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 10 paragraph (4) and specific actions as referred to in Article 11 to the public.

CHAPTER IV
CLOSING PROVISIONS
Article 13
This Financial Services Authority Regulation takes effect on the date of enactment.

This copy is consistent with the original
Deputy Director of Legal Consultation and
Banking Regulation Harmonization 1
Legal Directorate 1
Legal Department signed
Wiwit Puspasari

To ensure everyone knows, 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 May 25, 2020
CHAIRMAN OF THE COMMISSIONERS' COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO
Enacted in Jakarta on June 2, 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 138

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 33 / POJK.04/2020
CONCERNING
FINANCIAL REPORT PREPARATION FOR COLLECTIVE INVESTMENT CONTRACT INVESTMENT PRODUCTS

I. GENERAL
Investment products such as Mutual Funds, KIK-EBA, Real Estate Investment Funds, Multi-Asset Investment Funds, and DINFRA have experienced very rapid development. In line with this development, accountability is one of the important aspects that must be carried out in managing investment products. One form of management accountability and information openness for investment product stakeholders is the obligation of investment products to prepare and submit annual financial reports. One of the impacts of the convergence of SAK to International Accounting Standards (IAS)/IFRS is that SAK is now more transaction-oriented. As a result, all industry-based SAK have been abolished, including SAK Number 49 concerning Mutual Fund Accounting, which has been one of the references in preparing Mutual Fund financial reports. After this abolition, until now there have been no regulations governing the presentation and disclosure of financial reports for general purpose Mutual Funds, including for other investment products such as KIK-EBA, Real Estate Investment Funds, Multi-Asset Investment Funds, and DINFRA. Given these conditions and in order to improve comparability and provide legal certainty for KIK Investment Products in preparing financial reports, it is necessary to regulate provisions concerning the presentation and disclosure guidelines for general purpose (general purpose) financial reports for Mutual Funds in the form of KIK, KIK-EBA, Real Estate Investment Funds, Multi-Asset Investment Funds, and DINFRA.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.
Article 2
Sufficiently clear.
Article 3
Sufficiently clear.
Article 4
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Letter a
The term "power" refers to existing rights that currently provide the ability to direct relevant activities.
Letter b
Sufficiently clear.
Letter c
Sufficiently clear.
Paragraph (3)
Sufficiently clear.
Article 5
Sufficiently clear.
Article 6
Sufficiently clear.
Article 7
Sufficiently clear.
Article 8
Sufficiently clear.
Article 9
Sufficiently clear.
Article 10
Sufficiently clear.
Article 11
The term "specific actions" includes, among others, orders to restate financial reports in accordance with the provisions regulated in this Financial Services Authority Regulation.
Article 12
Sufficiently clear.
Article 13
Sufficiently clear.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6519