Financial Services Authority Circular No. 50/SEOJK.04/2016 Regarding Recognition of Investment Manager Associations

To:

1. Boards of Directors of Securities Companies conducting business as Investment Managers;
2. Indonesia Investment Fund Association; and
3. Indonesia Investment Manager Association,
   At your location.

COPY
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 50 /SEOJK.04/2016
REGARDING RECOGNITION OF INVESTMENT MANAGER ASSOCIATIONS

In the implementation of Article 3 of the Financial Services Authority Regulation Number 43/POJK.04/2015 concerning Guidelines for Investment Manager Conduct (State Gazette of the Republic of Indonesia Year 2015 Number 370, Supplement to the State Gazette of the Republic of Indonesia Number 5810), it is necessary to regulate regarding the recognition of Investment Manager Associations in this Financial Services Authority Circular as follows:

I. GENERAL PROVISIONS
In this Financial Services Authority Circular, the following terms are defined:

1. Investment Manager is a Party whose business activities manage Securities Portfolios for clients or manage collective investment portfolios for a group of clients, except Insurance Companies, Pension Funds, and Banks that conduct their own business activities based on applicable laws and regulations.
2. Business License as an Investment Manager, hereinafter referred to as Investment Manager License, is a license granted by the Financial Services Authority to Securities Companies conducting business as Investment Managers.
3. Investment Manager Association, hereinafter referred to as the Association, is a legal entity in the form of an association consisting of Investment Managers.
4. Association Member, hereinafter referred to as Member, is a Securities Company that has obtained a business license as an Investment Manager from the Financial Services Authority and has rights and obligations according to the articles of association, by-laws, and internal regulations of the Association.

II. REQUIREMENTS FOR THE ASSOCIATION TO OBTAIN RECOGNITION FROM THE FINANCIAL SERVICES AUTHORITY
To obtain recognition from the Financial Services Authority, the Association must meet the following requirements:

1. has obtained approval as a legal entity in the form of an association from the competent Government agency;
2. has at least 1/3 (one third) of the total number of Investment Manager License holders as Members;
3. has an Association code of ethics;
4. has an organizational structure and management composition consisting of at least a chairman or other title, secretary or other title, treasurer or other title, and working committee or other title;
5. has a working committee responsible for at least the following functions:
   a. assessment and development; b. ethical supervision; and
   c. implementation of Association activities;
6. has standard operating procedures for the implementation of Association activities, at least including:
   a. enforcement of the code of ethics; b. formulation and enforcement of Association regulations;
   c. process for applying sanctions to Members; and
   d. decision-making;
7. has membership regulations containing at least:
   a. requirements and procedures for accepting Members; b. limitations on membership in similar Associations where Members can only be members of 1 (one) Association;
   c. rights and obligations of Members;
   d. management and membership of the Association; e. funding of Association activities; f. membership fees; and g. sanctions;
8. has an Association activity plan;
9. has a Member database, containing at least:
   a. Investment Manager name; b. address;
   c. Investment Manager License number; and
   d. telephone number; and
10. has or controls adequate facilities and infrastructure, consisting of at least:
    a. building or room as the location of the Association office; b. electronic facilities for the Association, such as email accessible by Members; and
    c. Member service facilities functioning to coordinate and communicate between the Association and Members.

III. PROCEDURE FOR APPLICATION FOR ASSOCIATION RECOGNITION

1. The application for recognition as an Association is submitted by the applicant in printed document form to the Financial Services Authority according to the format of the Application for Recognition of Investment Manager Association as stated in the Appendix which is an integral part of this Financial Services Authority Circular.
2. In the event that the Financial Services Authority has provided an electronic system, the application for recognition as an Association may be submitted through that electronic system.
3. The application for recognition as an Association as referred to in numbers 1 and 2 must be accompanied by the following complete 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 Investment Manager License holders as Members, at least 1/3 (one third) of the total number of Investment Manager License holders according to the format Data of Investment Manager License Holders as Members of the Investment Manager Association as stated in the Appendix which is an integral part of this Financial Services Authority Circular;
   c. copy of the Association code of ethics;
   d. Association organizational structure and composition of management and working committees accompanied by documents:
   1) latest signed curriculum vitae;
   2) photocopy of valid Identity Card or Passport;
   3) latest color passport-size photo 4x6 cm with a red background, 1 (one) sheet; and
   4) integrity statement according to the format of the Integrity Statement as stated in the Appendix which is an integral part of this Financial Services Authority Circular,
   for each management and committee leadership of the Association; e. standard operating procedures for the implementation of Association activities, at least including:
   1) enforcement of the code of ethics;
   2) formulation and enforcement of Association regulations;
   3) process for applying sanctions to Members; and
   4) decision-making;
   f. copy of the Association membership regulations; g. Association activity plan; h. documents related to the Member database;
   i. domicile letter from the building manager or competent agency (if any); and
   j. photocopy of proof of ownership or lease agreement for the Association office (if any).
4. In the event that the application for recognition is submitted by the applicant in printed document form to the Financial Services Authority as referred to in number 1, the application documents for recognition as an Association as referred to in number 3 must also be prepared in digital format and submitted to the Financial Services Authority using digital media such as compact disk 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 applicant's readiness 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 as needed.
7. Recognition of the Association is granted by the Financial Services Authority no later than 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 received does not meet the requirements, no later than 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 specified in the notification letter as referred to in number 8 letter a no later than 20 (twenty) working days after the date of the notification letter.
10. The submission of document changes, additional information, and/or completion of missing requirements as referred to in number 9 is considered received by the Financial Services Authority on the date of receipt of the document changes, additional information, and/or completion of missing requirements.
11. Since the receipt of document changes, additional information, and/or completion of missing requirements as referred to in number 10, the application for recognition as an Association is considered newly received by the Financial Services Authority and processed as referred to in number 7.
12. An applicant who does not complete the deficiencies specified within the time limit as referred to in number 9 is considered to have cancelled the application for recognition as an Association already submitted to the Financial Services Authority.

IV. TASKS, AUTHORITIES, AND PROHIBITIONS OF THE ASSOCIATION

1. An Association that has obtained recognition from the Financial Services Authority has the following tasks and authorities:
   a. establish Association membership regulations; b. establish and enforce the code of ethics for Members;
   c. impose sanctions on Members in the event of violations of the Member code of ethics and internal Association regulations;
   d. conduct periodic monitoring and evaluation every 1 (one) year regarding the implementation of Association activities; e. update the Member database as soon as possible if there are changes in Member data; f. have a website with an Indonesian domain name containing general information about the Association and information regarding members and Association activities, which can be accessed by the public; and g. establish other matters supporting Association activities.
2. An Association that has obtained recognition from the Financial Services Authority is prohibited from:
   a. providing different treatment to its members; and/or b. taking actions contrary to its tasks and authorities as referred to in this Financial Services Authority Circular, articles of association, by-laws, and/or internal Association regulations.

V. FUNDING SOURCES

1. In order to support its activities, the Association may obtain funding from:
   a. registration fees and regular membership dues; and b. other sources as long as stipulated in the articles of association, by-laws, and/or internal Association regulations, which do not conflict with laws and regulations.
2. The Association must prepare financial accountability reports to Members every 1 (one) management period.

VI. REPORTING

1. An Association that has obtained recognition from the Financial Services Authority must submit reports to the Financial Services Authority:
   a. annual activity report, no later than every January 12, according to the format of the Annual Activity Report, as stated in the Appendix which is an integral part of this Financial Services Authority Circular; b. report on the acceptance and termination of Members, no later than 7 (seven) working days since the occurrence of the acceptance and/or termination of Members according to the format of the Report on Acceptance and Termination of Members of the Investment Manager Association as stated in the Appendix which is an integral part of this Financial Services Authority Circular (if any);
   c. report on changes to the Association office address, no later than 7 (seven) working days since the occurrence of the change (if any);
   d. report on changes to the articles of association, by-laws, management composition, and/or working committees, no later than 30 (thirty) days since the occurrence of the change (if any); and e. report on sanctions established by the Association to Members no later than 7 (seven) working days since the establishment of sanctions by the Association (if any).
2. In the event that the deadline for submitting reports as referred to in number 1 letter a and letter d falls on a holiday, the reports must be submitted no later than 1 (one) working day following.

VII. REVOCATION OF ASSOCIATION RECOGNITION

1. The recognition letter as an Association becomes invalid if:
   a. the legal entity of the Association housing Investment Managers is dissolved; and/or b. the legal status of the Association is revoked by the competent Government 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 possesses; b. the Association office cannot be found;
   c. the Association violates this Financial Services Authority Circular;
   d. the Association has received 3 (three) warning letters but within 1 (one) month since the issuance of the third warning letter does not meet the provisions as stated in the content of the warning letter; and/or e. does not meet the requirements as referred to in number II.
3. In the event that the Association returns the recognition letter as referred to in number 2 letter a, the Association must submit a letter requesting the return of the Association recognition letter to the Financial Services Authority accompanied by the following documents:
   a. statement regarding the reasons for returning the recognition letter; b. the Association recognition letter from the Financial Services Authority;
   c. statement of accountability letter from the Association management regarding the Association's obligations to third parties and/or Members; and
   d. decision letter from the member meeting approving the return of the Association recognition letter by the Financial Services Authority.
4. In the event that the revocation of the Association recognition letter is caused by the Association committing violations as referred to in number 2 letter b, letter c, letter d, and letter e, the Association must fulfill its obligations to Members and/or third parties.
5. The invalidity of the Association recognition letter as referred to in number 1 and the revocation of the Association recognition letter as referred to in number 2 may be announced by the Financial Services Authority through the mass media.

VIII. CLOSING PROVISIONS
This Financial Services Authority Circular takes effect on the date of establishment.

Established in Jakarta on December 19, 2016
EXECUTIVE HEAD
MARKET SURVEILLANCE SUPERVISOR, sd
NURHAIDA

Copy in accordance with the original
Legal Director 1
Legal Department sd
Yuliana

APPENDIX
FINANCIAL SERVICES AUTHORITY CIRCULAR
NUMBER 50 /SEOJK.04/2016
REGARDING
RECOGNITION OF INVESTMENT MANAGER ASSOCIATIONS

APPLICATION FOR RECOGNITION OF INVESTMENT MANAGER ASSOCIATION
Number : ..................... ...., ................ 20....
Attachments : .....................
Subject : Application for Recognition
Investment Manager Association
To
Executive Head
Market Surveillance Supervisor
Financial Services Authority in Jakarta

Hereby we submit an application for recognition of the Investment Manager Association. 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 changes to the articles of association
   : ..........................................................
5. Number and date
   approval/permission/ notification from the Minister who handles 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 Investment Manager License holders as Association members;
c. copy of the Association code of ethics;
d. Association organizational structure and composition of management and working committees containing:

1. latest signed curriculum vitae;
2. photocopy of valid Identity Card or Passport;
3. latest color passport-size photo 4x6 cm with a red background, 1 (one) sheet; and
4. integrity statement;
   for each management and committee leadership of the Association. e. standard operating procedures for the implementation of Association activities, at least including:
   1) enforcement of the code of ethics;
   2) formulation and enforcement of Association regulations;
   3) process for applying sanctions to Members; and
   4) decision-making;
   f. copy of the Association membership regulations; g. Association activity plan; h. documents related to the Member database;
   i. domicile letter from the building manager or competent agency (if any); and
   j. photocopy of proof of ownership or lease agreement for the Association office (if any).

This application is submitted, and we thank you for your attention.
Stamp Duty 6000
……………………………………....

DATA OF INVESTMENT MANAGER LICENSE HOLDERS
AS MEMBERS OF THE INVESTMENT MANAGER ASSOCIATION As of: (date/month/year) No.
Name
License Holder
Investment Manager
Address
Investment Manager
Telephone Number
Investment Manager
License Number
Decision Letter Number
Decision Letter Date
.........., ...................... 20.....
(place and date)
……………………………………....

INTEGRITY STATEMENT LETTER
I, the undersigned:
Name : .................................................................................
Position : (chairman/ secretary/ treasurer/ other*) .................
Full Address : .................................................................................
(street name and number)
......................... - □□□□□
(city and postal code)
Telephone Number : .................................................................................
hereby state that I:
a. have good character and morality; b. 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 by the Financial Services Authority within the last 3 (three) years; e. have/have not*) been declared bankrupt or served as a manager whose guilt caused a company to be declared bankrupt; and f. have a high commitment to comply with laws and regulations.

This statement is made truthfully so that it may be used as appropriate.
.........., ...................... 20.....
(place and date)
Applicant,
Stamp Duty 6000
……………………………………....
Note:
*) strike out what is not necessary

ANNUAL ACTIVITY REPORT
YEAR....
Number : .................... ………., …………………20…
Attachments : ....................
Subject : Annual Activity Report Year.......
To
Executive Head
Market Surveillance Supervisor
Up. Investment Management Director in Jakarta
Association Name : ................................
Annual activities for year .......... are as follows:
No. Planned Activities Implementation Period
……………………………………....

REPORT ON ACCEPTANCE OF MEMBERS OF THE INVESTMENT MANAGER ASSOCIATION Number : .................... ………., ……….………20…
Attachments : ....................
Subject : Report on Member Acceptance
Investment Manager Association
To
Executive Head
Market Surveillance Supervisor
Up. Investment Management Director in Jakarta
Association Name : ................................
Acceptance of Investment Manager Association members as of date .......... is as follows:
Acceptance of Members
Investment Manager Association
No. Name
Investment Manager License
Date
Becoming
Member
Decision Letter Number
Decision Letter Date
……………………………………....

REPORT ON TERMINATION OF MEMBERS OF THE INVESTMENT MANAGER ASSOCIATION Number : .................... ………., …………………20…
Attachments : ....................
Subject : Report on Member Termination
Investment Manager Association
To
Executive Head
Market Surveillance Supervisor
Up. Investment Management Director in Jakarta
Association Name : ................................
Termination of Investment Manager Association members as of date .......... is as follows:
Termination of Members
Investment Manager Association
No. Name
Investment Manager License
Date
Stopped as
Member
Decision Letter Number
Decision Letter Date
……………………………………....

Established in Jakarta on December 19, 2016
EXECUTIVE HEAD
MARKET SURVEILLANCE SUPERVISOR, sd
NURHAIDA

Copy in accordance with the original
Legal Director 1
Legal Department sd
Yuliana