Financial Services Authority Regulation Number 18 of 2022 Concerning Written Orders

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 18 OF 2022
CONCERNING
WRITTEN ORDERS
BY THE GRACE OF THE ALMIGHTY GOD,
THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to carry out the regulatory duties as referred to in Article 8 letter f and supervisory duties as referred to in Article 9 letter d of Law Number 21 of 2011 concerning the Financial Services Authority, it is necessary to establish a Financial Services Authority Regulation concerning Written Orders; Considering: 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 WRITTEN ORDERS.

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

1. Financial Institution, hereinafter abbreviated as FI, is an institution that conducts activities in the banking, capital market, insurance, pension fund, financing institution, and other financial service sectors.
2. Written Order is a written order from the Financial Services Authority to an FI and/or Specific Party to carry out or not carry out certain activities, in order to fulfill statutory regulations in the financial service sector and/or prevent and reduce losses to consumers, the public, and the financial service sector.
3. Specific Party is a party other than an FI that may be subject to a Written Order by the Financial Services Authority.

Article 2
(1) The Financial Services Authority has the authority to issue Written Orders.
(2) The Written Order as referred to in paragraph (1) is issued by the Financial Services Authority to:
a. FIs; and/or b. Specific Parties.
(3) Specific Parties as referred to in paragraph (2) letter b include:
a. principal parties; b. parties having a relationship with FIs; and
c. issuers or public companies.

Article 3
(1) FIs as referred to in Article 2 paragraph (2) letter a and/or Specific Parties as referred to in Article 2 paragraph (2) letter b are obligated to fulfill Written Orders issued by the Financial Services Authority.
(2) FIs and/or Specific Parties that intentionally ignore, fail to fulfill, or hinder the implementation of the Financial Services Authority's authority in issuing Written Orders to FIs and/or Specific Parties are subject to sanctions as referred to in Article 53 of Law Number 21 of 2011 concerning the Financial Services Authority. (3) FIs and/or Specific Parties that intentionally ignore and/or fail to execute Written Orders are subject to sanctions as referred to in Article 54 of Law Number 21 of 2011 concerning the Financial Services Authority. (4) The imposition of sanctions as referred to in paragraph (2) and/or paragraph (3) does not negate or eliminate the obligation of FIs and/or Specific Parties to fulfill Written Orders as referred to in paragraph (1) and/or the imposition of administrative sanctions by the Financial Services Authority.

CHAPTER II
PROCEDURE FOR ISSUING WRITTEN ORDERS
Article 4
The Financial Services Authority issues Written Orders as referred to in Article 2 paragraph (1) with:
a. preceded by a written instruction; or b. without being preceded by a written instruction with certain considerations.

Article 5
The Financial Services Authority determines the time limit for the implementation of Written Orders by FIs and/or Specific Parties based on supervisory needs and/or considerations of the complexity of the scope of the Written Order issued, except where there are certain considerations not to determine a time limit in the Written Order.

Article 6
(1) In issuing Written Orders to FIs and/or Specific Parties, the Financial Services Authority may require fulfillment of:
a. the preparation of an action plan and the implementation of the action plan; and b. the submission of progress reports on the implementation of the action plan, by FIs and/or Specific Parties in responding to the Written Order.
(2) The fulfillment of the submission of progress reports on the implementation of the action plan by FIs and/or Specific Parties as referred to in paragraph (1) letter b may be done periodically according to the time limit determined by the Financial Services Authority. (3) FIs and/or Specific Parties receiving Written Orders as referred to in paragraph (1) must submit action plans and progress reports on the implementation of the action plan to the Financial Services Authority.

Article 7
FIs and/or Specific Parties must submit a report on the fulfillment of Written Orders to the Financial Services Authority no later than 2 (two) working days after the Written Order issued by the Financial Services Authority has been fulfilled.

Article 8
(1) Submissions regarding:
a. action plans and progress reports on the implementation of action plans as referred to in Article 6; and/or b. reports on the fulfillment of Written Orders as referred to in Article 7, are submitted by FIs and/or Specific Parties to the Financial Services Authority. (2) Submissions to the Financial Services Authority as referred to in paragraph (1) are conducted through the Financial Services Authority's correspondence system or submissions in other forms adjusted to the Financial Services Authority's supervisory needs. (3) In the event of force majeure such that the Financial Services Authority's correspondence system as referred to in paragraph (2) cannot be used, submissions are made offline to the Financial Services Authority.

Article 9
(1) The Financial Services Authority evaluates the fulfillment of the implementation of Written Orders after:
a. the expiration of the time limit for Written Orders as referred to in Article 5; or b. the receipt of reports on the fulfillment of Written Orders submitted by FIs and/or Specific Parties as referred to in Article 7.
(2) In the event that based on the results of the Financial Services Authority's evaluation of reports on the fulfillment of Written Orders as referred to in Article 7, FIs and/or Specific Parties have fulfilled the Written Order, the Financial Services Authority declares to FIs and/or Specific Parties that the obligation to fulfill the Written Order has been completed. (3) In the event that based on the results of the Financial Services Authority's evaluation of reports on the fulfillment of Written Orders as referred to in Article 7, it is assessed that FIs and/or Specific Parties have not yet fulfilled the Written Order, the Financial Services Authority declares to FIs and/or Specific Parties to complete the fulfillment of the Written Order according to the time limit:
a. as referred to in Article 5; or b. based on the Financial Services Authority's considerations.
(4) In the event that the time limit:
a. as referred to in Article 5; or b. based on the Financial Services Authority's considerations as referred to in paragraph (3) letter b, has expired and based on the results of the Financial Services Authority's evaluation, FIs and/or Specific Parties have not fulfilled the Written Order, the Financial Services Authority declares to FIs and/or Specific Parties that FIs and/or Specific Parties have not fulfilled the Written Order.

Article 10
The Financial Services Authority conducts supervision on the fulfillment of Written Orders by FIs and/or Specific Parties and may take necessary actions and evaluate the fulfillment of Written Orders, and/or other supervisory actions.

Article 11
In the event that Written Orders issued by the Financial Services Authority are preceded by written instructions as referred to in Article 4 letter a, if FIs and/or Specific Parties ignore, do not comply with, do not fulfill, do not execute, and/or hinder the written instructions, FIs and/or Specific Parties are subject to supervisory actions by the Financial Services Authority based on authority and/or statutory regulations.

CHAPTER III
CLOSING PROVISIONS
Article 12
Upon the implementation of this Financial Services Authority Regulation:
a. all provisions in Financial Services Authority Regulations and other regulations prior to the implementation of this Financial Services Authority Regulation, which contain the authority of the Financial Services Authority to issue orders made in writing, which can be subject to administrative sanctions, are interpreted as written instructions; b. all provisions in Financial Services Authority Regulations and other regulations prior to the implementation of this Financial Services Authority Regulation, which contain the authority of the Financial Services Authority to issue orders made in writing and are intended as the implementation of Article 9 letter d of Law Number 21 of 2011 concerning the Financial Services Authority, are interpreted as Written Orders as per this Financial Services Authority Regulation.

Article 13
Upon the implementation of this Financial Services Authority Regulation, all provisions in Financial Services Authority Regulations and other regulations prior to the implementation of this Financial Services Authority Regulation that are equated with written instructions or Written Orders according to this Financial Services Authority Regulation, remain valid insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 14
Upon the implementation of this Financial Services Authority Regulation, Financial Services Authority Regulation Number 35/POJK.05/2016 concerning Procedures for Determining Written Orders in the Insurance Sector (State Gazette of the Republic of Indonesia Year 2016 Number 203, Supplement to the State Gazette of the Republic of Indonesia Number 5938) is repealed and declared invalid.

Article 15
This Financial Services Authority Regulation comes into force on the date of enactment.

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

For the information of everyone, 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 14 October 2022

CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
MAHENDRA SIREGAR

Enacted in Jakarta on 17 October 2022
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2022 NUMBER 21/OJK

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 18 OF 2022
CONCERNING
WRITTEN ORDERS

I. GENERAL
Indonesia firmly adheres to the concept of a law-based state as contained in the Constitution of the Republic of Indonesia as the source of state law. The formulation contained in the law-based state (rechtstaat) is that the state aims to organize legal order. For the implementation of legal order, the execution of the functions, duties, and authorities of regulation, supervision, examination, and investigation of the Financial Services Authority as referred to in Article 1 number 1 of Law Number 21 of 2011 concerning the Financial Services Authority, must be carried out within the legal framework that serves as the basis for the implementation of the Financial Services Authority's authority in a transparent and accountable manner. One of the authorities possessed by the Financial Services Authority in carrying out regulatory duties and supervisory duties is to establish regulations regarding the procedures for determining Written Orders to FIs and Specific Parties and issuing Written Orders to FIs and/or Specific Parties as referred to in Article 8 letter f and Article 9 letter d of Law Number 21 of 2011 concerning the Financial Services Authority. For the enhancement of regulatory duties and supervisory duties across all financial service sectors, including market conduct supervision, and to exercise the Financial Services Authority's authority more transparently and accountably, a Financial Services Authority Regulation regarding the procedures for determining Written Orders to FIs and/or Specific Parties is required, applicable to all financial service sectors. This Financial Services Authority Regulation, which is a further regulation of the Financial Services Authority's authority regarding Written Orders applicable to all financial service sectors, aims to further explain the procedures for determining Written Orders and also provide harmonization of Written Order regulations for all financial service sectors. Further regulations regarding the procedures for determining Written Orders are needed, among others, to regulate supervisory duties that can be carried out based on the Financial Services Authority's authority, namely Written Orders that have criminal sanctions according to the Law concerning the Financial Services Authority, and written orders other than Written Orders that have administrative sanctions and other related aspects. The existence of a Financial Services Authority Regulation regarding the procedures for issuing Written Orders is expected to be able to increase the supervisory function of the financial service sector so that all activities within the financial service sector are carried out in an orderly, fair, transparent, and accountable manner, in realizing a financial system that grows sustainably and stably, and protecting the interests of consumers and the public. Furthermore, it must be realized that the issuance of Written Orders in the implementation of the Financial Services Authority's supervisory duties
towards FIs and/or Specific Parties to carry out or not carry out certain activities in order to fulfill statutory regulations in the financial service sector and/or prevent and reduce losses to consumers, the public, and the financial service sector, may not run as expected, among others due to changes in internal and external conditions in the fulfillment of Written Orders by FIs and/or Specific Parties. Therefore, in the event that FIs and/or Specific Parties have fulfilled the Written Order but the conditions of FIs and/or Specific Parties do not show improvement and/or there are other problems, the Financial Services Authority may determine other supervisory actions according to statutory regulations. In relation to this, a provision is needed to support the strengthening of rules that become the basis for the mechanism and procedures for issuing and implementing Written Orders to FIs and/or Specific Parties applicable to all financial service sectors in a Financial Services Authority Regulation.

II. ARTICLE BY ARTICLE
Article 1
Clear enough.

Article 2
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Letter a
What is meant by "principal party" is the principal party according to the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial institutions.
Letter b
What is meant by "parties having a relationship with FIs" are parties having a relationships with FIs, whether individuals, legal entities, non-legal entities, associations, and organized groups, including, among others, alternative dispute resolution institutions in the financial service sector, statutory administrators, and parties providing services to FIs according to statutory regulations. Parties providing services to FIs include, among others, Sharia supervisory boards, public accountants, public accounting firms, notaries, appraisers, parties preparing reports for FIs, representatives of mutual fund securities sales agents, and representatives of securities companies. Letter c Clear enough.

Article 3
Paragraph (1)
What is meant by "fulfilling Written Orders" is fulfilling, executing, not hindering, and/or not ignoring Written Orders issued by the Financial Services Authority.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Administrative sanctions include, among others, prohibitions as principal parties according to the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial institutions.

Article 4
Letter a
What is meant by "written instruction" is the grouping or categorization of forms of orders issued in writing other than Written Orders to FIs and/or Specific Parties to carry out or not carry out certain activities, where FIs and/or Specific Parties that ignore, do not comply with, do not fulfill, do not execute, and/or hinder the implementation of the Financial Services Authority's authority through orders issued in writing other than Written Orders can be subject to administrative sanctions. Written Orders preceded by written instructions among others consider FIs and/or Specific Parties ignoring, not complying with, not fulfilling, not executing, and/or hindering written instructions issued by the Financial Services Authority. Letter b Written Orders without being preceded by written instructions with certain considerations are carried out based on the authority to carry out supervisory duties of the Financial Services Authority, among others the need for:

1. acceleration of handling problems of FIs and/or Specific Parties, in relation to:
   a) urgency of supervisory actions, among others there are problems of FIs and/or Specific Parties that have the potential to threaten the condition of the financial service industry and/or financial system stability; and/or b) significance or materiality of problems of FIs and/or Specific Parties to the performance of the financial service industry, considering among others aspects of liquidity problems, solvability/capital adequacy, number of regulation violations, and/or financial and non-financial losses;
2. resolution of consumer complaints harmed by FIs and/or Specific Parties; and/or
3. execution of attributive authorities originating from statutory regulations to issue Written Orders.

Article 5
Examples of certain considerations not to determine a time limit in Written Orders include Written Orders to FIs and/or Specific Parties not to hinder the process of resolving FI problems.

Article 6
Clear enough.

Article 7
Clear enough.

Article 8
Paragraph (1)
The submission of action plans, progress reports on the implementation of action plans, and/or reports on the fulfillment of Written Orders are signed by authorized FI officials according to internal FI regulations.
Paragraph (2)
What is meant by "submissions in other forms adjusted to the Financial Services Authority's supervisory needs" are submissions other than through the Financial Services Authority's correspondence system, among others through electronic mail. Paragraph (3) Clear enough.

Article 9
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Letter a
Clear enough.
Letter b
The Financial Services Authority's considerations regarding the time limit are based on:

1. developments or follow-ups carried out by FIs and/or Specific Parties in fulfilling Written Orders issued by the Financial Services Authority; and/or
2. requests from FIs and/or Specific Parties regarding efforts to fulfill Written Orders issued by the Financial Services Authority.
   Paragraph (4)
   Clear enough.

Article 10
Necessary actions taken by the Financial Services Authority consider among others:
a. developments or follow-ups carried out by FIs and/or Specific Parties in fulfilling Written Orders issued by the Financial Services Authority; and/or b. requests from FIs and/or Specific Parties regarding efforts to fulfill Written Orders issued by the Financial Services Authority. Other supervisory actions are supervisory actions other than Written Orders that are necessary according to supervisory needs, both related to the scope of Written Order problems or other problems affecting the efforts of FIs and/or Specific Parties in fulfilling Written Orders.

Article 11
Supervisory actions by the Financial Services Authority can be administrative sanctions or other supervisory actions in relation to FIs and/or Specific Parties ignoring, not complying with, not fulfilling, not executing, and/or hindering written instructions.

Article 12
Included in Financial Services Authority Regulations and other regulations are derivative regulations of related Financial Services Authority Regulations, and regulations still in the form of documents from Bank Indonesia, the Ministry of Finance, and the Capital Market and Financial Institution Supervisory Agency, which are owned and/or used in regulatory and supervisory activities in the financial service sector, in relation to the transfer of functions, duties, and authorities for regulation and supervision of financial service activities in the banking, capital market, insurance, pension fund, financing institution, and other financial service sectors from Bank Indonesia, the Minister of Finance, and the Capital Market and Financial Institution Supervisory Agency to the Financial Services Authority. Documents are data and information, whether in written or electronic form, owned and/or used in regulatory and supervisory activities in the financial service sector. Used means can be utilized, managed, and/or maintained by the Financial Services Authority. Included in written instructions in Financial Services Authority Regulations and other regulations prior to the implementation of this Financial Services Authority Regulation are regulations containing the phrases "Written Orders," "written orders," "orders," and/or other phrases or terminology that are equated, in the event that FIs and/or Specific Parties ignore, do not comply with, do not fulfill, do not execute, and/or hinder the implementation of the Financial Services Authority's authority through such written instructions, they are subject to administrative sanctions. Included in Written Orders in Financial Services Authority Regulations and other regulations prior to the implementation of this Financial Services Authority Regulation are regulations containing the phrases "Written Orders," "written orders," "orders," and/or other phrases or terminology that are equated, in the event that FIs and/or Specific Parties intentionally ignore, do not fulfill, or hinder the implementation of the Financial Services Authority's authority in issuing Written Orders to FIs and/or Specific Parties, or FIs and/or Specific Parties intentionally ignore and/or do not execute Written Orders, they are subject to sanctions as referred to in Article 53 or Article 54 of Law Number 21 of 2011 concerning the Financial Services Authority.

Article 13
Clear enough.

Article 14
Clear enough.

Article 15
Clear enough.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 13/OJK