Financial Services Authority Regulation Number 22 of 2022 Concerning Equity Participation Activities by Commercial Banks

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 22 OF 2022
CONCERNING
EQUITY PARTICIPATION ACTIVITIES BY COMMERCIAL BANKS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that equity participation activities are one of the business activities of commercial banks carried out to enhance the resilience, competitiveness, and efficiency of the national banking sector; b. that with the development of commercial bank business activities, information technology, and the financial sector ecosystem, flexibility is needed in certain aspects of equity participation activities, while still observing the principle of prudence in their implementation;
c. that flexibility in certain aspects of equity participation activities must observe the principle of prudence in their implementation, so it is necessary to replace the Financial Services Authority Regulation Number 36/POJK.03/2017 concerning Prudential Principles in Equity Participation Activities;
d. that based on the considerations as referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning Equity Participation Activities by Commercial Banks;

Recalling:

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 21 of 2008 concerning Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
3. 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);

DECIDING:

To Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING EQUITY PARTICIPATION ACTIVITIES BY COMMERCIAL BANKS.

CHAPTER I
GENERAL PROVISIONS

Article 1
In this Financial Services Authority Regulation, the following terms are defined:

1. Commercial Bank, hereinafter referred to as Bank, is a bank that conducts business activities conventionally or based on Sharia principles, which in its activities provides services in the payment transaction flow, including branches of banks located outside the country and Sharia business units.
2. Equity Participation is the investment of Bank funds in the form of shares, including investment in the form of mandatory convertible debt instruments or mandatory convertible investment instruments or certain types of transactions that result in the Bank having or will have shares in the recipient company of the Equity Participation.
3. Temporary Equity Participation is the investment of Bank funds in the form of shares in a debtor in the form of a company to overcome the consequences of credit failure or financing failure based on Sharia principles.
4. Recipient of Equity Participation, hereinafter referred to as Investee, is the company where the Bank conducts Equity Participation.
5. Subsidiary Company is an entity controlled by the Bank as referred to in the financial accounting standards in Indonesia.
6. Divestment is the release or reduction of Equity Participation in the Investee, whether carried out directly or through the capital market.

Article 2
(1) Banks are required to apply effective risk management in Equity Participation and Temporary Equity Participation activities in accordance with:
a. Financial Services Authority Regulations concerning the application of risk management for commercial banks; or b. Financial Services Authority Regulations concerning the application of risk management for Sharia commercial banks and Sharia business units.

(2) Equity Participation activities are carried out by observing consistency with the Bank's corporate plan, the Bank's business plan, and applicable regulations.

(3) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in accordance with:
a. Financial Services Authority Regulations concerning the application of risk management for commercial banks; or b. Financial Services Authority Regulations concerning the application of risk management for Sharia commercial banks and Sharia business units.

Article 3
(1) Banks conducting business activities conventionally are prohibited from conducting Equity Participation other than to companies engaged in the financial sector. (2) Banks conducting business activities based on Sharia principles are prohibited from conducting Equity Participation other than to companies engaged in the financial sector based on Sharia principles. (3) Sharia business units and branches of banks located outside the country are prohibited from conducting Equity Participation activities. (4) Banks that violate the provisions as referred to in paragraph (1), paragraph (2), or paragraph (3) are subject to administrative sanctions in the form of a written reprimand. (5) In the event that a Bank has been subject to administrative sanctions in the form of a written reprimand as referred to in paragraph (4) and continues to violate the provisions as referred to in paragraph (1), paragraph (2), or paragraph (3), the Bank is subject to administrative sanctions in the form of:
a. prohibition on conducting new Equity Participation activities; and/or b. reduction of the Bank's health level.

CHAPTER II
EQUITY PARTICIPATION ACTIVITIES

First Section
General

Article 4
(1) Companies engaged in the financial sector as referred to in Article 3 paragraph (1) and paragraph (2) include:
a. companies in the form of financial service institutions; b. companies that utilize information technology to generate financial products as their main business; and/or
c. credit information management institutions.

(2) Banks must ensure that companies as referred to in paragraph (1):
a. letters a and c are licensed; and b. letter b is registered or licensed, with the competent authority.

Article 5
(1) Equity Participation can be conducted directly or through the capital market.
(2) Equity Participation as referred to in paragraph (1) is only conducted for long-term investment and not for share trading.

Article 6
(1) The total amount of the Bank's Equity Participation portfolio is at most 35% (thirty-five percent) of the Bank's capital.
(2) The total amount of the Equity Participation portfolio as referred to in paragraph (1) is the sum of Equity Participation in all Investees, including increases in Equity Participation and share dividends. (3) Increases in Equity Participation as referred to in paragraph (2) occur due to:
a. accumulation of profits; and/or b. exchange rate changes and/or fair value changes in accordance with financial accounting standards in Indonesia.

Article 7
(1) For Banks that have applied consolidated risk management with Subsidiary Companies, increases in Equity Participation as referred to in Article 6 paragraph (3) and Equity Participation originating from share dividends in the same Subsidiary Company are excluded from the Equity Participation limit as referred to in Article 6 paragraph (1). (2) In the event that the Investee is:
a. a Subsidiary Company but the Bank has not yet applied consolidated risk management with the Subsidiary Company; or b. other than a Subsidiary Company, increases in Equity Participation originating from accumulated profits in the Investee using the equity method are excluded from the Equity Participation limit as referred to in Article 6 paragraph (1), provided that it does not exceed a period of 1 (one) year from the end of the Investee's fiscal year.

Article 8
Banks monitor the total amount of the Equity Participation portfolio, including Equity Participation as referred to in Article 7.

Second Section
Exceeding the Equity Participation Limit

Article 9
(1) Banks are required to submit a corrective action plan for exceeding the Equity Participation limit to the Financial Services Authority if for 3 (three) consecutive months the total amount of the Equity Participation portfolio exceeds the Equity Participation limit as referred to in Article 6 paragraph (1) caused by:
a. increases in Equity Participation in the Investee; and/or b. reduction of the Bank's capital.

(2) The corrective action plan as referred to in paragraph (1) is a plan to adjust the amount of Equity Participation within a maximum period of 1 (one) year.

(3) The corrective action plan as referred to in paragraph (1) is submitted to the Financial Services Authority at the latest by the end of the fourth month since the exceeding of the Equity Participation limit occurred.

(4) The Financial Services Authority may request the Bank to adjust the corrective action plan as referred to in paragraph (1).

(5) Banks that are late in submitting the corrective action plan as referred to in paragraph (1) are subject to administrative sanctions in the form of a fine of Rp1,000,000.00 (one million rupiah) per day of delay and at most Rp50,000,000.00 (fifty million rupiah).

Third Section
Prohibitions in Equity Participation

Article 10
(1) Banks are prohibited from:
a. receiving share participation from the Investee or conducting Equity Participation in companies that are shareholders of the Bank, either directly or indirectly; and b. conducting Equity Participation that results in the Bank having unlimited liability to the Investee.

(2) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in the form of a written reprimand.

(3) In the event that a Bank has been subject to administrative sanctions in the form of a written reprimand as referred to in paragraph (2) and continues to violate the provisions as referred to in paragraph (1), the Bank is subject to administrative sanctions in the form of:
a. prohibition on conducting new Equity Participation activities; and/or b. reduction of the Bank's health level.

Fourth Section
Policies, Procedures, and Internal Control Systems

Article 11
(1) Banks are required to have written policies and procedures to manage risks related to Equity Participation.
(2) The policies and procedures as referred to in paragraph (1) contain at least:
a. risk management and internal control in Equity Participation activities; b. periodic evaluation of Equity Participation activities;
c. periodic reports from the Investee; and
d. actions by the Bank in the event of a decrease in the value of Equity Participation in the form of a contingency plan.

(3) The policies and procedures as referred to in paragraph (1) are drafted by the Bank's Board of Directors and approved by the Bank's Board of Commissioners.

Article 12
Banks are required to have an effective internal control system for Equity Participation activities, at least:
a. supervision by management and the application of a control culture; b. identification and assessment of risks;
c. control activities and segregation of functions;
d. support from information systems, accounting systems, and communication systems; and e. monitoring activities and corrective actions for deviations.

Article 13
(1) Banks that violate the provisions as referred to in Article 11 paragraph (1) and/or Article 12 are subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Bank has been subject to administrative sanctions in the form of a written reprimand as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 11 paragraph (1) and/or Article 12, the Bank is subject to administrative sanctions in the form of:
a. prohibition on conducting new Equity Participation activities; and/or b. reduction of the Bank's health level.

CHAPTER III
MECHANISM FOR APPLICATION FOR EQUITY PARTICIPATION ACTIVITIES LICENSE

First Section
Equity Participation Plan

Article 14
(1) Banks are required to include the Equity Participation plan in the Bank's business plan.

(2) The Equity Participation plan in the Bank's business plan as referred to in paragraph (1) contains at least:
a. the name of the Investee company, including the Investee's business field; b. the purpose of the Equity Participation;
c. Equity Participation projections; and
d. ownership percentage, including control aspects.

(3) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in accordance with Financial Services Authority Regulations concerning bank business plans.

(4) In the event that there are certain considerations according to the Financial Services Authority, the Bank may be exempted from fulfilling the provisions as referred to in paragraph (1).

Second Section
Application for Equity Participation Activities License

Article 15
(1) Banks are required to obtain a license from the Financial Services Authority in conducting Equity Participation in accordance with the Equity Participation plan as referred to in Article 14 paragraph (1).

(2) Equity Participation originating from share dividends is exempted from the obligation to obtain a license from the Financial Services Authority as referred to in paragraph (1).

(3) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in the form of a written reprimand and a fine of Rp100,000,000.00 (one hundred million rupiah) per Equity Participation activity.

Article 16
In submitting an application for Equity Participation license, Banks must fulfill the following requirements:
a. minimum capital adequacy ratio according to risk profile; b. having a health level with composite rating 1 (one) or 2 (two) based on the Bank's health level assessment for the last 2 (two) consecutive periods; and
c. Equity Participation:

1. does not disrupt the Bank's business continuity; and
2. does not significantly increase the Bank's risk profile.

Article 17
The Financial Services Authority, based on the Bank's application, may exempt the fulfillment of the provisions as referred to in Article 16 letter b in the event that Equity Participation is conducted as an effort to overcome the capital problems of the Subsidiary Company.

Article 18
(1) Banks submit an application for license as referred to in Article 15 paragraph (1) before conducting Equity Participation accompanied by complete application documents.

(2) The format and application documents as referred to in paragraph (1) are contained in the Appendix which is an integral part of this Financial Services Authority Regulation.

(3) Banks submit the application for license as referred to in paragraph (1) accompanied by a letter of statement from the Bank's Board of Directors signed by the President Director and the Director overseeing the Bank's compliance function.

(4) In the event that certain conditions cause the President Director and/or the Director overseeing the Bank's compliance function to be unable to sign the letter of statement as referred to in paragraph (3), the letter of statement may be signed by other Directors in accordance with the Bank's Articles of Association.

(5) The format of the letter of statement as referred to in paragraph (3) is contained in the Appendix which is an integral part of this Financial Services Authority Regulation.

(6) The Financial Services Authority grants or rejects the application for Equity Participation activities license at the latest 14 (fourteen) working days after all requirements are fulfilled and the application documents are received completely by the Financial Services Authority.

Article 19
(1) In granting a license, the Financial Services Authority is authorized to request the Bank and/or the Investee to provide written commitments.
(2) In the event of a violation of the commitments as referred to in paragraph (1), the Financial Services Authority orders the Bank to take specific actions.

Article 20
(1) The application for license as referred to in Article 18 is submitted to the Financial Services Authority online through the Financial Services Authority's integrated licensing and registration system. (2) In the event that the transmission facility as referred to in paragraph (1) is not yet available, the submission is carried out through the Financial Services Authority's reporting system for unstructured reports to:
a. the Department of Supervision of the relevant Bank or the Regional Office of the Financial Services Authority in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province or Banten Province; or b. the Regional Office of the Financial Services Authority or the local Financial Services Authority Office, for Banks headquartered outside the Special Capital Region of Jakarta Province or Banten Province. (3) The procedure for submitting license applications through the Financial Services Authority's reporting system as referred to in paragraph (2) is carried out in accordance with Financial Services Authority Regulations concerning the reporting of commercial banks through the Financial Services Authority's reporting system.

Article 21
(1) Banks must realize the Equity Participation plan at the latest 6 (six) months since obtaining the license from the Financial Services Authority.
(2) The Financial Services Authority, based on the Bank's application, may extend the period as referred to in paragraph (1) by considering certain factors.
(3) If the Bank does not realize the Equity Participation plan within the period as referred to in paragraph (1) or paragraph (2), the license issued by the Financial Services Authority becomes invalid.

CHAPTER IV
DIVESTMENT

First Section
Divestment Mandatory for Banks

Article 22
(1) Banks are required to conduct Divestment based on:
a. Equity Participation conducted results in or is estimated based on the Bank's assessment to result in a decrease in the Bank's capital and/or a significant increase in the Bank's risk profile; and/or b. an order from the Financial Services Authority.

(2) The order from the Financial Services Authority as referred to in paragraph (1) letter b is given with the following criteria:
a. Equity Participation has not obtained a license from the Financial Services Authority; b. Equity Participation is not in accordance with the license application submitted to the Financial Services Authority;
c. Equity Participation is assessed or has the potential to have a negative impact on the national economic condition or is not in line with national interests;
d. Equity Participation in the Investee located domestically or abroad is assessed to cause supervision difficulties carried out by the Financial Services Authority; e. there is a recommendation from the Subsidiary Company's authority; and/or f. there are other considerations.

(3) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in the form of a written reprimand.

(4) In the event that a Bank has been subject to administrative sanctions in the form of a written reprimand as referred to in paragraph (3) and continues to violate the provisions as referred to in paragraph (1), the Bank is subject to administrative sanctions in the form of:
a. prohibition on conducting new Equity Participation activities; and/or b. reduction of the Bank's health level.

Article 23
(1) Banks are required to submit a Divestment implementation plan as referred to in Article 22 paragraph (1) letter a to the Financial Services Authority at the latest 7 (seven) working days before the Divestment is conducted. (2) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in the form of a written reprimand.

Second Section
Divestment at the Bank's Initiative

Article 24
(1) Banks may conduct Divestment at their own initiative.
(2) Banks conducting Divestment at their own initiative must fulfill the following requirements:
a. Divestment is aimed at adjusting to the Bank's business strategy; b. Equity Participation has been conducted for at least 5 (five) years;
c. the Divestment plan is included in the Bank's business plan for the same year as the year of the Divestment license application;
d. Divestment is conducted through a fair transaction; and e. Divestment is not solely aimed at obtaining profit.

Article 25
(1) Banks are required to submit an application for license for the Divestment plan at their own initiative as referred to in Article 24 accompanied by complete application documents. (2) The application documents as referred to in paragraph (1) contain at least:
a. information regarding the Investee; b. the background and purpose of the Divestment; and
c. an analysis of the impact of the Divestment on the Bank's performance.
(3) In the event that the Divestment plan as referred to in Article 24 is conducted on a Subsidiary Company, in addition to the documents as referred to in paragraph (2), the Bank must submit the results of the decision of the General Meeting of Shareholders or the approval of the Board of Commissioners containing the Divestment plan on the Subsidiary Company. (4) If necessary, the Financial Services Authority may request supporting documents other than those referred to in paragraph (2) and/or paragraph (3). (5) The requirements as referred to in Article 24 paragraph (2) and the obligation to apply for a license as referred to in paragraph (1) are exempted for Divestment in an Investee declared bankrupt or in the liquidation process. (6) The Financial Services Authority grants or rejects the application for license for the Divestment plan as referred to in paragraph (1) at the latest 14 (fourteen) working days after all requirements are fulfilled and the application documents are received completely by the Financial Services Authority. (7) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in the form of a written reprimand and a fine of Rp100,000,000.00 (one hundred million rupiah) per Divestment activity.

Article 26
(1) The application for license as referred to in Article 25 paragraph (1) is submitted to the Financial Services Authority online through the Financial Services Authority's integrated licensing and registration system. (2) In the event that the transmission facility as referred to in paragraph (1) is not yet available, the submission is carried out through the Financial Services Authority's reporting system for unstructured reports to:
a. the Department of Supervision of the relevant Bank or the Regional Office of the Financial Services Authority in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province or Banten Province; or b. the Regional Office of the Financial Services Authority or the local Financial Services Authority Office, for Banks headquartered outside the Special Capital Region of Jakarta Province or Banten Province. (3) The procedure for submitting license applications through the Financial Services Authority's reporting system as referred to in paragraph (2) is carried out in accordance with Financial Services Authority Regulations concerning the reporting of commercial banks through the Financial Services Authority's reporting system.

Article 27
(1) Banks must realize the Divestment plan at their own initiative at the latest 6 (six) months since obtaining the license from the Financial Services Authority. (2) If the Bank does not realize the Divestment plan at their own initiative within the period as referred to in paragraph (1), the license issued by the Financial Services Authority becomes invalid.

CHAPTER V
TEMPORARY EQUITY PARTICIPATION

Article 28
Banks may conduct Temporary Equity Participation for credit or financing rescue.

Article 29
(1) Banks are required to divest Temporary Equity Participation if:
a. the Temporary Equity Participation has exceeded the maximum period of 5 (five) years; or b. the debtor in the form of a company where the Temporary Equity Participation was made has obtained cumulative profits. (2) In the event that the 5 (five) year period as referred to in paragraph (1) letter a is about to expire and the debtor in the form of a company where the Temporary Equity Participation was made has not obtained cumulative profits, the Bank is required to submit a corrective action plan to the Financial Services Authority at the latest 30 (thirty) working days before the period expires. (3) Banks that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in accordance with Financial Services Authority Regulations concerning the assessment of the quality of assets of commercial banks or Financial Services Authority Regulations concerning the assessment of the quality of assets of Sharia commercial banks and Sharia business units. (4) Banks that are late in submitting the corrective action plan for Temporary Equity Participation as referred to in paragraph (2) are subject to administrative sanctions in the form of a fine of Rp1,000,000.00 (one million rupiah) per working day of delay per corrective action plan and at most Rp50,000,000.00 (fifty million rupiah) per corrective action plan.

CHAPTER VI
REPORTING

Article 30
(1) Banks are required to submit a report on the realization of Equity Participation to the Financial Services Authority at the latest 5 (five) working days after the Equity Participation is effectively conducted.

(2) The realization report as referred to in paragraph (1) must at least contain information and explanations regarding:
a. the Investee profile; b. the effective date of the Equity Participation; and
c. the alignment between the implementation and the Equity Participation license obtained,
according to the realization report format as set forth in the Appendix which is an inseparable part of this Financial Services Authority Regulation.

Article 31
(1) Banks are required to submit realization reports of Divestment at the latest 5 (five) working days after the implementation of the Divestment.
(2) The realization report as referred to in paragraph (1) must at least contain information and explanations regarding:
a. the Investee profile; and b. the implementation date of the Divestment, according to the realization report format as set forth in the Appendix which is an inseparable part of this Financial Services Authority Regulation. (3) In the event that a Bank carries out Divestment as referred to in:
a. Article 22 paragraph (1) letter a, in addition to containing information and explanations as referred to in paragraph (2), it must also contain information and explanations regarding the alignment between the Divestment implementation plan and the Divestment implementation; or b. Article 24 paragraph (1), in addition to containing information and explanations as referred to in paragraph (2), it must also contain information and explanations regarding the alignment between the Divestment license application and the Divestment implementation.

Article 32
(1) Banks are required to submit realization reports of the divestment of Temporary Equity Participation to the Financial Services Authority at the latest 5 (five) working days after the implementation of the divestment of Temporary Equity Participation. (2) The realization report as referred to in paragraph (1) must at least contain information and explanations regarding:
a. the implementation date of the divestment of Temporary Equity Participation; and b. the debtor in the form of a company where the Temporary Equity Participation is located.

Article 33
(1) Submission:
a. realization reports of Equity Participation as referred to in Article 30 paragraph (1); b. realization reports of Divestment as referred to in Article 31 paragraph (1); and
c. realization reports of the divestment of Temporary Equity Participation as referred to in Article 32 paragraph (1),
shall be conducted online through the Financial Services Authority's integrated licensing and registration system.
(2) In the event that the submission facility as referred to in paragraph (1) is not yet available, submission shall be conducted through the Financial Services Authority's reporting system for unstructured reports to:
a. the Supervision Department of the relevant Bank or the Financial Services Authority Regional Office in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province or Banten Province; or b. the Financial Services Authority Regional Office or the local Financial Services Authority Office, for Banks headquartered outside the Special Capital Region of Jakarta Province or Banten Province. (3) The procedure for submitting realization reports through the Financial Services Authority's reporting system as referred to in paragraph (2) shall be implemented in accordance with the Financial Services Authority Regulation regarding the reporting of general banks through the Financial Services Authority's reporting system.

Article 34
(1) Submission:
a. action plans for exceeding the Equity Participation limits as referred to in Article 9 paragraph (1); b. Divestment implementation plans as referred to in Article 23 paragraph (1); and/or
c. action plans as referred to in Article 29 paragraph (2),
shall be conducted online through the Financial Services Authority's reporting system.
(2) The submission of action plans and/or Divestment implementation plans as referred to in paragraph (1) shall be addressed to:
a. the Supervision Department of the relevant Bank or the Financial Services Authority Regional Office in Jakarta, for Banks headquartered in the Special Capital Region of Jakarta Province or Banten Province; or b. the Financial Services Authority Regional Office or the local Financial Services Authority Office, for Banks headquartered outside the Special Capital Region of Jakarta Province or Banten Province. (3) The procedure for submitting action plans and/or Divestment implementation plans as referred to in paragraph (1) shall be implemented in accordance with the Financial Services Authority Regulation regarding the reporting of general banks through the Financial Services Authority's reporting system.

Article 35
(1) Banks that are late in submitting reports as referred to in Article 30 paragraph (1), Article 31 paragraph (1), or Article 32 paragraph (1) shall be subject to administrative sanctions in the form of a fine of IDR 1,000,000.00 (one million rupiah) per working day of delay per report and at most IDR 50,000,000.00 (fifty million rupiah) per report. (2) The imposition of administrative sanctions as referred to in paragraph (1) does not eliminate the obligation to submit reports for Banks that have not yet submitted reports as referred to in Article 30 paragraph (1), Article 31 paragraph (1), or Article 32 paragraph (1). (3) Banks that submit reports as referred to in Article 30 paragraph (1), Article 31 paragraph (1), or Article 32 paragraph (1) incompletely shall be subject to administrative sanctions in the form of a written reprimand and must correct the report within a period determined by the Financial Services Authority in the written reprimand. (4) Banks that do not correct the report within the period established in the written reprimand as referred to in paragraph (3) shall be subject to administrative sanctions in the form of a fine of IDR 50,000,000.00 (fifty million rupiah).

CHAPTER VII
EQUITY PARTICIPATION BY BANK SUBSIDIARIES

Article 36
(1) In the event that a Subsidiary carries out equity participation, the Bank is required to ensure that the equity participation activity by the Subsidiary is conducted on companies:
a. that operate in the financial sector as referred to in Article 4; and/or b. supporting financial services.
(2) The equity participation activity by the Subsidiary as referred to in paragraph (1) shall be conducted by fulfilling the provisions issued by the competent authority regulating the Subsidiary. (3) In the event that the Subsidiary is a venture capital company, the provisions as referred to in paragraph (1) may be exempted, provided that the Financial Services Authority Regulation regarding the conduct of venture capital business is still fulfilled. (4) The Bank is required to monitor consolidated capital adequacy calculations up to the companies controlled by the Subsidiary.

Article 37
(1) The Bank is required to ensure that the supporting financial services companies as referred to in Article 36 paragraph (1) letter b include:
a. companies established or whose business activities are directed solely to support the business activities of the Bank and/or the Subsidiary; b. companies whose business activities are prioritized to support the Bank and/or the Subsidiary, according to the business characteristics of the Bank and/or the Subsidiary; or
c. companies whose business characteristics are directed to support the business activities of the banking industry or the Subsidiary industry.
(2) The Bank is required to ensure that the conduct of business activities of supporting financial services companies as referred to in paragraph (1) is implemented in accordance with regulations regarding licensing and/or business activities of supporting financial services companies.

Article 38
(1) Banks that violate the provisions as referred to in Article 36 paragraph (1), paragraph (4), and/or Article 37 shall be subject to administrative sanctions in the form of a written reprimand. (2) In the event that a Bank has been subject to administrative sanctions in the form of a written reprimand as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 36 paragraph (1), paragraph (4), and/or Article 37, the Bank shall be subject to administrative sanctions in the form of:
a. a prohibition on conducting new Equity Participation activities; and/or b. a downgrade of the Bank's health level.

CHAPTER VIII
SUPERVISORY ACTIONS

Article 39
(1) In the event that, based on the Financial Services Authority's assessment, the Investee's activities:
a. reflect unhealthy financial and non-financial conditions; and/or b. disrupt the financial and non-financial conditions of the Bank, the Financial Services Authority may take supervisory actions by ordering the Bank to take corrective actions and/or recommending to the competent authority to take corrective actions or suspend part or all of the Investee's activities. (2) The Bank is required to implement the Financial Services Authority's orders as referred to in paragraph (1). (3) Banks that do not implement the provisions as referred to in paragraph (2) shall be subject to administrative sanctions in the form of a written reprimand. (4) In the event that a Bank has been subject to administrative sanctions in the form of a written reprimand as referred to in paragraph (3) and continues to violate the provisions as referred to in paragraph (2), the Bank shall be subject to administrative sanctions in the form of:
a. a prohibition on conducting new Equity Participation activities; and/or b. a downgrade of the Bank's health level.

CHAPTER IX
TRANSITIONAL PROVISIONS

Article 40
Applications for licenses for Equity Participation and Divestment activities submitted before the implementation of this Financial Services Authority Regulation shall continue to follow the provisions in Financial Services Authority Regulation Number 36/POJK.03/2017 concerning Prudential Principles in Equity Participation Activities (State Gazette of the Republic of Indonesia Year 2017 Number 142, Supplement to the State Gazette of the Republic of Indonesia Number 6085).

CHAPTER X
CLOSING PROVISIONS

Article 41
Upon the implementation of this Financial Services Authority Regulation:
a. Bank Indonesia Regulation Number 15/11/PBI/2013 concerning Prudential Principles in Equity Participation Activities (State Gazette of the Republic of Indonesia Year 2013 Number 187, Supplement to the State Gazette of the Republic of Indonesia Number 5466); and b. Financial Services Authority Regulation Number 36/POJK.03/2017 concerning Prudential Principles in Equity Participation Activities (State Gazette of the Republic of Indonesia Year 2017 Number 142, Supplement to the State Gazette of the Republic of Indonesia Number 6085), are repealed and declared invalid.

Article 42
This Financial Services Authority Regulation shall come into force on the date of its promulgation.

This copy is in accordance with the original.
Director of Law 1
Legal Department signed
Mufli Asmawidjaja

In order that everyone may know it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia. Determined in Jakarta on November 1, 2022 CHAIRMAN OF THE COMMISSIONERS COUNCIL FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed MAHENDRA SIREGAR

Promulgated in Jakarta on November 2, 2022
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2022 NUMBER 25/OJK

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 22 OF 2022
CONCERNING
EQUITY PARTICIPATION ACTIVITIES BY GENERAL BANKS

I. GENERAL
Equity Participation and Temporary Equity Participation are part of the Bank's fund investment activities alongside other activities such as credit or financing disbursement, investment in the form of securities, and interbank money market activities. In accordance with applicable legislation, Banks may only conduct Equity Participation in companies operating in the financial sector or conduct Temporary Equity Participation in debtor companies as part of credit or financing restructuring.

Through Equity Participation activities, Banks can enhance resilience, competitiveness, and efficiency in conducting their business. The development of information technology supports the rapid growth of companies operating in the financial sector by utilizing information technology and encourages the development of an integrated financial sector ecosystem. One form of Bank collaboration in this ecosystem can be achieved through Equity Participation. To support this, it is necessary to clarify regulations regarding companies in the financial sector that can become Investees of Banks, including companies in the financial sector that utilize information technology to generate financial products as their main business.

Another aspect that can support Bank collaboration in the financial sector ecosystem is through equity participation conducted by Subsidiaries. Therefore, it is necessary to adjust the scope of supporting financial services companies that can receive equity participation from Subsidiaries. This is expected to be utilized by Banks to enhance competitiveness and efficiency.

Furthermore, changes in customer behavior oriented towards using integrated information technology for transactions can also cause changes in Bank business strategies in the future in collaborating with companies that utilize information technology. Therefore, to support Bank business strategies in the future, it is necessary to adjust the provisions regarding Divestment initiated by the Bank. Banks are permitted to determine the amount of Divestment according to Bank needs. However, Divestment conducted is not intended for stock trading activities that are not the main function of banking.

In addition, it must be realized that Equity Participation activities must be balanced with an increase in the quality of risk management implementation to anticipate risks that may arise, including from Subsidiaries and Investees, which can ultimately affect the Bank's business continuity and risk profile.

To enhance Bank resilience, adjustments are made to provisions regarding risk management implementation, Equity Participation requirements, and the maximum amount of Equity Participation. In applying prudential principles and supervisory aspects regarding Equity Participation activities by Banks, the Financial Services Authority establishes health level requirements that must be fulfilled by Banks before conducting Equity Participation. Adjustments to provisions are made while still considering banking industry developments.

In light of this and to mitigate potential risks, it is necessary to formulate regulations regarding equity participation activities by general banks in this Financial Services Authority Regulation.

II. ARTICLE BY ARTICLE

Article 1
Sufficiently clear.

Article 2
Paragraph (1)
Risk management implementation includes ensuring that the Subsidiary applies adequate risk management in the equity participation activities to be conducted by the Subsidiary.

Paragraph (2)
What is meant by "Bank corporate plan" is the corporate plan in accordance with the Financial Services Authority Regulation regarding general banks and the Financial Services Authority Regulation regarding Sharia general banks. What is meant by "Bank business plan" is the business plan in accordance with the Financial Services Authority Regulation regarding bank business plans.

Paragraph (3)
Sufficiently clear.

Article 3
Sufficiently clear.

Article 4
Paragraph (1)
Companies operating in the financial sector can be companies located within Indonesia or outside Indonesia.

Letter a
What is meant by "financial service institution" is:

1. financial service institutions in accordance with the Law regarding the Financial Services Authority; or
2. institutions that:
   a) based on provisions or statements from the competent authority are financial service institutions; and b) their business activities can be equated with the business activities of financial service institutions in accordance with the Law regarding the Financial Services Authority, for companies located outside Indonesia.

Letter b
The use of information technology is done to generate financial products only or accompanied by financial transaction facilities.
Example: electronic money service provider companies.

Letter c
What is meant by "credit information management institution" is the credit information management institution in accordance with the Financial Services Authority Regulation regarding credit information management institutions.

Paragraph (2)
Sufficiently clear.

Article 5
Sufficiently clear.

Article 6
Paragraph (1)
What is meant by "capital" is the Bank's capital consisting of core capital and supplementary capital in accordance with the Financial Services Authority Regulation regarding minimum capital provision requirements for general banks and the Financial Services Authority Regulation regarding minimum capital provision requirements for Sharia general banks.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 7
Sufficiently clear.

Article 8
Sufficiently clear.

Article 9
Paragraph (1)
Letter a
Sufficiently clear.

Letter b
Examples of causes for Bank capital reduction include, for example, when the Bank incurs losses.

Paragraph (2)
Examples of action plans to adjust the Equity Participation amount can include:
a. Divestment plans; or b. plans to increase Bank capital.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Paragraph (5)
Sufficiently clear.

Article 10
Paragraph (1)
Letter a
Sufficiently clear.

Letter b
This prohibition is intended to prevent Banks from being exposed to Equity Participation in companies with unlimited liabilities (open-ended liability), such as the existence of letters of undertaking that bind the Investee both accounting-wise and legally to third parties in such a way that the Bank has unlimited responsibility.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 11
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Letter a
Sufficiently clear.

Letter b
The Bank determines the evaluation period for Equity Participation activities according to Bank needs.

Letter c
The Bank determines the period for submitting periodic reports from the Investee according to Bank needs.

Letter d
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 12
The general principles of implementing an effective internal control system for Equity Participation activities are implemented in accordance with:
a. Financial Services Authority Regulation regarding risk management implementation for general banks; b. Financial Services Authority Regulation regarding risk management implementation for Sharia general banks and Sharia business units; and/or
c. Financial Services Authority provisions regarding standard internal control system guidelines for general banks.

Article 13
Sufficiently clear.

Article 14
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Examples of specific considerations include Equity Participation conducted to resolve the Subsidiary's capital issues but not included in the Bank's business plan for the current year.

Article 15
Paragraph (1)
The obligation to obtain a license from the Financial Services Authority is required for every Equity Participation conducted by the Bank, including additional Equity Participation in the same Investee.

Paragraph (2)
What is meant by "stock dividends" is the portion of profit distributed to shareholders in the form of shares.

Paragraph (3)
Sufficiently clear.

Article 16
Letter a
Minimum capital provision includes minimum capital provision according to risk profile and fulfillment of additional capital as a buffer in accordance with:

1. Financial Services Authority Regulation regarding minimum capital provision requirements for general banks; or
2. Financial Services Authority Regulation regarding minimum capital provision requirements for Sharia general banks.

Letter b
The health level assessment used is the result of the health level assessment conducted by the Financial Services Authority in accordance with:

1. Financial Services Authority Regulation regarding health level assessment for general banks; or
2. Financial Services Authority Regulation regarding health level assessment for Sharia general banks and Sharia business units.

Letter c
Number 1
What is meant by "disrupting Bank business continuity" is a significant decline in the Bank's financial condition, including aspects of liquidity and solvency.

Number 2
The Bank's risk profile reflects the inherent risks in all Bank business activities and the quality of risk management implementation.
The Bank's risk profile increases significantly when there is an increase in risk causing a downgrade in the risk profile rating.

Article 17
Sufficiently clear.

Article 18
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Specific conditions causing the President Director and/or the Director overseeing the compliance function of the Bank to be unable to sign the statement of assurance include, for example, vacant positions.

Paragraph (5)
Sufficiently clear.

Paragraph (6)
Sufficiently clear.

Article 19
Paragraph (1)
Written commitments include, for example, the Bank's commitment to ensure that the Investee will not conduct certain activities estimated to have a negative impact on the financial and non-financial conditions of the Bank.

Paragraph (2)
Included in specific actions is, for example, Divestment.

Article 20
Sufficiently clear.

Article 21
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Specific factors include, for example, uncontrollable external factors, and/or obstacles arising to fulfill policies or provisions of the competent authority.

Paragraph (3)
Sufficiently clear.

Article 22
Paragraph (1)
Letter a
What is meant by "significant decline in Bank capital" is a capital decline resulting in the Bank's capital amount being lower than the minimum capital provision requirement according to risk profile and fulfillment of additional capital as a buffer in accordance with:

1. Financial Services Authority Regulation regarding minimum capital provision requirements for general banks; or
2. Financial Services Authority Regulation regarding minimum capital provision requirements for Sharia general banks.

What is meant by "significant increase in Bank risk profile" is a condition where there is an increase in risk causing a downgrade in the risk profile rating. An increase in risk profile can be caused, for example, by an increase in reputation risk and/or legal risk affecting the business continuity of the Investee.

Letter b
Sufficiently clear.

Paragraph (2)
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Supervisory difficulties include, for example:

1. difficulties in accessing Investee data and information; and
2. difficulties in conducting examinations of the Investee.

Letter e
Sufficiently clear.

Letter f
Other considerations include, for example:

1. Equity Participation is not in line with the direction of banking development policy in Indonesia; and
2. Equity Participation is not in accordance with applicable legislation.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Article 23
Sufficiently clear.

Article 24
Sufficiently clear.

Article 25
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
What is meant by "general meeting of shareholders" is the general meeting of shareholders in accordance with the Law regarding limited liability companies for Banks in the form of a limited liability company, or the organ or equivalent party for Banks with other legal entity forms.

Paragraph (4)
Sufficiently clear.

Paragraph (5)
Sufficiently clear.

Paragraph (6)
Sufficiently clear.

Paragraph (7)
Sufficiently clear.

Article 26
Sufficiently clear.

Article 27
Sufficiently clear.

Article 28
Sufficiently clear.

Article 29
Paragraph (1)
Letter a
Sufficiently clear.

Letter b
What is meant by "cumulative profit" is company profit after being calculated with losses from previous years.

Paragraph (2)
Action plans can include:
a. Divestment implementation plans; or b. Bank plans in the event Divestment cannot be carried out, accompanied by underlying reasons, and Bank efforts to fulfill Divestment obligations.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Article 30
Paragraph (1)
What is meant by "effective" is:
a. upon obtaining approval from the competent authority, for Investees whose ownership changes must obtain approval from the competent authority; b. upon the occurrence of share ownership changes at the custodian, for shares traded on the capital market and ownership changes of the Investee that do not need to obtain approval from the competent authority; or
c. upon submitting reports to the Ministry of Law and Human Rights, for Investees that do not need to obtain approval from the competent authority and shares are not traded on the capital market.

Paragraph (2)
Letter a
The Investee Profile includes, among other things, the name and business field of the Investee.
Letter b
Is sufficiently clear.
Letter c
Is sufficiently clear.

Article 31
Paragraph (1)
Divestment includes Divestment initiated by the Bank in an Investee that has been declared bankrupt or is in the liquidation process.
Paragraph (2)
Is sufficiently clear.
Paragraph (3)
Is sufficiently clear.

Article 32
Is sufficiently clear.

Article 33
Is sufficiently clear.

Article 34
Is sufficiently clear.

Article 35
Is sufficiently clear.

Article 36
Paragraph (1)
Capital participation conducted by a Subsidiary Company refers to the investment of the Subsidiary Company's funds in the form of shares, including investment in the form of mandatory convertible debt instruments and/or mandatory convertible investment instruments. Paragraph (2) Is sufficiently clear. Paragraph (3) The term "venture capital company" refers to a venture capital company in accordance with the Financial Services Authority Regulation regarding the conduct of business by venture capital companies. Paragraph (4) Is sufficiently clear.

Article 37
Paragraph (1)
The term "business activity" refers to:
a. for Banks, business activities in accordance with the provisions of legislation governing banking and sharia banking; or b. for Subsidiary Companies, business activities in accordance with the provisions of legislation governing the business activities of Subsidiary Companies.

Examples of supporting financial services companies include:
a. companies operating in payment systems outside of financial service institutions; b. companies providing information technology services specifically for Banks and/or Subsidiary Companies; and
c. companies included in digital financial innovation providers in accordance with the Financial Services Authority Regulation regarding digital financial innovation in the financial services sector.
Paragraph (2)
Is sufficiently clear.

Article 38
Is sufficiently clear.

Article 39
Paragraph (1)
Examples of unhealthy non-financial conditions include the deterioration of the Investee's reputation affecting the continuity of the Investee's business.
Included in corrective actions include improvements in governance and/or risk management of the Subsidiary Company.
Paragraph (2)
Is sufficiently clear.
Paragraph (3)
Is sufficiently clear.
Paragraph (4)
Is sufficiently clear.

Article 40
Is sufficiently clear.

Article 41
Is sufficiently clear.

Article 42
Is sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 17/OJK

APPENDIX
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 22 OF 2022
REGARDING
CAPITAL PARTICIPATION ACTIVITIES BY COMMERCIAL BANKS

I. Application Documents for Licensing of Capital Participation Activities
APPLICATION FOR CAPITAL PARTICIPATION ACTIVITIES LICENSING BANK : ______________________________________________ YEAR : ______________________________________________

1. Documents containing general information regarding Capital Participation activities, at least containing:
   a. the name of the Investee company; b. the business field of the Investee;
   c. the time of implementation of the Capital Participation activity;
   d. the range of value or amount of Capital Participation to be conducted; and e. the Bank's funding sources to conduct Capital Participation.

2. Documents containing information regarding:
   a. the results of the analysis of the Bank's financial conditions and projections, including capital adequacy projections before and after Capital Participation; b. the results of the analysis of the Bank's risk profile before and after Capital Participation, both individually and consolidated;
   c. the results of the calculation of the minimum capital provision ratio for the last monthly period before the application for licensing submission; and
   d. capital participation and/or planned capital participation conducted by related parties with the Bank in the same Investee.

3. Documents containing the application of risk management inherent in the Bank's Capital Participation activities.

4. Documents containing explanations regarding the internal control system and Accounting Information System (AIS).

5. Documents containing information regarding the Investee, at least containing:
   a. the latest ownership structure and management of the Investee; b. the results of the analysis regarding the Investee's business profile, including support and benefits of the Investee's business for the Bank's business development;
   c. the latest annual financial reports and the latest quarterly interim financial reports, as well as the Investee's financial projections;

1. d. the identity of the majority shareholders or parties controlling the Investee or other parties who will conduct Capital Participation jointly with the Bank;
   e. agreements or draft agreements:
2. among the Investee's shareholders; and/or
3. between the Bank and the Investee's shareholders who sell shares to the Bank; and

f. photocopies of the legal entity establishment deed and the Investee's articles of association.
2)

6. Documents containing information regarding: 3)
   a. the purpose of the company's establishment; b. feasibility studies regarding the estimated business from a financial aspect (including financial report projections) and a non-financial aspect;
   c. feasibility studies regarding the Investee's market opportunities; and
   d. documentation of the establishment application to the competent authority or approval for the establishment of a new company from the competent authority.

7. Documents containing information regarding: 4)
   a. feasibility studies regarding the estimated business from a financial aspect (including financial report projections) and a non-financial aspect; b. feasibility studies regarding the Investee's market opportunities;
   c. information regarding the competence and integrity of the members of the board of directors, members of the board of commissioners, and executive officials, as well as the integrity of the controlling shareholders of the Investee;
   d. plans for the application of consolidated risk management in the event that the Investee is a Subsidiary Company; and e. a certificate from the competent authority supervising the Investee's business activities, along with a statement of no objection that the Financial Services Authority may conduct examinations of the Investee. 5)

8. Sharia opinion from the Bank's Sharia Supervisory Board regarding the Capital Participation activity. 6)

9. Supporting documents 7)
   a. ….. b. ….. etc.

Notes:

1. This document does not need to be submitted if the Investee is a new company that is in the process of establishment or has been operating for less than 1 (one) year.
2. In the event that the Investee is a company in the process of establishment, the Bank may submit the legal entity establishment application document for the Investee.
3. This document is submitted if the Investee is a new company.
4. This document is submitted if the Bank conducts Capital Participation of 20% (twenty percent) or more of the Investee's capital or meets the control criteria.
5. A certificate from the competent authority, among others, explains the performance and/or financial and non-financial conditions of the Investee. A statement of no objection that the Financial Services Authority may conduct examinations is required if the Investee:
   a) is located abroad and there is no memorandum of understanding regarding cross-border supervision; or b) is located domestically and the Financial Services Authority is not the competent authority to supervise the Investee's business activities.
6. This document is submitted if the Bank conducts business activities based on sharia principles.
7. Examples of supporting documents include, among others, due diligence results against the Investee for the first-time Capital Participation.

II. Format of the Bank's Statement Letter regarding the Conduct of Capital Participation Activities
BANK'S STATEMENT LETTER
We, the undersigned, the Board of Directors of:
Bank Name : ................................................................
Address : ................................................................
Telephone Number : ................................................................
represented by the President Director and Compliance Director, in the framework of conducting Capital Participation activities, declare truthfully that:

1. the Capital Participation activity is conducted for long-term investment purposes and not for share trading;
2. the licensing application and all accompanying application documents submitted to the Financial Services Authority are complete and in accordance with the requirements stipulated in the applicable legislation;
3. the submitted licensing application does not contain untrue, misleading, or incorrect statements, information, or facts;
4. we are committed to applying the principle of prudence in the conduct of Capital Participation activities;
5. If it is later discovered that the submitted data and/or information do not meet the provisions of the Financial Services Authority Regulation regarding Capital Participation Activities by Commercial Banks and/or are untrue and/or do not correspond to the actual facts, we are willing to be subject to sanctions in accordance with the applicable legislation.
   … (place), … (date, month, year)
   On behalf of the Bank's Board of Directors…………….
   President Director Compliance Director
   ....................................... …………………………........
   (clear name and signature) (clear name and signature)

III. Documents for the Report on the Realization of Capital Participation Activities/Divestment
A. Report on the Realization of Capital Participation Activities REPORT ON THE REALIZATION OF CAPITAL PARTICIPATION ACTIVITIES BANK : ______________________________________________ YEAR : ______________________________________________

1. Documents containing information regarding:
   a. the name of the Investee company; b. the business field of the Investee;
   c. the effective date of the Capital Participation; and
   d. the amount and percentage of the Bank's share ownership in the Investee before and after the effective Capital Participation.

2. Documents containing the conformity between the Capital Participation licensing application and the implementation of Capital Participation.

3. Supporting documents 1)
   a. ….. b. ….. etc.

Notes:

1. Examples of supporting documents include, among others, licensing documents from the Investee's authority in the event that Capital Participation requires approval from the Investee's authority.

This copy is in accordance with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja

B. Report on the Realization of Divestment
REPORT ON THE REALIZATION OF DIVESTMENT
BANK : ______________________________________________ YEAR : ______________________________________________

1. Documents containing information regarding:
   a. the name of the Investee company; b. the business field of the Investee;
   c. the date of Divestment implementation; and
   d. the amount and percentage of the Bank's share ownership in the Investee before and after the Divestment is conducted;

2. Documents resulting from the General Meeting of Shareholders' decision or the Board of Commissioners' approval containing the Divestment plan for the Subsidiary Company.

3. Documents containing the conformity between: 2)
   a. the Divestment plan and the Divestment implementation; or b. the Divestment licensing application and the Divestment implementation.

4. Supporting documents 3)
   a. ….. b. ….. etc.

Notes:

1. This document is submitted if the Bank conducts Divestment on its own initiative in the Subsidiary Company.
2. This document is not submitted if the Bank conducts Divestment on its own initiative caused by the Investee being declared bankrupt or in the liquidation process.
3. Examples of supporting documents include, among others, licensing documents from the Investee's authority in the event that Divestment requires approval from the Investee's authority.

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