Financial Services Authority Regulation Number 22/POJK.04/2019 Concerning Securities Transactions

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 22 /POJK.04/2019
CONCERNING
SECURITIES TRANSACTIONS
BY THE GRACE OF GOD THE ALMIGHTY,
THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that with the increasing complexity of securities transactions, regulations are needed to support the implementation of orderly, fair, and efficient securities transactions; b. that to enhance protection for investors and market participants and to improve the supervision of securities transactions by the Financial Services Authority, adjustments to regulations concerning securities transactions are necessary;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Securities Transactions;
Recalling:

1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 24 of 2002 concerning Government Bonds (State Gazette of the Republic of Indonesia Year 2002 Number 110, Supplement to the State Gazette of the Republic of Indonesia Number 4236);
3. Law Number 19 of 2008 concerning Sharia Government Securities (State Gazette of the Republic of Indonesia Year 2008 Number 70, Supplement to the State Gazette of the Republic of Indonesia Number 4852);
4. 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:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING SECURITIES TRANSACTIONS.

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

1. Securities are negotiable instruments, namely debt instruments, commercial paper, shares, bonds, debt certificates, Investment Contract Units, futures contracts over Securities, and any derivatives over Securities.
2. Securities Transaction is any activity or contract aimed at acquiring, disposing of, or using Securities that results in a change of ownership or does not result in a change of ownership.
3. Party is an individual, company, joint venture, association, or organized group.
4. Stock Exchange is a Party that organizes and provides systems and/or facilities to match buy and sell offers of Securities from other Parties with the aim of trading Securities among them.
5. Securities Company is a Party that conducts business activities as a securities underwriter, securities broker-dealer, and/or investment manager.
6. Exchange Transaction is a contract made by members of the Stock Exchange in accordance with the requirements determined by the Stock Exchange regarding the sale and purchase of Securities, lending and borrowing of Securities, or other contracts concerning Securities or the price of Securities.
7. Off-Exchange Transaction is a Securities Transaction between Securities Companies or between a Securities Company and another Party that is not regulated by the Stock Exchange, and a Securities Transaction between Parties that are not Securities Companies.
8. Clearing is the process of determining rights and obligations for each clearing member arising from Exchange Transactions and/or Off-Exchange Transactions.
9. Netting is a Clearing activity that results in rights and obligations to deliver or receive a certain amount of specific Securities for each type of Security traded and to receive or pay a certain amount of funds for all Securities traded.
10. Securities Underwriter is a Party that makes a contract with the issuer to conduct a public offering for the benefit of the issuer with or without the obligation to purchase unsold Securities.
11. Investment Manager is a Party whose business activity is to manage a portfolio of Securities for clients or to manage a collective investment portfolio for a group of clients, except insurance companies, pension funds, and banks that conduct their own business activities based on applicable legislation.
12. Securities Broker-Dealer is a Party that conducts business activities buying and selling Securities for its own interest or for the interest of other Parties.
13. Custodian is a Party that provides safekeeping services for Securities and other assets related to Securities, as well as other services, including receiving dividends, interest, and other rights, settling Securities Transactions, and representing account holders who are its clients.
14. Custodian Bank is a general bank that has obtained approval from the Financial Services Authority to conduct business activities as a Custodian.
15. Clearing and Guarantee Agency is a Party that organizes clearing and guarantee services for the settlement of Exchange Transactions.
16. Depository and Clearing Agency is a Party that organizes central custodian activities for Custodian Banks, Securities Companies, and other Parties.
17. Stock Exchange Member is a Securities Broker-Dealer that has obtained a business license from the Financial Services Authority and has the right to use the Stock Exchange's systems and/or facilities in accordance with Stock Exchange regulations.
18. Government Securities are government debt instruments as referred to in Law Number 24 of 2002 concerning Government Bonds and Sharia government securities as referred to in Law Number 19 of 2008 concerning Sharia Government Securities.
19. Securities Account is a record showing the position of Securities and/or funds of the Parties at the Custodian.
20. Client is a Party using the services of financial service providers in the capital market sector.
21. Public Offering is the activity of offering Securities conducted by the issuer to sell Securities to the public in accordance with the procedures regulated in the legislation concerning the capital market and its implementing regulations.
22. Issuer is a Party conducting a Public Offering.
23. Public Company is an Issuer that has conducted a Public Offering of equity Securities or a public company.
24. Securities Administration Bureau is a Party that, based on a contract with the Issuer, implements the recording of Securities ownership and the distribution of rights related to Securities.
25. Preemptive Right, hereinafter abbreviated as HMETD, is a right attached to shares that gives the relevant shareholder the opportunity to buy shares and/or other equity Securities, including those convertible into shares or those giving the right to buy shares, before they are offered to other Parties.
26. Investment Product is mutual funds, asset-backed Securities, infrastructure investment funds in the form of collective investment contracts, real estate investment funds in the form of collective investment contracts, multi-asset investment funds in the form of collective investment contracts, and other Investment Products determined by the Financial Services Authority.

Article 2
(1) Securities Transactions regulated in this Financial Services Authority Regulation cover Securities Transactions over Securities that are regulated and/or supervised by the Financial Services Authority. (2) Securities Transactions as referred to in paragraph (1) include the following types of transactions:
a. offering of Securities by the issuer of Securities; b. short selling;
c. donation or testamentary donation;
d. prizes, donations, gratuities, and the like; e. inheritance; f. waqf; g. exchange; h. transfer due to court decision;
i. transfer due to merger, consolidation, takeover, or separation;
j. lending and borrowing; k. repurchase agreement transactions;
l. book transfer of Securities conducted by the same Party;
m. buyback; n. transfer of Securities in the context of the creation and repurchase/redemption of mutual fund units traded on the Stock Exchange; o. conversion into other Securities; p. pledge of Securities; and q. other types of Securities Transactions determined by the Financial Services Authority.

Article 3
Securities Transactions conducted by state institutions and/or the government implementing policies for the management of Government Securities, monetary policy, and deposit guarantee do not fall under this Financial Services Authority Regulation.

Article 4
Securities Transactions must be conducted in an orderly, fair, and efficient manner.

Article 5
Securities Transactions may be conducted by any Party directly, or through a Securities Underwriter, Securities Broker-Dealer, Investment Manager, and other Parties determined by the Financial Services Authority.

Article 6
(1) Securities Transactions may be conducted in the primary market and/or the secondary market.
(2) Securities Transactions in the secondary market may be conducted through Exchange Transactions or Off-Exchange Transactions.
(3) Off-Exchange Transactions as referred to in paragraph (2) may be conducted through direct negotiation between Parties or through an off-exchange trading organizer that has obtained approval from the Financial Services Authority.

Article 7
(1) Securities Transactions in the primary market are implemented in accordance with the provisions of legislation in the capital market sector related to the offering of Securities. (2) Securities Transactions in the primary market as referred to in paragraph (1) become binding at the time of distribution of Securities, implementation of Securities, allocation of Securities, and/or the end of the offering period of Securities.

Article 8
(1) Securities Transactions over Investment Products are implemented in accordance with the provisions of legislation in the capital market sector related to Investment Products. (2) Securities Transactions over Investment Products that are not recorded and traded on the Stock Exchange become binding at the time the Securities of the Investment Product are issued or repaid/redeemed.

Article 9
Settlement of Securities Transactions may be implemented through electronic book transfer or physical settlement.

Article 10
(1) Settlement of Securities Transactions that has been implemented by:
a. the Depository and Clearing Agency for Securities stored at the Depository and Clearing Agency; b. the Parties conducting Securities Transactions over physical securities with a valid deed of transfer;
c. the Clearing and Guarantee Agency for futures contracts and options; and
d. the Custodian Bank for Investment Product Securities that are not recorded and traded on the Stock Exchange, is final and irrevocable.
(2) Settlement of Securities Transactions over Government Securities that is final and irrevocable is implemented in accordance with the provisions of legislation.

Article 11
(1) Securities records at:
a. the Depository and Clearing Agency in electronic form for Securities stored in collective custody at the Depository and Clearing Agency; b. the Securities Administration Bureau or the Issuer and/or public company that conducts its own Securities administration for physical securities;
c. the Clearing and Guarantee Agency for futures contracts and options traded on the Stock Exchange; and/or
d. the Custodian Bank for Investment Product Securities that are not recorded and traded on the Stock Exchange, constitute valid evidence of Securities ownership records.
(2) Recording of ownership over Government Securities is implemented in accordance with the provisions of legislation.

CHAPTER II
EXCHANGE TRANSACTIONS
Article 12
The Stock Exchange may establish more than one type of market in Exchange Transactions managed and supervised by the Stock Exchange.

Article 13
(1) The Stock Exchange must have regulations containing provisions and requirements for each type of market in Exchange Transactions.
(2) Stock Exchange regulations as referred to in paragraph (1) must contain at least:
a. the time when the contract becomes binding; b. provisions regarding the date for settlement of Exchange Transactions;
c. provisions regarding the rights of Stock Exchange Members; and
d. provisions regarding the time limit and type of information that can be corrected in Exchange Transactions.

Article 14
The Stock Exchange may prohibit its members from conducting Securities Transactions off the Stock Exchange for Securities listed on the Stock Exchange.

Article 15
The Stock Exchange is prohibited from making regulations that prohibit or hinder Securities Companies, Issuers, Securities Administration Bureaus, or other Parties from:
a. transferring Securities from one Securities Account to another at or between Custodian Banks or Securities Companies; b. transferring Securities into the name of a Securities Company, Clearing and Guarantee Agency, or Securities financing institution to be used as collateral;
c. transferring Securities in the context of Securities Transactions considering the provisions of Article 14;
d. registering Securities obtained through Off-Exchange Transactions; and e. requiring that the transfer of Securities must be based on an Exchange Transaction.

Article 16
Exchange Transactions become binding at the time of buy requests and sell offers of Securities, agreement on sale and purchase, or agreement on other contracts of Stock Exchange Members meeting through the Stock Exchange's trading system.

Article 17
Clearing of Exchange Transactions may be conducted via Netting or per-transaction.

Article 18
Clients of Stock Exchange Members are only responsible for fulfilling their obligations to the Stock Exchange Member conducting the Exchange Transaction on behalf of the respective Client and are not responsible to other Parties including the Clearing and Guarantee Agency, other Stock Exchange Members, and clients of other Stock Exchange Members.

Article 19
(1) In the event that settlement of Exchange Transactions is conducted via Clearing using Netting and book transfer, the legal relationship between Stock Exchange Members that gives rise to rights and obligations over the Exchange Transactions they conduct shifts to the legal relationship between clearing members and the Clearing and Guarantee Agency at the time the Exchange Transaction becomes binding. (2) With the shift in legal relationship as referred to in paragraph (1), each Stock Exchange Member conducting Exchange Transactions cannot sue each other.

Article 20
(1) To prevent failure to fulfill the obligation to deliver Securities, the settlement of Exchange Transactions by the Clearing and Guarantee Agency may use a cash substitute delivery mechanism. (2) The mechanism for using cash substitute delivery as referred to in paragraph (1) is implemented in accordance with the regulations of the Clearing and Guarantee Agency.

Article 21
The guarantee of settlement of Exchange Transactions is conducted by the Clearing and Guarantee Agency based on Financial Services Authority Regulations concerning the guarantee of settlement of Exchange Transactions.

CHAPTER III
OFF-EXCHANGE TRANSACTIONS
Article 22
Off-Exchange Transactions conducted through direct negotiation and not through an off-exchange trading organizer become binding at the time of allocation, agreement of the Parties, approval of the Parties, or at the time determined by the judicial body or legislation.

Article 23
(1) Off-Exchange Transactions conducted through an off-exchange trading organizer become binding at the time of buy requests and sell offers or agreement on sale and purchase of users of the off-exchange trading organizer meeting through the off-exchange trading organizer's system. (2) Cancellation and correction of Off-Exchange Transactions conducted through an off-exchange trading organizer are implemented in accordance with the regulations of the off-exchange trading organizer.

Article 24
(1) Securities Broker-Dealers conducting Off-Exchange Transactions for their own interest must ensure the availability of documents serving as the basis for such Off-Exchange Transactions. (2) Securities Broker-Dealers and/or Custodians conducting or settling Off-Exchange Transactions for the interest of their Clients must ensure the availability of instruction documents from the Clients and documents serving as the basis for such Client transactions. (3) Securities Broker-Dealers and/or Custodians conducting or settling Off-Exchange Transactions for their own interest or for their Clients over Government Securities must ensure the conformity of such transactions with the provisions and requirements of Government Securities.

Article 25
(1) In the event that Clearing and/or guarantee is conducted over Off-Exchange Transactions conducted through an off-exchange trading organizer, such Clearing and/or guarantee may be conducted by the Clearing and Guarantee Agency. (2) The guarantee as referred to in paragraph (1) is conducted based on the shift in legal relationship from between users of the off-exchange trading organizer conducting Securities Transactions at the off-exchange trading organizer, to between clearing members and the Clearing and Guarantee Agency at the time the Off-Exchange Transactions conducted through the off-exchange trading organizer become binding. (3) With the shift in legal relationship as referred to in paragraph (2), each user of the off-exchange trading organizer conducting Securities Transactions through the off-exchange trading organizer cannot sue each other.

CHAPTER IV
SECURITIES TRANSACTIONS BY SECURITIES BROKER-DEALERS
Article 26
(1) Securities Transactions by Securities Broker-Dealers for the interest of their Clients may be conducted by the Securities Broker-Dealer executing the Client's Securities Transaction order and:
a. matching it with the counterparty's order of the Client; or b. becoming the counterparty to the Client or becoming the counterparty to another Party for the Client's order.
(2) In the event that the Securities Broker-Dealer becomes the counterparty to another Party for the Client's order as referred to in paragraph (1) letter b, the Client is only bound to the Securities Broker-Dealer executing the Securities Transaction order and is not bound to other Parties.

Article 27
In conducting Securities Transactions, Securities Broker-Dealers must first:
a. ensure that the Securities Transaction is conducted by authorized officials or employees of the Securities Broker-Dealer; b. ensure the availability of sufficient funds and/or Securities for the settlement of the Securities Transaction; and/or
c. have a contractual document with the Client containing the rights and obligations between the Securities Broker-Dealer and the Client.

Article 28
(1) Securities Broker-Dealers must send written confirmation to the counterparty and/or Client for each Securities Transaction that has been conducted on the day the Securities Transaction is conducted. (2) The sending of written confirmation to the counterparty as referred to in paragraph (1) is excluded in the event that the Securities Broker-Dealer conducts Securities Transactions through the Stock Exchange or an off-exchange trading organizer. (3) The written confirmation as referred to in paragraph (1) binds the Client, counterparty, and Securities Broker-Dealer, unless there is an objection regarding the confirmation submitted no later than 1 (one) business day after receipt of the confirmation by one of the parties.

Article 29
(1) The written confirmation as referred to in Article 28 paragraph (1) must contain at least the following information:
a. information related to the Securities Broker-Dealer, counterparty, and/or Client:

1. name of the Securities Broker-Dealer;
2. name of the counterparty or Client;
3. name and position of the authorized party conducting the transaction from the counterparty or Client;
4. third party managing collateral in repurchase agreement transactions, if there is a third party managing collateral in repurchase agreement transactions; and
5. third party acting as calculation agent in risk or margin calculation for derivative transactions, if there is a third party acting as a calculation agent in risk or margin calculation for derivative transactions;
   b. information related to the Securities Transaction:
6. type of Securities Transaction;
7. name and code of the Securities traded;
8. price;
9. quantity;
10. value;
11. net transaction value;
12. currency;
13. yield or coupon rate (for sale and purchase of debt Securities or sukuk);
14. price level (for repurchase agreement transactions or lending and borrowing of Securities);
15. market where the Securities Transaction is conducted (on Stock Exchange/off Stock Exchange/at off-exchange trading organizer);
16. date of the Securities Transaction;
17. purchase date and repurchase date (for repurchase agreement transactions or lending and borrowing of Securities);
18. settlement date; and
19. number of days for interest or profit sharing (number of days coupon) for debt and sukuk Securities Transactions;
    c. information related to the settlement of the Securities Transaction:
20. Securities account number and/or funds account number;
21. name and identity of the Custodian; and
22. settlement mechanism of the Securities Transaction with payment (delivery versus payment), without payment (delivery versus free of payment), or with delivery of Securities (delivery versus delivery); and
    d. information related to costs, if there is information related to costs:
23. commission fees charged;
24. Clearing and settlement fees; and/or
25. tax information.
    (2) The written confirmation as referred to in Article 28 paragraph (1) may be created and sent electronically based on the agreement of the Parties.

CHAPTER V
ADMINISTRATIVE SANCTIONS
Article 30
(1) Any party violating the provisions as referred to in Article 4, Article 13, Article 15, Article 24, Article 27, Article 28, and Article 29 shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) shall also be imposed on parties causing the occurrence of violations as referred to in paragraph (1). (3) Sanctions as referred to in paragraph (1) and paragraph (2) are imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) include:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and/or g. cancellation of registration.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, f, or g. (7) The procedure for imposing sanctions as referred to in paragraph (3) is implemented in accordance with the provisions of legislation.

Article 31
In addition to administrative sanctions as referred to in Article 30 paragraph (4), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 32
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 30 paragraph (4) and specific actions as referred to in Article 31 to the public.

CHAPTER VI
CLOSING PROVISIONS
Article 33
Upon the commencement of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Board Number Kep-42/PM/1997 concerning Securities Transactions together with Regulation Number III.A.10 which is its attachment, is revoked and declared invalid.

This copy is in accordance with the original
Director of Law 1
Legal Department signed
Yuliana

Article 34
This Financial Services Authority Regulation shall commence on the date of its promulgation.
To ensure that everyone knows it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Established in Jakarta on September 12, 2019
CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Promulgated in Jakarta on September 17, 2019
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2019 NUMBER 168

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 22 /POJK.04/2019
CONCERNING
SECURITIES TRANSACTIONS

I. GENERAL

The development of increasingly complex Securities Transactions requires the provision of regulatory infrastructure to support the implementation of Securities Transactions in an orderly, fair, and efficient manner. The legal framework governing Securities Transactions activities in Indonesia is found in several legislative regulations. At the level of Law, Securities Transactions are regulated through Law Number 8 of 1995 concerning the Capital Market, Law Number 24 of 2002 concerning Government Bonds, and Law Number 19 of 2008 concerning Sharia State Securities.

As for regulations at the Financial Services Authority level, regulations concerning Securities Transactions have been regulated in Regulation Number III.A.10, annex of the Decision of the Chairman of the Capital Market Supervisory Board Number Kep-42/PM/1997 concerning Securities Transactions. However, that regulation does not cover all types of Securities existing in the Capital Market, has minimal regulation regarding Securities Transactions activities Off-Exchange, and does not accommodate regulations for Securities Transactions for Securities Brokers other than Securities Companies.

Based on these conditions and in order to provide a comprehensive legal basis for Securities Transactions activities in the Indonesian capital market, it is necessary to adjust and refine Regulation Number III.A.10 concerning Securities Transactions. This refinement is necessary to support safe, efficient, and integrated Securities Transactions activities. In addition, the regulation of clearing and settlement activities for Securities Transactions in this Financial Services Authority Regulation also refers to the Principles for Financial Market Infrastructures (PFMI) issued by the Committee on Payment and Financial Market Infrastructures and the International Organization of Securities Commission (CPMI-IOSCO).

II. ARTICLE BY ARTICLE

Article 1
Is clear enough.

Article 2
Paragraph (1)
Regulations regarding the scope of Securities Transactions that only cover Securities Transactions over Securities regulated and/or supervised by the Financial Services Authority are implemented to accommodate exceptions for Securities Transactions that are under the supervision of other agencies or institutions, such as regulations and supervision over Government Bonds in the primary market, which is the authority of the Ministry of Finance based on Law Number 24 of 2002 concerning Government Bonds and Law Number 19 of 2008 concerning Sharia State Securities.

Paragraph (2)
Letter a
What is meant by "offer of Securities by the issuer of Securities" is the offer of Securities either through a Public Offer or not through a Public Offer.

Letter b
Is clear enough.

Letter c
Is clear enough.

Letter d
Is clear enough.

Letter e
Is clear enough.

Letter f
Is clear enough.

Letter g
Is clear enough.

Letter h
Is clear enough.

Letter i
Is clear enough.

Letter j
Is clear enough.

Letter k
What is meant by "repurchase agreement transaction" is a contract to buy or sell Securities with a promise to buy or sell back at a specified time and price as referred to in Financial Services Authority Regulation Number 9/POJK.04/2015 concerning Guidelines for Repurchase Agreement Transactions for Financial Service Institutions.

Letter l
Is clear enough.

Letter m
What is meant by "buyback" includes among others the buyback/repayment of issued Securities and the buyback of shares by a public company (buy back).

Letter n
Is clear enough.

Letter o
Is clear enough.

Letter p
Is clear enough.

Letter q
Other types of Securities Transactions determined by the Financial Services Authority include among others the distribution of economic benefits in the form of Securities from Investment Products.

Article 3
Is clear enough.

Article 4
What is meant by "orderly, fair, and efficient Securities Transactions" is a Securities Transaction that is carried out based on clear rules and implemented consistently. Thus, the prices that occur reflect the market mechanism based on supply and demand forces. Efficient Securities Transactions are reflected in the quick settlement of transactions with relatively low costs.

Article 5
Is clear enough.

Article 6
Paragraph (1)
What is meant by "primary market" is the activity of offering and/or selling Securities for the first time by the issuer of Securities, whether conducted through a Public Offer or not through a Public Offer. Share ownership programs through the issuance of new shares are part of the primary market activities. What is meant by "secondary market" is the activity of Securities Transactions over Securities that have been sold in the primary market.

Paragraph (2)
Is clear enough.

Paragraph (3)
What is meant by "off-exchange trading organizer" is a Party that organizes and provides or uses an electronic system to continuously match Securities Transactions among service users outside the Stock Exchange. Off-exchange trading organizers that have been regulated by the Financial Services Authority include among others alternative market organizers.

Article 7
Paragraph (1)
What is meant by "legislative regulations in the capital market field related to the offer of Securities" include among others regulations governing the registration procedure for Public Offers, ongoing Public Offers of debt Securities and/or sukuk, capital increases of public companies by issuing HMETD, and Public Offers of debt Securities and/or sukuk to professional investors.

Paragraph (2)
Examples of binding points for Securities Transactions in the primary market include the following:

1. Securities Transactions in the primary market through Public Offers are binding at the time of Securities allocation.
2. Securities Transactions in the primary market through capital increases with HMETD are binding at the time of HMETD distribution.
3. Securities Transactions in the primary market to implement HMETD are binding at the time of payment.
4. Securities Transactions in the primary market for additional orders for HMETD implementation are binding at the time of allocation.
5. Securities Transactions in the primary market through capital increases without issuing HMETD with the issuance of new shares in the context of a share ownership program are binding at the time of implementing the capital increase, namely the date of capital deposit by investors who are the target of the share ownership program.
   A share ownership program is a program offering to employees, members of the board of directors, and/or members of the board of commissioners of a Public Company and/or controlled companies that meet the requirements to own shares of the Public Company.
6. Securities Transactions in the primary market through capital increases without issuing HMETD with the issuance of new shares in the context of converting debt into shares are binding on the date of implementing the debt conversion.
7. Securities Transactions on crowdfunding services through the offer of technology-based equity (equity crowdfunding) are binding since the end of the offer period of Securities by the issuer of Securities through the crowdfunding service organizer.

Article 8
Paragraph (1)
Securities from Investment Products include among others participation units, shares, and other forms determined by the Financial Services Authority such as asset-backed securities in the form of participation certificates. Legislative regulations in the capital market field related to Securities Transactions over Investment Products include among others capital market legislative regulations governing mutual funds, asset-backed securities, infrastructure investment funds in the form of collective investment contracts, real estate investment funds, and multi-asset investment funds in the form of collective investment contracts.

Paragraph (2)
Is clear enough.

Article 9
What is meant by "electronic book transfer" is the fulfillment of rights and obligations arising from Securities Transactions carried out by electronically reducing/adding Securities and/or funds, among others through Securities accounts and/or funds accounts. What is meant by "physical settlement" is the settlement of Securities Transactions over certificate Securities carried out, among others, by handing over certificate Securities accompanied by the issuance of new certificate Securities by the Securities Administration Bureau or the Issuer and/or a public company that administers its own Securities, or by signing on the certificate Securities sheet (endorsement).

Article 10
Paragraph (1)
Letter a
Is clear enough.

Letter b
Transfer deeds can be deeds made before a notary or deeds under hand.

Letter c
What is meant by "forward contract" is an agreement that obligates the Parties to buy or sell a certain amount of underlying at a specific price and time in the future.
What is meant by "option" is the right owned by a Party to buy or sell to another Party a certain amount of Securities at a specific price and time.

Letter d
Is clear enough.

Paragraph (2)
What is meant by "Legislative Regulations" include among others Bank Indonesia Regulations regarding auctions and management of Government Bonds, organization of transactions, management of securities, and immediate fund settlement.

Article 11
Paragraph (1)
Letter a
What is meant by "collective custody" is a custody service for Securities owned jointly by more than one Party whose interests are represented by a Custodian.

Letter b
What is meant by "public company" is a corporation whose shares are owned by at least 300 (three hundred) shareholders and have paid-in capital of at least Rp3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid-in capital determined by Government Regulation.

Letter c
Is clear enough.

Letter d
Is clear enough.

Paragraph (2)
What is meant by "regulatory provisions" include among others Bank Indonesia Regulations regarding auctions and management of Government Bonds, organization of transactions, management of securities, and immediate fund settlement.

Article 12
Is clear enough.

Article 13
Paragraph (1)
Is clear enough.

Paragraph (2)
Letter a
Is clear enough.

Letter b
Is clear enough.

Letter c
What is meant by "provisions regarding the rights of Stock Exchange Members" are provisions regarding the rights of Stock Exchange Members to buy among others dividends, bonus shares, interest, and HMETD, provisions regarding the rights of Stock Exchange Members in the event of delays or failures in the settlement of Exchange Transactions, and provisions regarding the collection of rights of Stock Exchange Members to buy and the return of taxes.

Letter d
Is clear enough.

Article 14
Is clear enough.

Article 15
Is clear enough.

Article 16
What is meant by "meeting" in this article is the matching of prices and/or amounts of Securities.
What is meant by "other contracts" in this article include among others securities lending and borrowing transactions.

Article 17
Per-transaction clearing is a clearing activity that generates rights and obligations for each Securities Transaction carried out directly over the Securities being traded.

Article 18
Is clear enough.

Article 19
Is clear enough.

Article 20
Is clear enough.

Article 21
At the time this Financial Services Authority Regulation takes effect, legislative regulations in the Capital Market sector governing the guarantee of settlement of exchange transactions are Financial Services Authority Regulation Number 26/POJK.04/2014 concerning Guarantee of Settlement of Exchange Transactions.

Article 22
Off-Exchange Transactions that are binding at the time of allocation include among others the Public Offer of shares by shareholders of a Public Company.
Off-Exchange Transactions that are binding based on Party agreement include among others gifts, wills, or waqf.

Article 23
Is clear enough.

Article 24
Paragraph (1)
What is meant by "documents that are the basis for transactions" include among others outright sale and purchase agreements, repurchase agreement transaction agreements, securities lending and borrowing agreements, gift agreements, inheritance deeds, inbreng deeds, execution orders from judicial bodies, or Securities Transaction confirmations.

Paragraph (2)
Is clear enough.

Paragraph (3)
Is clear enough.

Article 25
Is clear enough.

Article 26
Paragraph (1)
The Securities Brokers included in this Financial Services Authority Regulation include among others Securities Companies conducting business activities as Securities Brokers, as well as banks and other Parties registered as Securities Brokers for debt Securities and sukuk.

Paragraph (2)
Clients and Securities Brokers are bound by the amount and type of Securities, price, and settlement date of the Securities Transaction.
What is meant by "other Parties" includes among others other Securities Brokers or Clearing and Guarantee Institutions that are Parties or related to in Exchange Transactions or Off-Exchange Transactions.

Article 27
Letter a
Is clear enough.

Letter b
Is clear enough.

Letter c
What is meant by "commitment documents" are documents showing the relationship between the Securities Broker and the Client, for example, a securities account opening contract.

Article 28
Is clear enough.

Article 29
Is clear enough.

Article 30
Is clear enough.

Article 31
What is meant by "certain actions" include among others actions by the Financial Services Authority ordering Securities Brokers to improve operational standard procedures.

Article 32
Is clear enough.

Article 33
Is clear enough.

Article 34
Is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6387