FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 28 /POJK.04/2016

ON

INTEGRATED INVESTMENT MANAGEMENT SYSTEM

BY THE GRACE OF THE ALMIGHTY GOD,

THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to improve the efficiency of investment management activities in the Indonesian Capital Market, an efficient system is needed supported by the integration of investment product transaction data and underlying asset transaction data of the investment management industry, as well as the centralization of investor data in the investment management industry within an integrated investment management system; b. that based on the considerations referred to in letter a, it is necessary to establish a Financial Services Authority Regulation on the Integrated Investment Management System;

Recalling:

1. Law Number 8 of 1995 on 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 21 of 2011 on Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);

DECIDES:

To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION ON THE INTEGRATED INVESTMENT MANAGEMENT SYSTEM.

CHAPTER I

GENERAL PROVISIONS

Article 1

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

1. Integrated Investment Management System, hereinafter referred to as S-INVEST, is an integrated electronic system or facility that integrates all processes of Investment Product Transactions, Underlying Asset Transactions, and reporting in the investment management industry.
2. Investment Product Transaction is an activity related to the sale, repurchase/settlement, transfer of Investment Product investments, and/or distribution of economic benefits of Investment Products.
3. Underlying Asset Transaction is an activity related to the investment and divestment of assets that form the basis of Investment Products.
4. Investment Product means Mutual Funds, Real Estate Investment Funds, Individual Securities Portfolio Management for Clients, and other investment products determined by the Financial Services Authority.
5. S-INVEST Provider is a Party that provides and manages S-INVEST.
6. S-INVEST User is an Investment Manager, Securities Broker that conducts Underlying Asset Transactions, Mutual Fund Sales Agent, Custodian Bank, Bank as a dealer, and other parties determined by the Financial Services Authority that are registered with the S-INVEST Provider.
7. Clearing and Custody Agency is a Party that conducts Central Custodian activities for Custodian Banks, Securities Companies, and other Parties.

Article 2

S-INVEST is established to improve the efficiency of Investment Product Transactions and Underlying Asset Transactions in the investment management industry, including the provision of investor data centralization and reporting.

CHAPTER II

S-INVEST PROVIDER AND USER

First Section

S-INVEST Provider

Article 3

Activities as an S-INVEST Provider may only be conducted by the Clearing and Custody Agency.

Article 4

The S-INVEST Provider is at least required to:
a. provide S-INVEST usage services which at least include:

1. Investment Product registration services; and
2. S-INVEST service coverage as regulated in this Financial Services Authority Regulation;
   b. provide a unique investor identification number for each Investment Product investor;
   c. have and establish standard operating mechanisms or procedures for the implementation of S-INVEST;
   d. have a business continuity plan related to the implementation of S-INVEST; e. have and place backup data center and disaster recovery center facilities related to the implementation of S-INVEST within Indonesian territory in a safe location separate from the main data center; f. ensure the implementation and continuity of S-INVEST activities; g. ensure the security and reliability of S-INVEST; h. have standard operating mechanisms and procedures for handling S-INVEST User complaints;
   i. be responsible for losses caused by errors or negligence in the provision and management of S-INVEST;
   j. provide an audit trail of all investor data processing activities, Investment Product transaction data, and Underlying Asset Transaction data in S-INVEST for supervision, law enforcement, dispute resolution, verification, testing, and other examinations; and k. inform S-INVEST Users in the event of system changes or development, including the addition of system services and features that require adjustments to the S-INVEST User system.

Article 5

(1) The S-INVEST Provider is required to establish regulations regarding the procedures and methods for implementing S-INVEST.
(2) Regulations regarding the procedures and methods for implementing S-INVEST as referred to in paragraph (1) become effective after obtaining approval from the Financial Services Authority. (3) Regulations regarding the procedures and methods for implementing S-INVEST as referred to in paragraph (1) at least cover:
a. requirements and procedures for registering S-INVEST Users, including the cancellation of S-INVEST User registration; b. requirements and procedures for registering Investment Products, including the cancellation of Investment Product registration;
c. registration and/or usage fees for S-INVEST;
d. procedures for using S-INVEST; e. rights and obligations of S-INVEST Users; f. access limitations for using S-INVEST; g. management of investor data, Investment Product transaction data, and Underlying Asset Transaction data in S-INVEST; h. reporting mechanisms and data retrieval to fulfill S-INVEST User reporting obligations;
i. standard operating mechanisms and procedures for handling S-INVEST User complaints;
j. mechanisms to ensure business continuity related to the implementation of S-INVEST; and k. temporary suspension of services to S-INVEST Users.

Article 6

The S-INVEST Provider is prohibited from disclosing investor data, Investment Product transaction data, and/or Underlying Asset Transaction data to third parties, unless prior approval has been obtained from the S-INVEST User investor or is mandated by applicable laws and regulations.

Article 7

The S-INVEST Provider is required to temporarily suspend services to S-INVEST Users if ordered by the Financial Services Authority.

Second Section

S-INVEST User

Article 8

(1) S-INVEST Users are required to:
a. comply with regulations established by the S-INVEST Provider; b. sign an S-INVEST usage agreement with the S-INVEST Provider, which at least contains:

1. rights and obligations of the S-INVEST Provider and S-INVEST User; and
2. access limitations for using S-INVEST;
   c. maintain the confidentiality and security of S-INVEST usage access;
   d. provide systems connected to S-INVEST; e. ensure the security and reliability of systems connected to S-INVEST; f. have standard operating mechanisms or procedures related to the use of S-INVEST; g. have a business continuity plan related to the use of S-INVEST; h. have and place backup data center and disaster recovery center facilities related to systems connected to S-INVEST within Indonesian territory, in a safe location separate from the main data center; and
   i. be responsible for losses caused by errors or negligence in the use of S-INVEST.
   (2) In addition to the obligations referred to in paragraph (1), every S-INVEST User acting as an Investment Product sales agent or Investment Manager conducting Investment Product sales is required to:
   a. open a separate account in S-INVEST for the benefit of each investor; b. ensure ownership of a unique investor identification number for each Investment Product investor;
   c. provide the unique investor identification number to the investor;
   d. ensure that each investor provides accurate, complete, and up-to-date investor data for the purpose of opening an account in S-INVEST as referred to in letter a; and e. input accurate, complete, and up-to-date investor data and Investment Product transaction data into S-INVEST. (3) In addition to the obligations referred to in paragraph (1), every S-INVEST User acting as a Securities Broker conducting Underlying Asset Transactions, Bank as a dealer, or Investment Manager conducting Underlying Asset Transactions for the benefit of Investment Products is required to input accurate and complete Underlying Asset Transaction data into S-INVEST. (4) In addition to the obligations referred to in paragraph (1), every S-INVEST User acting as a Mutual Fund Custodian Bank is at least required to register and update Investment Product data.

CHAPTER III

DATA SOURCE, INVESTMENT PRODUCTS, SERVICE COVERAGE, AND ACCESS LIMITATIONS FOR S-INVEST USE

First Section

S-INVEST Data Source

Article 9

(1) Investor data, Investment Product transaction data, and Underlying Asset Transaction data existing in S-INVEST originate from data submitted by S-INVEST Users. (2) S-INVEST Users are required to ensure that the data referred to in paragraph (1) is correct, up-to-date, and accurate.

Article 10

Data and/or information contained in S-INVEST that can be accessed and/or used by the S-INVEST Provider and S-INVEST Users include:
a. investor data; b. S-INVEST User data;
c. Investment Product Transactions; and
d. Underlying Asset Transactions.

Second Section

Investment Products

Article 11

(1) Every Investment Product must be registered in S-INVEST.
(2) The obligation to register Investment Products as referred to in paragraph (1) is carried out by S-INVEST Users acting as Custodian Banks.
(3) Registration of Investment Products in S-INVEST as referred to in paragraph (2) must be conducted no later than 5 (five) working days after the effectiveness of the Public Offering Registration Statement for Investment Products or the recording of Investment Products with the Financial Services Authority.

Third Section

S-INVEST Service Coverage

Article 12

(1) S-INVEST service coverage consists of activities:
a. Investment Product Transactions; b. Underlying Asset Transactions;
c. data centralization;
d. reporting; and e. other services that have obtained approval from the Financial Services Authority.
(2) S-INVEST service coverage related to Investment Product Transaction activities as referred to in paragraph (1) letter a includes at least the processing of orders for the purpose of sales, repurchase/settlement, investment transfer, and/or processing of the distribution of economic benefits from Investment Products. (3) S-INVEST service coverage related to Underlying Asset Transaction activities as referred to in paragraph (1) letter b includes at least:
a. investment and divestment of assets that form the basis of Investment Products; b. allocation;
c. matching process for securities settlement instructions;
d. transaction confirmation; and e. settlement instructions.
(4) S-INVEST service coverage related to reporting activities as referred to in paragraph (1) letter d includes at least:
a. reporting related to fulfilling Investment Product reporting obligations in accordance with applicable laws and regulations; b. provision of reporting features related to Investment Product transaction reports to investors through systems provided by the S-INVEST Provider; and
c. provision of reporting features related to periodic reports on Investment Products to investors through systems provided by the S-INVEST Provider.

Fourth Section

Access Limitations for S-INVEST Use

Article 13

The S-INVEST Provider is required to establish access limitations for S-INVEST for each S-INVEST User.

CHAPTER IV

REPORTING

Article 14

(1) The S-INVEST Provider is required to submit reports to the Financial Services Authority if there are the following matters:
a. planned system changes or development, including the addition of system services and features that require adjustments to the S-INVEST User system; b. S-INVEST failure causing S-INVEST to be unusable; and/or
c. temporary suspension of services to S-INVEST Users.
(2) Reports as referred to in paragraph (1) letter a must be submitted no later than 3 (three) months before the implementation of system changes or development. (3) S-INVEST failure as referred to in paragraph (1) letter b must be informed electronically to the Financial Services Authority and reported to S-INVEST Users no later than 2 (two) hours since the occurrence of S-INVEST failure. (4) Information as referred to in paragraph (3) must be followed by the submission of a report in printed document form to the Financial Services Authority no later than 2 (two) working days since the occurrence of S-INVEST failure. (5) Reports as referred to in paragraph (1) letter c must be submitted no later than 2 (two) working days since the temporary suspension of services to S-INVEST Users.

Article 15

S-INVEST Users acting as Mutual Fund Custodian Banks are required to submit:
a. reports showing the financial position of each Mutual Fund to the Financial Services Authority; b. Mutual Fund financial information to Investment Managers at the beginning of each working day;
c. letters or confirmation documents regarding the execution of sales, repurchase/settlement, and/or transfer orders for shares or Mutual Fund Participation Units to shareholders of Mutual Funds in the form of Companies or holders of Mutual Fund Participation Units; and
d. periodic reports to each shareholder of Mutual Funds in the form of Companies or holders of Mutual Fund Participation Units regarding changes in share or Mutual Fund Participation Unit ownership and ownership positions, as referred to in applicable laws and regulations regarding Mutual Fund Reports, through S-INVEST.

Article 16

S-INVEST Users acting as Limited Participation Mutual Fund Custodian Banks are required to submit Limited Participation Mutual Fund Reports as referred to in the Financial Services Authority Regulation on Mutual Funds in the Form of Collective Investment Contracts with Limited Participation, through S-INVEST.

CHAPTER V

SANCTION PROVISIONS

Article 17

(1) Without prejudice to criminal provisions in the field of Capital Markets, the Financial Services Authority has the authority to impose administrative sanctions on any party violating the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:
a. written warnings; b. fines, namely the obligation to pay a certain amount of money;
c. business activity restrictions;
d. business activity suspension; e. business license revocation; f. approval cancellation; and g. registration cancellation.
(2) Administrative sanctions as referred to in paragraph (1) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (1) letter a. (3) Administrative sanctions in the form of fines as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 18

In addition to administrative sanctions as referred to in Article 17 paragraph (1), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 19

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 17 paragraph (1) and specific actions as referred to in Article 18 to the public.

CHAPTER VI

TRANSITIONAL PROVISIONS

Article 20

(1) The obligation to use S-INVEST and submit Mutual Fund reports through S-INVEST as regulated in this Financial Services Authority Regulation fully takes effect on August 31, 2016. (2) Regulations regarding the obligation to submit reports for Investment Products other than Mutual Funds through S-INVEST are regulated by a Financial Services Authority Circular. (3) The obligation to provide and use S-INVEST services related to Underlying Asset Transaction activities as referred to in Article 12 paragraph (3) fully takes effect on August 31, 2017. (4) Further regulations regarding the obligation to provide reporting features as referred to in Article 12 paragraph (4) letters b and c, and the obligation of S-INVEST Users acting as Mutual Fund Custodian Banks to submit letters or confirmation documents and periodic reports through S-INVEST as referred to in Article 15 letters c and d, are regulated by a Financial Services Authority Circular. (5) At the time this Financial Services Authority Regulation takes effect until the obligation to use and submit reports through S-INVEST based on this Financial Services Authority Regulation takes full effect as referred to in paragraph (1), S-INVEST Users must conduct system usage testing through systems established by the S-INVEST Provider.

CHAPTER VII

CLOSING PROVISIONS

Article 21

This Financial Services Authority Regulation takes effect upon being enacted.

To ensure that everyone knows it, it is ordered to enact this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on July 29, 2016

THE CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY,

signed

MULIAMAN D. HADAD

Enacted in Jakarta on July 29, 2016

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 149

A copy in accordance with the original
Legal Director 1
Legal Department

signed

Yuliana

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 28 /POJK.04/2016

ON

INTEGRATED INVESTMENT MANAGEMENT SYSTEM

I. GENERAL

Regulation of investment management in the field of Capital Market includes not only investment management products such as Mutual Funds, Asset-Backed Securities, Real Estate Investment Funds, Individual Client Fund Management Contracts, and other investment products determined by the Financial Services Authority, but also regulations regarding parties conducting investment management activities such as Investment Managers, Custodian Banks, Mutual Fund Sales Agents, or Banks as dealers.

That in order to improve the efficiency of investment management activities, there is a need for an Integrated Investment Management System supported by adequate Financial Services Authority regulatory infrastructure. Where such regulations are intended to provide a legal basis for the provision and use of the Integrated Investment Management System in Indonesia.

The Integrated Investment Management System is an integrated electronic facility that integrates all processes of Investment Product Transactions, Underlying Asset Transactions, and reporting in the investment management industry.

This Financial Services Authority Regulation regulates the Provider and Users of the Integrated Investment Management System, including their obligations and prohibitions, data sources, information access limitations, and reporting.

II. ARTICLE BY ARTICLE

Article 1

Clear enough.

Article 2

Clear enough.

Article 3

Clear enough.

Article 4

Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Examples of standard operating mechanisms or procedures for implementing S-INVEST in these provisions include mechanisms for managing Underlying Asset Transactions and Investment Product Transactions.

Letter d
In practice, "business continuity plan" is commonly referred to as business continuity plan.

Letter e
The provision of backup data center and disaster recovery center facilities as referred to in these provisions takes into account applicable laws and regulations regarding the operation of electronic systems for public services.

Letter f
The obligation of the S-INVEST Provider to ensure the continuity of S-INVEST, among others, by ensuring that the backup data center operates properly in the event that the main data center experiences system failure.

Letter g
Clear enough.

Letter h
Clear enough.

Letter i
Clear enough.

Letter j
Clear enough.

Letter k
Clear enough.

Article 5

Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Letter a
Clear enough.

Letter b
Examples of investment product cancellation in these provisions include cases where a Mutual Fund has become effective and registered with S-INVEST, but after 90 (ninety) trading days or 120 (one hundred twenty) trading days the Mutual Fund must be dissolved because it does not meet the minimum managed funds requirements, then the Investment Product registration in S-INVEST is cancelled.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Clear enough.

Letter f
Clear enough.

Letter g
Clear enough.

Letter h
Clear enough.

Letter i
Clear enough.

Letter j
Clear enough.

Letter k
Clear enough.

Article 6

Clear enough.

Article 7

Clear enough.

Article 8

Paragraph (1)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Letter d
What is meant by "connected systems" is systems that can input and retrieve data by S-INVEST Users from S-INVEST.

Letter e
What is meant by "ensuring the security and reliability of systems connected to S-INVEST" includes among others having standard operating procedures for system usage including security of usage of systems connected to S-INVEST, providing system security devices including firewalls for the system, and access limitations for S-INVEST User employees.

Letter f
Clear enough.

Letter g
Clear enough.

Letter h
The provision of backup data center and disaster recovery center facilities as referred to in these provisions takes into account applicable laws and regulations regarding the operation of electronic systems for public services.

Letter i
Clear enough.

Paragraph (2)
Letter a
The opening of separate accounts by Investment Product sales agents or Investment Managers is conducted through account opening procedures as regulated in Clearing and Custody Agency regulations and subsequently registered to obtain a unique investor identification number to be able to conduct transactions through S-INVEST.

Letter b
What is meant by "unique investor identification number" which in practice is often called single investor identification (SID) is the unique investor identification number at the Clearing and Custody Agency.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Article 9

Clear enough.

Article 10

Clear enough.

Article 11

Clear enough.

Article 12

Paragraph (1)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Data centralization in these provisions covers the centralization of investor data, Investment Product transaction data, Investment Product data, and Underlying Asset Transaction data. The centralized data can be used by the Financial Services Authority in the context of supervising investment management activities.

Letter d
Clear enough.

Letter e
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Letter a
What is meant by "investment" is the acquisition of assets that form the basis of Investment Products, while what is meant by "divestment" is the disposal of assets that form the basis of Investment Products.

Letter b
What is meant by "allocation" is the distribution/determination of the quantity or proportion of a Security as an asset that forms the basis purchased by Investment Managers for the benefit of Investment Products.

Letter c
In practice, the "process of installing/matching settlement instructions for Securities Transactions" referred to is commonly called pairing and matching.

Letter d
In practice, the "transaction confirmation" referred to is commonly called trade confirmation.
The "transaction confirmation" referred to is the confirmation of Securities transactions from Securities Brokers as referred to in legislation in the Capital Market sector.

Letter e
In practice, the "settlement instruction" referred to is commonly called settlement instruction.
The "settlement instruction" referred to is the instruction for the settlement of Securities transactions given by the Investment Manager through S-INVEST to the relevant Securities Brokers and Custodian Banks.

Paragraph (4)
Letter a
It is clear enough.

Letter b
The "report on Investment Product Transactions to investors" referred to is the confirmation and report to investors regarding the sale, repurchase/redemption, and/or transfer of Investment Product investments as regulated in legislation. In the event that the reporting feature related to the report on Investment Product Transactions to investors is available, the aforementioned report can be accessed by investors on the system established by the S-INVEST Provider.

Letter c
The "periodic report on Investment Products to investors" referred to is the periodic report to investors regarding the investor's ownership amount of Investment Products as regulated in legislation. In the event that the reporting feature related to the periodic report on Investment Products to investors is available, the aforementioned report can be accessed by investors on the system established by the S-INVEST Provider.

Article 13
The S-INVEST access limits referred to in these provisions include, for example, data on investors of Mutual Fund ABC can only be accessed by the Investment Manager and Custodian Bank of Mutual Fund ABC; Selling Agents of Securities of Mutual Fund ABC can only access data on investors of Mutual Fund ABC that they market.

Article 14
Paragraph (1)
Letter a
It is clear enough.

Letter b
The "S-INVEST failure causing S-INVEST to be unusable" includes, among others:

1. S-INVEST security failure caused by hacking; and/or
2. S-INVEST failure caused by force majeure conditions such as natural disasters.

Letter c
It is clear enough.

Paragraph (2)
It is clear enough.

Paragraph (3)
Electronic reporting as referred to in this paragraph can be submitted, among others, via electronic mail (e-mail) to the address pelaporansinvest@ojk.go.id.

Paragraph (4)
It is clear enough.

Paragraph (5)
It is clear enough.

Article 15
At the time this Financial Services Authority Regulation enters into force, the legislation in the Capital Market sector regulating Mutual Fund Reports that is in effect is Regulation Number X.D.1, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number KEP-06/PM/2004 dated 9 February 2004 concerning Mutual Fund Reports.

Article 16
It is clear enough.

Article 17
It is clear enough.

Article 18
It is clear enough.

Article 19
It is clear enough.

Article 20
Paragraph (1)
It is clear enough.

Paragraph (2)
The "Investment Products other than Mutual Funds" referred to are Real Estate Investment Funds in the form of Collective Investment Contracts, Asset-Backed Securities, and Individual Securities Portfolio Management for Clients.

Paragraph (3)
It is clear enough.

Paragraph (4)
It is clear enough.

Paragraph (5)
It is clear enough.

Article 21
It is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5910