Financial Services Authority Regulation Number 3 of 2021 Concerning the Organization of Activities in the Capital Market

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 3 /POJK.04/2021
CONCERNING
THE ORGANIZATION OF ACTIVITIES IN THE CAPITAL MARKET BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that with the enactment of Law Number 21 of 2011 concerning the Financial Services Authority, the functions, duties, and authority to regulate and supervise financial service activities in the capital market sector have shifted from the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority; b. that based on the considerations referred to in letter a, it is necessary to establish a Financial Services Authority Regulation concerning the Organization of Activities in the Capital Market; 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 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);
FINANCIAL SERVICES AUTHORITY
OF THE REPUBLIC OF INDONESIA

RESOLVES:
Decree: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE ORGANIZATION OF ACTIVITIES IN THE CAPITAL MARKET.

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

Capital Market is an activity concerning public offerings and trading of securities, public companies related to the securities they issue, as well as institutions and professions related to securities.
Securities are negotiable instruments, namely debt instruments, commercial paper, shares, bonds, debt certificates, Investment Contract Units, futures contracts on Securities, and every derivative of Securities.
Party is an individual, company, joint venture, association, or organized group.
Stock Exchange is a Party that organizes and provides systems and/or facilities to bring together buy and sell offers of Securities of other Parties with the aim of trading Securities among them.
Clearing and Guarantee Institution is a Party that organizes clearing and guarantee services for the settlement of exchange transactions.
Depository and Settlement Institution is a Party that organizes central custodian activities for custodian banks, Securities Companies, and other Parties.
Stock Exchange Member is a securities broker intermediary 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.
Mutual Fund is a container used to gather funds from investor public to be further invested in a portfolio of Securities by an investment manager.
Securities Company is a Party that conducts business activities as a securities underwriter, securities broker intermediary, and/or investment manager.
Securities Underwriter is a Party that makes a contract with an Issuer to conduct a Public Offering for the benefit of the Issuer with or without the obligation to purchase unsold Securities.
Securities Broker Intermediary is a Party that conducts business activities buying and selling Securities for its own behalf or for other Parties.
Investment Manager is a Party whose business activity manages a Securities Portfolio for clients or manages a collective investment portfolio for a group of clients, except insurance companies, pension funds, and banks that conduct their own business activities based on statutory regulations.
Securities Broker Intermediary Agent is a Party that refers prospective clients to Securities Broker Intermediaries to become clients of the Securities Broker Intermediary in exchange for a commission based on a cooperation contract.
Mutual Fund Securities Sales Agent is a Party that sells Mutual Fund Securities based on a cooperation contract with the Investment Manager managing the Mutual Fund.
Registration Statement is a document that must be submitted to the Financial Services Authority by the issuer in the context of a public offering or for a public company.
Public Offering is the activity of offering Securities conducted by an issuer to sell Securities to the public in accordance with the procedures regulated in the Law concerning the Capital Market and its implementing regulations.
Issuer is a Party that conducts a Public Offering.
Public Company is a corporation whose shares are owned by at least 300 (three hundred) shareholders and has paid-up capital of at least IDR 3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid-up capital determined by the Financial Services Authority.
Open Company is an Issuer that has conducted a Public Offering of equity Securities or is a Public Company.
Foreign Investor is an individual foreign citizen investor or an investor in the form of a foreign legal entity.
Domestic Investor is an individual Indonesian citizen investor or an investor in the form of an Indonesian legal entity.
Administering Client Securities Accounts is the activity of receiving the opening of client securities accounts, conducting securities account mutations, and storing client securities accounts.
General Meeting of Shareholders, hereinafter abbreviated as GMS, is the organ of the Open Company that has authority not delegated to the board of directors or board of commissioners as referred to in the Law concerning limited liability companies and/or the articles of association of the Open Company.
Investment Advisor is a Party that gives advice to other Parties regarding the sale or purchase of Securities in exchange for service fees.
Custodian is a Party that provides securities deposit services and other assets related to Securities and other services, including receiving dividends, interest, and other rights, settling Securities transactions, and representing account holders who are its clients.
Custodian Bank is a general bank that has obtained approval from the Financial Services Authority to conduct business activities as a Custodian.
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.
Trustee is a Party that represents the interests of holders of debt and/or sukuk Securities.
Independent Shareholder is a shareholder who does not have a personal economic interest in relation to a specific transaction and:
a. is not a member of the board of directors, member of the board of commissioners, major shareholder, and controller; or b. is not an affiliate of members of the board of directors, members of the board of commissioners, major shareholders, and controllers.
Corporation is a limited liability company as referred to in the Law concerning Limited Liability Companies.
Controller of an Open Company, hereinafter referred to as Controller, is a Controller as referred to in the Financial Services Authority Regulation concerning the takeover of Open Companies.
Securities Rating Company is an Investment Advisor in the form of a limited liability company that conducts rating activities and provides ratings.

CHAPTER II
STOCK EXCHANGE
Article 2
A Stock Exchange may conduct business after obtaining a business license from the Financial Services Authority.

Article 3
The paid-up capital of a Stock Exchange is at least IDR 100,000,000,000.00 (one hundred billion rupiah).

Article 4
(1) An application to obtain a business license for a Stock Exchange is submitted to the Financial Services Authority accompanied by documents and information:
a. the deed of establishment of the Corporation that has been ratified by the minister in charge of legal and human rights affairs; b. a list of Securities Companies that are shareholders of the Stock Exchange;
c. the corporation's tax identification number;
d. economic considerations underlying the establishment of the Stock Exchange, including an explanation of the market conditions to be served; e. 3 (three) year financial projections; f. a 3 (three) year activity plan including organizational structure, communication facilities, and training programs to be conducted; g. a list of candidates for the board of directors and board of commissioners, including officials one level below the board of directors; h. a list of Parties planning to list Securities on the Stock Exchange;
i. draft regulations concerning membership, listing, trading, securities parity, clearing, and settlement of exchange transactions, including regarding the determination of costs and fees related to services provided;
j. the opening balance sheet of the Corporation that has been audited by an accountant registered with the Financial Services Authority; and k. other supporting documents and information related to the application for a Stock Exchange business license in accordance with statutory regulations in the field of Capital Market concerning Stock Exchange licensing.

(2) The application as referred to in paragraph (1) is submitted using a form in accordance with statutory regulations in the field of Capital Market concerning Stock Exchange licensing.

Article 5
The Financial Services Authority considers the application as referred to in Article 4 by taking into account:
a. the integrity and expertise of candidates for the board of directors and board of commissioners; b. the feasibility level of the plan that has been prepared; and
c. the prospect of forming a regular, fair, and efficient market.

Article 6
(1) Only Securities Companies that have obtained a business license as a Securities Broker Intermediary may become shareholders of the Stock Exchange.
(2) A Stock Exchange must have at least 50 (fifty) shareholders at the time of establishment.
(3) A Stock Exchange is required to accept applications from Securities Companies to become shareholders of the Stock Exchange as long as the shareholders who are Stock Exchange Members have not reached 200 (two hundred).

Article 7
(1) Only shareholders of the Stock Exchange who meet the requirements as Stock Exchange Members may become Stock Exchange Members.
(2) A Stock Exchange is required to accept applications from shareholders who meet the requirements as Stock Exchange Members to become Stock Exchange Members as long as the number of Stock Exchange Members has not reached 200 (two hundred).

Article 8
(1) The transfer of rights over Stock Exchange shares may only be conducted to Securities Companies that have a business license as a Securities Broker Intermediary and meet the requirements to become Members of that Stock Exchange. (2) The transfer of Stock Exchange shares may only be conducted after a statement from the Stock Exchange that the Securities Company receiving the transfer of Stock Exchange shares has met the requirements to become a Stock Exchange Member.

Article 9
(1) Securities Companies that no longer are Stock Exchange Members must:
a. transfer the Stock Exchange shares they own to another Securities Company that meets the requirements as a Stock Exchange Member; or b. submit a request to the Stock Exchange to sell the shares to another Securities Company that meets the requirements as a Stock Exchange Member, no later than 36 (thirty-six) months since the Securities Company no longer is a Stock Exchange Member. (2) In the event that a Securities Company chooses to transfer Stock Exchange shares using the method as referred to in paragraph (1) letter a and after the passage of 36 (thirty-six) months the Stock Exchange shares have not been transferred, the Stock Exchange is required to buy back the Stock Exchange shares at nominal value. (3) In the event that a Securities Company chooses to request the Stock Exchange to sell Stock Exchange shares as referred to in paragraph (1) letter b and after the passage of 36 (thirty-six) months the Stock Exchange shares have not been sold, the Stock Exchange is required to buy back the Stock Exchange shares at nominal value. (4) The sale of Stock Exchange shares as referred to in paragraph (3) is conducted through an auction mechanism conducted 1 (one) time in 1 (one) month within a period of 36 (thirty-six) months based on the opening auction price set by the Securities Company. (5) A Securities Company may change the choice of share transfer as referred to in paragraph (1) letter a to the choice as referred to in paragraph (1) letter b or vice versa, as long as the entire period of share transfer is at most 36 (thirty-six) months.

Article 10
(1) A Stock Exchange is required to have at least 3 (three) members of the board of directors.
(2) The number of members of the board of directors and members of the board of commissioners of the Stock Exchange is each at most 7 (seven) persons.
(3) Members of the board of directors of the Stock Exchange are prohibited from holding concurrent positions as members of the board of directors, members of the board of commissioners, or employees in other companies or institutions in any position. (4) Members of the board of directors and members of the board of commissioners of the Stock Exchange are appointed for a term of office of 4 (four) years and may be reappointed.

Article 11
Every member of the board of directors and members of the board of commissioners of the Stock Exchange must be free from the use of narcotics without right or illegally.

Article 12
(1) Stock Exchange shares are registered shares that have the same nominal value and voting rights.
(2) Each shareholder of the Stock Exchange may only hold 1 (one) share.
(3) Securities Companies that are shareholders of the Stock Exchange and no longer are Stock Exchange Members cannot use voting rights over the shares they own.

Article 13
(1) A Stock Exchange is prohibited from distributing dividends to shareholders.
(2) A Stock Exchange may capitalize retained earnings into paid-up capital after obtaining approval from the shareholders of the Stock Exchange and the Financial Services Authority.
(3) The capitalization of retained earnings as referred to in paragraph (2) is conducted by increasing the nominal value of Stock Exchange shares and is exempt from the provisions as referred to in paragraph (1).

Article 14
(1) Securities Companies that are shareholders of the Stock Exchange are prohibited from having relationships with other Securities Companies that are also shareholders of the same Stock Exchange through:
a. ownership, either directly or indirectly, of at least 20% (twenty percent) of shares with voting rights; b. concurrent positions as members of the board of directors or members of the board of commissioners; or
c. control in the management and/or policy of the company, either directly or indirectly.
(2) The prohibition as referred to in paragraph (1) does not apply if the relationship arises due to ownership or capital participation by the Government, either directly or indirectly.

Article 15
Shareholders of the Stock Exchange are required to submit the Stock Exchange shares they own to the Clearing and Guarantee Institution for:
a. guarantees for Securities transactions conducted by them; and b. the implementation of share auctions as referred to in Article 9 paragraph (4).

Article 16
(1) The articles of association or regulations of the Stock Exchange and their amendments must be submitted to the Financial Services Authority to obtain approval.
(2) In the event that the articles of association or regulations of the Stock Exchange and their amendments as referred to in paragraph (1) are rejected, the Financial Services Authority provides reasons for the rejection. (3) To create a regular, fair, and efficient Capital Market, the Financial Services Authority may order the Stock Exchange to change the articles of association or regulations of the Stock Exchange.

CHAPTER III
CLEARING AND GUARANTEE INSTITUTION, AND DEPOSITORY AND SETTLEMENT INSTITUTION
Article 17
Clearing and Guarantee Institutions and Depository and Settlement Institutions may conduct business after obtaining a business license from the Financial Services Authority.

Article 18
The paid-up capital of a Clearing and Guarantee Institution or a Depository and Settlement Institution is at least IDR 200,000,000,000.00 (two hundred billion rupiah).

Article 19
(1) An application to obtain a business license for a Clearing and Guarantee Institution or a Depository and Settlement Institution is submitted to the Financial Services Authority accompanied by documents and information:
a. the deed of establishment of the Corporation that has been ratified by the minister in charge of legal and human rights affairs; b. the corporation's tax identification number;
c. 3 (three) year financial projections;
d. a 3 (three) year activity plan including organizational structure, communication facilities, and training programs to be conducted; e. a list of candidates for the board of directors and board of commissioners, including officials one level below the board of directors; f. the Stock Exchange that will control and/or use the services of the Clearing and Guarantee Institution or Depository and Settlement Institution; g. draft regulations concerning clearing and guarantee activities for the settlement of exchange transactions, including provisions concerning service usage fees set by the Clearing and Guarantee Institution; h. draft regulations concerning central custodian services and Securities transaction settlement services, including provisions concerning service usage fees set by the Depository and Settlement Institution; and
i. other supporting documents and information related to the application for a business license for the Clearing and Guarantee Institution or Depository and Settlement Institution in accordance with statutory regulations in the field of Capital Market concerning:

licensing of the Clearing and Guarantee Institution; or
licensing of the Depository and Settlement Institution.

(2) The application as referred to in paragraph (1) is submitted using a form in accordance with statutory regulations in the field of Capital Market concerning:
a. licensing of the Clearing and Guarantee Institution; or b. licensing of the Depository and Settlement Institution.

Article 20
The Financial Services Authority considers the application as referred to in Article 19 by taking into account:
a. the integrity and expertise of candidates for the board of directors and board of commissioners; b. the feasibility level of the plan that has been prepared;
c. the prospect of forming a regular, fair, and efficient market; and
d. clearing, guarantee, settlement systems, and Custodian services that are safe and efficient.

Article 21
(1) Clearing and Guarantee Institutions and Depository and Settlement Institutions are required to have at least 3 (three) members of the board of directors.
(2) The number of members of the board of directors and members of the board of commissioners of the Clearing and Guarantee Institution and the Depository and Settlement Institution is each at most 7 (seven) persons. (3) Members of the board of directors of the Clearing and Guarantee Institution or Depository and Settlement Institution are prohibited from holding concurrent positions as members of the board of directors, members of the board of commissioners, or employees in other companies or institutions in any position. (4) Members of the board of directors and members of the board of commissioners of the Clearing and Guarantee Institution or Depository and Settlement Institution are appointed for a term of office of 4 (four) years and may be reappointed.

Article 22
Every member of the board of directors and members of the board of commissioners of the Clearing and Guarantee Institution and the Depository and Settlement Institution must be free from the use of narcotics without right or illegally.

Article 23
(1) Shares of the Clearing and Guarantee Institution and the Depository and Settlement Institution are registered shares that have the same nominal value and voting rights.
(2) Shares of the Clearing and Guarantee Institution or Depository and Settlement Institution may only be owned by:
a. Stock Exchange; b. Securities Company;
c. Securities Administration Bureau;
d. Custodian Bank; or e. other Parties that have obtained approval from the Financial Services Authority.
(3) The majority of shares of the Clearing and Guarantee Institution must be owned by the Stock Exchange.
(4) The transfer of rights over shares of the Clearing and Guarantee Institution or Depository and Settlement Institution may only be conducted to:
a. Stock Exchange; b. Securities Company;
c. Securities Administration Bureau;
d. Custodian Bank; or e. other Parties that have obtained approval from the Financial Services Authority.
(5) The transfer of rights over shares of the Clearing and Guarantee Institution by the Stock Exchange to Parties that are not Stock Exchanges may only be conducted as long as the Stock Exchange still owns the majority of shares of the Clearing and Guarantee Institution.

Article 24
(1) Clearing and Guarantee Institutions and Depository and Settlement Institutions are prohibited from distributing dividends to shareholders.
(2) The Clearing and Guarantee Institution may capitalize retained earnings into paid-up capital after obtaining approval from the shareholders of the Clearing and Guarantee Institution and the Financial Services Authority. (3) The Depository and Settlement Institution may capitalize retained earnings into paid-up capital after obtaining approval from the shareholders of the Depository and Settlement Institution and the Financial Services Authority. (4) The capitalization of retained earnings as referred to in paragraph (2) is conducted by increasing the nominal value of shares of the Clearing and Guarantee Institution and is exempt from the provisions as referred to in paragraph (1). (5) The capitalization of retained earnings as referred to in paragraph (3) is conducted by increasing the nominal value of shares of the Depository and Settlement Institution and is exempt from the provisions as referred to in paragraph (1).

Article 25
(1) The articles of association or regulations of the Clearing and Guarantee Institution or Depository and Settlement Institution and their amendments must be submitted to the Financial Services Authority to obtain approval. (2) In the event that the articles of association or regulations of the Clearing and Guarantee Institution or Depository and Settlement Institution and their amendments as referred to in paragraph (1) are rejected, the Financial Services Authority provides reasons for the rejection. (3) To create a regular, fair, and efficient Capital Market, the Financial Services Authority may order the Clearing and Guarantee Institution or Depository and Settlement Institution to change the articles of association or regulations of the Clearing and Guarantee Institution or Depository and Settlement Institution.

Article 26
(1) The Depository and Settlement Institution is required to establish regulations concerning the electronic recording of Securities that are not part of the collective deposit of Securities. (2) Securities records at the Depository and Settlement Institution as referred to in paragraph (1) are not proof of ownership of the Securities.

Article 27
(1) The Depository and Settlement Institution has the authority to conduct examinations regarding the correspondence of Securities records at the Depository and Settlement Institution with records at the Securities Administration Bureau or Open Company that conducts its own Securities administration. (2) The Securities Administration Bureau or Open Company that conducts its own Securities administration is required to ensure that the Securities record data at the Depository and Settlement Institution is the same as the Securities records at the Securities Administration Bureau or Issuer that conducts its own Securities administration. (3) In addition to the obligations as referred to in paragraph (2), the Securities Administration Bureau or Open Company that conducts its own Securities administration is required to ensure the correspondence and correctness of shareholder data at least:
a. debtor information system number; b. identity number;
c. name;
d. address; e. ownership amount; and f. information on the transfer of rights over shares.
(4) In the event that there are differences in Securities records at the Depository and Settlement Institution with the Securities Administration Bureau or Open Company that conducts its own Securities administration, the records

that are held by the Custody and Clearing Institution are used as records.
(5) The Custody and Clearing Institution and the Securities Administration Bureau or an Open Company that conducts its own securities administration are prohibited from providing information regarding securities ownership records to anyone, except to implement provisions of legislation.

Article 28
Regulations of the Custody and Clearing Institution as referred to in Article 26 paragraph (1) must at least contain:
a. mechanisms for the electronic recording of Securities; and b. obligations of the Securities Administration Bureau or an Open Company that conducts its own securities administration regarding the electronic recording of Securities; and
c. costs for the recording of Securities.

Article 29
(1) Parties entitled to demand the fulfillment of obligations from other Parties and the fulfillment of such obligations linked to Securities owned by other Parties stored at the Custody and Clearing Institution, may report and request the Custody and Clearing Institution to freeze the related Securities. (2) The Custody and Clearing Institution is required to freeze the Securities as referred to in paragraph (1) on the same trading day upon receipt of the report and request.

CHAPTER IV
MUTUAL FUNDS

Article 30
Mutual Funds in the form of a Corporation may conduct business after obtaining a business license from the Financial Services Authority.

Article 31
(1) Applications to obtain a business license for Mutual Funds in the form of a Corporation as referred to in Article 30 are submitted to the Financial Services Authority accompanied by documents and information:
a. the articles of association of the Mutual Fund in the form of a Corporation which have received approval and consent from the Minister in charge of government affairs in the field of law and human rights; b. the name and address of the applicant Mutual Fund;
c. the name and address of the members of the Board of Directors of the Mutual Fund;
d. the name and address of the Investment Manager and Custodian Bank; e. the Mutual Fund management contract; f. the contract regarding Custodian services over the Mutual Fund's assets; g. the appointment of supporting Capital Market professions; and h. other supporting documents and information related to the business license application for Mutual Funds in the form of a Corporation in accordance with the regulations of the Financial Services Authority regarding the procedures for applying for a business license for Mutual Funds in the form of a Corporation. (2) Applications as referred to in paragraph (1) are submitted using a form in accordance with the regulations of the Financial Services Authority regarding the procedures for applying for a business license for Mutual Funds in the form of a Corporation.

Article 32
The purpose and objectives of Mutual Funds in the form of a Corporation are solely to conduct Mutual Fund business activities.

Article 33
The issuance of new shares, share buybacks, and share transfers for Open Mutual Funds in the form of a Corporation may be conducted without the approval of the General Meeting of Shareholders.

Article 34
In the event that the business license of a Mutual Fund in the form of a Corporation is revoked by the Financial Services Authority, the Mutual Fund in the form of a Corporation must be dissolved.

Article 35
In the event that the Investment Manager and/or members of the Board of Directors of a Mutual Fund in the form of a Corporation violate:
a. Laws regarding Capital Markets and/or their implementing regulations; b. the Mutual Fund management contract; and/or
c. the articles of association of the Mutual Fund,
the Financial Services Authority has the authority to freeze the business activities of the Mutual Fund, secure the assets, appoint another Investment Manager to manage the Mutual Fund's assets, and/or revoke the business license of the said Mutual Fund.

Article 36
In the event that the Investment Manager for Mutual Funds in the form of a collective investment contract violates:
a. Laws regarding Capital Markets and/or their implementing regulations; and/or b. the collective investment contract, the Financial Services Authority has the authority to freeze the business activities of the Mutual Fund, secure the assets, appoint another Investment Manager to manage the Mutual Fund's assets, and/or dissolve the said Mutual Fund.

CHAPTER V
SECURITIES COMPANIES

Article 37
Securities Companies may conduct business as Underwriters of Securities, Securities Brokers, and/or Investment Managers after obtaining a business license from the Financial Services Authority.

Article 38
(1) Securities Companies as referred to in Article 37 may be in the form of:
a. National Securities Companies, whose entire shares are owned by Indonesian individual citizens and/or Indonesian legal entities; or b. Joint Venture Securities Companies, whose shares are owned by Indonesian individual citizens or Indonesian legal entities and foreign legal entities operating in the financial sector. (2) In the event that a Securities Company conducts a Public Offering, the provisions as referred to in paragraph (1) do not apply.

Article 39
Shares of Joint Venture Securities Companies may be owned by foreign legal entities operating:
a. in the financial sector other than securities, up to a maximum of 85% (eighty-five percent) of paid-up capital; or b. in the securities sector that has obtained a license or is under the supervision of the Capital Market regulator in its home country, up to a maximum of 99% (ninety-nine percent) of paid-up capital.

Article 40
(1) In the event that a Securities Company as referred to in Article 38 paragraph (1) letter b conducts a Public Offering, the shares of such Securities Company may be wholly owned by Domestic Investors or Foreign Investors. (2) Foreign Investors as referred to in paragraph (1) may also be Foreign Investors not operating in the financial sector.

Article 41
(1) Securities Companies conducting business as Underwriters of Securities must have paid-up capital of at least Rp50,000,000,000.00 (fifty billion rupiah).
(2) Securities Companies conducting business as Securities Brokers who Administer Client Securities Accounts must have paid-up capital of at least Rp30,000,000,000.00 (thirty billion rupiah). (3) Securities Companies conducting business as Securities Brokers who do not Administer Client Securities Accounts must have paid-up capital of at least Rp500,000,000.00 (five hundred million rupiah). (4) Securities Companies conducting business as Investment Managers must have paid-up capital of at least Rp25,000,000,000.00 (twenty-five billion rupiah). (5) Securities Companies conducting business as Underwriters of Securities and Investment Managers must have paid-up capital of at least Rp75,000,000,000.00 (seventy-five billion rupiah). (6) Securities Companies conducting business as Securities Brokers who Administer Client Securities Accounts and Investment Managers must have paid-up capital of at least Rp55,000,000,000.00 (fifty-five billion rupiah).

Article 42
(1) Applications to obtain a business license as a Securities Company are submitted to the Financial Services Authority accompanied by documents and information:
a. the deed of establishment of the Corporation which has been ratified by the Minister in charge of government affairs in the field of law and human rights; b. the Corporation's tax identification number;
c. a list of names of members of the Board of Directors and experts who hold individual licenses as representatives of the Securities Company from the Financial Services Authority; and
d. other supporting documents and information related to the business license application for Securities Companies in accordance with:

regulations of the Financial Services Authority regarding the licensing of Securities Companies conducting business activities as Underwriters of Securities and Securities Brokers; and
legislation in the capital market sector regarding the licensing of Securities Companies conducting business activities as Investment Managers.
(2) Applications as referred to in paragraph (1) are submitted using a form in accordance with:
a. regulations of the Financial Services Authority regarding the licensing of Securities Companies conducting business activities as Underwriters of Securities and Securities Brokers; and/or b. legislation in the capital market sector regarding the licensing of Securities Companies conducting business activities as Investment Managers.

Article 43
(1) Securities Companies are prohibited from being controlled, directly or indirectly, by individuals who:
a. have previously committed disgraceful acts and/or have been sentenced for proven criminal offenses in the financial sector; and b. do not possess good character and morality.
(2) Members of the Board of Directors, members of the Board of Commissioners, and representatives of Securities Companies must meet at least the following requirements:
a. individuals competent to perform legal acts; b. have never been declared bankrupt or served as members of the Board of Directors or Board of Commissioners whose fault caused a company to be declared bankrupt;
c. have never committed disgraceful acts and/or have been sentenced for proven criminal offenses in the financial sector;
d. possess good character and morality; and e. have expertise in the Capital Market sector.

Article 44
(1) Securities Companies conducting business as Underwriters of Securities must have at least one member of the Board of Directors and one employee, each of whom has obtained an individual license as a representative Underwriter of Securities. (2) Securities Companies conducting business as Securities Brokers must have at least one member of the Board of Directors and one employee, each of whom has obtained an individual license as a representative Securities Broker or representative Underwriter of Securities. (3) Securities Companies conducting business as Investment Managers must have at least one member of the Board of Directors and one employee, each of whom has obtained an individual license as a representative Investment Manager.

Article 45
Every member of the Board of Directors and Board of Commissioners of a Securities Company must be free from the unauthorized or illegal use of narcotics.

Article 46
(1) Securities Companies whose business licenses are revoked and which consequently no longer hold business licenses as Underwriters of Securities, Securities Brokers, and/or Investment Managers, are required to dissolve the Securities Company. (2) The dissolution of the Securities Company as referred to in paragraph (1) must be carried out no later than 180 (one hundred eighty) days after the revocation of its business license and the consequent loss of its business license as Underwriter of Securities, Securities Broker, and/or Investment Manager. (3) Dissolution as referred to in paragraph (1) may be carried out without going through the General Meeting of Shareholders. (4) Securities Companies whose business licenses are revoked as referred to in paragraph (1) are prohibited from using the company name and logo for any purpose and activities, except for activities related to the dissolution of the said Securities Company. (5) If after the expiration of the time limit as referred to in paragraph (2), the Securities Company whose business license has been revoked has not yet carried out the dissolution, the Financial Services Authority may petition the Attorney General's Office of the Republic of Indonesia for the dissolution or declaration of bankruptcy of the said Securities Company.

CHAPTER VI
REPRESENTATIVES OF SECURITIES COMPANIES

Article 47
(1) Individual licenses as:
a. representatives of Underwriters of Securities are only granted to individuals who have expertise in underwriting and securities brokerage; b. representatives of Securities Brokers are only granted to individuals who have expertise in securities brokerage; and
c. representatives of Investment Managers are only granted to individuals who have expertise in securities analysis and portfolio management.
(2) Further provisions regarding expertise requirements as referred to in paragraph (1) are determined by the Financial Services Authority.

Article 48
(1) Applications to obtain licenses as representatives of Securities Companies are submitted to the Financial Services Authority accompanied by documents and information:
a. formal education certificates; b. expertise certificates or work experience statements; and
c. other supporting documents and information related to the license application as a representative of a Securities Company in accordance with the regulations of the Financial Services Authority regarding:

licensing of representatives of Underwriters of Securities and Representatives of Securities Brokers; and
licensing of representatives of Investment Managers.
(2) Applications as referred to in paragraph (1) are submitted using a form in accordance with the regulations of the Financial Services Authority regarding:
a. licensing of representatives of Underwriters of Securities and representatives of Securities Brokers; and b. licensing of representatives of Investment Managers.

CHAPTER VII
INVESTMENT ADVISORS AND SECURITIES RATING COMPANIES
Part One
Investment Advisors

Article 49
(1) Parties eligible to conduct business as Investment Advisors are individuals or companies that have obtained a business license from the Financial Services Authority.
(2) Individuals serving as Investment Advisors or individuals serving as members of the Board of Directors, Board of Commissioners, or controlling, directly or indirectly, Investment Advisors in the form of a company must meet at least the following requirements:
a. have never committed disgraceful acts and/or have been sentenced for proven criminal offenses in the financial sector; b. possess good character and morality; and
c. have expertise in the Capital Market sector.

Article 50
(1) Investment Advisors as referred to in Article 49 must have at least one expert who holds a license as a representative Investment Manager.
(2) In the event that an Investment Advisor is an individual and has obtained a license as a representative Investment Manager, that individual is not required to appoint another representative Investment Manager.

Article 51
(1) Applications to obtain a business license as an Investment Advisor are submitted to the Financial Services Authority accompanied by documents and information:
a. license as a representative Investment Manager; b. tax identification number; and
c. other supporting documents and information related to the business license application for Investment Advisors in accordance with legislation in the Capital Market sector regarding the licensing of Investment Advisors.
(2) Applications as referred to in paragraph (1) are submitted using a form in accordance with legislation in the Capital Market sector regarding the licensing of Investment Advisors.

Article 52
Every member of the Board of Directors and Board of Commissioners of an Investment Advisor in the form of a company must be free from the unauthorized or illegal use of narcotics.

Part Two
Securities Rating Companies

Article 53
(1) Corporations conducting business as Securities Rating Companies must have a business license from the Financial Services Authority.
(2) Applications to obtain a business license as a Securities Rating Company are submitted to the Financial Services Authority accompanied by documents and information:
a. the deed of establishment of the Corporation which has been ratified by the competent authority, along with the latest articles of association which have obtained approval from the competent authority, or the issuance of a letter of acceptance of changes to the articles of association from the competent authority; b. proof of lawful payment of paid-up capital;
c. the Corporation's tax identification number;
d. the organizational structure of the Corporation which separates the sections functioning for Rating, research, marketing, and compliance; and e. other supporting documents and information related to the business license application for Securities Rating Companies in accordance with the regulations of the Financial Services Authority regarding the licensing of Securities Rating Companies. (3) Applications as referred to in paragraph (2) are submitted using a form in accordance with the regulations of the Financial Services Authority regarding the licensing of Securities Rating Companies.

CHAPTER VIII
COMMERCIAL BANKS AS CUSTODIANS

Article 54
Commercial Banks may conduct business as Custodians in the Capital Market sector after obtaining approval from the Financial Services Authority.

Article 55
(1) Applications to obtain approval as Custodians are submitted to the Financial Services Authority accompanied by documents and information:
a. articles of association; b. tax identification number;
c. business license as a commercial bank;
d. financial reports of the last year which have been audited by accountants registered with the Financial Services Authority; e. operational manuals regarding the Custodian activities to be conducted and descriptions of the physical facilities to be used by the bank; f. recommendation from the banking supervisory regulator of the Financial Services Authority; and g. other supporting documents and information related to the application for approval of commercial banks as Custodians in accordance with the regulations of the Financial Services Authority regarding the approval of commercial banks as Custodians. (2) Applications as referred to in paragraph (1) are submitted using a form in accordance with the regulations of the Financial Services Authority regarding the approval of commercial banks as Custodians.

CHAPTER IX
SECURITIES ADMINISTRATION BUREAUS

Article 56
Securities Administration Bureaus may conduct business after obtaining a business license from the Financial Services Authority.

Article 57
The paid-up capital of Securities Administration Bureaus must be at least Rp500,000,000.00 (five hundred million rupiah).

Article 58
(1) Applications to obtain a business license for Securities Administration Bureaus are submitted to the Financial Services Authority accompanied by documents and information:
a. the deed of establishment which has been ratified by the Minister in charge of government affairs in the field of law and human rights; b. the Corporation's tax identification number;
c. operational manuals regarding the activities to be conducted and descriptions of the physical facilities to be used; and
d. other supporting documents and information related to the business license application for Securities Administration Bureaus in accordance with the regulations of the Financial Services Authority regarding Securities Administration Bureaus. (2) Applications as referred to in paragraph (1) are submitted using a form in accordance with the regulations of the Financial Services Authority regarding the licensing of Securities Administration Bureaus.

CHAPTER X
TRUSTEES

Article 59
(1) Business activities as Trustees may be conducted by commercial banks.
(2) Trustees may conduct business in the Capital Market sector after registering with the Financial Services Authority.

Article 60
(1) Applications to register as Trustees are submitted to the Financial Services Authority accompanied by documents and information:
a. articles of association; b. the Corporation's tax identification number;
c. business license as a commercial bank;
d. financial reports of the last year which have been audited by accountants registered with the Financial Services Authority; e. recommendation from the banking sector supervisor of the Financial Services Authority; and f. other supporting documents and information related to the trustee registration application in accordance with the regulations of the Financial Services Authority regarding commercial banks conducting activities as Trustees. (2) Applications as referred to in paragraph (1) are submitted using a form in accordance with the regulations of the Financial Services Authority regarding commercial banks conducting activities as Trustees.

CHAPTER XI
SUPPORTING CAPITAL MARKET PROFESSIONS

Article 61
(1) Supporting Capital Market profession activities may be conducted by:
a. accountants; b. legal consultants;
c. appraisers;
d. notaries; and e. other professions determined by the Financial Services Authority.
(2) Supporting Capital Market professions may only conduct business in the Capital Market sector after registering with the Financial Services Authority.
(3) Supporting Capital Market professions whose registration certificates are frozen by the Financial Services Authority or the agency issuing the professional license are prohibited from conducting business in the Capital Market sector during the period of freezing of the registration certificate.

Article 62
(1) Applications to register as supporting Capital Market professions are submitted to the Financial Services Authority, using a form in accordance with:
a. regulations of the Financial Services Authority regarding the use of public accountants and public accounting firms in financial service activities; b. regulations of the Financial Services Authority regarding legal consultants conducting activities in the Capital Market;
c. regulations of the Financial Services Authority regarding appraisers conducting activities in the Capital Market;
d. regulations of the Financial Services Authority regarding notaries conducting activities in the Capital Market; and e. other regulations of the Financial Services Authority governing supporting Capital Market professions. (2) Parties submitting applications as referred to in paragraph (1) must meet the following requirements:
a. have never committed disgraceful acts and/or have been sentenced for proven criminal offenses in the financial sector; b. possess good character and morality; and
c. have expertise in the Capital Market sector.
(3) In the event that Parties conducting activities as supporting Capital Market professions are not individuals, the provisions as referred to in paragraph (2) apply to the management, supervisors, and Parties who control, directly or indirectly, the supporting Capital Market profession.

CHAPTER XII
OPEN COMPANIES
Part One
Public Offerings of Equity Securities

Article 63
Parties conducting Public Offerings of Equity Securities must:
a. list their Equity Securities on the Stock Exchange; and b. register their Equity Securities with the collective custody at the Custody and Clearing Institution.

Part Two
Change of Status of Open Companies to Closed Corporations Paragraph 1 Change of Status Based on Application by Open Companies

Article 64
(1) Open Companies intending to change their status from Open Companies to Closed Corporations must:
a. obtain approval from Independent Shareholders in the General Meeting of Shareholders; b. conduct a buyback of all shares held by public shareholders so that the number of shareholders becomes less than 50 (fifty) Parties or another amount determined by the Financial Services Authority;
c. announce information openness to the public and submit it to the Financial Services Authority simultaneously with the announcement of the General Meeting of Shareholders as referred to in letter a; and
d. submit an application for the withdrawal of the effectiveness of the Registration Statement for Public Offerings of Equity Securities or the Registration Statement for Public Companies to the Financial Services Authority. (2) Applications as referred to in paragraph (1) letter d must be accompanied by documents:
a. statements from:

the Custody and Clearing Institution; and
the Securities Administration Bureau or an Open Company that conducts its own securities administration,
confirming that the shareholders of the Open Company have met the provisions as referred to in paragraph (1) letter b, attached with the latest shareholder structure; b. a statement from the Stock Exchange that the Open Company has fulfilled all its obligations to the Stock Exchange;
c. a statement from the Custody and Clearing Institution that the Open Company has fulfilled its obligations to the Custody and Clearing Institution;
d. proof of settlement of administrative sanction obligations in the form of fines and/or interest and other obligations to the Financial Services Authority, if there are administrative sanction obligations in the form of fines and/or interest and other obligations; and e. a copy of the approval of the Minister in charge of government affairs in the field of law and human rights regarding the change of articles of association.

(3) Documents as referred to in paragraph (2) letter a may be supplemented and/or replaced with documents resulting from tender offers by other Parties.

(4) The Financial Services Authority revokes the effectiveness of the Registration Statement in the context of a Public Offering of Equity Securities and/or the Registration Statement of a Public Company within a maximum of 14 (fourteen) working days after the application as referred to in paragraph (1) letter d is received in complete form.

(5) The Financial Services Authority issues a letter ordering:

a. The Stock Exchange to cancel the listing of Securities on the Stock Exchange; and

b. The Depository and Settlement Institution to cancel the registration of Securities in collective custody at the Depository and Settlement Institution, after the revocation of the effectiveness of the Registration Statement as referred to in paragraph (4).

Article 65

(1) The Stock Exchange is required to cancel the listing of Securities of an Open Company no later than 14 (fourteen) working days after receiving the letter from the Financial Services Authority as referred to in Article 64 paragraph (5) letter a.

(2) The Depository and Settlement Institution is required to cancel the registration of Securities of an Open Company in collective custody no later than 14 (fourteen) working days after receiving the letter from the Financial Services Authority as referred to in Article 64 paragraph (5) letter b.

Paragraph 2

Change of Status Based on Order of the Financial Services Authority

Article 66

(1) Under certain conditions, the Financial Services Authority may order an Open Company to change its status from an Open Company to a Closed Company.

(2) The order of the Financial Services Authority as referred to in paragraph (1) is copied to the Stock Exchange.

(3) The Stock Exchange is required to suspend trading of Securities of an Open Company as referred to in paragraph (1) as soon as possible, no later than on the next trading day after receiving the copy as referred to in paragraph (2).

(4) The change of status from an Open Company to a Closed Company as referred to in paragraph (1) must be accompanied by actions of the Open Company to:

a. obtain approval from the General Meeting of Shareholders (GMS);

b. announce to the public as soon as possible, no later than 2 (two) working days after receiving the status change order from the Financial Services Authority;

c. conduct a repurchase of all shares owned by public shareholders so that the number of shareholders becomes less than 50 (fifty) Parties or another amount determined by the Financial Services Authority;

d. submit a statement that the shareholders of the Open Company have met the provisions as referred to in letter c, accompanied by the final shareholder structure from:

The Depository and Settlement Institution; and
The Securities Administration Bureau or an Open Company that conducts its own securities administration;

e. fulfill all obligations to the Financial Services Authority, the Stock Exchange, and the Depository and Settlement Institution; and

f. request approval for the amendment of the Articles of Association regarding the change of status of the Open Company to a Closed Company from the Minister in charge of the government affairs in the field of law and human rights.

(5) The procedure and time limit for the implementation of the GMS as referred to in paragraph (4) letter a are determined by the Financial Services Authority.

(6) The Open Company is required to submit to the Financial Services Authority proof of fulfillment of obligations as referred to in paragraph (4) letters d, e, and f no later than 14 (fourteen) working days after the date of the Minister in charge of government affairs in the field of law and human rights' approval of the amendment of the Articles of Association.

(7) The Financial Services Authority revokes the effectiveness of the Registration Statement in the context of a Public Offering of Equity Securities and/or the Registration Statement of a Public Company no later than 14 (fourteen) working days after receiving the proof of fulfillment of obligations as referred to in paragraph (6).

(8) The Financial Services Authority issues a letter ordering:

a. The Stock Exchange to cancel the listing of Securities on the Stock Exchange; and

Article 67

Paragraph 3

Change of Status Based on Application by the Stock Exchange

Article 68

The Stock Exchange may cancel the listing of Securities of an Open Company if:

a. The Open Company experiences a condition or event that has a significant negative impact on the continuity of the business of the Open Company; and/or

b. The Open Company does not meet the listing requirements for Securities on the Stock Exchange.

Article 69

(1) The Stock Exchange is required to submit a notification to the Financial Services Authority no later than 2 (two) working days:

a. after the Open Company experiences a condition or event as referred to in Article 68 letter a; and

b. before the Stock Exchange cancels the listing of Securities.

(2) An Open Company whose Securities listing is cancelled by the Stock Exchange as referred to in paragraph (1) letter b is required to change its status from an Open Company to a Closed Company.

(3) The change of status as referred to in paragraph (2) must follow the procedure for changing the status from an Open Company to a Closed Company as referred to in Article 64, except for the obligation to obtain approval from Independent Shareholders in the GMS.

(4) The change of status of an Open Company to a Closed Company as referred to in paragraph (2) must obtain GMS approval.

Article 70

(1) Before cancelling the listing of Securities of an Open Company as referred to in Article 68 letter b, the Stock Exchange is required to submit an application to change the status of the Open Company to a Closed Company to the Financial Services Authority.

(2) Upon the application of the Stock Exchange as referred to in paragraph (1), the Financial Services Authority orders the Open Company to change its status from an Open Company to a Closed Company.

(3) The change of status as referred to in paragraph (2) must follow the procedure for changing the status from an Open Company to a Closed Company as referred to in Article 64.

(4) The Stock Exchange cancels the listing of Securities of an Open Company as referred to in Article 65 paragraph (1) after the Financial Services Authority revokes the effectiveness of the Registration Statement of the Open Company.

(5) In the event that the procedure for changing the status from an Open Company to a Closed Company as referred to in paragraph (3) cannot be fulfilled, the Financial Services Authority has the authority to determine the procedure for changing the status from an Open Company to a Closed Company.

Paragraph 4

Responsibility of Controllers, Board of Directors, and Board of Commissioners

Article 71

The Financial Services Authority has the authority to prohibit Controllers, the Board of Directors, and the Board of Commissioners of an Open Company who are responsible for causing the Open Company to:

a. be ordered by the Financial Services Authority to change its status from an Open Company to a Closed Company; and/or

b. have its Securities listing cancelled by the Stock Exchange,

from becoming Controllers, members of the Board of Directors, and members of the Board of Commissioners of an Issuer, an Open Company, a Stock Exchange, a Clearing and Guarantee Institution, a Depository and Settlement Institution, and/or a Securities Company.

Paragraph 5

Application for Dissolution or Bankruptcy Declaration by the Financial Services Authority to the Attorney General's Office of the Republic of Indonesia

Article 72

The Financial Services Authority may apply for the dissolution or bankruptcy declaration of an Open Company that does not meet the provisions as referred to in Article 66, Article 69 paragraph (2), and Article 70 paragraph (2) to the Attorney General's Office of the Republic of Indonesia.

Paragraph 6

Implementation of Share Repurchase Due to Change of Status of Open Company to Closed Company

Article 73

(1) Share repurchase as referred to in Article 64 paragraph (1) letter b must be implemented in accordance with the regulations of the Financial Services Authority regarding share repurchases issued by an Open Company, unless otherwise regulated in this Financial Services Authority Regulation.

(2) The implementation of share repurchase as referred to in paragraph (1) must be completed no later than 18 (eighteen) months after the announcement of information disclosure as referred to in Article 64 paragraph (1) letter c.

(3) The obligation of share repurchase by an Open Company as referred to in Article 64 paragraph (1) letter b is exempted if there is a Party conducting a tender offer for all shares owned by public shareholders so that the number of shareholders becomes less than 50 (fifty) Parties or another amount determined by the Financial Services Authority.

(4) The tender offer as referred to in paragraph (3) must be implemented in accordance with the regulations of the Financial Services Authority regarding voluntary tender offers, except for provisions regarding price.

Article 74

(1) Share repurchase as referred to in Article 66 paragraph (4) letter c is implemented in accordance with the procedures and time limits determined by the Financial Services Authority.

(2) The obligation of share repurchase by an Open Company as referred to in Article 66 paragraph (4) letter c is exempted if there is a Party conducting a tender offer for all shares owned by public shareholders so that the number of shareholders becomes less than 50 (fifty) Parties or another amount determined by the Financial Services Authority.

(3) The tender offer as referred to in paragraph (2) is implemented in accordance with the procedures and time limits determined by the Financial Services Authority.

Article 75

(1) The implementation of share repurchase as referred to in Article 73 paragraph (1) and Article 74 paragraph (1) may be conducted without first obtaining GMS approval.

(2) Share repurchase may be conducted up to an amount exceeding 10% (ten percent) of the paid-up capital of the Open Company, so that the number of shareholders is not more than 50 (fifty) Parties or another amount determined by the Financial Services Authority.

Article 76

The price of share repurchase as referred to in Article 64 paragraph (1) letter b must meet the following provisions:

a. for shares of an Open Company listed and traded on the Stock Exchange, the share purchase price must be higher than the average price of the highest daily trading prices on the Stock Exchange over the last 90 (ninety) days prior to the GMS announcement for the change of status of the Open Company to a Closed Company;

b. for shares of an Open Company listed and traded on the Stock Exchange, but which were not traded on the Stock Exchange or had their trading temporarily suspended by the Stock Exchange for 90 (ninety) days or more prior to the GMS announcement in the context of changing the status of the Open Company to a Closed Company, the share purchase price must be higher than the average price of the highest daily trading prices on the Stock Exchange over the last 12 (twelve) months calculated backwards from the last trading day or the day trading was temporarily suspended; or

c. for shares of an Open Company that are not listed and not traded on the Stock Exchange, the share purchase price must be higher than the fair value determined by an appraiser registered with the Financial Services Authority.

Article 77

The price of share repurchase as referred to in Article 66 paragraph (4) letter c must meet the following provisions:

a. for shares of an Open Company listed and traded on the Stock Exchange, the share purchase price must be at least equal to the average price of the daily closing trading prices on the Stock Exchange over the last 90 (ninety) days prior to the order to change the status of the Open Company to a Closed Company;

b. for shares of an Open Company listed and traded on the Stock Exchange, but which were not traded on the Stock Exchange or had their trading temporarily suspended by the Stock Exchange for 90 (ninety) days or more prior to the order to change the status of the Open Company to a Closed Company, the share purchase price must be at least equal to the average price of the daily closing trading prices on the Stock Exchange over the last 12 (twelve) months calculated backwards from the last trading day or the day trading was temporarily suspended; or

c. for shares of an Open Company that are not listed and not traded on the Stock Exchange, the share purchase price must not be lower than the fair value determined by an appraiser registered with the Financial Services Authority.

Article 78

The price of share repurchase as referred to in Article 69 paragraph (3) must comply with:

a. the average trading price of the Open Company's shares on the Stock Exchange over the last 30 (thirty) days calculated backwards from the last trading day or the day trading was temporarily suspended; or

b. the book value per share based on the latest financial statements,

using the higher value.

Paragraph 7

Tender Offer Price

Article 79

The tender offer price as referred to in Article 73 paragraph (4) and Article 74 paragraph (3) must follow the price provisions for share repurchase as referred to in:

a. Article 76 in the event an Open Company changes its status from an Open Company to a Closed Company based on the application of the Open Company as referred to in Article 64 paragraph (1) letter b;

b. Article 77 in the event an Open Company changes its status from an Open Company to a Closed Company based on the order of the Financial Services Authority as referred to in Article 66 paragraph (4) letter c; or

c. Article 78 in the event an Open Company changes its status from an Open Company to a Closed Company based on the application of the Stock Exchange as referred to in Article 69 paragraph (3).

Paragraph 8

Information Disclosure

Article 80

(1) Information disclosure as referred to in Article 64 paragraph (1) letter c must contain at least:

a. explanation, considerations, and reasons for the change of status from an Open Company to a Closed Company;

b. company data including brief history, business field, capital structure, supervision and management, and summary of important financial data;

c. the Party that will conduct the purchase of public shares through a tender offer, if there is another Party conducting a tender offer to public shareholders;

d. the share purchase price;

e. summary of the appraiser's report on the fair value of shares, if using an appraiser;

f. date, time, and place of the GMS implementation;

g. explanation of the address that can be contacted by shareholders; and

h. a statement from the Board of Commissioners and the Board of Directors that all material information has been disclosed and is not misleading.

(2) In the event of changes and/or additions to information as referred to in paragraph (1), the changes and/or additions to information must be announced no later than 2 (two) working days before the implementation of the GMS.

Paragraph 9

General Meeting of Shareholders

Article 81

The implementation of the GMS as referred to in Article 64 paragraph (1) letter a and Article 69 paragraph (4) must be conducted in accordance with the provisions of the Financial Services Authority regulations regarding the plan and implementation of the GMS of an Open Company, unless otherwise regulated in this Financial Services Authority Regulation.

Article 82

In the event that the GMS does not approve the plan of the Open Company as referred to in Article 64, the plan may only be requested for GMS approval again no sooner than 12 (twelve) months after the implementation of that GMS.

Article 83

(1) In the event that the plan of the Open Company as referred to in Article 64 which has been approved in the GMS is not implemented within a period of 12 (twelve) months from the date of GMS approval, the Open Company is required to:

a. disclose it in the annual report; and

b. provide a special explanation regarding the non-implementation of the change of status from an Open Company to a Closed Company in the nearest GMS.

(2) In the event that the plan of the Open Company as referred to in paragraph (1) will be implemented, the Open Company is required to obtain GMS approval again for the plan of the Open Company.

Part Three

Control, Board of Directors, and Board of Commissioners

Paragraph 1

Control

Article 84

(1) Shares of an Open Company that are owned and/or managed as a portfolio of Securities by 1 (one) Investment Manager with an amount of at least 20% (twenty percent) of the paid-up capital of that Open Company are not counted in the calculation of the quorum for attendance and decision-making in the GMS of that Open Company.

(2) In the event that the shares of the Open Company as referred to in paragraph (1) are a portfolio of Securities in a Collective Investment Contract Mutual Fund with limited participation, the provisions as referred to in paragraph (1) do not apply.

Article 85

(1) An Open Company is required to determine the Party that is the Controller of that Open Company and report it to the Financial Services Authority.

(2) The determination of the Controller as referred to in paragraph (1) may be based on a GMS decision.

(3) The Controller as referred to in paragraph (1) is a Party that exercises control over the Open Company directly or indirectly.

(4) The determination as referred to in paragraph (1) is made for the first time upon the submission of the Registration Statement and whenever there is a change of Controller.

(5) The first determination of the Controller as referred to in paragraph (2) must be disclosed in the prospectus in the context of the Registration Statement.

Article 86

(1) The Controller is responsible for losses experienced by the Open Company if the losses arise from:

a. the Controller, directly or indirectly, in bad faith exploiting the Open Company for personal interests;

b. the Controller being involved in unlawful acts committed by the Open Company; or

c. the Controller, directly or indirectly, unlawfully using the assets of the Open Company, resulting in the assets of the Open Company becoming insufficient to meet financial obligations.

(2) The Controller is deemed to have met the provisions as referred to in paragraph (1) based on:

a. a decision of Independent Shareholders in the GMS in accordance with the provisions of the Financial Services Authority regulations regarding the plan and implementation of the GMS of an Open Company;

b. a court decision; or

c. a decision of the Financial Services Authority.

Article 87

(1) Under certain conditions, the Financial Services Authority has the authority to determine a specific Party as a Controller.

(2) The provisions of Article 86 paragraph (1) apply to the Party determined by the Financial Services Authority as a Controller as referred to in paragraph (1).

Article 88

Every Party is prohibited from taking actions to obscure their status as a Controller by splitting their ownership of Securities in the Open Company through several Parties, both directly and indirectly, with the aim of avoiding responsibility as a Controller in accordance with applicable legislation.

Paragraph 2

Board of Directors and Board of Commissioners

Article 89

(1) Members of the Board of Directors and/or members of the Board of Commissioners of an Open Company are responsible for losses experienced by the Open Company if the losses arise from:

a. members of the Board of Directors and/or members of the Board of Commissioners, directly or indirectly, in bad faith exploiting the Open Company for personal interests;

b. members of the Board of Directors and/or members of the Board of Commissioners being involved in unlawful acts committed by the Open Company; or

c. members of the Board of Directors and/or members of the Board of Commissioners, directly or indirectly, unlawfully using the assets of the Open Company, resulting in the assets of the Open Company becoming insufficient to meet financial obligations.

(2) Members of the Board of Directors and/or members of the Board of Commissioners of an Open Company are deemed to have met the provisions as referred to in paragraph (1) based on:

a. a GMS decision;

b. a court decision; or

c. a decision of the Financial Services Authority.

CHAPTER XIII

PROCEDURES FOR GRANTING OR DENYING LICENSES, APPROVALS, AND REGISTRATIONS

Article 90

(1) Approval or rejection of every Party's application to obtain a license, approval, or registration from the Financial Services Authority is given no later than 45 (forty-five) days since the application is received in complete form by the Financial Services Authority.

(2) Within the time period as referred to in paragraph (1), the Financial Services Authority may request changes and/or additional information to complete the application for a license, approval, or registration.

(3) In the event that changes and/or additional information as referred to in paragraph (2) have been submitted to the Financial Services Authority, the application for a license, approval, or registration is calculated from the date the changes and/or additional information are received by the Financial Services Authority.

Article 91

(1) Approval or rejection of an application to amend the regulations of a Stock Exchange, a Clearing and Guarantee Institution, or a Depository and Settlement Institution is given no later than 60 (sixty) days since the application is received in complete form by the Financial Services Authority.

(2) Within the time period as referred to in paragraph (1), the Financial Services Authority may request to change the material of the amendment of the regulations of a Stock Exchange, a Clearing and Guarantee Institution, or a Depository and Settlement Institution and/or request additional information related to the amendment of the aforementioned regulations.

(3) In the event that changes and/or additional information as referred to in paragraph (2) have been submitted to the Financial Services Authority, the application for amendment

Regulations of Stock Exchanges, Clearing and Guarantee Institutions, or Custody and Settlement Institutions are calculated from the date the change or additional information is received by the Financial Services Authority.

CHAPTER XIV
WRITTEN ORDERS

Article 92
(1) The Financial Services Authority has the authority to issue written orders to any Party to comply with legislation in the capital market sector, prevent public loss, and/or protect public interests. (2) Written orders as referred to in paragraph (1) include:
a. orders to carry out specific activities; and/or b. orders not to carry out specific activities.
(3) Written orders as referred to in paragraph (1) may be imposed alone or together with the imposition of administrative sanctions.
(4) Parties who do not comply with written orders as referred to in paragraph (1) will be processed further to the investigation stage in accordance with the provisions of the Law concerning the Financial Services Authority. (5) The process as referred to in paragraph (4) does not eliminate the obligation of the Party concerned to carry out the written order. (6) In addition to the processing as referred to in paragraph (4), the Financial Services Authority may file a civil lawsuit and/or a petition for a declaration of bankruptcy through the Attorney General's Office of the Republic of Indonesia.

CHAPTER XV
ADMINISTRATIVE SANCTIONS

Article 93
Issuers, Public Companies, Stock Exchanges, Clearing and Guarantee Institutions, Custody and Settlement Institutions, securities valuation institutions, securities protection fund organizers, parties issuing Sharia securities lists, Securities Rating Companies, Mutual Funds, Securities Companies, Investment Advisors, representatives of Securities Underwriters, representatives of Securities Brokers, representatives of Investment Managers, Mutual Fund Sales Agents, representatives of Mutual Fund Sales Agents, capital market Sharia experts, Securities Broker Agents, Securities Administration Offices, Custodian Banks, Trustees, capital market supporting professions, and other Parties who have obtained licenses, approvals, or registrations from the Financial Services Authority, members of the board of directors, members of the board of commissioners, and any Party who directly or indirectly owns at least 5% (five percent) of the shares of an Issuer or Public Company, as well as other Parties who commit violations and/or cause violations of legislation in the capital market sector, are subject to administrative sanctions in the form of:
a. written warnings; b. fines consisting of the obligation to pay a certain amount of money;
c. restrictions on business activities;
d. suspension of business activities; e. revocation of business licenses; f. cancellation of approvals; g. cancellation of registrations; h. revocation of the effectiveness of the Registration Statement; and/or
i. revocation of individual licenses.

Article 94
In addition to administrative sanctions as referred to in Article 93, the Financial Services Authority may take certain actions and/or order Parties who commit violations and/or cause violations to take certain actions in the form of:
a. return of illegally obtained profits or avoided losses; b. payment of compensation to specific Parties;
c. suspension or cancellation of rights and benefits;
d. restrictions on carrying out specific activities; and/or e. other specific actions.

Article 95
(1) Sanctions as referred to in Article 93 letters b, c, d, e, f, g, h, or i may be imposed with or without prior imposition of written warning sanctions as referred to in Article 93 letter a. (2) Fine sanctions as referred to in Article 93 letter b may be imposed separately or together with sanctions as referred to in Article 93 letters c, d, e, f, g, h, or i.

Article 96
(1) Every Party as referred to in Article 85, Article 86, and Article 87 of Law Number 8 of 1995 concerning the Capital Market and other Parties who have obtained licenses, approvals, or registrations from the Financial Services Authority who are late in submitting reports to the Financial Services Authority or late in announcing to the public in accordance with the provisions established by the Financial Services Authority, are subject to administrative sanctions:
a. Stock Exchanges, Clearing and Guarantee Institutions, or Custody and Settlement Institutions are subject to a fine of Rp1,000,000.00 (one million rupiah) for every day of delay in submitting reports or announcements to the public; b. Securities Administration Offices, Custodian Banks, or Trustees are subject to a fine of Rp200,000.00 (two hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public;
c. Securities Companies are subject to a fine of Rp200,000.00 (two hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public;
d. Investment Advisors and Securities Rating Companies are subject to a fine of Rp200,000.00 (two hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public; e. Mutual Fund Sales Agents and Securities Broker Agents are subject to a fine of Rp200,000.00 (two hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public; f. Issuers whose Registration Statements have become effective are subject to a fine of Rp2,000,000.00 (two million rupiah) for every day of delay in submitting reports or announcements to the public; g. Issuers with small-scale and/or medium-scale assets whose Registration Statements have become effective are subject to a fine of Rp1,000,000.00 (one million rupiah) for every day of delay in submitting reports or announcements to the public; h. Public Companies whose Registration Statements have become effective are subject to a fine of Rp500,000.00 (five hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public;
i. members of the board of directors or board of commissioners of Issuers or Public Companies, or any Party who directly or indirectly owns at least 5% (five percent) of the shares of an Issuer or Public Company, are subject to a fine of Rp200,000.00 (two hundred thousand rupiah) for every day of delay in submitting the aforementioned reports;
j. public accountants, legal consultants, notaries, appraisers, representatives of Securities Companies, representatives of Mutual Fund Sales Agents, individual Investment Advisors, and other professions who have obtained licenses, approvals, or registrations from the Financial Services Authority are subject to a fine of Rp100,000.00 (one hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public; and k. securities valuation institutions, securities protection fund organizers, parties issuing Sharia securities lists, and Parties other than those referred to in letters a through j who have obtained licenses, approvals, or registrations from the Financial Services Authority are subject to a fine of Rp200,000.00 (two hundred thousand rupiah) for every day of delay in submitting reports or announcements to the public.

(2) Reports that must be submitted to the Financial Services Authority or announcements to the public as referred to in paragraph (1) are classified into several obligation periods as follows:
a. annual; b. semi-annual;
c. quarterly;
d. monthly; e. daily; and f. incidental.

(3) For Parties who have not submitted reports or announcements in the periods as referred to in paragraph (2), they are declared not to have submitted reports or announcements if:
a. reports or announcements required to be done in the annual obligation period are not submitted or announced for a maximum of 6 (six) months after the end of the deadline for submitting reports or announcements; b. reports or announcements required to be done in the semi-annual obligation period are not submitted or announced for a maximum of 3 (three) months after the end of the deadline for submitting reports or announcements;
c. reports or announcements required to be done in the quarterly obligation period are not submitted or announced for a maximum of 2 (two) months after the end of the deadline for submitting reports or announcements;
d. reports or announcements required to be done in the monthly obligation period are not submitted or announced for a maximum of 1 (one) month after the end of the deadline for submitting reports or announcements; e. reports or announcements required to be done in the daily obligation period are not submitted or announced for a maximum of 1 (one) month after the end of the deadline for submitting reports or announcements; and f. reports or announcements required to be done in the incidental obligation period are not submitted or announced for a maximum of 1 (one) month after the end of the deadline for submitting reports or announcements.

(4) Every Party as referred to in Article 85, Article 86, and Article 87 of Law Number 8 of 1995 concerning the Capital Market and other Parties who have obtained licenses, approvals, or registrations from the Financial Services Authority who are declared not to have submitted reports to the Financial Services Authority or announced to the public as referred to in paragraph (3) are subject to administrative sanctions:
a. Issuers, Stock Exchanges, Clearing and Guarantee Institutions, or Custody and Settlement Institutions are subject to a fine of:

Rp1,000,000,000.00 (one billion rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the annual and semi-annual obligation periods as referred to in paragraph (3) letters a and b; and
Rp250,000,000.00 (two hundred fifty million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the quarterly, monthly, daily, and incidental obligation periods as referred to in paragraph (3) letters c through f;
b. Issuers with small-scale and/or medium-scale assets whose Registration Statements have become effective are subject to a fine of:
Rp100,000,000.00 (one hundred million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the annual and semi-annual obligation periods as referred to in paragraph (3) letters a and b; and
Rp25,000,000.00 (twenty-five million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the quarterly, monthly, daily, and incidental obligation periods as referred to in paragraph (3) letters c through f;
c. Securities Companies or Public Companies are subject to a fine of:
Rp500,000,000.00 (five hundred million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the annual and semi-annual obligation periods as referred to in paragraph (3) letters a and b; and
Rp250,000,000.00 (two hundred fifty million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the quarterly, monthly, daily, and incidental obligation periods as referred to in paragraph (3) letters c through f;
d. Securities Administration Offices, Custodian Banks, Trustees, Investment Advisors, Securities Rating Companies, securities valuation institutions, securities protection fund organizers, corporate parties issuing Sharia securities lists, or companies other than those referred to in Article 93 letters a through g who have obtained licenses, approvals, or registrations from the Financial Services Authority are subject to a fine of:
Rp300,000,000.00 (three hundred million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the annual and semi-annual obligation periods as referred to in paragraph (3) letters a and b; and
Rp100,000,000.00 (one hundred million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the quarterly, monthly, daily, and incidental obligation periods as referred to in paragraph (3) letters c through f; and
e. Mutual Fund Sales Agents and Securities Broker Agents, members of the board of directors or board of commissioners of Issuers or Public Companies, or any Party who directly or indirectly owns at least 5% (five percent) of the shares of an Issuer or Public Company, individual parties issuing Sharia securities lists, or individual parties other than those referred to in Article 93 letters a through g who have obtained licenses, approvals, or registrations from the Financial Services Authority are subject to a fine of:
Rp200,000,000.00 (two hundred million rupiah) if declared not to have submitted reports to the Financial Services Authority or announced to the public in the annual and semi-annual obligation periods as referred to in paragraph (3) letters a and b; and
Rp50,000,000.00 (fifty million rupiah) if declared not to have submitted reports to the OJK or announced to the public in the quarterly, monthly, daily, and incidental obligation periods as referred to in paragraph (3) letters c through f.

(5) In the event that the obligation to submit reports to the Financial Services Authority is accompanied by the obligation to announce to the public, the Financial Services Authority imposes administrative sanctions in the form of fines for one violation with the highest value based on the calculation of the number of days of delay in submitting reports to the Financial Services Authority or announcing to the public.

(6) For Parties declared not to have submitted reports or announcements, and who have been subject to administrative sanctions in the form of fines as referred to in paragraph (3), they must still submit reports to the Financial Services Authority or announce to the public in accordance with the provisions of legislation.

Article 97
In the event that there are other Financial Services Authority Regulations governing otherwise, the provisions regarding fine sanctions as referred to in this Financial Services Authority Regulation do not apply.

Article 98
(1) Any Party who violates legislation in the capital market sector other than provisions on late submission of reports or announcements as referred to in Article 96 may be subject to a fine of up to Rp5,000,000,000.00 (five billion rupiah) for individuals and up to Rp25,000,000,000.00 (twenty-five billion rupiah) for Parties that are not individuals. (2) The imposition of fine sanctions as referred to in paragraph (1) is carried out in accordance with the provisions established by the Financial Services Authority.

Article 99
(1) Fine sanctions as referred to in Article 96 and Article 98 are imposed for each violation of legislation in the capital market sector.
(2) The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 93 to the public.

Article 100
Any Party who commits and/or causes violations of the provisions of Article 6 paragraph (3), Article 7 paragraph (2), Article 9 paragraphs (2) and (3), Article 10 paragraphs (1) and (3), Article 11, Article 13 paragraph (1), Article 14 paragraph (1), Article 15, Article 16 paragraph (1), Article 21 paragraphs (1) and (3), Article 22, Article 24 paragraph (1), Article 25 paragraph (1), Article 26 paragraph (1), Article 27 paragraphs (2), (3), and (5), Article 29 paragraph (2), Article 41, Article 43 paragraphs (1) and (2), Article 44, Article 45, Article 50, Article 52, Article 61, Article 63, Article 64 paragraph (1), Article 65 paragraphs (1) and (2), Article 66 paragraphs (3), (4), and (6), Article 67 paragraphs (1) and (2), Article 69, Article 70 paragraphs (1) and (3), Article 73 paragraphs (1), (2), and (4), Article 76, Article 77, Article 78, Article 79, Article 80 paragraph (2), Article 81, Article 83, Article 85 paragraph (1), and Article 88 are subject to administrative sanctions as referred to in Article 93 and/or specific actions as referred to in Article 94.

CHAPTER XVI
TRANSITIONAL PROVISIONS

Article 101
Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions must adjust their paid-up capital as referred to in Article 3 and Article 18 no later than 5 (five) years from the date this Financial Services Authority Regulation comes into force.

Article 102
For members of the board of directors and board of commissioners of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions who are serving before this Financial Services Authority Regulation comes into force, the term of office of members of the board of directors and board of commissioners adjusts to the provisions as referred to in Article 10 paragraph (4) and Article 21 paragraph (4).

Article 103
Custody and Settlement Institutions must establish regulations regarding the electronic recording of Securities that are not part of collective custody of Securities as referred to in Article 26 paragraph (1) no later than 2 (two) years from the date this Financial Services Authority Regulation comes into force.

Article 104
The provisions on the dissolution or declaration of bankruptcy of Securities Companies as referred to in Article 46 apply to Securities Companies whose business licenses were revoked before this Financial Services Authority Regulation comes into force.

Article 105
For Parties who have conducted Public Offerings of Equity Securities before this Financial Services Authority Regulation comes into force, but have not yet listed and registered their equity Securities on the Stock Exchange and Custody and Settlement Institution, the fulfillment of obligations as referred to in Article 63 must be done:
a. no later than 2 (two) years after this Financial Services Authority Regulation comes into force; or b. before the Party concerned increases capital by issuing pre-emptive rights in accordance with Financial Services Authority regulations regarding capital increases of Open Companies by issuing pre-emptive rights, if the Party concerned increases capital by issuing pre-emptive rights before the 2 (two) year deadline as referred to in letter a.

CHAPTER XVII
CLOSING PROVISIONS

Article 106
At the time this Financial Services Authority Regulation comes into force:
a. provisions regarding the conduct of activities in the capital market sector; and b. provisions regarding share ownership and capital of Securities Companies, are subject to this Financial Services Authority Regulation.

Article 107
At the time this Financial Services Authority Regulation comes into force:
a. provisions regarding the term of office of members of the board of directors of Stock Exchanges as referred to in Article 22 and provisions regarding the term of office of members of the board of commissioners of Stock Exchanges as referred to in Article 43 of Financial Services Authority Regulation Number 58/POJK.04/2016 concerning the Board of Directors and Board of Commissioners of Stock Exchanges (State Gazette of the Republic of Indonesia Year 2016 Number 312, Supplement to the State Gazette of the Republic of Indonesia Number 6000); b. provisions regarding the term of office of members of the board of directors of Clearing and Guarantee Institutions as referred to in Article 22 and provisions regarding the term of office of members of the board of commissioners of Clearing and Guarantee Institutions as referred to in Article 43 of Financial Services Authority Regulation Number 59/POJK.04/2016 concerning the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions (State Gazette of the Republic of Indonesia Year 2016 Number 313, Supplement to the State Gazette of the Republic of Indonesia Number 6001); and
c. provisions regarding the term of office of members of the board of directors of Custody and Settlement Institutions as referred to in Article 22 and provisions regarding the term of office of members of the board of commissioners of Custody and Settlement Institutions as referred to in Article 43 of Financial Services Authority Regulation Number 60/POJK.04/2016 concerning the Board of Directors and Board of Commissioners of Custody and Settlement Institutions (State Gazette of the Republic of Indonesia Year 2016 Number 314, Supplement to the State Gazette of the Republic of Indonesia Number 6002),
are revoked and declared invalid.

Article 108
This Financial Services Authority Regulation comes into force on the date of its promulgation.

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

To ensure that everyone knows, orders the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on February 22, 2021
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Promulgated in Jakarta on February 22, 2021
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 71

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 3/POJK.04/2021
CONCERNING
THE CONDUCT OF ACTIVITIES IN THE CAPITAL MARKET SECTOR

I. GENERAL
In order to create an orderly, fair, and efficient Capital Market, it is necessary to establish various requirements that must be met by every Party conducting activities in the capital market sector. The aforementioned requirements apply in the context of licensing, approval, or registration of Stock Exchanges, Clearing and Guarantee Institutions, Custody and Settlement Institutions, Mutual Funds, Securities Companies, Investment Advisors, representatives of Securities Companies, Securities Administration Offices, Custodians, Trustees, and capital market supporting professions.

In addition to the requirements that need to be met in the context of the aforementioned licensing, approval, or registration, it is also necessary to regulate reporting submission requirements applicable to every Party who has obtained a license, approval, or registration from the Financial Services Authority, including Issuers, Public Companies, and members of the board of directors or board of commissioners or any Party who owns at least 5% (five percent) of the shares of an Issuer or Public Company.

Furthermore, in order to enforce various regulations in the capital market sector, it is also necessary to establish provisions regarding the imposition of administrative sanctions. Considering the variety and types of violations that exist in capital market activities, the Financial Services Authority Regulation on the Conduct of Activities in the Capital Market Sector is fundamentally...

This further delegates the regulation of administrative sanctions to the Financial Services Authority within the limits set in this Financial Services Authority Regulation.

With the enactment of Law Number 21 of 2011 concerning the Financial Services Authority, as of December 31, 2012, the regulation and supervision of financial services activities in the Capital Market sector shifted from the Capital Market and Financial Institution Supervisory Board to the Financial Services Authority.

Based on Article 70 of Law Number 21 of 2011 concerning the Financial Services Authority, it is regulated that when that Law comes into force, legislation in the financial services sector is declared to remain in force insofar as it is not contrary to and has not been replaced based on that Law. Based on Article 70 of that Law, the Financial Services Authority has the authority to re-regulate provisions related to the conduct of activities in the Capital Market field contained in Government Regulation Number 45 of 1995 concerning the Conduct of Activities in the Capital Market Field as amended by Government Regulation Number 12 of 2004 concerning Amendments to Government Regulation Number 45 of 1995 concerning the Conduct of Activities in the Capital Market Field with Financial Services Authority Regulations.

In light of the above and as a further elaboration of Law Number 8 of 1995 concerning the Capital Market, it is deemed necessary to establish a Financial Services Authority Regulation concerning the Conduct of Activities in the Capital Market Field.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Clear enough.

Article 3
Clear enough.

Article 4
Paragraph (1)
Letter a
Clear enough.
Letter b
Clear enough.
Letter c
Clear enough.
Letter d
Clear enough.
Letter e
What is meant by "financial projection" is prospective financial information, forecasts, and projections commonly applied in Assurance Engagement Standards.
Such financial projections are for 3 (three) years starting from the year of submitting the Stock Exchange license application.
Letter f
Clear enough.
Letter g
Clear enough.
Letter h
Clear enough.
Letter i
Clear enough.
Letter j
Clear enough.
Letter k
The supporting documents and explanations are to complete the documents and explanations mentioned in letters a through j, and do not constitute new requirements. The same applies to the requirements for business license applications, approvals, and/or registration of other business activities in the Capital Market field as regulated in this Financial Services Authority Regulation. Paragraph (2) Clear enough.

Article 5
Clear enough.

Article 6
Clear enough.

Article 7
Clear enough.

Article 8
Clear enough.

Article 9
Paragraph (1)
A Securities Company ceases to be a Stock Exchange Member as of the date of membership revocation by the Stock Exchange.
Membership revocation by the Stock Exchange may be caused by:
a. The Securities Company does not meet the membership requirements of the Stock Exchange; b. The Securities Company returns the Stock Exchange Member approval letter; and/or
c. The business license of the Securities Company is revoked by the Financial Services Authority.
A Securities Company is deemed to no longer meet the requirements as a Stock Exchange Member as of the date the Stock Exchange revokes the membership of that Securities Company.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
The opportunity to participate in auctions is only open to Securities Companies that have obtained a business license as a Securities Broker from the Financial Services Authority and meet the requirements as Stock Exchange Members, provided that such Securities Company has not become a shareholder of the said Stock Exchange.

Paragraph (5)
Example:
If a Securities Company chooses to transfer the Stock Exchange shares it owns to another Securities Company that meets the requirements as a Stock Exchange Member, but in the ninth month that Securities Company wishes to change to requesting the Stock Exchange to sell the said shares to another Securities Company that meets the requirements as a Stock Exchange Member, the auction period for the Stock Exchange shares by the Stock Exchange is at most 27 (twenty-seven) months.

Article 10
Paragraph (1)
Clear enough.
Paragraph (2)
The determination of the number of board of directors members and board of commissioners members is based on the needs for the conduct of Stock Exchange activities.
Paragraph (3)
Clear enough.
Paragraph (4)
Clear enough.

Article 11
Freedom from the illegal or unlawful use of narcotics is proven by a drug-free certificate (SKBN) from the competent party, among others, health service centers, police, and central laboratories of the National Narcotics Agency.

Article 12
Paragraph (1)
Clear enough.
Paragraph (2)
This provision is intended to avoid or prevent the control of a Stock Exchange by a single Securities Company.

Paragraph (3)
Clear enough.

Article 13
Paragraph (1)
A Stock Exchange functions to organize and provide systems and/or facilities for the trading of Securities, so that Stock Exchange Members can conduct regular, fair, and efficient buy and sell offers of Securities. Based on this, the income of the Stock Exchange, which is basically obtained from levies in the form of membership fees, transaction fees, and security listing fees, is primarily used to achieve the implementation of this function. Paragraph (2) Clear enough. Paragraph (3) This provision clarifies that the capitalization of the retained earnings balance of the Stock Exchange is not done through the issuance of new shares but through an increase in the nominal value of the Stock Exchange's shares.

Article 14
Paragraph (1)
Letter a
Direct ownership relationships occur if one Securities Company owns shares in another Securities Company that is also a shareholder of the same Stock Exchange of at least 20% (twenty percent) of the shares with voting rights. Indirect ownership relationships occur if at least 20% (twenty percent) of the issued shares with voting rights of 2 (two) or more Securities Companies that are shareholders of the same Stock Exchange are owned by the same Party. The relationship between 2 (two) or more Securities Companies referred to constitutes an indirect ownership relationship. Letter b Concurrent holding of positions occurs if board of directors members or board of commissioners members of a Securities Company also hold positions as board of directors and/or board of commissioners members of another Securities Company at the same time. Letter c Control includes, among others, control exercised by a Party, directly or indirectly, over 2 (two) or more Securities Companies that are shareholders of the same Stock Exchange. Paragraph (2) Clear enough.

Article 15
Stock Exchange shares owned by a Securities Company serve as collateral for Securities transactions conducted by the relevant Securities Company. Therefore, the share certificates of the Stock Exchange must be submitted to the Clearing and Guarantee Institution. With the submission of the Stock Exchange share certificates, the Clearing and Guarantee Institution is authorized based on this Financial Services Authority Regulation to sell the Stock Exchange shares for the fulfillment of obligations arising from the Securities transactions it conducts.

Article 16
Paragraph (1)
The articles of association of the Stock Exchange and its amendments are first submitted to the Financial Services Authority to obtain approval before being submitted to the minister in charge of government affairs in the field of law and human rights. Paragraph (2) Rejection as referred to in this paragraph is among others done if the articles of association or regulations of the Stock Exchange and its amendments contradict legislation in the Capital Market field or can hinder the creation of a regular, fair, and efficient Capital Market.

Paragraph (3)
Example:
Stock Exchange regulations considered to hinder the creation of a regular, fair, and efficient Capital Market include, among others, Stock Exchange regulations that prohibit the listing of Securities on other Stock Exchanges.

Article 17
Clear enough.

Article 18
Clear enough.

Article 19
Paragraph (1)
Letter a
Clear enough.
Letter b
Clear enough.
Letter c
What is meant by "financial projection" is prospective financial information, forecasts, and projections commonly applied in Assurance Engagement Standards.
Such financial projections are for 3 (three) years starting from the year of submitting the license application for the Clearing and Guarantee Institution or Custody and Settlement Institution. Letter d Clear enough. Letter e Clear enough. Letter f Clear enough. Letter g Clear enough. Letter h Clear enough.

Letter i
Clear enough.
Paragraph (2)
Clear enough.

Article 20
Clear enough.

Article 21
Paragraph (1)
Clear enough.
Paragraph (2)
The determination of the number of board of directors members and board of commissioners members is based on the needs for the conduct of activities of the Clearing and Guarantee Institution or Custody and Settlement Institution. Paragraph (3) Clear enough. Paragraph (4) Clear enough.

Article 22
Clear enough.

Article 23
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
The transfer of rights over shares can be done among others through sale and purchase and donation.
Paragraph (5)
What is meant by "majority" is share ownership of more than 50% (fifty percent) of the placed and paid-up capital.

Article 24
Paragraph (1)
The Clearing and Guarantee Institution or Custody and Settlement Institution functions to organize clearing, guaranteeing, stock exchange transaction settlement, and central custody activities safely, regularly, fairly, and efficiently. Based on this, the income of the Clearing and Guarantee Institution or Custody and Settlement Institution is primarily used to finance the implementation of this function. Paragraph (2) Clear enough. Paragraph (3) Clear enough. Paragraph (4) This provision clarifies that the capitalization of the retained earnings balance of the Clearing and Guarantee Institution is not done through the issuance of new shares but through an increase in the nominal value of the shares of the Clearing and Guarantee Institution. Paragraph (5) This provision clarifies that the capitalization of the retained earnings balance of the Custody and Settlement Institution is not done through the issuance of new shares but through an increase in the nominal value of the shares of the Custody and Settlement Institution.

Article 25
Paragraph (1)
The articles of association of the Clearing and Guarantee Institution or Custody and Settlement Institution and its amendments are first submitted to the Financial Services Authority to obtain approval before being submitted to the minister in charge of government affairs in the field of law and human rights. Paragraph (2) Rejection as referred to in this paragraph is among others done if the articles of association or regulations of the Clearing and Guarantee Institution or Custody and Settlement Institution and its amendments contradict legislation in the Capital Market field or can hinder the creation of a regular, fair, and efficient Capital Market. Paragraph (3) Example:
If the Financial Services Authority establishes policies in legislation that impact the articles of association of the Clearing and Guarantee Institution or Custody and Settlement Institution, the Financial Services Authority can order the Clearing and Guarantee Institution or Custody and Settlement Institution to adjust the articles of association of the Clearing and Guarantee Institution or Custody and Settlement Institution.

Article 26
Paragraph (1)
This provision is intended to facilitate the electronic listing of Securities but is not intended for trading.
With the electronic listing of Securities that are not part of the collective deposit of Securities, more comprehensive data and information on Securities will be realized.
Paragraph (2)
Electronic listing at the Custody and Settlement Institution is not followed by the conversion of certificate Securities into certificate-less Securities.

Article 27
Paragraph (1)
Securities records at the Custody and Settlement Institution are reporting data originating from the Securities Administration Bureau or Public Companies that conduct their own Securities administration. Paragraph (2) Clear enough. Paragraph (3) Clear enough.

Paragraph (4)
Clear enough.
Paragraph (5)
Clear enough.

Article 28
Clear enough.

Article 29
Paragraph (1)
What is meant by "fulfillment of obligations" is the fulfillment of obligations arising among others from securities lending and borrowing and secured debts and receivables.
This provision does not require the submission of reports and requests for the freezing of Securities to the Custody and Settlement Institution. Reports and requests for the freezing of Securities will be done by the transacting Parties according to the risk level of the transaction. Securities guarantee becomes effective as of the date the Custody and Settlement Institution freezes the Securities in the Securities account to be used for the fulfillment of obligations arising from the agreement. Paragraph (2) Clear enough.

Article 30
Clear enough.

Article 31
Clear enough.

Article 32
Clear enough.

Article 33
The issuance of new shares, share buybacks, and share transfers of Mutual Funds in the form of a Company follow the mechanism of issuing participation units in Open-End Mutual Funds in the form of a collective investment contract.

Article 34
Clear enough.

Article 35
Clear enough.

Article 36
Clear enough.

Article 37
Clear enough.

Article 38
Clear enough.

Article 39
Clear enough.

Article 40
Clear enough.

Article 41
Clear enough.

Article 42
Clear enough.

Article 43
Paragraph (1)
Letter a
Never having committed disgraceful acts, proven by submitting at least a Police Record Certificate (SKCK).
Financial crimes include, among others, crimes in the banking field, Capital Market field, and non-bank financial industry field.
Letter b
Clear enough.
Paragraph (2)
Clear enough.

Article 44
Paragraph (1)
Clear enough.
Paragraph (2)
Individuals who have obtained a license as a representative of an Underwriter of Securities Issuance can conduct activities as a representative of a Securities Broker.
Paragraph (3)
Clear enough.

Article 45
Clear enough.

Article 46
Clear enough.

Article 47
Clear enough.

Article 48
Clear enough.

Article 49
Clear enough.

Article 50
Clear enough.

Article 51
Clear enough.

Article 52
Clear enough.

Article 53
Clear enough.

Article 54
Clear enough.

Article 55
Clear enough.

Article 56
Clear enough.

Article 57
Clear enough.

Article 58
Clear enough.

Article 59
Clear enough.

Article 60
Clear enough.

Article 61
Clear enough.

Article 62
Paragraph (1)
Letter a
Clear enough.

Letter b
Clear enough.
Letter c
Clear enough.
Letter d
Clear enough.
Letter e
What is meant by "other Financial Services Authority regulations regulating supporting professions in the Capital Market" are other Financial Services Authority regulations containing application forms for registration as a supporting profession in the Capital Market. The aforementioned Financial Services Authority Regulations are Financial Services Authority Regulations that are either already in force or will be regulated later. Examples of Financial Services Authority Regulations regulating supporting professions in the Capital Market other than accountants, legal consultants, appraisers, and notaries that are already in force include Financial Services Authority Regulations concerning capital market Shariah experts. Paragraph (2) Letter a Clear enough. Letter b Clear enough. Letter c Requirements regarding expertise can include certificates of education in the Capital Market field. Paragraph (3) Clear enough.

Article 63
Clear enough.

Article 64
Clear enough.

Article 65
Clear enough.

Article 66
Paragraph (1)
Examples of "certain conditions" include:
a. committing violations of legislation, including if the violation causes its business activities to be prohibited by the Public Company; b. the invalidity of all business licenses from the competent party;
c. there is an order from the competent authority to order the change of status of a Public Company to a Closed Company;
d. there are provisions in legislation requiring a Public Company to change its status to a Closed Company; e. declared bankrupt based on a court decision that has obtained permanent legal force; f. has not operated fully for at least the last 3 (three) years; g. receiving restrictions on business activities from the competent party that disrupt business continuity for at least the last 3 (three) years; and/or; h. receiving a freeze on all business activities;
i. the Financial Services Authority has been unable to correspond with the Issuer or Public Company for at least the last 3 (three) years; and/or
j. there are no members of the Board of Directors, members of the Board of Commissioners, and major shareholders who can be contacted for at least the last 3 (three) years.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.
Paragraph (5)
Clear enough.
Paragraph (6)
Clear enough.
Paragraph (7)
Clear enough.
Paragraph (8)
Clear enough.

Article 67
Clear enough.

Article 68
Letter a
Conditions or events that significantly negatively affect the continuity of a Public Company refer to Stock Exchange regulations.
Letter b
Clear enough.

Article 69
Clear enough.

Article 70
Clear enough.

Article 71
This authority includes the power to prohibit such parties from becoming Controllers, directors, and board of commissioners members of companies that will submit a Registration Statement in the context of an Initial Public Offering.

Article 72
Clear enough.

Article 73
Clear enough.

Article 74
Clear enough.

Article 75
Clear enough.

Article 76
Clear enough.

Article 77
Clear enough.

Article 78
Clear enough.

Article 79
Clear enough.

Article 80
Clear enough.

Article 81
Clear enough.

Article 82
Clear enough.

Article 83
Clear enough.

Article 84
Clear enough.

Article 85
Paragraph (1)
The designated Controller can be 1 (one) Party or more.
Paragraph (2)
The designation of a Controller based on a General Meeting of Shareholders decision is among others done if there is a shareholder who has control capabilities but does not declare themselves as a Controller. Paragraph (3) Example 1:
Direct control is the relationship between a company and a Party that directly controls the company as follows: Mr. A controls PT X.
As an example, the relationship between a company and a Party that indirectly controls the company is as follows: Mr. A controls PT X and PT X controls PT Y. Thus, Mr. A indirectly controls PT Y. Example 2:
The relationship between a company and a Party that is directly controlled by the company is as follows: PT Y is controlled by PT X.
Example 3:
The relationship between a company and a Party that is indirectly controlled by the company is as follows: PT Z is controlled by PT Y and PT Y is controlled by PT X. Thus, PT Z is indirectly controlled by PT X. Example 4:
The relationship between 2 (two) companies that are directly controlled by the same Party is as follows: PT X and PT Y are controlled by Mr. A.
Example 5:
The relationship between 2 (two) companies that are indirectly controlled by the same Party is as follows: PT X 1 is controlled by PT X 2 and PT Y 1 is controlled by PT Y 2, subsequently PT X 2 and PT Y 2 are controlled by Mr. A. Thus, PT X 1 and PT Y 1 are indirectly controlled by Mr. A. Control also includes control through funds. Examples of control through funds include control exercised by an Investment Manager who owns or manages a portfolio of Securities in the form of shares in a Public Company of more than 50% (fifty percent). Paragraph (4) What is meant by "Registration Statement" is the Registration Statement for Initial Public Offering and the Registration Statement for Public Companies. Paragraph (5) Clear enough.

Article 86
Clear enough.

Article 87
Paragraph (1)
Examples of certain conditions include a Public Company being unable to designate a Controller because the majority of shares are held by the public.
The designation of a certain Party as a Controller by the Financial Services Authority among others considers the interconnection between shareholders, either because:
a. there is an affiliation relationship; and/or b. there is cooperation or concerted action to achieve common goals in controlling a Public Company (acting in concert) with or without a written agreement so that together they have option rights or other rights to own shares of the Public Company. Paragraph (2) Clear enough.

Article 88
Legislative provisions include:

Financial Services Authority Regulation Number 9/POJK.04/2018 concerning Takeover of Public Companies; and
Presidential Regulation of the Republic of Indonesia Number 13 of 2018 concerning the Implementation of Beneficial Owner Identification Principles from Corporations in the Context of Prevention and Eradication of Money Laundering Crimes and Terrorism Financing Crimes.

Article 89
Clear enough.

Article 90
Clear enough.

Article 91
Clear enough.

Article 92
Paragraph (1)
Clear enough.
Paragraph (2)
Letter a
What is meant by "certain activities" includes but is not limited to the explanation of Article 8 letter f of the Law on the Financial Services Authority, including therein the order to return a certain amount of money to the injured Party and/or the order to correct errors, conditions, and/or states arising from violations. Letter b Clear enough. Paragraph (3) Clear enough. Paragraph (4) Clear enough.

Paragraph (5)
Clear enough.
Paragraph (6)
Clear enough.

Article 93
Clear enough.

Article 94
Letter a
Clear enough.
Letter b
Clear enough.
Letter c
Freezing or cancellation of rights and benefits includes among others freezing or cancellation of rights and benefits, freezing of the right to receive dividends, voting rights, or the right to receive a share of the liquidation surplus of the Issuer or Public Company if there is a violation of legislation in the Capital Market field related to share instruments. Letter d Restrictions on conducting certain activities, for example, restrictions on business activities as a Securities Broker and restrictions on becoming a director of a Securities Company or Issuer for a certain period. Letter e What is meant by "other certain actions" can include:
a. postponement of the issuance of an effective statement; b. postponement of the issuance of licenses for supporting professions in the Capital Market, representatives of Securities Companies, and agency or marketing agents for products in the Capital Market; and
c. prohibition to financial service institutions in the capital market field from accepting new service users or customers.

Article 95
Clear enough.

Article 96
Paragraph (1)
Reporting to the Financial Services Authority also includes the obligation to submit information openness to the Financial Services Authority.
Letter a
Clear enough.
Letter b
Clear enough.
Letter c
The imposition of fines on Securities Companies also includes the imposition of fines on Investment Managers.
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.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.
Paragraph (6)
Clear enough.

Article 97
Clear enough.

Article 98
Paragraph (1)
Clear enough.
Paragraph (2)
The imposition of fines referred to in this provision, for example, is against the failure of a Securities Company to adjust working capital requirements.

Article 99
Clear enough.

Article 100
Clear enough.

Article 101
Clear enough.

Article 102
Clear enough.

Article 103
Clear enough.

Article 104
Clear enough.

Article 105
Clear enough.

Article 106
Clear enough.

Article 107
Clear enough.

Article 108
Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6663

Financial Services Authority Regulation Number 3 of 2021 Concerning the Organization of Activities in the Capital Market

Lineage: Superseded

Timeline