Financial Services Authority Regulation Number 32/POJK.03/2016 Regarding Amendment to Financial Services Authority Regulation Number 6/POJK.03/2015 on Transparency and Publication of Bank Reports

FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 32/POJK.03/2016
CONCERNING
AMENDMENT TO FINANCIAL SERVICES AUTHORITY
REGULATION NUMBER 6/POJK.03/2015 ON TRANSPARENCY AND PUBLICATION OF BANK REPORTS

BY THE GRACE OF THE ALMIGHTY GOD,
THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to create market discipline and in line with the development of international standards, it is necessary to improve regulations regarding the transparency and publication of Bank reports; b. that based on the considerations referred to in letter a, it is necessary to establish a Financial Services Authority Regulation regarding Amendment to Financial Services Authority Regulation Number 6/POJK.03/2015 on Transparency and Publication of Bank Reports;

Considering:

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 21 of 2008 concerning Islamic Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
3. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
4. Financial Services Authority Regulation Number 6/POJK.03/2015 on Transparency and Publication of Bank Reports (State Gazette of the Republic of Indonesia Year 2015 Number 74, Supplement to the State Gazette of the Republic of Indonesia Number 5687);
5. Financial Services Authority Regulation Number 42/POJK.03/2015 on Liquidity Coverage Ratio Obligations for General Banks (State Gazette of the Republic of Indonesia Year 2015 Number 369, Supplement to the State Gazette of the Republic of Indonesia Number 5809);

DECIDES:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION ON AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 6/POJK.03/2015 ON TRANSPARENCY AND PUBLICATION OF BANK REPORTS.

Article I
Several provisions in Financial Services Authority Regulation Number 6/POJK.03/2015 on Transparency and Publication of Bank Reports (State Gazette of the Republic of Indonesia Year 2015 Number 74, Supplement to the State Gazette of the Republic of Indonesia Number 5687) are amended as follows:

1. The provision of paragraph (2) of Article 3 is amended so that Article 3 reads as follows:
   Article 3
   (1) Public Reports as referred to in Article 2 consist of:
   a. Monthly Public Reports; b. Quarterly Public Reports;
   c. Annual Public Reports; and
   d. Other Public Reports.
   (2) The completeness and truthfulness of the contents of Public Reports as referred to in paragraph (1) are the responsibility of the Board of Directors and the Board of Commissioners of the Bank.

2. The provision of paragraph (3) of Article 11 is amended so that Article 11 reads as follows:
   Article 11
   (1) Banks are required to submit Monthly Public Reports online through the Financial Services Authority reporting system.
   (2) In the event that the submission of reports as referred to in paragraph (1) cannot yet be carried out, Banks are required to submit Monthly Public Reports online through the General Bank Headquarters Report System (LKPBU). (3) The submission of Monthly Public Reports online through the Financial Services Authority reporting system or LKPBU system as referred to in paragraph (1) and paragraph (2) is carried out in accordance with the procedures, formats, and timeframes in regulations regarding the Financial Services Authority reporting system or LKPBU.

3. The provisions of paragraph (1) and paragraph (3) of Article 13 are amended so that Article 13 reads as follows:
   Article 13
   (1) Quarterly Public Reports as referred to in Article 12 paragraph (1) include:
   a. financial reports; b. financial performance information;
   c. information on the composition of Shareholders, composition of the Board of Directors and Board of Commissioners, and composition of the Sharia Supervisory Board for Sharia General Banks; and
   d. other information determined by the Financial Services Authority.
   (2) Financial reports as referred to in paragraph (1) letter a consist of:
   a. Financial Position Reports (Balance Sheets); b. Profit and Loss and Other Comprehensive Income Reports; and
   c. Commitment and Contingency Reports.
   (3) Financial performance information as referred to in paragraph (1) letter b consists of:
   a. Minimum Capital Requirement (KPMM) calculations; b. the quantity and quality of productive assets and Impairment Loss Reserves (CKPN);
   c. Bank financial ratios; and
   d. spot transactions and derivative transactions.
   (4) The quantity and quality of productive assets and CKPN as referred to in paragraph (3) letter b, are grouped based on information:
   a. financial instruments; b. funding provided to Related Parties;
   c. credit or financing to debtors or Micro, Small, and Medium Enterprises (MSME) customers;
   d. credit or financing requiring special attention; and e. Asset Write-off Provisions (PPA) that must be formed based on financial instruments.

4. Between Article 13 and Article 14, 1 (one) article is inserted, namely Article 13A so that it reads as follows:
   Article 13A
   Banks are required to add quantitative information on risk exposures faced by the Bank in the Quarterly Public Reports at the end of June.

5. The provision of Article 15 is amended so that it reads as follows:
   Article 15
   (1) General Banks based on Business Activities (BUKU) 3 and BUKU 4 are required to add information regarding capital disclosure according to the Basel framework in Quarterly Public Reports. (2) Capital disclosure as referred to in paragraph (1) must include at least:
   a. Capital Calculations; b. Capital Reconciliation; and
   c. Details of Capital Instrument Features.

6. Between Article 15 and Article 16, 1 (one) article is inserted, namely Article 15A so that it reads as follows:
   Article 15A
   (1) Banks required to prepare and publish liquidity adequacy ratio reports (liquidity coverage ratio), hereinafter abbreviated as LCR, as regulated in Financial Services Authority Regulations regarding liquidity adequacy ratio obligations for General Banks, are required to add information regarding LCR disclosure in Quarterly Public Reports. (2) Disclosure regarding LCR as referred to in paragraph (1) consists of:
   a. quantitative information in the form of LCR calculations and values; and b. qualitative information explaining the calculations and values of LCR as referred to in letter a. (3) The format of LCR disclosure as referred to in paragraph (2) is further regulated in Financial Services Authority Circular Letters regarding transparency and publication of conventional bank reports.

7. The provisions of paragraph (2) and paragraph (5) of Article 18 are amended so that Article 18 reads as follows:
   Article 18
   (1) Banks are required to announce Quarterly Public Reports as referred to in Article 13, Article 14, and Article 17 at:
   a. at least 1 (one) daily newspaper in Indonesian language with wide circulation at the location of the Bank's headquarters or at the location of the Bank's branch located abroad; and b. The Bank's Website. (2) Banks are required to announce information as referred to in Article 13A, Article 15, and Article 15A on the Bank's Website. (3) The announcement of Quarterly Public Reports in newspapers as referred to in paragraph (1) letter a must be signed by at least the President Director and 1 (one) member of the Board of Directors of the Bank. (4) In the event that the President Director as referred to in paragraph (3) is unable to act, other Board of Directors members performing the function of President Director sign the Quarterly Public Reports. (5) Banks are required to maintain announcements of Quarterly Public Reports on the Bank's Website as referred to in paragraph (1) letter b and paragraph (2) for at least 5 (five) Last Fiscal Years. (6) Banks are required to include the name of the Public Accountant Firm that audited the annual financial reports along with the name of the Public Accountant responsible for the audit (partner in charge) together with the opinion provided in the announcement of Quarterly Public Reports as referred to in paragraph (1) for the end of December positions.

8. The provision of paragraph (3) of Article 20 is amended so that Article 20 reads as follows:
   Article 20
   (1) Banks are required to submit Quarterly Public Reports online through the Financial Services Authority reporting system.
   (2) In the event that the submission of reports as referred to in paragraph (1) cannot yet be carried out, Banks are required to submit Quarterly Public Reports online through the General Bank Headquarters Report System (LKPBU). (3) The submission of Quarterly Public Reports online through the Financial Services Authority reporting system or LKPBU system as referred to in paragraph (1) and paragraph (2) is carried out in accordance with the procedures, formats, and timeframes in regulations regarding the Financial Services Authority reporting system or LKPBU.

9. The provisions of paragraph (1), paragraph (2), and paragraph (4) of Article 24 are amended and 2 (two) new paragraphs are added, namely paragraph (5) and paragraph (6) so that Article 24 reads as follows:
   Article 24
   (1) Annual Public Reports as referred to in Article 23 must include at least:
   a. general information; b. financial reports;
   c. financial performance information;
   d. capital disclosure and risk management practices applied by the Bank, at least including descriptions of risk types, potential losses faced by the Bank, and risk mitigation as referred to in regulations governing capital and risk management; e. other disclosures as regulated in accounting standards; and f. other information determined by the Financial Services Authority. (2) General information as referred to in paragraph (1) letter a must include at least:
   a. composition of the Board of Directors, Board of Commissioners, and Executive Officers of the Bank as well as the composition of the Sharia Supervisory Board for Sharia General Banks; b. composition and composition of Shareholders;
   c. business development of the Bank and Bank business group, including if there is business development of Sharia Business Units (UUS);
   d. strategies and policies established by Bank management, including for UUS if the Bank has UUS; and e. management reports containing information on Bank management, including for UUS if the Bank has UUS. (3) Financial reports as referred to in paragraph (1) letter b must include at least:
   a. Financial Position Reports (Balance Sheets); b. Profit and Loss and Other Comprehensive Income Reports;
   c. Equity Change Reports;
   d. Cash Flow Reports; and e. Notes to Financial Reports, including information on commitments and contingencies.
   (4) Financial performance information as referred to in paragraph (1) letter c consists of:
   a. Minimum Capital Requirement (KPMM) calculations; b. the quantity and quality of productive assets and Impairment Loss Reserves (CKPN), which must at least provide grouping information:

1. financial instruments;
2. funding provided to Related Parties;
3. credit or financing to debtors or Micro, Small, and Medium Enterprises (MSME) customers;
4. credit or financing requiring special attention; and
5. Asset Write-off Provisions (PPA) that must be formed based on financial instruments.
   c. Bank financial ratios; and
   d. spot transactions and derivative transactions.
   (5) Disclosure of risk exposures and related matters applied by the Bank as referred to in paragraph (1) letter d must be announced on the Bank's Website quarterly, in the event there are changes in information that tend to be rapid (prone to rapid change). (6) Reporting procedures and sanctions for violations of regulations as referred to in paragraph (5) refer to reporting procedures and sanctions for Quarterly Public Reports.

10. The provision of letter e of Article 26 is amended and 1 (one) new letter is added, namely letter f so that Article 26 reads as follows:
    Article 26
    Banks that are part of a business group and/or have Subsidiary Entities are required to add Annual Public Reports as referred to in Article 24 with information including at least:
    a. Bank business group structure; b. Transactions between the Bank and Related Parties;
    c. Transactions with Related Parties conducted by each entity in the Bank's business group operating in the financial sector;
    d. Funding, commitments, and other facilities equivalent to those from each entity within the same business group as the Bank to debtors and/or parties that have received funding from the Bank; e. Consolidated disclosure regarding capital and risk management practices applied by the Bank, at least including descriptions of risk types, potential losses faced by the Bank, and risk mitigation as referred to in regulations governing capital and risk management; and f. The existence of prohibitions, limitations, and/or other significant obstacles to transferring funds or in fulfilling regulatory capital requirements between the Bank and other entities within the same business group.

11. The provision of Article 33 is amended so that it reads as follows:
    Article 33
    (1) Other Public Reports as referred to in Article 3 paragraph (1) letter d include:
    a. Basic Credit Interest Rate Reports (SBDK); b. Information and/or Material Fact Reports; and;
    c. Other public reports, if required by the Financial Services Authority according to needs and banking industry development.
    (2) Banks announce other public reports as referred to in paragraph (1) letter c periodically in accordance with regulations established by the Financial Services Authority.

12. Between Article 34 and Article 35, 1 (one) article is inserted, namely Article 34A so that it reads as follows:
    Article 34A
    (1) Banks are required to:
    a. announce Information and/or Material Fact Reports as referred to in Article 33 paragraph (1) letter b at least on the Bank's Website; and b. submit Information and/or Material Fact Reports as referred to in Article 33 paragraph (1) letter b to the Financial Services Authority, immediately within a maximum timeframe of 2 (two) working days after the existence of information and/or material facts, unless otherwise determined in legislation. (2) The submission of Information and/or Material Fact Reports as referred to in paragraph (1) letter b must be signed by at least the President Director and 1 (one) member of the Board of Directors of the Bank. (3) In the event that the President Director as referred to in paragraph (2) is unable to act, other Board of Directors members performing the function of President Director sign the Information and/or Material Fact Reports.

13. Between Article 36 and Article 37, 1 (one) article is inserted containing an explanation of Article 10 paragraph (1) letter d of Financial Services Authority Regulation Number 42/POJK.03/2015 on Liquidity Coverage Ratio Obligations for General Banks, namely Article 36A so that it reads as follows:
    Article 36A
    Securities issued by the Central Government and Bank Indonesia in foreign currency that can be counted as High Quality Liquid Asset (HQLA) Level 1 are at most equal to the net cash outflow requirements in the aforementioned foreign currency.

14. The provisions of paragraph (1) and paragraph (2) of Article 44 are amended and 1 (one) new paragraph is added, namely paragraph (3) so that Article 44 reads as follows:
    Article 44
    (1) Banks that announce Basic Credit Interest Rate Reports as referred to in Article 34 paragraph (2) late, are subject to sanctions in the form of fines of Rp1,000,000.00 (one million rupiah) per day. (2) Banks that do not announce Basic Credit Interest Rate Reports as referred to in Article 34 paragraph (3), are subject to sanctions in the form of fines of Rp50,000,000.00 (fifty million rupiah). (3) Banks that:
    a. do not announce information and/or material facts as referred to in Article 34A paragraph (1) letter a; and/or b. do not submit information and/or material facts as referred to in Article 34A paragraph (1) letter b and paragraph (2), are subject to sanctions in the form of:

1. written warnings;
2. reduction of Bank health levels;
3. suspension of certain business activities; and/or
4. listing of Shareholders, Board of Directors members, Board of Commissioners members, or Executive Officers of the Bank in the list of parties prohibited from becoming:
   a) Controlling Shareholders or owners of Banks; and/or b) Board of Directors members, Board of Commissioners members, or Executive Officers of Banks.

15. Between Article 48 and Article 49, 1 (one) article is inserted, namely Article 48A so that it reads as follows:
    Article 48A
    (1) The obligation to disclose quantitative information on risk exposures as referred to in Article 13A is first carried out for reports at the end of June 2017. (2) The obligation to disclose quantitative and qualitative information on LCR as referred to in Article 15A is first carried out for reports at the end of September 2016.

16. Between Article 51 and Article 52, 2 (two) articles are inserted, namely Article 51A and Article 51B so that they read as follows:
    Article 51A
    Article 58 paragraph (2) and Appendix III of Financial Services Authority Regulation Number 42/POJK.03/2015 on Liquidity Coverage Ratio Obligations for General Banks are repealed and declared invalid as of reports at the end of September 2016.
    Article 51B
    At the time this Financial Services Authority Regulation takes effect, all provisions in Financial Services Authority Regulation Number 42/POJK.03/2015 on Liquidity Coverage Ratio Obligations for General Banks remain valid insofar as they do not conflict with provisions in this Financial Services Authority Regulation.

Article II
This Financial Services Authority Regulation takes effect on the date of enactment.

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

Established in Jakarta on August 8, 2016
CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD

Enacted in Jakarta on August 12, 2016
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 170 Copy in accordance with the original Legal Director 1 Legal Department signed Yuliana

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 32/POJK.03/2016
CONCERNING
AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 6/POJK.03/2015 ON TRANSPARENCY AND PUBLICATION OF BANK REPORTS

I. GENERAL
In line with the development of the application of the Basel framework, Banks are required to disclose types of risks and potential losses (risk exposures), risk management practices applied by the Bank, and more detailed capital components accurately and completely. In this regard, improvements are needed regarding bank report transparency and publication regulations, including the addition of report scope, frequency of risk exposure and risk management practice disclosures, and adjustments to capital components.

II. ARTICLE BY ARTICLE
Article I
Number 1
Article 3
Clear enough.

Number 2
Article 11
Paragraph (1)
The obligation to submit Monthly Public Reports online through the Financial Services Authority reporting system is implemented after the Financial Services Authority reporting system is available. Paragraph (2) Clear enough. Paragraph (3) Clear enough.

Number 3
Article 13
Clear enough.

Number 4
Article 13A
Clear enough.

Number 5
Article 15
Paragraph (1)
Capital disclosure according to the Basel framework refers among others to the document Composition of Capital Disclosure Requirements issued by the Basel Committee on Banking Supervision. Paragraph (2) Clear enough.

Number 6
Article 15A
Paragraph (1)
LCR disclosure refers to the document Liquidity Coverage Ratio Disclosure Standards issued by the Basel Committee on Banking Supervision.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.

Number 7
Article 18
Paragraph (1)
Letter a
Announcement in daily newspapers in Indonesian language with wide circulation is intended so that information in Quarterly Public Reports can be known by the public. What is meant by "daily newspaper in Indonesian language with wide circulation" is:

1. at least newspapers with national circulation for Banks that:
   a) have headquarters in Jakarta, Bogor, Depok, Tangerang or Bekasi; b) have headquarters outside Jakarta, Bogor, Depok, Tangerang or Bekasi, but have branches outside the headquarters region; or c) have conducted public offerings of Debt Securities and/or Equity Securities;
2. at least local newspapers with wide circulation in a region, specifically for Banks with headquarters outside Jakarta, Bogor, Depok, Tangerang or Bekasi, and do not have branches outside the headquarters region.
   Letter b
   What is meant by "Bank's Website" is a Website with an Indonesian domain that is not part of the Parent Entity's Website or the Bank's business group.
   Report announcements on the Bank's Website are placed on easily accessible pages, for example by providing special links for public reports on the front page of the Bank's Website. Public report formats are in forms that allow users to process them further, while still considering data security aspects. Paragraph (2) Information announcements on the Bank's Website are placed in special links, for example with titles:
3. "Quantitative information on risk exposures" for disclosure of quantitative risk exposure information faced by the Bank as referred to in Article 13A.
4. "Capital Disclosure according to the Basel framework" for capital disclosure as referred to in Article 15.
5. "Liquidity Coverage Ratio (LCR)" for LCR disclosure as referred to in Article 15A.
   Paragraph (3)
   Signing by Bank Board of Directors members is done by clearly stating the name.
   Paragraph (4)
   What is meant by "function as President Director" is the function performed by Board of Directors members, whether because the function is already stated in the Bank's Articles of Association, a special power of attorney to perform that function, or other documents in accordance with legislation. Paragraph (5) Example:
   On March 31, 2020, on the Bank's Website, Quarterly Public Reports must be maintained at least since the period ending in March 2015.
   This regulation does not apply to Banks that have just started operations or new Banks that are the result of mergers, consolidations, spin-offs, or conversions for less than 5 (five) years. Paragraph (6) Clear enough.

Number 8
Article 20
Paragraph (1)
The obligation to submit Quarterly Public Reports online through the Financial Services Authority reporting system is implemented after the Financial Services Authority reporting system is available. Paragraph (2) Clear enough. Paragraph (3) Clear enough.

Number 9
Article 24
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Clear enough.

Paragraph (5)
What is meant by "other related matters" includes, among others, a general summary of policies and objectives for the implementation of risk management, as well as the risk management reporting system used. Information changes that tend to be rapid (prone to rapid change) include, among others, changes in economic conditions, technology, regulations, and internal Bank/business group policies.

Paragraph (6)
Sufficiently clear.

Number 10
Article 26
Letter a
Sufficiently clear.
Letter b
Transactions with Related Parties are as referred to in financial accounting standards.
Letter c
Sufficiently clear.
Letter d
Sufficiently clear.
Letter e
Sufficiently clear.
Letter f
Sufficiently clear.

Number 11
Article 33
Paragraph (1)
Letter a
What is meant by "Basic Credit Interest Rate Report (SBDK)" is a report that presents the calculation of basic credit interest rates, which includes, among others, the principal cost of funds for credit (HPDK), overhead costs, and profit margin set by the Bank in its lending activities. Letter b What is meant by "Report of Information and/or Material Facts" is a report containing important and relevant information and/or facts regarding events, occurrences, or facts that can influence the decisions of interested parties regarding the aforementioned information and/or facts. Letter c Sufficiently clear. Paragraph (2) Sufficiently clear.

Number 12
Article 34A
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Signing by members of the Bank's Board of Directors is done by clearly stating the name.
Paragraph (3)
What is meant by "function as Chief Executive Officer" is the function carried out by a member of the Board of Directors, whether because the function is already stated in the Bank's Articles of Association, a specific power of attorney document to carry out that function, or other documents in accordance with applicable laws and regulations.

Number 13
Article 36A
Sufficiently clear.

Number 14
Article 44
Sufficiently clear.

Number 15
Article 48A
Sufficiently clear.

Number 16
Article 51A
Sufficiently clear.
Article 51B
Sufficiently clear.
Article II
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5917