FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 33 /POJK.04/2017
CONCERNING
GUIDELINES FOR THE MANAGEMENT OF CORPORATE-STRUCTURED MUTUAL FUNDS BY THE GRACE OF THE MOST HIGH GOD

THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that with the enactment of Law Number 21 of 2011 concerning the Financial Services Authority, as of December 31, 2012, the functions, duties, and authority for the regulation and supervision of financial services activities in the capital market sector, including regulations regarding guidelines for the management of corporate-structured mutual funds, have transferred from the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority; b. that to provide clarity and certainty regarding regulations on guidelines for the management of corporate-structured mutual funds, existing capital market sector regulations regarding such guidelines issued prior to the establishment of the Financial Services Authority need to be changed into a Financial Services Authority Regulation;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Guidelines for the Management of Corporate-Structured Mutual Funds;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY

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);

DECIDING:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING GUIDELINES FOR THE MANAGEMENT OF CORPORATE-STRUCTURED MUTUAL FUNDS.

CHAPTER I

GENERAL PROVISIONS

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

1. Corporate-Structured Mutual Fund is an Issuer whose business activity involves raising funds by selling shares, and subsequently, the funds from the sale of such shares are invested in various types of securities traded in the capital market and money market.
2. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, units of participation in collective investment contracts, futures contracts over Securities, and any derivatives of Securities.
3. Securities Portfolio is a collection of Securities owned by a party.
4. Unit of Participation is a unit of measurement that indicates the interest portion of each party in a collective investment portfolio.
5. Investment Manager is a party whose business activity manages Securities Portfolios for clients or manages collective investment portfolios for a group of clients, except insurance companies, pension funds, and banks that conduct their own business activities based on applicable regulations.
6. Custodian Bank is a general bank that has obtained approval from the Financial Services Authority to conduct business activities as a custodian.
7. Party refers to an individual, company, joint venture, association, or organized group.
8. Public Offering is the offering activity of Securities conducted by an Issuer to sell Securities to the public based on procedures regulated in Law Number 8 of 1995 concerning the Capital Market and its implementing regulations.
9. Registration Statement is a document that must be submitted to the Financial Services Authority by an Issuer in the context of a Public Offering or for a public company.
10. Stock Exchange is a Party that organizes and provides systems and/or facilities to match buy and sell offers of Securities of other Parties with the aim of trading Securities among them.
11. Affiliation is:
    a. family relationship due to marriage and descent up to the second degree, both horizontally and vertically; b. relationship between a Party and its employees, directors, or commissioners;
    c. relationship between 2 (two) companies where there is one or more members of the board of directors or board of commissioners who are the same;
    d. relationship between a company and a Party, directly or indirectly, controlling or being controlled by said company; e. relationship between 2 (two) companies controlled, directly or indirectly, by the same Party; or f. relationship between a company and its major shareholders.

CHAPTER II

GUIDELINES FOR THE MANAGEMENT OF CORPORATE-STRUCTURED MUTUAL FUNDS

Article 2
Corporate-Structured Mutual Funds that have obtained a business license must comply with the following provisions:
a. appoint an Investment Manager that has obtained a business license to manage the investments of the Corporate-Structured Mutual Fund and carry out other necessary activities supporting its function as an Investment Manager based on a Corporate-Structured Mutual Fund management contract; b. in the event that the Investment Manager ceases its activities regarding the management of a Corporate-Structured Mutual Fund and no plan is made for the transfer of the Corporate-Structured Mutual Fund management contract or the creation of a new Corporate-Structured Mutual Fund contract, the Corporate-Structured Mutual Fund must be dissolved;
c. the Corporate-Structured Mutual Fund management contract must first obtain approval from the majority of the members of the board of directors of the Corporate-Structured Mutual Fund;
d. all transfers of the Corporate-Structured Mutual Fund management contract must be based on the approval of the majority of the board of directors; e. the position of board of directors members of the Corporate-Structured Mutual Fund shall not be given to:

1. persons who have been declared bankrupt or who were members of the board of directors or board of commissioners declared guilty of causing a company to be declared bankrupt; and
2. persons who have committed disgraceful acts and/or have been sentenced for proven criminal offenses in the capital market sector in particular or the financial sector in general;
   f. any plan to terminate the Corporate-Structured Mutual Fund management contract must first obtain approval from the majority of the board of directors, and such termination must be notified to the shareholders and the Financial Services Authority at least 60 (sixty) days or within the timeframe set by the Financial Services Authority before the termination of said contract; and g. the Investment Manager must submit to the board of directors all reports, notes, and other material and relevant information, as well as provide other information related to the management of the Corporate-Structured Mutual Fund requested by the board of directors to evaluate the Corporate-Structured Mutual Fund management contract.

Article 3
Any changes to the basic policies contained in the Corporate-Structured Mutual Fund management contract or the appointment and change of auditors must first obtain approval from the majority of the board of directors, and such changes must be notified to the Financial Services Authority and shareholders at least 60 (sixty) days before the changes take effect.

Article 4
The Financial Services Authority may reject changes as referred to in Article 3 within a period of 45 (forty-five) days from the date the notification is received.

Article 5
In the event that the Financial Services Authority does not object to the changes as referred to in Article 3 within the period referred to in Article 4, the changes shall automatically take effect on the 61st (sixty-first) day from the date the notification is received by the Financial Services Authority.

Article 6
The Board of Directors must carefully consider, both regarding candidate professions and supporting institutions involved and the contract requirements submitted, before approving, extending, or approving the transfer of any contract for the benefit of the Corporate-Structured Mutual Fund.

Article 7
The Board of Directors must:
a. conduct continuous, careful, and detailed supervision over the Corporate-Structured Mutual Fund, including supervision over activities conducted by related professions and supporting institutions; and b. request from related professions and supporting institutions all documents, notes, and other information necessary to evaluate the performance of such related professions and supporting institutions.

Article 8
In considering the appointment of an Investment Manager, the Board of Directors must at least consider the following:
a. the capability of the Investment Manager; b. the costs of the Investment Manager;
c. services provided by the Investment Manager other than management services; and
d. any benefits other than management fees paid based on the Corporate-Structured Mutual Fund management contract, obtained by the Investment Manager or its Affiliates.

Article 9
All contracts and their amendments must be made notarially.

Article 10
Corporate-Structured Mutual Funds that have obtained a business license and have been declared effective may only conduct purchases and sales of:
a. Securities that have been sold in a Public Offering and/or listed on a Stock Exchange, both domestically and abroad; b. money market instruments with a maturity of less than 1 (one) year, including:

1. Bank Indonesia certificates;
2. money market securities;
3. debt acknowledgment instruments;
4. deposit certificates in either Rupiah or foreign currency; and
5. bonds issued by the Government of the Republic of Indonesia; and
   c. commercial paper with a maturity of less than 3 (three) years and rated by a Securities Rating Agency.

Article 11
In the event that the Registration Statement for shares of a closed-end Corporate-Structured Mutual Fund has been declared effective by the Financial Services Authority, the shares of said Corporate-Structured Mutual Fund may be listed on a Stock Exchange.

Article 12
The Investment Manager must maintain all important records related to the financial reports and management of the Corporate-Structured Mutual Fund as established by the Financial Services Authority.

Article 13
In the event that a Corporate-Structured Mutual Fund conducts a subsequent Public Offering, the Corporate-Structured Mutual Fund must:
a. announce daily the net asset value of its shares during the Public Offering period; and b. offer its shares at a price equal to or greater than the net asset value per share.

Article 14
Corporate-Structured Mutual Funds must calculate the net asset value per share every trading day for open-end Corporate-Structured Mutual Funds and once a week for closed-end Corporate-Structured Mutual Funds.

Article 15
The Investment Manager of a Corporate-Structured Mutual Fund is prohibited from taking actions that may cause the Corporate-Structured Mutual Fund to:
a. purchase Securities traded on foreign Stock Exchanges whose information cannot be accessed through mass media or available internet facilities; b. purchase Securities traded on foreign Stock Exchanges whose information can be accessed through mass media or available internet facilities exceeding 15% (fifteen percent) of the net asset value;
c. purchase equity Securities issued by companies that have listed their Securities on a Stock Exchange in Indonesia exceeding 5% (five percent) of the paid-up capital of said company;
d. purchase Securities issued by a company exceeding 10% (ten percent) of the net asset value of the Corporate-Structured Mutual Fund at any time, with the provision that this restriction includes ownership of securities issued by banks but does not include Bank Indonesia certificates and bonds issued by the Government of the Republic of Indonesia; e. sell shares of an open-end Corporate-Structured Mutual Fund to each investor exceeding 2% (two percent) of the issued capital, except for the Investment Manager of the relevant open-end Corporate-Structured Mutual Fund; f. purchase asset-backed Securities exceeding 10% (ten percent) of the net asset value of the Corporate-Structured Mutual Fund, with the provision that each type of asset-backed Security does not exceed 5% (five percent) of the net asset value of the Corporate-Structured Mutual Fund; g. purchase Securities not through a Public Offering and/or not listed on a Stock Exchange, except for money market Securities and bonds issued by the Government of the Republic of Indonesia; h. purchase Securities issued by affiliated parties, both with the Investment Manager and Unit of Participation holders, exceeding 20% (twenty percent) of the net asset value, except for Affiliation relationships arising from government capital participation;
i. engage in activities other than investment, reinvestment, or trading of Securities;
j. engage in the sale of Securities not yet owned; k. engage in purchasing Securities on margin;
l. issue bonds or credit securities;
m. engage in various forms of loans, except short-term loans related to transaction settlement and such loans do not exceed 10% (ten percent) of the net asset value of the Corporate-Structured Mutual Fund at the time of purchase; n. purchase Securities currently being offered in a Public Offering where the Investment Manager acts as the underwriter of said Securities; o. engage in joint transactions or profit-sharing contracts with the Investment Manager or its Affiliates; p. pay dividends other than from profits; q. purchase asset-backed Securities where the Investment Manager is the same as the Investment Manager of the Corporate-Structured Mutual Fund and/or is affiliated with the original creditor of said asset-backed Securities; or r. purchase asset-backed Securities not listed on a Stock Exchange in Indonesia.

Article 16
After notifying the Financial Services Authority, the Investment Manager of an open-end Corporate-Structured Mutual Fund may instruct the Custodian Bank and sales agents to suspend repurchase (redemption) if any of the following occur:
a. the Stock Exchange where most of the Securities Portfolio of the Corporate-Structured Mutual Fund is traded is closed; b. trading of Securities for most of the Securities Portfolio of the Corporate-Structured Mutual Fund at the Stock Exchange is halted;
c. a state of emergency; or
d. other matters established in the investment management contract after obtaining approval from the Financial Services Authority.

Article 17
The Investment Manager or its Affiliates may buy or sell shares of a closed-end Corporate-Structured Mutual Fund managed by said Investment Manager, provided that the net asset value is calculated, valued, and announced every day.

Article 18
The sale or repurchase (redemption) of shares (redemption) of an open-end Corporate-Structured Mutual Fund may be conducted through the Custodian Bank or sales agents appointed by the Investment Manager.

Article 19
The Investment Manager is prohibited from being affiliated with the Custodian Bank.

Article 20
Payment for open-end Corporate-Structured Mutual Fund shares resold by investors is to be made as soon as possible, not later than 7 (seven) working days from the request for resale by the shareholders.

Article 21
The initial net asset value for each share of an open-end Corporate-Structured Mutual Fund must be set at Rp1,000.00 (one thousand Rupiah).

Article 22
The annual financial report of the Corporate-Structured Mutual Fund must be audited by an accountant registered with the Financial Services Authority and submitted to the Financial Services Authority by the Investment Manager at the latest by the end of the third month after the end of the annual financial reporting period.

Article 23
The Corporate-Structured Mutual Fund must issue an updated prospectus accompanied by the latest annual financial report and submit it to the Financial Services Authority by the Investment Manager at the latest by the end of the 3rd (third) month after the end of the annual financial reporting period.

Article 24
In the event that a Corporate-Structured Mutual Fund is dissolved, the costs of legal consultants, accountants, and other expenses to third parties become the responsibility and must be paid by the Investment Manager to the respective parties.

CHAPTER III

SANCTION PROVISIONS

Article 25
(1) Without prejudice to criminal provisions in the capital market sector, the Financial Services Authority has the authority to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and/or g. cancellation of registration.
(2) Administrative sanctions as referred to in paragraph (1) letters b, c, d, e, f, or g may be imposed with or without prior imposition of an administrative sanction in the form of a written warning as referred to in paragraph (1) letter a. (3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 26
In addition to administrative sanctions as referred to in Article 25 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 27
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 25 paragraph (1) and specific actions as referred to in Article 26 to the public.

CHAPTER IV

CLOSING PROVISIONS

Article 28
Upon the commencement of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Agency Number Kep-13/PM/2002 concerning Guidelines for the Management of Corporate-Structured Mutual Funds, along with Regulation Number IV.A.3 which is its attachment, is repealed and declared invalid.

Article 29
This Financial Services Authority Regulation shall take effect on the date of its promulgation.

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

In order that everyone may know it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on June 21, 2017
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD

Promulgated in Jakarta on June 22, 2017
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 133

EXPLANATION

OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 33 /POJK.04/2017
CONCERNING
GUIDELINES FOR THE MANAGEMENT OF CORPORATE-STRUCTURED MUTUAL FUNDS

I. GENERAL
Since December 31, 2012, the functions, duties, and authority for the regulation and supervision of financial services activities in the capital market, insurance, pension funds, financing institutions, and other financial service institutions have transferred from the Minister of Finance and the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority.

In relation to the above, it is necessary to reorganize the existing regulatory structure, particularly those related to the capital market sector, by converting Capital Market Supervisory Agency and Financial Institutions Regulations related to the capital market sector into Financial Services Authority Regulations. This reorganization is conducted to ensure that there are Financial Services Authority Regulations regarding the capital market sector that are consistent with Financial Services Authority Regulations in other sectors.

Based on the background and aspects mentioned above, it is necessary to replace the capital market sector regulations governing guidelines for the management of Corporate-Structured Mutual Funds, namely the Decision of the Head of the Capital Market Supervisory Agency Number Kep-13/PM/2002 concerning Guidelines for the Management of Corporate-Structured Mutual Funds, along with Regulation Number IV.A.3 which is its attachment, into a Financial Services Authority Regulation concerning Guidelines for the Management of Corporate-Structured Mutual Funds.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Clear enough.

Article 3
Clear enough.

Article 4
Clear enough.

Article 5
Clear enough.

Article 6
Clear enough.

Article 7
Clear enough.

Article 8
Clear enough.

Article 9
Clear enough.

Article 10
Clear enough.

Article 11
Clear enough.

Article 12
Clear enough.

Article 13
Clear enough.

Article 14
Clear enough.

Article 15
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Clear enough.

Letter f
Clear enough.

Letter g
Clear enough.

Letter h
Clear enough.

Letter i
Clear enough.

Letter j
In practice, "sale of Securities not yet owned" is also known as short sale.

Letter k
Clear enough.

Letter l
Clear enough.

Letter m
Clear enough.

Letter n
Clear enough.

Letter o
Clear enough.

Letter p
Clear enough.

Letter q
Clear enough.

Letter r
Clear enough.

Article 16
Clear enough.

Article 17
Clear enough.

Article 18
Clear enough.

Article 19
Clear enough.

Article 20
Clear enough.

Article 21
Clear enough.

Article 22
Clear enough.

Article 23
Clear enough.

Article 24
Clear enough.

Article 25
Clear enough.

Article 26
Clear enough.

Article 27
Clear enough.

Article 28
Clear enough.

Article 29
Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6080