Financial Services Authority Regulation Number 35/POJK.05/2018 Concerning the Conduct of Financing Company Business

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 35 /POJK.05/2018
CONCERNING
THE CONDUCT OF FINANCING COMPANY BUSINESS
BY THE GRACE OF THE MOST HIGH GOD,
THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to carry out the regulatory and supervisory tasks in the financing institution sector as referred to in Article 8 and Article 9 of Law Number 21 of 2011 concerning the Financial Services Authority, the Financial Services Authority has the authority to establish legislation regarding financing companies; b. that in order to increase the role of financing companies in the national economy, improve prudential regulation, and enhance consumer protection, it is necessary to improve the provisions regarding the conduct of financing company business;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning the Conduct of Financing Company Business;

Recalling: 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);

DECIDES:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE CONDUCT OF FINANCING COMPANY BUSINESS.

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

Financing Company is a business entity that conducts financing activities for goods and/or services.
Investment Financing is the financing of capital goods along with services required for business/investment activities, rehabilitation, modernization, expansion, or relocation of business/investment premises provided to the debtor.
Working Capital Financing is financing provided to meet expenditure needs that are consumed within one cycle of the debtor's business activity.
Multi-purpose Financing is the financing of goods and/or services required by the debtor for use/consumption and not for business needs or productive activities within the agreed period.
Finance Lease, hereinafter referred to as Lease Financing, is a financing activity in the form of the provision of goods by the Financing Company for use by the debtor for a certain period, which substantially transfers the benefits and risks of the financed goods.
Sale and Leaseback, hereinafter referred to as Sale and Leaseback, is a financing activity in the form of the sale of a good by the debtor to the Financing Company accompanied by leasing the good back to the same debtor.
Factoring, hereinafter referred to as Factoring, is a financing activity in the form of the purchase of a company's business receivables along with the management of those receivables.
Factoring With Recourse, hereinafter referred to as Factoring with Seller's Guarantee, is a Factoring transaction where the seller of receivables bears the risk of non-collection of part or all of the receivables sold to the Financing Company.
Factoring Without Recourse, hereinafter referred to as Factoring without Seller's Guarantee, is a Factoring transaction where the Financing Company bears the risk of non-collection of all receivables sold to the Financing Company.
Purchase with Installment Payment is a financing activity for goods and/or services purchased by the debtor from the provider of goods and/or services with installment payments.
Project Financing is financing provided for the implementation of a project that requires several types of capital goods and/or services related to the procurement of the project.
Infrastructure Financing is the financing of goods and/or services for infrastructure construction.
Business Capital Facility is the financing of goods and/or services channeled directly to the debtor for business or productive activities, which are consumed within one cycle of the debtor's business activity.
Fund Facility is the financing of goods and/or services channeled directly to the debtor for use/consumption and not for business needs or productive activities within the agreed period.
Down Payment for Motor Vehicle Financing is an upfront or cash down payment whose funds come from the debtor for the procurement of motor vehicles using the Purchase with Installment Payment method.
Outstanding Principal is the total receivables minus:
a. unearned interest income; and b. other income and expenses related to financing transactions that are amortized.
Net Non-Performing Financing (NPF Net) is financing receivables consisting of financing receivables with less active, doubtful, and default quality, after being reduced by provisions for impairment of financing receivables for financing receivables consisting of financing receivables with less active, doubtful, and default quality.
Net Non-Performing Financing Ratio (Net NPF Ratio) is the ratio between Net NPF and total financing receivables.
Debtor is a business entity or individual who receives financing for goods and/or services from the Financing Company.
Financial Health Level is the result of the assessment of the capital adequacy, quality of financing receivables, liquidity, and performance of the Financing Company.
Paid-up Capital is the paid-up capital for Financing Companies in the form of a limited liability company or the principal savings and mandatory savings for Financing Companies in the form of a cooperative legal entity.
Equity is equity based on the financial accounting standards applicable in Indonesia.
Board of Directors is the corporate organ authorized and fully responsible for managing the corporation for the interests of the corporation, in accordance with the purpose and objectives of the corporation and representing the corporation, both inside and outside of court, in accordance with the articles of association for Financing Companies in the form of a limited liability company or managers as referred to in legislation in the cooperative sector for Financing Companies in the form of a cooperative legal entity.
Board of Commissioners is the Corporate Organ tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors for Financing Companies in the form of a limited liability company or supervisory boards as referred to in legislation in the cooperative sector for Financing Companies in the form of a cooperative legal entity.
Maximum Limit for Financing Provision, hereinafter abbreviated as BMPP, is a specific limit in the provision of financing permitted based on this Financial Services Authority Regulation.
Professional Certification Body is a body implementing professional certification activities that obtains a license from the state agency authorized to grant licenses to professional certification bodies in Indonesia.

CHAPTER II
BUSINESS ACTIVITIES
Section One
Types of Business Activities and Financing Methods
Article 2
(1) The business activities of Financing Companies include:
a. Investment Financing; b. Working Capital Financing;
c. Multi-purpose Financing; and/or
d. other financing business activities based on approval from the Financial Services Authority.
(2) In addition to the business activities referred to in paragraph (1), Financing Companies may conduct operating lease and/or fee-based activities as long as they do not conflict with regulations in the financial services sector.

Article 3
Investment Financing activities as referred to in Article 2 paragraph (1) letter a and/or Working Capital Financing as referred to in Article 2 paragraph (1) letter b are directed at Debtors who:
a. have productive businesses; and/or b. have ideas for the development of productive businesses.

Article 4
(1) Investment Financing as referred to in Article 2 paragraph (1) letter a must be conducted using the following methods:
a. Lease Financing; b. Sale and Leaseback;
c. Factoring with Seller's Guarantee;
d. Factoring without Seller's Guarantee; e. Purchase with Installment Payment; f. Project Financing; g. Infrastructure Financing; and/or h. other financing methods after obtaining prior approval from the Financial Services Authority. (2) Working Capital Financing as referred to in Article 2 paragraph (1) letter b must be conducted using the following methods:
a. Sale and Leaseback; b. Factoring with Seller's Guarantee;
c. Factoring without Seller's Guarantee;
d. Business Capital Facility; and/or e. other financing methods after obtaining prior approval from the Financial Services Authority.
(3) Multi-purpose Financing as referred to in Article 2 paragraph (1) letter c must be conducted using the following methods:
a. Lease Financing; b. Purchase with Installment Payment;
c. Fund Facility; and/or
d. other financing methods after obtaining prior approval from the Financial Services Authority.

Article 5
(1) Financing Companies intending to conduct other financing business activities as referred to in Article 2 paragraph (1) letter d and other financing methods as referred to in Article 4 paragraph (1) letter h, paragraph (2) letter e, and paragraph (3) letter d, must meet the following requirements:
a. the plan to conduct other financing business activities and other financing methods has been included in the Financing Company's business plan; b. has a Financial Health Level with a minimum healthy condition;
c. has a minimum risk level of low-medium;
d. meets the gearing ratio requirements; e. has Equity of at least Rp200,000,000,000.00 (two hundred billion rupiah); and f. is not currently subject to administrative sanctions by the Financial Services Authority. (2) Financing Companies intending to conduct other financing business activities and other financing methods as referred to in paragraph (1) must submit an application to the Financial Services Authority and must attach documents containing at least descriptions regarding:
a. the products to be marketed; b. business prospect analysis;
c. the mechanism or financing method to be used;
d. the rights and obligations of the parties; and e. sample financing agreements to be used.
(3) The Financial Services Authority provides approval, requests document completeness, or rejects the application as referred to in paragraph (2) within a maximum period of 20 (twenty) working days from the date the application is received. (4) In providing approval, requesting document completeness, or rejecting as referred to in paragraph (3), the Financial Services Authority conducts:
a. analysis of document completeness as referred to in paragraph (2); b. analysis of compliance with provisions in this Financial Services Authority Regulation; and
c. analysis of the feasibility of the proposed other financing business activities or other financing methods.
(5) The Board of Directors must submit the complete documents as referred to in paragraph (2) within a maximum of 20 (twenty) working days from the date of the document completeness request letter from the Financial Services Authority. (6) In the event that the Board of Directors has submitted the complete documents as referred to in paragraph (5), the Financial Services Authority provides approval or rejection in accordance with the provisions as referred to in paragraph (3). (7) If within 20 (twenty) working days from the date of the document completeness request letter as referred to in paragraph (5), the Financial Services Authority has not received a response to the document completeness request, the Board of Directors is deemed to have cancelled the application for approval to conduct other financing business activities or other financing methods. (8) In the event that the application for approval to conduct other financing business activities or other financing methods as referred to in paragraph (3) is approved, the Financial Services Authority establishes an approval decision for conducting other financing business activities or other financing methods for the Financing Company. (9) In the event that the Financial Services Authority rejects the application for approval to conduct other financing business activities or other financing methods as referred to in paragraph (3), the rejection must be done in writing and accompanied by reasons for the rejection.

Article 6
(1) Financing Companies intending to conduct fee-based activities as referred to in Article 2 paragraph (2) must report to the Financial Services Authority by attaching at least descriptions regarding:
a. descriptions of the fee-based products to be marketed; b. descriptions of the marketing mechanism;
c. descriptions of the rights and obligations of the parties;
d. draft cooperation agreements; and e. photocopies of permits from the competent authority (if any).
(2) In the event that the Financial Services Authority has received the report as referred to in paragraph (1) completely, the Financial Services Authority issues a letter recording fee-based activities in the Financial Services Authority administration within a maximum of 20 (twenty) working days from the date the report is received. (3) If within the period as referred to in paragraph (2), the Financial Services Authority does not issue the recording letter, the Financing Company may conduct fee-based activities as referred to in paragraph (1).

Article 7
Financing Companies must clearly state the business activities as referred to in Article 2 in their articles of association.

Section Two
Lease Financing
Article 8
(1) Lease Financing as referred to in Article 4 paragraph (1) letter a is conducted in the provision of goods by the Financing Company for use by the Debtor for a certain period, which substantially transfers the benefits and risks of the financed goods. (2) In the event that the Lease Financing agreement is still valid, ownership of the transaction object goods of the Lease Financing remains with the Financing Company.

Article 9
(1) Financing Companies must include clauses in the financing agreement that the Debtor is prohibited from sub-leasing the leased goods to other parties.
(2) During the Lease Financing period, the Financing Company must affix a plaque or label on the leased goods stating the name and address of the Financing Company and a statement that the goods are bound by the Lease Financing agreement.

Section Three
Factoring
Article 10
(1) Financing Companies are prohibited from conducting Factoring with Seller's Guarantee transactions with a business receivable period of more than 10 (ten) years.
(2) Financing Companies are prohibited from conducting Factoring without Seller's Guarantee transactions with a business receivable period of more than 2 (two) years.
(3) Financing Companies are prohibited from conducting Factoring with Seller's Guarantee transactions with other Financing Companies as the Debtor.

Section Four
Purchase with Installment Payment
Article 11
In the event of Purchase with Installment Payment for the procurement of goods, ownership of the financing object in the agreement transfers from the provider of goods to the Debtor.

Section Five
Project Financing
Article 12
Investment Financing using the Project Financing method can only be conducted using one or more financing methods as referred to in Article 4 paragraph (1) letters a through e.

Section Six
Infrastructure Financing
Article 13
(1) Financing Companies conducting Investment Financing activities using the Infrastructure Financing method must meet the following requirements:
a. the plan to conduct Investment Financing activities using the Infrastructure Financing method has been included in the Financing Company's business plan; b. has a Financial Health Level with a minimum healthy condition;
c. has a minimum risk level of low-medium;
d. has Equity greater than Rp1,000,000,000,000.00 (one trillion rupiah); e. has standard operating procedures related to Infrastructure Financing; and f. is not currently subject to administrative sanctions by the Financial Services Authority. (2) Investment Financing using the Infrastructure Financing method can only be conducted using one or more financing methods as referred to in Article 4 paragraph (1) letters a through e.

Section Seven
Business Capital Facility and Fund Facility
Article 14
(1) Business Capital Facility as referred to in Article 4 paragraph (2) letter d is conducted by providing financing based on the needs for the purchase of goods and/or use of services received by the Debtor from the provider of goods and/or services. (2) Financing Companies must state the purpose of the needs for the purchase of goods and/or use of services as referred to in paragraph (1) in the financing agreement with the Debtor. (3) Financing Companies must obtain proof of payment for the purchase of goods and/or use of services by the Debtor to the provider of goods and/or services no later than:
a. 3 (three) months from the date of signing the financing agreement; or b. in accordance with the period agreed upon in the financing agreement, whichever is shorter.

Article 15
(1) Fund Facility as referred to in Article 4 paragraph (3) letter c is conducted by providing financing based on the needs for the purchase of goods and/or use of services for consumptive needs received by the Debtor from the provider of goods and/or services. (2) Financing Companies must state the purpose of the needs for the purchase of goods and/or use of services as referred to in paragraph (1) in the financing agreement with the Debtor. (3) Financing Companies must obtain proof of payment for the purchase of goods and/or use of services by the Debtor to the provider of goods and/or services no later than:
a. 3 (three) months from the date of signing the financing agreement; or b. in accordance with the period agreed upon in the financing agreement, whichever is shorter.

Article 16
(1) To conduct Working Capital Financing activities using the Business Capital Facility method and Multi-purpose Financing using the Fund Facility method, Financing Companies must meet the following requirements:
a. has a Financial Health Level with a minimum healthy condition; b. has a risk level of low or low-medium;
c. meets capital adequacy ratio requirements; and
d. meets gearing ratio requirements.
(2) Working Capital Financing receivables using the Business Capital Facility method and Multi-purpose Financing receivables using the Fund Facility method are prohibited from exceeding 25% (twenty-five percent) compared to total financing receivables. (3) The assessment of compliance with requirements for Financing Companies conducting Working Capital Financing activities using the Business Capital Facility method and Multi-purpose Financing using the Fund Facility method as referred to in paragraph (1) is calculated based on monthly reports as of June 30 and December 31. (4) The application of compliance with requirements for Financing Companies as referred to in paragraph (3) takes effect on August 1 or February 1 for the following 6 (six) month period. (5) In the event that a Financing Company does not meet the requirements as referred to in paragraph (1) based on a specific reporting period, the disbursement of financing through Working Capital Financing activities using the Business Capital Facility method and Multi-purpose Financing using the Fund Facility method that has already been disbursed by the Financing Company during the period when the Financing Company met the requirements may still continue until the end of the financing agreement period.

Article 17
Working Capital Financing using the Business Capital Facility method and Multi-purpose Financing using the Fund Facility method must meet the following requirements:
a. the financing value for each Debtor is at most Rp500,000,000 (five hundred million rupiah). b. has collateral in the form of motor vehicles, land, buildings, and/or heavy equipment;
c. includes an assessment of Debtor feasibility through a credit information management agency that has obtained a business license from the Financial Services Authority; and
d. includes an analysis of the Debtor's repayment capacity.

CHAPTER III
INFORMATION SYSTEM AND TECHNOLOGY
Article 18
(1) Financing Companies must have an integrated information and technology system.
(2) The obligation as referred to in paragraph (1) applies to Financing Companies that have more than 5 (five) branch offices.

Article 19
(1) Financing Companies may conduct their business activities by utilizing information technology.
(2) To conduct business activities by utilizing information technology as referred to in paragraph (1), Financing Companies must meet the following requirements:
a. has standard operating procedures (SOP) related to business activities utilizing information technology; b. has human resources with expertise and/or background in information technology;
c. has a data center and disaster recovery center located in Indonesia; and
d. has a reliable and secure information technology system.

CHAPTER IV
DOWN PAYMENT FOR MOTOR VEHICLE FINANCING
Article 20
(1) Financing Companies that have a Financial Health Level with a minimum healthy condition and have a Net NPF Ratio for motor vehicle financing lower than or equal to 1% (one percent) may apply the following down payment amounts for Motor Vehicle Financing to Debtors:
a. for two- or three-wheeled motor vehicles, at least 0% (zero percent) of the selling price of the relevant vehicle; b. for four-wheeled or more motor vehicles used for Investment Financing, at least 0% (zero percent) of the selling price of the relevant vehicle; or
c. for four-wheeled or more motor vehicles used for Multi-purpose Financing, at least 0% (zero percent) of the selling price of the relevant vehicle.
(2) Financing Companies that have a Financial Health Level with a minimum healthy condition and

have a Net NPF Ratio for motor vehicle financing higher than 1% (one percent) and lower than or equal to 3% (three percent) must apply the provisions on the amount of Down Payment for Motor Vehicle Financing to Debtors as follows:
a. for two-wheeled or three-wheeled motor vehicles, at least 10% (ten percent) of the selling price of the relevant vehicle; b. for four-wheeled or more motor vehicles used for Investment Financing, at least 10% (ten percent) of the selling price of the relevant vehicle; or
c. for four-wheeled or more motor vehicles used for Multi-purpose Financing, at least 10% (ten percent) of the selling price of the relevant vehicle.
(3) Financing Companies that have a Financial Health Level with a minimum healthy condition and have a Net NPF Ratio for motor vehicle financing higher than 3% (three percent) and lower than or equal to 5% (five percent) must apply the provisions on the amount of Down Payment for Motor Vehicle Financing to Debtors as follows:
a. for two-wheeled or three-wheeled motor vehicles, at least 15% (fifteen percent) of the selling price of the relevant vehicle; b. for four-wheeled or more motor vehicles used for Investment Financing, at least 15% (fifteen percent) of the selling price of the relevant vehicle; or
c. for four-wheeled or more motor vehicles used for Multi-purpose Financing, at least 15% (fifteen percent) of the selling price of the relevant vehicle.
(4) Financing Companies that do not meet the Financial Health Level with a minimum healthy condition and have a Net NPF Ratio for motor vehicle financing lower than or equal to 5% (five percent) must apply the provisions on the amount of Down Payment for Motor Vehicle Financing to Debtors as follows:
a. for two-wheeled or three-wheeled motor vehicles, at least 15% (fifteen percent) of the selling price of the relevant vehicle; b. for four-wheeled or more motor vehicles used for Investment Financing, at least 15% (fifteen percent) of the selling price of the relevant vehicle; or
c. for four-wheeled or more motor vehicles used for Multi-purpose Financing, at least 20% (twenty percent) of the selling price of the relevant vehicle.
(5) Financing Companies that have a Net NPF Ratio for motor vehicle financing higher than 5% (five percent) must apply the provisions on the amount of Down Payment for Motor Vehicle Financing to Debtors as follows:
a. for two-wheeled or three-wheeled motor vehicles, at least 20% (twenty percent) of the selling price of the relevant vehicle; b. for four-wheeled or more motor vehicles used for Investment Financing, at least 20% (twenty percent) of the selling price of the relevant vehicle; or
c. for four-wheeled or more motor vehicles used for Multi-purpose Financing, at least 25% (twenty-five percent) of the selling price of the relevant vehicle.
(6) Four-wheeled or more motor vehicles used for Investment Financing as referred to in paragraph (1) letter b, paragraph (2) letter b, paragraph (3) letter b, paragraph (4) letter b, and paragraph (5) letter b must meet at least the following criteria:
a. are passenger or cargo transport vehicles that have permits issued by the competent authority to conduct specific business activities; or b. are submitted by individuals or legal entities that have specific business permits from the competent authority and are used for business activities relevant to the business permits held. (7) Motor vehicle financing provided by Financing Companies to Debtors in motor vehicle ownership programs with other corporations is exempt from the obligation to apply the provisions on the amount of Down Payment for Motor Vehicle Financing to Debtors as referred to in paragraphs (1) to (5). (8) The vehicle ownership program as referred to in paragraph (7) must be stipulated in a cooperation agreement between the Financing Company and the other corporation that can provide certainty of the collectability of the financing receivables that have been provided. (9) Certainty of the collectability of financing receivables that have been provided as referred to in paragraph (8) can be in the form of:
a. installment payments through a salary deduction mechanism from the employees of the relevant corporation; and b. guarantees on financing receivables.
Article 21
(1) The application of the amount of Down Payment for Motor Vehicle Financing as referred to in Article 20 paragraphs (1) to (5) is calculated based on monthly reports as of June 30 and December 31. (2) The application of the amount of Down Payment for Motor Vehicle Financing as referred to in Article 20 paragraphs (1) to (5) takes effect on August 1 or February 1 for the next 6 (six) month period. (3) The calculation of the amount of Down Payment for Motor Vehicle Financing as referred to in Article 20 paragraphs (1) to (5) is done against the selling price of the vehicle after deducting price discounts (discount) and other discounts. (4) The calculation of the amount of Down Payment for Motor Vehicle Financing as referred to in Article 20 paragraphs (1) to (5) does not include the first installment, survey costs, commissions, insurance, guarantees, collateral charges, notary fees, and/or other costs. (5) Incentive costs provided by the Financing Company to third parties related to financing acquisition cannot be calculated in the calculation of the amount of Down Payment for Motor Vehicle Financing as referred to in Article 20 paragraphs (1) to (5).
CHAPTER V
LIMITS ON THIRD-PARTY INCENTIVES
Article 22
(1) Financing Companies are prohibited from providing financing acquisition incentive costs to third parties exceeding 17.5% (seventeen point five percent) of the value of income to be received related to financing for each financing agreement. (2) Income to be received related to financing as referred to in paragraph (1) consists of:
a. interest income before considering cost of fund; b. income from insurance and/or guarantee discounts;
c. administrative income; and
d. commission income.
CHAPTER VI
MAXIMUM LIMITS ON FINANCING PROVISION
Article 23
(1) Financing Companies must comply with the Maximum Related Party Financing (BMPP) provisions to all related parties at most 50% (fifty percent) of the Financing Company's Equity. (2) The basis for calculating Equity in calculating BMPP as referred to in paragraph (1) is the Equity in the Financing Company's latest monthly report before financing disbursement is carried out. (3) If the Financing Company obtains a business license for less than 1 (one) month, the basis for calculating Equity in calculating BMPP as referred to in paragraph (1) is the Equity in the financial report submitted at the time of the business license application. (4) Related parties as referred to in paragraph (1) include:
a. individuals or business entities that are controllers of the Financing Company; b. business entities where the Financing Company acts as a controller;
c. individuals or business entities that act as controllers of business entities as referred to in letter b;
d. business entities whose control is carried out by:

individuals and/or business entities as referred to in letter a; or
individuals and/or business entities as referred to in letter c;
e. Board of Commissioners or Board of Directors at the Financing Company; f. parties having family relationships up to the second degree, both horizontal and vertical:
from individuals who are controllers of the Financing Company as referred to in letter a;
and/or
from the Board of Commissioners or Board of Directors at the Financing Company as referred to in letter e;
g. board of commissioners or directors at business entities as referred to in letters a to d; h. business entities whose board of commissioners or directors are:
Board of Commissioners or Board of Directors at the Financing Company; or
board of commissioners or directors at business entities as referred to in letters a to d;
i. business entities where:
Board of Commissioners or Board of Directors at the Financing Company as referred to in letter e act as controllers; or
board of commissioners or directors of parties as referred to in letters a to d act as controllers;
and j. business entities that have financial interdependence with the Financing Company and/or parties as referred to in letters a to i.
(5) Financing Companies must have and account for a detailed list of related parties as referred to in paragraph (4).
Article 24
(1) Financing Companies must comply with the Maximum Related Party Financing (BMPP) provisions to 1 (one) Debtor who is not a related party as referred to in Article 23 paragraph (4) set at most 20% (twenty percent) of the Financing Company's Equity. (2) Financing Companies must comply with the Maximum Related Party Financing (BMPP) provisions to 1 (one) group of Debtors who are not related parties as referred to in Article 23 paragraph (4) set at most 50% (fifty percent) of the Financing Company's Equity. (3) The basis for calculating Equity in calculating BMPP as referred to in paragraphs (1) and (2) is the Equity in the Financing Company's latest monthly report before financing disbursement is carried out. (4) If the Financing Company obtains a business license for less than 1 (one) month, the basis for calculating Equity in calculating BMPP as referred to in paragraphs (1) and (2) is the Equity in the financial report submitted at the time of the business license application. (5) Debtors are classified as members of a Debtor group as referred to in paragraph (2) when Debtors have a control relationship with other Debtors either through ownership, management, and/or financial relationships, which include:
a. the Debtor is a controller of another Debtor; b. 1 (one) same party is a controller of several Debtors (common ownership);
c. the Debtor has financial interdependence with another Debtor;
d. the Debtor issues a guarantee to take over and/or repay part or all of the obligations of another Debtor in the event that the other Debtor fails to meet its obligations (default) to the Financing Company; and/or e. the board of commissioners and/or directors of the Debtor become board of commissioners and/or directors at another Debtor.
Article 25
The BMPP provisions as referred to in Article 23 paragraph (1), and Article 24 paragraphs (1) and (2) are exempted for financing for the procurement of goods and/or services in government programs.
CHAPTER VII
FINANCING RISK MITIGATION
Article 26
(1) Financing Companies must carry out financing risk mitigation.
(2) Financing risk mitigation as referred to in paragraph (1) can be done by:
a. transferring financing risk through credit insurance or credit guarantee mechanisms in accordance with applicable laws and regulations; b. transferring risk over collateral from financing activities through insurance mechanisms; and/or
c. imposing fiduciary guarantees, mortgage rights, or mortgages on collateral from financing activities.
Article 27
(1) Financing Companies that carry out risk mitigation by risk transfer as referred to in Article 26 paragraph (2) letter a must use insurance companies or guarantee institutions that meet the following provisions:
a. have obtained a business license from the Financial Services Authority; and b. are not subject to administrative sanctions in the form of business activity restrictions or business activity suspensions from the Financial Services Authority. (2) The coverage period for credit insurance or credit guarantees as referred to in Article 26 paragraph (2) letter a must be at least equal to the financing period.
Article 28
(1) Financing Companies that carry out risk mitigation by risk transfer as referred to in Article 26 paragraph (2) letter b must use insurance companies that meet the following provisions:
a. have obtained a business license from the Financial Services Authority; and b. are not subject to administrative sanctions in the form of business activity restrictions from the Financial Services Authority. (2) The coverage period for insurance as referred to in Article 26 paragraph (2) letter b must be at least equal to the financing period.
Article 29
(1) Financing Companies that carry out risk mitigation by credit guarantees, credit insurance, and/or insurance on financing objects must calculate credit guarantee claims, credit insurance claims, and/or insurance claims on collateral in the repayment of receivables. (2) In the event of excess insurance claim results against the Debtor's obligations, the Financing Company must return the excess money from the insurance claim results to the Debtor within a period in accordance with the financing agreement.
Article 30
(1) Financing Companies that carry out risk mitigation by imposing fiduciary guarantees as referred to in Article 26 paragraph (2) letter c must register the fiduciary guarantee at the fiduciary registration office, in accordance with applicable laws and regulations regarding fiduciary guarantees. (2) The obligation to register fiduciary guarantees as referred to in paragraph (1) also applies to Financing Companies that carry out financing by imposing fiduciary guarantees where the financing uses a cooperation mechanism in the form of channeling financing or joint financing.
Article 31
Financing Companies that carry out financing by imposing fiduciary guarantees must register the fiduciary guarantee as referred to in Article 30 at the fiduciary registration office no later than 1 (one) month from the date of the financing agreement.
Article 32
Financing Companies that carry out risk mitigation by imposing mortgage rights or mortgages as referred to in Article 26 paragraph (2) letter c must comply with provisions regarding the imposition of collateral with mortgage rights and mortgages in accordance with applicable laws and regulations regarding mortgage rights and mortgages.
CHAPTER VIII
TRANSPARENCY OF BUSINESS ACTIVITIES
First Section
Financing Agreements
Article 33
(1) All financing agreements between Financing Companies and Debtors must be made in writing.
(2) Financing agreements between Financing Companies and Debtors must meet the agreement drafting provisions as regulated in the Financial Services Authority Regulation regarding consumer protection in the financial services sector.
Article 34
(1) Financing agreements as referred to in Article 33 must contain at least:
a. type of business activity and financing method; b. number and date of the financing agreement;
c. identity of the parties, including other parties carrying out financing cooperation with the Financing Company (if any);
d. goods or services financed; e. purpose of financing; f. value of goods or services financed; g. amount of receivables and financing installment values; h. financing period;
i. financing interest rate;
j. collateral including storage of proof of ownership over collateral (if any); k. details of costs related to financing consisting of:
survey costs (if any);
insurance costs (if any);
guarantee costs (if any);
collateral charge costs; (if any);
commission costs (if any);
notary costs (if any); and/or
other costs (if any);
l. clauses on the imposition of fiduciary guarantees, mortgage rights, or mortgages clearly, if there is collateral imposition in financing activities;
m. mechanism in the event of disputes and selection of dispute resolution venue; n. provisions on giving warnings in the event of Debtor default; o. provisions on collateral execution in the event of Debtor default; p. provisions on collateral sales in the event of Debtor default (if any); q. provisions regarding the mechanism for financing receivable repayment and return of excess money from collateral sales or insurance claims accompanied by a time period in the event the Financing Company carries out risk mitigation by means as referred to in Article 26 paragraph (2) letters b and c; r. illustration of the division of financing principal receivables, interest, and outstanding principal financing; s. provisions regarding the rights and obligations of the parties; and t. provisions regarding penalties. (2) In the event that the Financing Company carries out financing for the procurement of motor vehicles via Purchase with Installment Payments, the financing agreement must state the down payment amount. (3) In the event that the Financing Company carries out financing via Financial Leasing, the financing agreement must state the security deposit value.
Article 35
Financing Companies must deliver a copy of the financing agreement to the Debtor no later than 3 (three) months from the date of the financing agreement.
Article 36
Financing Companies must post announcements at the headquarters, branches, and offices other than branches informing prospective Debtors and Debtors to read and understand the contents of the contract regulated in the financing agreement. Second Section Transparency of Interest Rates and Penalties
Article 37
Financing Companies must clearly state information regarding financing interest rates at every headquarters, branch, offices other than branches, and the website of the Financing Company.
Article 38
(1) Financing Companies must explain illustrations of the calculation of financing principal receivables and interest during the financing period as well as illustrations of the imposition of penalties and collateral execution costs in the event of Debtor default to Debtors before the signing of the financing agreement. (2) The explanation of illustrations to Debtors as referred to in paragraph (1) must be stipulated in a document signed by the Debtor.
CHAPTER IX
FINANCING COOPERATION
Article 39
(1) In carrying out business activities as referred to in Article 2, Financing Companies can cooperate with other parties through channeling financing or joint financing. (2) Cooperation between Financing Companies and other parties through channeling financing or joint financing as referred to in paragraph (1) must be carried out in accordance with applicable laws and regulations regulating each party. (3) Financing Companies are prohibited from carrying out financing cooperation with other parties through channeling financing with recourse and joint financing with recourse schemes. (4) Other parties as referred to in paragraph (1) include:
a. banks; b. secondary housing financing companies;
c. microfinance institutions;
d. Financing Companies; e. internet-based lending service providers; f. venture capital companies; and/or g. other institutions that are permitted by applicable laws and regulations to carry out financing cooperation through channeling financing and joint financing schemes. (5) In carrying out cooperation as referred to in paragraph (2), Financing Companies must carry out cooperation with banks, microfinance institutions, Financing Companies, internet-based lending service providers, and/or venture capital companies that have obtained business licenses or are registered with the Financial Services Authority.
Article 40
(1) Financing Companies may only carry out channeling financing as referred to in Article 39 paragraph (1) if the risks arising from this activity are borne by the fund owner. (2) In channeling financing, the fund recipient only acts as a manager and receives remuneration from the management of the funds.
Article 41
(1) Financing Companies may only carry out joint financing as referred to in Article 39 paragraph (1) if the financing funds come from the Financing Company and other parties. (2) Risks arising from joint financing as referred to in paragraph (1) become the burden of each party proportionally according to the amount of funds disbursed.
Article 42
In carrying out financing cooperation through channeling financing and/or joint financing, Financing Companies must have adequate information technology systems to ensure the consistency of Debtor data held by the Financing Company and other parties as referred to in Article 39 paragraph (4).
CHAPTER X
CUSTODY AND RETURN OF PROOF OF OWNERSHIP OVER COLLATERAL
Article 43
(1) In the event that the Financing Company disburses Financing where the funds do not come from channeling financing and/or joint financing cooperation, the Financing Company must store and maintain documents proving ownership over collateral at the headquarters and/or branches of the Financing Company until the financing agreement ends. (2) Financing Companies must have written guidelines in carrying out the storage and maintenance of proof of ownership over collateral. (3) Financing Companies must carry out risk mitigation over the storage and maintenance of proof of ownership over collateral. (4) In the event that the Financial Services Authority assesses that the Financing Company does not have a storage place for proof of ownership over collateral that meets security standards, the proof of ownership over collateral must be deposited at a custodian.
Article 44
(1) Financing Companies that carry out financing disbursement through channeling financing and/or joint financing must ensure that the storage and maintenance of proof of ownership over collateral is carried out by:
a. the fund owner; b. deposited at a custodian; and/or
c. the Financing Company with the approval of the fund owner.
(2) Provisions as referred to in Article 43 paragraphs (2) to (4) apply mutatis mutandis to Financing Companies that carry out storage of proof of ownership over collateral by the Financing Company based on the approval of the fund owner as referred to in paragraph (1) letter c.
Article 45
(1) Financing Companies are prohibited from pawning and/or mortgaging the physical proof of ownership over collateral to other parties.
(2) Financing Companies are prohibited from mortgaging the value of financing receivables for 1 (one) Debtor to more than 1 (one) party that provides loans to the Financing Company.

Article 46
(1) Financing Companies are required to submit notification to the Debtor regarding the return of proof of ownership of collateral no later than 1 (one) month from the date of repayment of the financing receivable. (2) Based on the notification referred to in paragraph (1), Financing Companies are required to return the proof of ownership and/or documents related to the collateral no later than 1 (one) month from the date of the request from the Debtor.

CHAPTER XI
DEBT COLLECTION

Article 47
(1) In the event of Debtor default, Financing Companies are required to conduct debt collection, at least by issuing a warning letter in accordance with the time frame in the financing agreement. (2) The warning letter referred to in paragraph (1) is required to contain at least the following information:
a. the number of days of payment obligation delay; b. outstanding principal owed;
c. interest owed; and
d. penalties owed.

Article 48
(1) Financing Companies may cooperate with other parties to perform debt collection functions towards the Debtor.
(2) Financing Companies are required to formalize the cooperation with other parties as referred to in paragraph (1) in the form of a written agreement with stamp duty. (3) Cooperation with other parties as referred to in paragraph (1) is required to meet the following provisions:
a. the other party is a legal entity; b. the other party has a license from the competent authority; and
c. the other party has human resources that have obtained certification in the field of debt collection from a Professional Certification Body in the financing sector.
(4) Financing Companies are fully responsible for all impacts arising from cooperation with other parties as referred to in paragraph (1).
(5) Financing Companies are required to conduct periodic evaluations of cooperation with other parties as referred to in paragraph (1).

Article 49
(1) Financing Companies are required to have internal guidelines regarding collateral execution.
(2) The Financial Services Authority is authorized to request Financing Companies to adjust their internal guidelines regarding collateral execution.
(3) Financing Companies are required to adjust their internal guidelines regarding collateral execution based on the request of the Financial Services Authority as referred to in paragraph (2).

Article 50
(1) Collateral execution by Financing Companies is required to meet the following provisions:
a. the Debtor is proven to be in default; b. the Debtor has been issued a warning letter; and
c. the Financing Company has a fiduciary certificate, land mortgage certificate, and/or mortgage certificate.
(2) Collateral execution as referred to in paragraph (1) is required to be implemented in accordance with the provisions of legislation regulating each type of collateral. (3) Collateral execution as referred to in paragraph (1) is required to be recorded in a collateral execution report. (4) In the event of collateral execution, Financing Companies are required to explain to the Debtor information regarding:
a. outstanding principal owed; b. interest owed;
c. penalties owed;
d. costs related to collateral execution; and e. the mechanism for selling the collateral in the event the Debtor does not settle their obligations.

Article 51
(1) In the event that after collateral execution and the Debtor cannot settle obligations within a certain time frame, Financing Companies may only:
a. sell the collateral through public auction and take repayment of their receivables from the sale proceeds; and/or b. sell the collateral privately based on an agreed price between the Financing Company and the Debtor before the collateral is sold. (2) The implementation of the sale as referred to in paragraph (1) letter b is conducted after 1 (one) month has passed since written notification by the Financing Company to the Debtor and announced in at least 2 (two) newspapers circulating in the relevant region.

Article 52
Financing Companies are required to return any surplus funds from the sale of collateral through public auction as referred to in Article 51 paragraph (1) letter a or the private sale of collateral as referred to in Article 51 paragraph (1) letter b to the Debtor within the time frame specified in the financing agreement.

CHAPTER XII
FRAUD CONTROL AND ANTI-FRAUD STRATEGY
First Section
Fraud Control

Article 53
(1) Financing Companies are required to implement fraud control.
(2) Fraud control as referred to in paragraph (1) includes the following aspects:
a. active management supervision; b. organizational structure and accountability;
c. control and monitoring; and
d. education and training.

Article 54
Active management supervision as referred to in Article 53 paragraph (2) letter a includes at least:
a. comprehensive fraud control conducted by the Board of Directors in performing their duties, authorities, and responsibilities; b. the authority, duties, and responsibilities of the Board of Directors in conducting fraud control, which generally include:

developing a culture and concern for anti-fraud at all levels of the organization, at least by:
a) declaring anti-fraud regulations; and b) adequate communication to all levels of the organization regarding behaviors constituting fraud;
drafting and supervising the implementation of an ethical code in fraud prevention for all levels of the organization;
drafting and supervising the implementation of anti-fraud strategies;
developing human resource (HR) quality, specifically related to increasing awareness and fraud control;
monitoring and evaluating fraud incidents and determining follow-up actions; and
developing effective communication channels within the Financing Company so that all levels of the organization understand and comply with applicable policies and procedures, including policies in fraud control; and
c. the Board of Commissioners is responsible for periodically monitoring fraud control.

Article 55
(1) In the implementation of the organizational structure and accountability aspect as referred to in Article 53 paragraph (2) letter b, Financing Companies are required to form a unit or function tasked with handling fraud control within the Financing Company's organization. (2) The formation of the unit or function as referred to in paragraph (1) must at least meet the following criteria:
a. the organizational structure is adjusted to the characteristics and complexity of the Financing Company's business activities; b. clear definition of duties and responsibilities;
c. accountability of the unit or function is directly to the Chief Executive Officer or equivalent in the Financing Company, with direct communication and reporting lines to the Board of Commissioners; and
d. the execution of duties in the unit or function is carried out by human resources (HR) possessing competence, integrity, and independence, supported by clear accountability.

Article 56
(1) Financing Companies are required to conduct fraud control and monitoring as referred to in Article 53 paragraph (2) letter c to increase the effectiveness of the internal control system. (2) Steps in fraud control and monitoring as referred to in paragraph (1) include at least:
a. establishing policies and procedures for control specifically aimed at fraud control; b. control through review, both by management (top level review) and operational review (functional review) by internal audit on the implementation of anti-fraud strategies;
c. control in the field of human resources (HR) aimed at increasing the effectiveness of task execution and fraud control;
d. establishing separation of functions in the implementation of Financing Company activities at all levels of the organization, for example, separation of functions between the acceptance, claim, and finance departments to ensure that each party involved in these activities does not have the opportunity to commit and conceal fraud; and e. information system control supporting electronic processing, storage, and data security to prevent potential fraud; and f. other controls in fraud control such as physical asset and documentation control.

Article 57
(1) In the implementation of the education and training aspect as referred to in Article 53 paragraph (2) letter d, Financing Companies are required to have an education and training plan for employees involved in the implementation of anti-fraud strategies. (2) The education and training plan as referred to in paragraph (1) includes at least:
a. education and training adjusted to the needs of the Financing Company and the complexity of the Financing Company's business organization; and b. stages and timing of implementation at least 1 (one) time in 1 (one) year.

Second Section
Anti-Fraud Strategy

Article 58
(1) Financing Companies are required to implement anti-fraud strategies including:
a. prevention; b. detection;
c. investigation, reporting, and sanctions; and
d. monitoring, evaluation, and follow-up.
(2) The implementation of anti-fraud strategies is directed towards parties involved in financing business activities, at least including:
a. Debtors; b. internal Financing Companies; and
c. other parties cooperating with Financing Companies.

Article 59
(1) The implementation of anti-fraud strategies as referred to in Article 58 paragraph (1) is required to be documented in guidelines that serve as a reference for Financing Companies to implement anti-fraud strategies. (2) In drafting anti-fraud strategy guidelines as referred to in paragraph (1), Financing Companies are required to consider at least the following:
a. internal and external environmental conditions; b. complexity of business activities;
c. potential, type, and risk of fraud; and
d. adequacy of required resources.

Article 60
Prevention steps to reduce the likelihood of fraud risk as referred to in Article 58 paragraph (1) letter a include at least:
a. anti-fraud awareness at least includes:

drafting and socializing an anti-fraud statement;
employee awareness programs; and
customer awareness programs;
b. vulnerability identification at least includes:
conducting processes to identify, analyze, and assess each Financing Company activity that has the potential to harm the Financing Company;
documenting and informing identification results to interested parties; and
updating information, especially regarding activities assessed as high risk for fraud; and
c. know your employee at least includes:
effective recruitment systems and procedures;
selection systems equipped with appropriate qualifications considering risk, established objectively and transparently; and
policies for recognizing employees (know your employee).

Article 61
Detection as referred to in Article 58 paragraph (1) letter b is an activity to identify and discover fraud incidents, including at least:
a. whistleblowing policies and mechanisms formulated clearly, easily understood, and effectively implementable, at least including:

protection for whistleblowers and ensuring the confidentiality of the reporter's identity and fraud reports submitted;
drafting internal regulations related to fraud complaints referring to legislation; and
drafting a fraud reporting system containing at least:
a) reporting procedures; b) facilities; c) parties responsible for handling reports; and d) follow-up mechanisms for reported fraud incidents; b. policies and mechanisms for surprise audits conducted at least on high-risk or vulnerable business units;
c. policies and mechanisms for surveillance systems, which are activities to monitor and test the effectiveness of anti-fraud policies conducted without the knowledge or awareness of the tested or examined parties; and
d. surveillance system policies conducted by independent parties and/or internal parties of the Financing Company.

Article 62
Investigation, reporting, and sanctions steps by Financing Companies as referred to in Article 58 paragraph (1) letter c must have at least the following:
a. Financing Company investigation standards include:

determination of parties authorized to conduct investigations considering the required independence and competence; and
mechanisms for implementing investigations to follow up on detection results while maintaining the confidentiality of obtained information;
b. mechanisms for reporting fraud incidents to internal Financing Companies and to the Financial Services Authority; and
c. the application of sanction policies to provide deterrent effects for fraud perpetrators in Financing Companies must be applied transparently and consistently, at least including:
mechanisms for imposing sanctions; and
parties authorized to impose sanctions.

Article 63
Monitoring, evaluation, and follow-up activities for fraud incidents as referred to in Article 58 paragraph (1) letter d consist of:
a. monitoring follow-up on fraud incidents considering internal Financing Company regulations and legislation; b. maintaining fraud incident data (fraud profiling) to support implementation of evaluations; and
c. follow-up mechanisms to prevent fraud incidents from recurring, at least including steps to:

improve weaknesses; and
strengthen the internal control system of the Financing Company.

Third Section
Reporting

Article 64
(1) Financing Companies are required to submit anti-fraud strategy reports to the Financial Services Authority as follows:
a. reports on the implementation of anti-fraud strategies as part of the good corporate governance implementation report for Financing Companies; and b. reports on each fraud estimated to have a significant negative impact on the Financing Company. (2) Reports on each fraud as referred to in paragraph (1) letter b must contain at least:
a. perpetrator's name; b. form or type of deviation;
c. location of the incident;
d. brief information regarding the modus operandi; and e. indication of losses.
(3) Reports on each fraud as referred to in paragraph (1) letter b are submitted by the Board of Commissioners receiving the accountability report from the unit or function for fraud control no later than 3 (three) working days from the time the fraud is known.

CHAPTER XIII
CERTIFICATION AND CONTINUING REQUIREMENTS FOR KEY PARTIES

Article 65
(1) Employees of Financing Companies holding managerial positions from branch head level up to one level below the Board of Directors are required to have a basic level certificate in the financing sector from a Professional Certification Body in the financing sector registered with the Financial Services Authority. (2) The Board of Directors is required to have expertise certificates in the financing sector from a Professional Certification Body in the financing sector registered with the Financial Services Authority. (3) The Board of Commissioners is required to have a basic level certificate in the financing sector from a Professional Certification Body in the financing sector registered with the Financial Services Authority. (4) The Board of Directors and officials one (1) level below the Board of Directors who oversee risk management functions are required to have expertise certificates in risk management from a Professional Certification Body in the risk management sector registered with the Financial Services Authority. (5) Employees and/or outsourced personnel of Financing Companies handling debt collection and collateral execution functions are required to have professional certificates in the debt collection sector from a Professional Certification Body in the financing sector registered with the Financial Services Authority.

Article 66
(1) Members of the Board of Directors and members of the Board of Commissioners who have passed the competency and fit and proper assessment are required to meet continuing requirements at least 1 (one) time within a period of 1 (one) year. (2) The obligation for continuing requirements as referred to in paragraph (1) begins to be calculated in the next calendar year after the members of the Board of Directors or members of the Board of Commissioners are approved by the Financial Services Authority as members of the Board of Directors or members of the Board of Commissioners. (3) Fulfillment of continuing requirements as referred to in paragraph (1) must be done by:
a. attending seminars, workshops, or similar activities; b. attending courses, training, or similar educational programs;
c. writing papers, articles, or other published written works; and/or
d. becoming speakers in activities as referred to in letter a, or becoming teachers or instructors in activities as referred to in letter b.
(4) The material of activities as referred to in paragraph (3) must be in the financial industry sector.
(5) Activities as referred to in paragraph (1) and paragraph (3) letters a, b, and d must be organized by:
a. financial services supervisory institutions inside and outside the country; b. financial services institution associations inside and outside the country;
c. universities inside and outside the country; or
d. training institutions obtaining licenses from competent authorities.

Article 67
Proof of certificates or other evidence showing that members of the Board of Directors and members of the Board of Commissioners have met the continuing requirements as referred to in Article 66 paragraph (1) are required to be submitted to the Financial Services Authority no later than 1 (one) month from the end of the annual period.

CHAPTER XIV
INVESTMENT

Article 68
(1) Financing Companies may only conduct direct investments in:
a. companies in the financial services sector in Indonesia; and/or b. companies related to the Financing Company's business activities.
(2) The total amount of direct investments by Financing Companies as referred to in paragraph (1) is prohibited from exceeding 20% (twenty percent) of the Financing Company's Equity. (3) The total amount of direct investments by Financing Companies to entities within 1 (one) group is prohibited from exceeding 10% (ten percent) of the Financing Company's Equity. (4) Financing Companies are required to meet the direct investment amount provisions as referred to in paragraph (2) and paragraph (3) at the time of making the investment. (5) The provisions as referred to in paragraph (2) and paragraph (3) are exempted for Financing Companies conducting direct investments in Financing Companies whose entire business activities are conducted based on Sharia principles resulting from the separation of the respective Financing Company.

CHAPTER XV
FUNDING

Article 69
(1) Financing Companies may only obtain funding in the form of:
a. increase in Paid-up Capital not through public stock offerings; b. loans from government institutions, banks, non-bank financial industries, institutions, and/or other business entities;
c. subordinated loans;
d. issuance of securities through public offerings; e. issuance of debt securities not through public offerings; and/or f. asset securitization.
(2) Financing Companies are required to use funds obtained from funding sources in accordance with the purposes established in the agreement.

Article 70
In the event that Financing Companies receive loans from other institutions and/or business entities as referred to in Article 69 paragraph (1) letter b, Financing Companies are required to receive loans that meet the following provisions:
a. the loan amount is at least IDR 1,000,000,000.00 (one billion rupiah) for each creditor; b. the loan repayment period is at least 1 (one) year;
c. documented in the form of a notarial deed agreement between the Financing Company and the lender; and
d. cannot be automatically extended (automatic roll over).

Article 71
Subordinated loans received by Financing Companies as referred to in Article 69 paragraph (1) letter c must meet the following provisions:
a. with a minimum term of 5 (five) years; b. in the event of liquidation, the claim right applies last among all existing loans; and
c. documented in the form of a notarial deed agreement between the Financing Company and the lender.

Article 72
Financing Companies intending to issue securities through public offerings as referred to in Article 69 paragraph (1) letter d are required to meet the following requirements:
a. the plan to issue securities through public offerings has been included in the Financing Company's business plan; b. having a financial health level with a minimum healthy condition;
c. having a minimum risk level of low-medium; and
d. meeting the gearing ratio provisions.

Article 73
(1) Financing Companies intending to issue securities through public offerings as referred to in Article 69 paragraph (1) letter d are required to report the issuance plan no later than 3 (three) months before the General Meeting of Shareholders approving the public offering or limited public offering according to Format 1 as contained in the Appendix which is an integral part of this Financial Services Authority Regulation, attaching documents in the form of:
a. details of the plan for the use of funds to be obtained from the public offering; b. history of previous security issuances (if any) containing at least information regarding:

the size of the security issuance;
ratings for debt securities;
terms for debt securities; and
profile of debt security holders;
c. projected financial statements;
d. information regarding important events and transactions after the date of the financial statements audited by a public accounting firm; e. a statement from the Board of Directors according to Format 2 as contained in the Appendix which is an integral part of this Financial Services Authority Regulation; and f. a management statement in the accounting field. (2) The Financial Services Authority issues a recording letter regarding the report of the plan to issue securities through public offerings as referred to in paragraph (1) within a maximum period of 20 (twenty) working days from the date the report is received in complete form.

Article 74
The provisions for issuing securities through public offerings as referred to in Article 69 paragraph (1) letter b follow the provisions of legislation in the capital market sector.

Article 75
Financing Companies intending to issue debt securities not through public offerings as referred to in Article 69 paragraph (1) letter e are required to meet the following requirements:
a. the plan to issue debt securities not through public offerings has been included in the Financing Company's business plan; b. having a financial health level with a minimum healthy condition;
c. having a minimum risk level of low-medium;
d. meeting the gearing ratio provisions; and e. having Equity greater than IDR 200,000,000,000.00 (two hundred billion rupiah).

Article 76
(1) Financing Companies intending to issue debt securities not through public offerings as referred to in Article 69 paragraph (1) letter e are required to report the issuance plan no later than 6 (six) months before issuance according to Format 3 as contained in the Appendix which is an integral part of this Financial Services Authority Regulation, attached with documents:
a. sample of debt securities; b. details of the plan for the use of funds to be obtained;
c. a draft information memorandum to be offered, containing at least information regarding:

the planned duration for the offering of debt securities;
debt-type securities;
principal funding amount;
funding term;
interest rate (if any);
collateral (if any); and
taxation;
d. history of previous issuance of securities (if any) which must contain at least information regarding:
the size of the debt-type securities issuance;
the rating of the debt-type securities;
the term of the debt-type securities issuance; and
the buyer profile;
e. prospective financial statements; f. information regarding significant events and transactions after the date of the financial statements audited by a public accounting firm; g. a statement from the Board of Directors in accordance with Format 4 as contained in the Appendix which is an integral part of this Financial Services Authority Regulation; h. the debt-type securities rating agency and monitoring agent to be used; and
i. a management statement in the field of accounting.
(2) The Financial Services Authority issues a recording letter regarding the reporting of the plan to issue securities not through a public offering as referred to in paragraph (1) within a maximum period of 20 (twenty) working days from the date the report is received.

Article 77
In the event that a Financing Company issues debt-type securities not through a public offering as referred to in Article 69 paragraph (1) letter e, the Financing Company must issue debt-type securities that meet the following requirements:
a. registered with the Indonesia Central Securities Depository; b. having a monitoring agent registered as a trustee with the Financial Services Authority;
c. being rated with a rating result of at least investment grade (investment grade) conducted by a rating agency that has a business license from the Financial Services Authority; and
d. being rated periodically at least once (1) per year.

Article 78
(1) Financing Companies must submit reports on the realization of the use of funds from the issuance of debt-type securities not through a public offering as referred to in Article 69 paragraph (1) letter e periodically every 3 (three) months with report dates of March 31, June 30, September 30, and December 31. (2) The form and content of the report on the realization of fund usage as referred to in paragraph (1) must be prepared in accordance with Format 5 as contained in the Appendix which is an integral part of this Financial Services Authority Regulation.

Article 79
(1) Financing Companies must meet the gearing ratio requirements of a minimum of 0 (zero) times and a maximum of 10 (ten) times.
(2) The gearing ratio as referred to in paragraph (1) for Financing Companies must be obtained from the comparison between the sum of:
a. loans as referred to in Article 69 paragraph (1) letter b; b. subordinated loans as referred to in Article 69 paragraph (1) letter c;
c. securities issued through a public offering as referred to in Article 69 paragraph (1) letter d that are debt-type; and
d. debt-type securities issued not through a public offering as referred to in Article 69 paragraph (1) letter e, with the difference between the sum of Equity and subordinated loans as referred to in Article 69 paragraph (1) letter c with participations. (3) Subordinated loans that can be calculated as the divisor in the gearing ratio calculation as referred to in paragraph (2) are set at a maximum of 50% (fifty percent) of Paid-up Capital.

Article 80
(1) Financing Companies that receive loans in the form of:
a. loans as referred to in Article 69 paragraph (1) letter b; b. subordinated loans as referred to in Article 69 paragraph (1) letter c;
c. securities issued through a public offering as referred to in Article 69 paragraph (1) letter d that are debt-type; and
d. debt-type securities issued not through a public offering as referred to in Article 69 paragraph (1) letter e, in foreign currency must conduct full hedge.
(2) Full hedge as referred to in paragraph (1) must be implemented for the loan principal, loan interest rate, and/or payment term.

Article 81
Financing Companies that will receive loans in foreign currency as referred to in Article 80 paragraph (1) must meet the Financial Health Level requirements with a minimum healthy condition.

CHAPTER XVI
PROHIBITIONS

Article 82
Financing Companies are prohibited from:
a. collecting funds directly from the public in the form of checking accounts, savings, deposits, and/or other forms equivalent to public fund collection; b. providing guarantees in any form for the fulfillment of obligations of other parties;
c. providing loans or financing using collateral based on pledge law;
d. issuing promissory notes, except as collateral for debts to banks that are their creditors; e. taking actions that cause or force other financial institutions under the supervision of the Financial Services Authority to violate statutory regulations; and/or f. taking actions that cause or force other financial institutions under the supervision of the Financial Services Authority to avoid statutory regulations.

Article 83
Financing Companies in conducting their business activities are prohibited from using incorrect information that can harm the interests of Debtors, creditors, and stakeholders including the Financial Services Authority.

CHAPTER XVII
FINANCING RECEIVABLES RATIOS

Article 84
(1) Financing Companies must have a Financing Receivables Balance (Outstanding Principal) net ratio against total assets (financing to asset ratio) of at least 40% (forty percent). (2) The Financing Receivables Balance (Outstanding Principal) net as referred to in paragraph (1) must be obtained from the deduction of the Financing Receivables Balance (Outstanding Principal) with the provision for impairment of financing receivables that has been established by the Financing Company. (3) Financing Companies must meet the requirements as referred to in paragraph (1) no later than 3 (three) years since obtaining the business license. (4) In the event that a Financing Company increases Paid-up Capital to meet the minimum Equity requirements, capital adequacy ratio, gearing ratio, and the ratio of Equity to Paid-up Capital, the Financing Company is exempted from meeting the requirements as referred to in paragraph (1) for a maximum period of 1 (one) year from the date the increase in Paid-up Capital is approved by the Financial Services Authority.

Article 85
(1) Financing Companies must set targets for the Financing Receivables Balance (Outstanding Principal) net ratio against total funding received in the business plan.
(2) The target ratio of Financing Receivables Balance (Outstanding Principal) net against total funding received as referred to in paragraph (1) must be set realistically. (3) The realization of the achievement of the target ratio of Financing Receivables Balance (Outstanding Principal) net against total funding received as referred to in paragraph (1) is reported in monthly reports submitted to the Financial Services Authority.

Article 86
(1) Financing Companies must have a ratio of Financing Receivables Balance (Outstanding Principal) for Investment Financing and Working Capital Financing compared to the total Financing Receivables Balance (Outstanding Principal) before deducting the provision for impairment of financing receivables that has been established of at least 10% (ten percent). (2) For Financing Companies that have obtained business licenses at the time this Financial Services Authority Regulation was enacted, the achievement of the ratio as referred to in paragraph (1) must be done gradually, namely:
a. at least 5% (five percent) within a period of 3 (three) years since this Financial Services Authority Regulation was enacted; and b. at least 10% (ten percent) within a period of 5 (five) years since this Financial Services Authority Regulation was enacted. (3) For Financing Companies that obtain business licenses after this Financial Services Authority Regulation was enacted, Financing Companies must meet the requirements as referred to in paragraph (1) no later than 1 (one) year since obtaining the business license.

CHAPTER XVIII
EQUITY

Article 87
(1) Financing Companies in the form of legal entities:
a. limited liability companies must have Equity of at least Rp100,000,000,000.00 (one hundred billion rupiah); or b. cooperatives must have Equity of at least Rp50,000,000,000.00 (fifty billion rupiah), no later than December 31, 2019. (2) Limited liability company Financing Companies that have obtained business licenses before this Financial Services Authority Regulation was enacted and have Equity below the requirements as referred to in paragraph (1) letter a, must have Equity with the following stages:
a. at least Rp40,000,000,000.00 (forty billion) at the time this Financial Services Authority Regulation was enacted; and b. at least Rp100,000,000,000.00 (one hundred billion) no later than December 31, 2019.

Article 88
Financing Companies must have an Equity to Paid-up Capital ratio of at least 50% (fifty percent).

CHAPTER XIX
FINANCIAL HEALTH LEVEL
First Section
General

Article 89
(1) Financing Companies must at all times meet the Financial Health Level requirements with a minimum healthy condition.
(2) The measurement of the Financial Health Level ratios as referred to in paragraph (1) includes:
a. capital adequacy ratio; b. financing receivables quality;
c. profitability; and
d. liquidity.
Second Section
Capital Adequacy Ratio

Article 90
(1) Financing Companies must meet the capital adequacy ratio of at least 10% (ten percent).
(2) The capital adequacy ratio as referred to in paragraph (1) is a comparison between adjusted capital and adjusted assets.
Third Section
Financing Receivables Quality
Paragraph 1
Financing Receivables Quality Assessment

Article 91
Financing Companies must assess, monitor, and take necessary steps to maintain the quality of financing receivables at all times.

Article 92
(1) The assessment of financing receivables quality as referred to in Article 91 is set as:
a. good (lancar); b. special attention (dalam perhatian khusus);
c. doubtful (kurang lancar);
d. questionable (diragukan); or e. non-performing (macet).
(2) The assessment of financing receivables quality as referred to in paragraph (1) is determined based on the accuracy of principal and/or interest payments.
(3) The assessment of financing receivables quality as referred to in paragraph (1) is categorized as follows:
a. good (lancar) if there is no delay or there is a delay in principal and/or interest payments up to 10 (ten) calendar days; b. special attention (dalam perhatian khusus) if there is a delay in principal and/or interest payments that has exceeded 10 (ten) calendar days up to 90 (ninety) calendar days;
c. doubtful (kurang lancar) if there is a delay in principal and/or interest payments that has exceeded 90 (ninety) calendar days up to 120 (one hundred twenty) calendar days;
d. questionable (diragukan) if there is a delay in principal and/or interest payments that has exceeded 120 (one hundred twenty) calendar days up to 180 (one hundred eighty) calendar days; or e. non-performing (macet) if there is a delay in principal and/or interest payments that has exceeded 180 (one hundred eighty) calendar days.

Article 93
(1) In addition to the factor of accuracy of principal and/or interest payments as referred to in Article 92 paragraph (2), the assessment of financing receivables quality for Investment Financing and Working Capital Financing with financing values at the time of signing the agreement of Rp5,000,000,000.00 (five billion rupiah) or more, can also be determined by considering factors:
a. the Debtor's ability to pay; b. the Debtor's financial performance; and
c. the Debtor's business prospects.
(2) The assessment of the Debtor's ability to pay as referred to in paragraph (1) letter a includes assessment of the following components:
a. availability and accuracy of the Debtor's financial information; b. completeness of financing documentation;
c. compliance with the financing agreement;
d. appropriateness of fund usage; and e. fairness of the source of obligation payments.
(3) The assessment of the Debtor's financial performance as referred to in paragraph (1) letter b includes assessment of the following components:
a. profit acquisition; b. capital structure;
c. cash flow; and
d. sensitivity to market risks.
(4) The assessment of the Debtor's business prospects as referred to in paragraph (1) letter c includes assessment of the following components:
a. business growth potential; b. market conditions and the Debtor's position in competition;
c. management quality and labor issues;
d. support from groups or affiliates; and e. efforts made by the Debtor in maintaining the environment.
(5) In the event of a difference between the financing receivables quality assessment by the Financing Company and the Financial Services Authority, the financing receivables quality that applies is that established by the Financial Services Authority. (6) Financing Companies must adjust the financing receivables quality with the financing receivables quality assessment established by the Financial Services Authority as referred to in paragraph (5) in reports submitted to the Financial Services Authority.

Paragraph 2
Financing Receivables Quality for Debtors with More Than One Financing Agreement

Article 94
(1) Financing Companies must set the same financing receivables quality for 1 (one) Debtor with more than 1 (one) financing.
(2) In setting the same financing receivables quality for 1 (one) Debtor with more than 1 (one) financing as referred to in paragraph (1), Financing Companies must use the lowest financing receivables quality. (3) Financing Companies may set different financing receivables quality for more than 1 (one) financing owned by 1 (one) Debtor as referred to in paragraph (1), in the event:
a. the financing receivables with the lowest quality have been written off; and/or b. the Financing Receivables Balance (Outstanding Principal) value is up to Rp5,000,000,000.00 (five billion rupiah).

Paragraph 3
Problematic Financing Receivables

Article 95
(1) Financing Companies must maintain the quality of financing receivables.
(2) Financing receivables categorized as problematic financing receivables (non-performing financing) consist of financing receivables with doubtful, questionable, and non-performing quality. (3) Financing Companies must at all times maintain the ratio of Financing Receivables Balance (Outstanding Principal) with the category of problematic financing receivables (non-performing financing) as referred to in paragraph (2) after deducting the provision for impairment of financing receivables that has been established by the Financing Company for financing receivables with doubtful, questionable, and non-performing quality compared to the total Financing Receivables Balance (Outstanding Principal) of at most 5% (five percent).

Article 96
Financing Companies may restructure financing receivables.

Paragraph 4
Provision for Impairment of Financing Receivables

Article 97
(1) Financing Companies must calculate the provision for impairment of financing receivables.
(2) The calculation of the provision for impairment of financing receivables as referred to in paragraph (1) is set at a minimum of:
a. 1% (one percent) of the Financing Receivables Balance (Outstanding Principal) with good quality after deducting collateral; b. 5% (five percent) of the Financing Receivables Balance (Outstanding Principal) with special attention quality after deducting collateral;
c. 15% (fifteen percent) of the Financing Receivables Balance (Outstanding Principal) with doubtful quality after deducting collateral;
d. 50% (fifty percent) of the Financing Receivables Balance (Outstanding Principal) with questionable quality after deducting collateral; e. 100% (one hundred percent) of the Financing Receivables Balance (Outstanding Principal) with non-performing quality after deducting collateral. (3) Financing Companies must establish the provision for impairment of financing receivables at a minimum in accordance with the requirements as referred to in paragraph (2) in monthly reports. (4) The value of collateral as referred to in paragraph (2) that can be calculated as a deduction from the Financing Receivables Balance (Outstanding Principal) is set at a maximum value equal to the financing receivables balance.

Paragraph 5
Provision for Impairment Losses of Financing Receivables

Article 98
(1) Financing Companies must establish provisions for impairment losses of financing receivables in accordance with applicable financial accounting standards.
(2) The establishment of provisions for impairment losses of financing receivables as referred to in paragraph (1) is done in the preparation of financial statements audited by a public accounting firm. Fourth Section Profitability

Article 99
(1) Profitability as referred to in Article 89 paragraph (2) letter c is the ability of Financing Companies to generate profits.
(2) The assessment of the profitability factor as referred to in paragraph (1) includes assessment of asset performance and operational efficiency.
Fifth Section
Liquidity

Article 100
The assessment of the liquidity factor as referred to in Article 89 paragraph (2) letter d is an assessment of the level of matching between current assets and current liabilities.

CHAPTER XX
FINANCING COMPANIES IN THE ELECTRICITY AND SHIPPING SECTORS

Article 101
(1) Financing Companies established specifically to conduct financing activities in the electricity sector may conduct business activities other than those referred to in Article 2. (2) Other business activities as referred to in paragraph (1) are only conducted in support of meeting national electricity needs. (3) Financing Companies as referred to in paragraph (1) are exempted from the obligation to meet the requirements as referred to in Article 79 paragraph (1), Article 84 paragraph (1), and Article 90 paragraph (1).

Article 102
Financing Companies established specifically to conduct activities in the shipping sector are exempted from the obligation to meet the requirements as referred to in Article 68 paragraph (2) and paragraph (3).

CHAPTER XXI
PERIODIC REPORT SUBMISSION

Article 103
(1) Financing Companies must submit periodic reports to the Financial Services Authority, namely:
a. monthly reports; and b. annual financial statements audited by public accountants.
(2) Regulations regarding monthly reports as referred to in paragraph (1) letter a are regulated in Financial Services Authority Regulations regarding monthly reports.

Article 104
(1) Financing Companies must submit annual financial statements audited by public accountants as referred to in Article 103 paragraph (1) letter b to the Financial Services Authority no later than 4 (four) months after the last fiscal year. (2) Financing Companies must submit annual financial statements audited by public accountants as referred to in Article 103 paragraph (1) letter b completely and correctly in hard copy and soft copy forms. (3) If the deadline for submitting annual financial reports as referred to in paragraph (1) falls on a holiday, the submission deadline is the next working day.

Article 105
(1) Annual financial statements audited as referred to in Article 103 paragraph (1) letter b must be prepared based on applicable financial accounting standards in Indonesia. (2) Annual financial reports as referred to in Article 103 paragraph (1) letter b must include calculations of matters specifically regulated in this Financial Services Authority Regulation. (3) Annual financial statements audited by public accountants as referred to in Article 103 paragraph (1) letter b must be prepared in Indonesian Rupiah. (4) The fiscal year as referred to in Article 104 paragraph (1) must be based on the calendar year. (5) Public accountants as referred to in Article 104 paragraph (2) must be registered with the Financial Services Authority. (6) If Financing Companies obtain business licenses less than 6 (six) months until the end of the calendar year, the obligation to submit annual financial reports as referred to in Article 103 paragraph (1) letter b applies starting from the next calendar year.

Article 106
(1) Financing Companies must announce financial position reports and condensed comprehensive income statements no later than 4 (four) months after the end of the fiscal year at least in 1 (one) daily newspaper in Indonesia with national circulation. (2) Financing Companies must report the implementation of the announcement as referred to in paragraph (1) in writing to the Financial Services Authority no later than 20 (twenty) calendar days since the implementation of the announcement, attached with proof of announcement. (3) If the deadline for submitting the announcement implementation report as referred to in paragraph (2) falls on a holiday, the submission deadline is the next working day.

CHAPTER XXII
OTHER PROVISIONS

Article 107
(1) Professional Certification Institutions must be registered with the Financial Services Authority.
(2) To be registered with the Financial Services Authority, Professional Certification Institutions as referred to in paragraph (1) must submit applications to the Financial Services Authority attached with:
a. valid licenses from Professional Certification Institutions from other institutions designated based on statutory regulations; b. photocopies of the articles of association of Professional Certification Institutions;
c. the certification scheme of Professional Certification Institutions;
d. standard operating procedures (SOP) for certification implementation; and e. the organizational structure of Professional Certification Institutions and the composition of the board of directors.

Article 108
In the event that the Financial Services Authority has provided electronic service systems (e-licensing), applications for approval and/or reporting as referred to

In Article 5 paragraph (2), Article 6 paragraph (1), Article 64 paragraph (1), Article 73 paragraph (1), Article 76 paragraph (1), Article 78 paragraph (1), Article 103 paragraph (1), and Article 106 paragraph (2) are submitted to the Financial Services Authority online through the Financial Services Authority's data communication network system.

Article 109
Further provisions regarding the operation of financing companies, including among others the procedures for measuring Financial Health Level, procedures for calculating capital adequacy ratios, guidelines for assessing the quality of productive assets, restructuring of productive assets, types, calculation procedures, return of collateral, procedures for restructuring productive assets, and procedures for calculating reserves, procedures for assessing profitability factors, procedures for assessing liquidity, and/or electronic services (e-licensing), are regulated in a Circular Letter of the Financial Services Authority.

CHAPTER XXIII
COMPLIANCE ENFORCEMENT

First Section
Notification

Article 110
(1) Financing Companies that do not meet the provisions as referred to in Article 6 paragraph (1), Article 7, Article 9, Article 23 paragraph (5), Article 26 paragraph (1), Article 27 paragraph (1), Article 28 paragraph (1), Article 33, Article 34, Article 35, Article 36, Article 80, Article 103 paragraph (1), Article 104 paragraph (1) and paragraph (2), Article 105 paragraph (1), paragraph (2), paragraph (3), paragraph (4), and paragraph (5), and/or Article 106 paragraph (1) and paragraph (2) of this Financial Services Authority Regulation shall be issued a notification letter. (2) Financing Companies are required to fulfill the provisions as referred to in paragraph (1) within a maximum of 1 (one) month from the date of the notification letter.

Second Section
Fulfillment Plan

Article 111
(1) Financing Companies that do not meet the provisions as referred to in Article 18 paragraph (1), Article 23 paragraph (1), Article 24 paragraph (1) and paragraph (2), Article 65, Article 84 paragraph (1) and paragraph (3), Article 86, Article 87, Article 88, Article 89 paragraph (1), Article 90 paragraph (1), Article 91, Article 95 paragraph (1) and paragraph (3), Article 97 paragraph (1) and paragraph (3), and/or Article 98 paragraph (1) of this Financial Services Authority Regulation are required to submit a fulfillment plan within a maximum of 1 (one) month from the date of the violation determination by the Financial Services Authority. (2) The fulfillment plan as referred to in paragraph (1) must at least contain plans to be carried out by the Financing Company accompanied by a specific time period required to fulfill the provisions as referred to in paragraph (1). (3) The fulfillment plan as referred to in paragraph (1) contains:
a. asset and/or liability restructuring; b. restriction on accepting new loans;
c. acceptance of subordinated loans;
d. transfer of part or all of the assets; e. restriction on profit distribution; f. restriction on activities causing violations of provisions; g. restriction on opening new branch offices; h. increase in Paid-up Capital;
i. merger of business entities; and/or
j. other actions.

(4) The time period for the fulfillment plan consisting of actions as referred to in paragraph (3) letters a through g is limited to a maximum of 1 (one) year.
(5) The time period for the fulfillment plan consisting of actions as referred to in paragraph (3) letters h and i is limited to a maximum of 2 (two) years.
(6) The time period for the fulfillment plan consisting of other actions as referred to in paragraph (3) letter j is limited to a maximum of 1 (one) year.

Article 112
(1) The fulfillment plan as referred to in Article 111 paragraph (1) must be signed by all Directors and Commissioners.
(2) The fulfillment plan as referred to in Article 111 paragraph (1) must first be approved by the General Meeting of Shareholders in the event that the plan contains a plan for increasing Paid-up Capital or a plan for merging business entities. (3) The fulfillment plan as referred to in Article 111 paragraph (1) must obtain a statement of no objection from the Financial Services Authority. (4) The Financial Services Authority submits requests for improvement, rejection, or statements of no objection regarding the fulfillment plan submitted by the Financing Company as referred to in Article 111 paragraph (1) within a maximum of 14 (fourteen) working days from the date the fulfillment plan is received. (5) The Financial Services Authority submits requests for improvement of the fulfillment plan in the event that the fulfillment plan is assessed to be able to resolve the issues of provisions not yet fulfilled by the Financing Company but the fulfillment plan still requires improvement. (6) Financing Companies are required to submit an improved fulfillment plan in accordance with the requests of the Financial Services Authority as referred to in paragraph (5) within a maximum of 14 (fourteen) working days from the date of the request for improvement letter for the fulfillment plan from the Financial Services Authority. (7) In the event that Financing Companies have submitted an improved fulfillment plan in accordance with the requests of the Financial Services Authority, the Financial Services Authority provides a statement of no objection or rejection in accordance with the provisions as referred to in paragraph (4). (8) The Financial Services Authority submits rejection regarding the fulfillment plan in the event that the fulfillment plan is assessed as unable to resolve the issues of provisions not yet fulfilled by the Financing Company. (9) The Financial Services Authority provides a statement of no objection regarding the fulfillment plan in the event that the fulfillment plan is assessed to be able to resolve the issues of provisions not yet fulfilled by the Financing Company. (10) If within the time period as referred to in paragraph (4), the Financial Services Authority does not submit requests for improvement, rejection, or statements of no objection, the Financing Company may implement the fulfillment plan. (11) Financing Companies are required to implement fulfillment plans that have obtained statements of no objection from the Financial Services Authority as referred to in paragraph (9) or fulfillment plans as referred to in paragraph (10).

CHAPTER XXIV
ADMINISTRATIVE SANCTIONS

Article 113
(1) In the event that by the end of the time period for the notification letter as referred to in Article 110 paragraph (2), Financing Companies still do not fulfill the provisions as referred to in Article 110 paragraph (1), Financing Companies are subject to graduated administrative sanctions consisting of:
a. warnings; b. suspension of business activities; and
c. revocation of business licenses.
(2) In addition to the administrative sanctions as referred to in paragraph (1), the Financial Services Authority may:
a. restrict certain business activities; b. lower the risk level assessment results;
c. cancel approvals; and/or
d. conduct re-assessments of the competence and propriety of the principal parties of the Financing Company.
(3) Financing Companies that violate the provisions as referred to in paragraph (1) but have resolved the violations are still subject to administrative sanctions in the form of the first warning which expires automatically. (4) Administrative sanctions in the form of warnings as referred to in paragraph (1) letter a may be issued in writing at most 3 (three) times consecutively with each validity period of a maximum of 2 (two) months. (5) In the event that before the end of the time period for administrative sanctions in the form of warnings as referred to in paragraph (4), Financing Companies have fulfilled the provisions as referred to in Article 110 paragraph (1), the Financial Services Authority revokes the administrative sanctions in the form of warnings. (6) In the event that the validity period of the third warning as referred to in paragraph (4) expires and Financing Companies still do not fulfill the provisions as referred to in Article 110 paragraph (1), the Financial Services Authority imposes administrative sanctions in the form of suspension of business activities. (7) Administrative sanctions in the form of suspension of business activities as referred to in paragraph (6) are issued in writing and take effect from the date of determination for a maximum period of 6 (six) months. (8) If the validity period of administrative sanctions in the form of warnings and/or suspension of business activities expires on a holiday, the administrative sanctions in the form of warnings and/or suspension of business activities take effect until the first working day thereafter. (9) Financing Companies subject to administrative sanctions in the form of suspension of business activities as referred to in paragraph (6) are prohibited from conducting business activities. (10) In the event that before the end of the time period for suspension of business activities as referred to in paragraph (7), Financing Companies have fulfilled the provisions as referred to in Article 110 paragraph (1), the Financial Services Authority revokes the administrative sanctions in the form of suspension of business activities. (11) In the event that administrative sanctions in the form of business suspension are still in effect and Financing Companies continue to conduct financing business activities, the Financial Services Authority may directly impose administrative sanctions in the form of revocation of business licenses. (12) In the event that by the end of the time period for suspension of business activities as referred to in paragraph (7), Financing Companies still do not fulfill the provisions as referred to in Article 110 paragraph (1), the Financial Services Authority revokes the business licenses of the respective Financing Companies. (13) The Financial Services Authority may announce administrative sanctions in the form of suspension of business activities as referred to in paragraph (1) letter b and/or revocation of business licenses as referred to in
paragraph (1) letter c to the public.

Article 114
(1) Financing Companies that:
a. violate the provisions as referred to in Article 111 paragraph (1) and/or Article 112 paragraph (6) and paragraph (11); b. have their fulfillment plans rejected by the Financial Services Authority as referred to in Article 112 paragraph (8); and/or
c. have not fulfilled the provisions as referred to in Article 18 paragraph (1), Article 23 paragraph (1), Article 24 paragraph (1) and paragraph (2), Article 65, Article 84 paragraph (1) and paragraph (3), Article 86, Article 87, Article 88, Article 89 paragraph (1), Article 90 paragraph (1), Article 91, Article 95 paragraph (1) and paragraph (3), Article 97 paragraph (1) and paragraph (3), and/or Article 98 paragraph (1) within the time period specified in the fulfillment plan as referred to in Article 111 paragraph (4) through paragraph (6), are subject to administrative sanctions.
(2) Administrative sanctions as referred to in paragraph (1) are imposed in a graduated manner consisting of:
a. warnings; b. suspension of business activities; and/or
c. revocation of business licenses.
(3) In addition to the administrative sanctions as referred to in paragraph (2), the Financial Services Authority may:
a. restrict certain business activities; b. lower the risk level assessment results;
c. cancel approvals; and/or
d. conduct re-assessments of the competence and propriety of the principal parties of the Financing Company.
(4) Financing Companies that violate the provisions as referred to in paragraph (1) but have resolved the violations are still subject to administrative sanctions in the form of the first warning which expires automatically. (5) Administrative sanctions in the form of warnings as referred to in paragraph (2) letter a may be issued in writing at most 3 (three) times consecutively with each validity period of a maximum of 2 (two) months. (6) In the event that before the end of the time period for administrative sanctions in the form of warnings as referred to in paragraph (5), Financing Companies have fulfilled the provisions as referred to in Article 18 paragraph (1), Article 23 paragraph (1), Article 24 paragraph (1) and paragraph (2), Article 65, Article 84 paragraph (1) and paragraph (3), Article 86, Article 87, Article 88, Article 89 paragraph (1), Article 90 paragraph (1), Article 91, Article 95 paragraph (1) and paragraph (3), Article 97 paragraph (1) and paragraph (3), Article 98 paragraph (1), Article 111 paragraph (1), and/or Article 112 paragraph (6) and paragraph (11), the Financial Services Authority revokes the administrative sanctions in the form of warnings. (7) In the event that the validity period of the third warning as referred to in paragraph (5) expires and Financing Companies still do not fulfill the provisions as referred to in Article 18 paragraph (1), Article 23 paragraph (1), Article 24 paragraph (1) and paragraph (2), Article 65, Article 86, Article 87, Article 88, Article 89 paragraph (1), Article 90 paragraph (1), Article 91, Article 95 paragraph (1) and paragraph (3), Article 97 paragraph (1) and paragraph (3), Article 98 paragraph (1), the Financial Services Authority imposes administrative sanctions in the form of suspension of business activities. (8) In the event that the validity period of the third warning as referred to in paragraph (5) expires and Financing Companies still do not fulfill the provisions as referred to in Article 84 paragraph (1) and paragraph (3), Article 111 paragraph (1), and/or Article 112 paragraph (6) and paragraph (11), the Financial Services Authority imposes administrative sanctions in the form of revocation of business licenses without prior imposition of administrative sanctions in the form of suspension of business activities. (9) Administrative sanctions in the form of suspension of business activities as referred to in paragraph (2) letter b are issued in writing and take effect from the date of determination for a maximum period of 6 (six) months. (10) If the validity period of administrative sanctions in the form of warnings as referred to in paragraph (2) letter a and/or suspension of business activities as referred to in paragraph (2) letter b expires on a holiday, the administrative sanctions in the form of warnings and/or suspension of business activities take effect until the first working day thereafter. (11) Financing Companies subject to administrative sanctions in the
form of suspension of business activities as referred to in paragraph (7) are prohibited from conducting business activities. (12) In the event that before the end of the time period for suspension of business activities as referred to in paragraph (9), Financing Companies have fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority revokes the administrative sanctions in the form of suspension of business activities. (13) In the event that administrative sanctions in the form of business suspension are still in effect and Financing Companies continue to conduct financing business activities, the Financial Services Authority may directly impose administrative sanctions in the form of revocation of business licenses. (14) In the event that by the end of the time period for suspension of business activities as referred to in paragraph (9), Financing Companies still do not fulfill the provisions as referred to in Article 18 paragraph (1), Article 23 paragraph (1), Article 24 paragraph (1) and paragraph (2), Article 65, Article 86, Article 87, Article 88, Article 89 paragraph (1), Article 90 paragraph (1), Article 91, Article 95 paragraph (1) and paragraph (3), Article 97 paragraph (1) and paragraph (3), Article 98 paragraph (1), the Financial Services Authority revokes the business licenses of the respective Financing Companies. (15) The Financial Services Authority may announce administrative sanctions in the form of suspension of business activities as referred to in paragraph (2) letter b, and/or revocation of business licenses as referred to in paragraph (2) letter c to the public.

Article 115
(1) Financing Companies that violate the provisions as referred to in Article 4, Article 5 paragraph (2), Article 10, Article 12, Article 13, Article 14 paragraph (2) and paragraph (3), Article 15 paragraph (2) and paragraph (3), Article 16 paragraph (1) and paragraph (2), Article 17, Article 19 paragraph (2), Article 20 paragraph (2), paragraph (3), paragraph (4), and paragraph (5), Article 22 paragraph (1), Article 29, Article 30 paragraph (1), Article 31, Article 32, Article 37, Article 38, Article 39 paragraph (2), paragraph (3), and paragraph (5), Article 40 paragraph (1), Article 41 paragraph (1), Article 42, Article 43, Article 44 paragraph (1), Article 45, Article 46, Article 47, Article 48 paragraph (2), paragraph (3), paragraph (4), and paragraph (5), Article 49 paragraph (1) and paragraph (3), Article 50, Article 51 paragraph (1), Article 52, Article 53 paragraph (1), Article 55 paragraph (1), Article 56 paragraph (1), Article 57 paragraph (1), Article 58 paragraph (1), Article 59, Article 64 paragraph (1), Article 66 paragraph (1), Article 67, Article 68 paragraph (1), paragraph (2), paragraph (3), and paragraph (4), Article 69, Article 70, Article 72, Article 73 paragraph (1), Article 75, Article 76 paragraph (1), Article 77, Article 78 paragraph (1), Article 79 paragraph (1), Article 81, Article 82, Article 83, Article 85 paragraph (1) and paragraph (2), Article 93 paragraph (6), Article 94 paragraph (1) and paragraph (2) of this Financial Services Authority Regulation are subject to graduated administrative sanctions consisting of:
a. warnings; b. suspension of business activities; and
c. revocation of business licenses.
(2) In addition to the administrative sanctions as referred to in paragraph (1), the Financial Services Authority may:
a. restrict certain business activities; b. lower the risk level assessment results;
c. cancel approvals; and/or
d. conduct re-assessments of the competence and propriety of the principal parties of the Financing Company.
(3) Financing Companies that violate the provisions as referred to in paragraph (1) but have resolved the violations are still subject to administrative sanctions in the form of the first warning which expires automatically. (4) Administrative sanctions in the form of warnings as referred to in paragraph (1) letter a may be issued in writing at most 3 (three) times consecutively with each validity period of a maximum of 2 (two) months. (5) In the event that before the end of the time period for administrative sanctions in the form of warnings as referred to in paragraph (4), Financing Companies have fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority revokes the administrative sanctions in the form of warnings. (6) In the event that the validity period of the third warning as referred to in paragraph (4) expires and Financing Companies still do not fulfill the provisions as referred to in paragraph (1), the Financial Services Authority imposes administrative sanctions in the form of suspension of business activities. (7) Administrative sanctions in the form of suspension of business activities as referred to in paragraph (6) are issued in writing and take effect from the date of determination for a maximum period of 6 (six) months. (8) If the validity period of administrative sanctions in the form of warnings and/or suspension of business activities expires on a holiday, the administrative sanctions in the form of warnings and/or suspension of business activities take effect until the first working day thereafter. (9) Financing Companies subject to administrative sanctions in the form of suspension of business activities as referred to in paragraph (6) are prohibited from conducting financing business activities. (10) In the event that before the end of the time period for suspension of business activities as referred to in paragraph (7), Financing Companies have fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority revokes the administrative sanctions in the form of suspension of business activities. (11) In the event that administrative sanctions in the form of business suspension are still in effect and Financing Companies continue to conduct financing business activities, the Financial Services Authority may directly impose administrative sanctions in the form of revocation of business licenses. (12) In the event that by the end of the time period for suspension of business activities as referred to in paragraph (7), Financing Companies still do not fulfill the provisions as referred to in paragraph (1), the Financial Services Authority revokes the business licenses of the respective Financing Companies. (13) The Financial Services Authority may announce administrative sanctions in the form of suspension of business activities as referred to in paragraph (1) letter b and/or revocation of business licenses as referred to in paragraph (1) letter c to the public.

Article 116
(1) The Financial Services Authority may impose administrative sanctions in the form of suspension of business activities without prior imposition of administrative sanctions in the form of warnings in the event that Financing Companies violate Article 82 letter a and/or Article 83. (2) Administrative sanctions in the form of suspension of business activities as referred to in paragraph (1) are issued in writing and take effect from the date of determination for a maximum period of 6 (six) months. (3) If the validity period of administrative sanctions in the form of suspension of business activities expires on a holiday, the administrative sanctions in the form of suspension of business activities take effect until the first working day thereafter. (4) Financing Companies subject to administrative sanctions in the form of suspension of business activities as referred to in paragraph (1) are prohibited from conducting business activities. (5) In the event that before the end of the time period for suspension of business activities as referred to in paragraph (2), Financing Companies have fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority revokes the administrative sanctions in the form of suspension of business activities. (6) In the event that administrative sanctions in the form of business suspension are still in effect and Financing Companies continue to conduct financing business activities, the Financial Services Authority may directly impose administrative sanctions in the form of revocation of business licenses. (7) In the event that by the end of the time period for suspension of business activities as referred to in paragraph (2), Financing Companies still do not fulfill the provisions as referred to in paragraph (1), the Financial Services Authority revokes the business licenses of the respective Financing Companies. (8) The Financial Services Authority may announce administrative sanctions in the form of suspension of business activities as referred to in paragraph (1) and/or revocation of business licenses as referred to in paragraph (6) or paragraph (7) to the public.

CHAPTER XXV
TRANSITIONAL PROVISIONS

Article 117
(1) For Financing Companies that have obtained business licenses before this Financial Services Authority Regulation is enacted, the provisions regarding the content of financing agreements as referred to in Article 34 letter e and letters n through r shall take effect 6 (six) months from the enactment of this Financial Services Authority Regulation. (2) For Financing Companies that have obtained business licenses before this Financial Services Authority Regulation is enacted, the obligation to store and maintain documents evidencing ownership of collateral at the head office and/or branch offices of Financing Companies as referred to in Article 43 paragraph (1) and Article 44 paragraph (1) shall take effect 1 (one) year from the enactment of this Financial Services Authority Regulation. (3) For Financing Companies that have obtained business licenses before this Financial Services Authority Regulation is enacted, the obligation to implement fraud control as referred to in Article 53 paragraph (1) shall take effect 1 (one) year from the enactment of this Financial Services Authority Regulation. (4) For Financing Companies that have obtained business licenses before this Financial Services Authority Regulation is enacted, the provisions regarding the obligation to establish units or functions responsible for handling fraud control within the organization of Financing Companies as referred to in Article 55 paragraph (1) shall take effect 6 (six) months from the enactment of this Financial Services Authority Regulation. (5) Certificates in the fields of financing, debt collection, and risk management as referred to in Article 65 that have been obtained from institutions designated by the association, before this Financial Services Authority Regulation is enacted, are declared valid and effective. (6) Institutions that have conducted certification in the fields of financing, debt collection, and risk management as referred to in paragraph (5) must meet the requirements as Professional Certification Institutions at the latest 3 (three) years from the enactment of this Financial Services Authority Regulation.

Article 118
(1) Every notification letter that has been issued by the Financial Services Authority to Financing Companies based on the Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business is declared valid and in force. (2) Every fulfillment plan that has received a statement of no objection from the Financial Services Authority based on the Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business is declared valid and in force. (3) Every administrative sanction that has been imposed on Financing Companies based on the Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business is declared valid and in force. (4) Financing Companies that have not been able to overcome the causes of the imposition of administrative sanctions as referred to in paragraph (3) are subject to further administrative sanctions in accordance with this Financial Services Authority Regulation.

CHAPTER XXVI
FINAL PROVISIONS

Article 119
At the time this Financial Services Authority Regulation comes into force, provisions concerning the conduct of Financing Company business are subject to this Financial Services Authority Regulation.

Article 120
At the time this Financial Services Authority Regulation comes into force:
a. The Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business (State Gazette of the Republic of Indonesia Year 2014 Number 364, Supplement to the State Gazette of the Republic of Indonesia Number 5638) is revoked and declared invalid; b. Article 49 of the Financial Services Authority Regulation Number 30/POJK.05/2014 concerning Good Corporate Governance for Financing Companies (State Gazette of the Republic of Indonesia Year 2014 Number 365, Supplement to the State Gazette of the Republic of Indonesia Number 5639) is revoked and declared invalid;
c. Circular Letter of the Financial Services Authority Number 47/SEOJK.05/2016 concerning the Amount of Down Payment for Motor Vehicle Financing for Financing Companies is revoked and declared invalid; and
d. Roman numeral V number 2 letter c number 4) to number 8) of the Circular Letter of the Financial Services Authority Number 1/SEOJK.05/2016 concerning the Financial Health Level of Financing Companies is revoked and declared invalid; and e. all implementing regulations of the Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business (State Gazette of the Republic of Indonesia Year 2014 Number 364, Supplement to the State Gazette of the Republic of Indonesia Number 5638) are declared still in force insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 121
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
Legal Department signed
Yuliana

In order that everyone may know it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia. Established in Jakarta on 27 December 2018 CHAIRMAN OF THE COMMISSIONERS BOARD FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed WIMBOH SANTOSO

Promulgated in Jakarta on 28 December 2018
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2018 NUMBER 260

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 35 /POJK.05/2018
CONCERNING
THE CONDUCT OF FINANCING COMPANY BUSINESS

I. GENERAL
The Financial Services Authority Regulation on the Conduct of Financing Company Business is an effort to improve the Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business. As an effort to improve the Financial Services Authority Regulation Number 29/POJK.05/2014 concerning the Conduct of Financing Company Business, there are content matters that are adjusted and/or added in this Financial Services Authority Regulation, including:

Increasing the role of Financing Companies in the national economy, namely minimum productive business financing, expansion of business activities, financing cooperation, and fintech 2.0 by Financing Companies;
Increasing prudential regulation, namely the issuance of securities as a source of funding, limits on financing acquisition incentives, and fraud control and anti-fraud strategies; and
Increasing consumer protection, namely interest rate transparency, prohibition of pledging collateral evidence and the obligation to return collateral evidence, maintenance of collateral evidence, and withdrawal and sale of collateral.
This Financial Services Authority Regulation is expected to increase the role of Financing Companies in driving national development by creating Financing Companies that are healthier, reliable, trustworthy, and competitive, which generally can be done by improving the Financial Services Authority Regulation regarding Financing Companies.

II. ARTICLE BY ARTICLE
Article 1
Clearly stated.

Article 2
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
The term "other financing business activities" refers to financing activities that generate financing receivables in the Financing Company's balance sheet, but cannot be classified into the categories of Investment Financing, Working Capital Financing, and/or Multi-purpose Financing.

Paragraph (2)
The term "operating lease" refers to a lease that does not substantially transfer the benefits and risks of the leased goods.
The term "fee-based activities" in this paragraph refers to activities that can be carried out by Financing Companies to market financial service products, including but not limited to mutual funds, micro-insurance, or other products related to financial service activities.

Article 3
Letter a
The term "productive business" refers to business activities to produce goods or services, including businesses that add value and increase income for the Debtor.

Letter b
Clearly stated.

Article 4
Paragraph (1)
Letter a
Clearly stated.
Letter b
Financing via Sale and Leaseback that falls under the category of Investment Financing is only Sale and Leaseback implemented via Finance Lease.
Financing via Sale and Leaseback implemented via operating lease is not included in the category of Investment Financing.

Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
Clearly stated.
Letter g
Clearly stated.
Letter h
Clearly stated.

Paragraph (2)
Letter a
Financing via Sale and Leaseback that falls under the category of Working Capital Financing is only Sale and Leaseback implemented via Finance Lease.
Financing via Sale and Leaseback implemented via operating lease (operating lease) is not included in the category of Working Capital Financing.

Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.

Paragraph (3)
Letter a
Clearly stated.
Letter b
Purchase with Installment Payments can be done by the Debtor using a credit card issued by the Financing Company.
Purchase with Installment Payments can be carried out for the procurement of services including but not limited to health, education, religious services, recreation, and other services.

Letter c
Clearly stated.
Letter d
Clearly stated.

Article 5
Paragraph (1)
The term "other financing business activities" refers to financing business activities for the procurement of goods and/or services that generate financing receivables in the Financing Company's financial position report.

Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.
Paragraph (6)
Clearly stated.
Paragraph (7)
Clearly stated.
Paragraph (8)
Clearly stated.
Paragraph (9)
Clearly stated.

Article 6
Clearly stated.

Article 7
In the Articles of Association of the Financing Company, for the purposes and objectives of the Financing Company is to engage in financing business.
To achieve these purposes and objectives, the Financing Company can carry out business activities as follows:
a. Investment Financing; b. Working Capital Financing;
c. Multi-purpose Financing; and/or
d. other financing business activities based on approval from the Financial Services Authority.

Article 8
Paragraph (1)
The term "substantially transfer" refers to accounting standards regarding leases. The Debtor in a Finance Lease scheme is the lessee.

Paragraph (2)
Clearly stated.

Article 9
Clearly stated.

Article 10
Clearly stated.

Article 11
Clearly stated.

Article 12
Clearly stated.

Article 13
Paragraph (1)
Examples of Infrastructure Financing objects:
a. transportation, including sea, river or lake ports, airports, rail networks, and railway stations; b. roads, including toll roads and toll bridges;
c. irrigation, including raw water conveyance channels;
d. drinking water, including raw water intake structures, transmission networks, distribution networks, drinking water treatment plants; e. wastewater, including wastewater treatment plants, collection networks and main networks, and waste facilities including transporters and disposal sites; f. telecommunications, including telecommunications networks; g. electricity, including power generation, transmission or distribution of electricity; and/or h. oil and gas, including processing, storage, transportation, transmission, or distribution of oil and gas.

Paragraph (2)
Clearly stated.

Article 14
Clearly stated.

Article 15
Paragraph (1)
The term "consumptive needs" refers to the need to purchase goods and/or use services that do not add value and/or increase the Debtor's income.

Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.

Article 16
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Example of assessment for fulfillment of requirements:
If based on the monthly report as of 30 June 2019 PT ABC Finance has:

Financial Health Level: healthy
Risk level: low
Capitalization ratio: 50% (fifty percent)
Gearing ratio: 3 (three) times
then PT ABC Finance can carry out Working Capital Financing via Business Capital Facilities and Multi-purpose Financing via Fund Facilities for the period 1 August 2019 to 31 January 2020. If based on the monthly report as of December 2020 PT ABC Finance has:
Financial Health Level: less healthy
Risk level: low-medium
Capitalization ratio: 20% (twenty percent)
Gearing ratio: 5 (five) times
then the Financing Company is prohibited from carrying out Working Capital Financing via Business Capital Facilities and Multi-purpose Financing via Fund Facilities for the period 1 February 2020 to 31 July 2020.

Paragraph (5)
Clearly stated.

Article 17
Letter a
Clearly stated.
Letter b
The term "collateral" refers to guarantees from the Debtor for the disbursement of financing that are useful to guarantee the repayment of financing in the event of Debtor default.

Letter c
The term "credit information management agency" refers to a credit information management agency as referred to in legislation concerning credit information management agencies.

Letter d
Clearly stated.

Article 18
Paragraph (1)
The term "integrated information and technology system" refers to an information and technology system that combines different activities, programs, or hardware components into one functional unit.

Paragraph (2)
Clearly stated.

Article 19
Paragraph (1)
The term "conducting business activities by utilizing information technology" means the Financing Company carries out:
a. marketing activities; b. financing application applications; and
c. installment payment monitoring,
through electronic systems using the internet network.
An electronic system is a series of electronic devices and procedures that function to prepare, collect, process, analyze, store, display, announce, transmit, and/or distribute electronic information in the field of financial service provision.

Paragraph (2)
Clearly stated.

Article 20
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Paragraph (6)
Clearly stated.
Paragraph (7)
Clearly stated.
Paragraph (8)
Clearly stated.
Paragraph (9)
Letter a
Clearly stated.
Letter b
The term "guarantee on financing receivables" consists of:
a. credit insurance or credit guarantee in accordance with applicable legislation; and/or b. guarantee on financing receivables from the relevant corporation.

Article 21
Paragraph (1)
Clearly stated.
Paragraph (2)
Example of the application of the Down Payment amount:
If based on the monthly report of the Financing Company as of 30 June 2019 the Financing Company has a Net NPF Ratio for motor vehicle financing higher than 5% (five percent), the Financing Company applies the Down Payment amount provisions for Motor Vehicle Financing as referred to in Article 20 paragraph (5). The application of the Down Payment amount for Motor Vehicle Financing mentioned above is valid from 1 August 2019 to 31 January 2019. If based on the monthly report of the Financing Company as of 31 December 2019 the Financing Company has a Financial Health Level with a healthy criterion and a Net NPF Ratio for motor vehicle financing of 3.5% (three point five percent), the Financing Company applies the Down Payment amount provisions for Motor Vehicle Financing as referred to in Article 20 paragraph (3). The application of the Down Payment amount for Motor Vehicle Financing mentioned above is valid from 1 February 2020 to 31 July 2020. If based on the monthly report of the Financing Company as of 30 June 2020 the Financing Company has a Financial Health Level with a very healthy criterion and a Net NPF Ratio for motor vehicle financing of 0.5% (zero point five percent), the Financing Company applies the Down Payment amount provisions for Motor Vehicle Financing as referred to in Article 20 paragraph (1). The application of the Down Payment amount for Motor Vehicle Financing mentioned above is valid from 1 August 2020 to 31 January 2021.

Paragraph (3)
Example calculation of the Down Payment amount: if the price of a two-wheeled vehicle: Rp10,000,000.00 Price discount (discount) and other discounts given: Rp500,000.00 Selling price of two-wheeled vehicle: Rp10,000,000.00 – Rp500,000.00 = Rp9,500,000.00 For Financing Companies that meet the criteria as referred to in Article 20 paragraph (3), the Down Payment for Motor Vehicle Financing that must be imposed and paid in cash at once is 15% x Rp9,500,000.00 = Rp1,425,000.00.

Paragraph (4)
Example calculation of the Down Payment amount:
Example (insurance costs, guarantees, or other costs paid in cash by the Debtor): Price of two-wheeled motor vehicle: Rp10,000,000.00 Price discount (discount) and other discounts given: Rp500,000.00 Insurance, guarantee, or other costs paid by the Debtor in cash: Rp1,000,000.00 Selling price of two-wheeled motor vehicle: Rp10,000,000.00 – Rp500,000.00 = Rp9,500,000.00 For Financing Companies that meet the criteria as referred to in Article 20 paragraph (3), the Down Payment for Motor Vehicle Financing of two wheels that must be imposed and paid in cash at once is 15% x Rp9,500,000.00 = Rp1,425,000.00. Thus, the costs paid by the Debtor in cash at once (insurance costs, guarantees, or other costs paid in cash by the Debtor) = Down Payment (Rp1,425,000.00) + insurance, guarantee, or other costs (Rp1,000,000.00) = Rp2,425,000.00 Total financing by the Financing Company to the Debtor = selling price of the vehicle (Rp9,500,000.00) – Down Payment (Rp1,425,000.00) = Rp8,075,000.00.

Example 2 (insurance costs, guarantees, or other costs not paid in cash (installment) by the Debtor): Price of two-wheeled motor vehicle: Rp10,000,000.00 Price discount (discount) and other discounts given: Rp500,000.00 Insurance, guarantee, or other costs: Rp1,000,000.00 Selling price of two-wheeled motor vehicle: Rp10,000,000.00 – Rp500,000.00 = Rp9,500,000.00 For Financing Companies that meet the criteria as referred to in Article 20 paragraph (3), the Down Payment for Motor Vehicle Financing that must be imposed is 15% x Rp9,500,000.00 = Rp1,425,000.00. Thus, the costs paid by the Debtor if insurance, guarantee, or other costs are not paid in cash by the Debtor or paid in installments = Down Payment (Rp1,425,000.00) Total financed by the Financing Company to the Debtor = insurance, guarantee, or other costs (Rp1,000,000.00) + financing price of two-wheeled motor vehicle (Rp8,075,000.00) = Rp9,075,000.00.

Paragraph (5)
Clearly stated.

Article 22
Paragraph (1)
The term "financing acquisition incentive costs to third parties" refers to all types of payments to third parties or third-party employees for business acquisition, including but not limited to:

commission payments to providers of goods and/or services paid in cash;
target achievement incentives;
third-party travel costs;
joint promotion costs;
income tax; and/or
other expenditures related to financing acquisition paid to third parties.

Example of limitation on financing incentive costs to third parties related to financing acquisition PT XYZ Finance disburses motor vehicle financing to a Debtor in one financing agreement with a financing value of Rp100,000,000.00. Through the disbursement of financing, PT XYZ Finance receives the following income:

interest income of Rp43,000,000.00;
insurance discount income of Rp15,000,000.00;
administrative income of Rp1,000,000.00; and
commission income of Rp1,000,000.00.
Thus, the maximum total third-party incentive costs related to financing acquisition that can be given for the disbursement of financing to the Debtor is = (17.5% x (Rp43,000,000.00 + Rp15,000,000.00 + Rp1,000,000.00 + Rp1,000,000.00)) = Rp10,500,000. The total incentive costs have taken into account commissions to providers of goods and/or services paid in cash, target achievement incentives, third-party travel costs, joint promotion costs, and/or income tax, and other expenditures related to financing acquisition paid to third parties.

Paragraph (2)
Clearly stated.

Article 23
Paragraph (1)
Example calculation of BMPP (Maximum Financing Exposure) to all related parties:
Based on monthly report data as of 30 April 2022, PT XYZ Finance has Equity valued at Rp1 trillion. PT ABC is a related company with PT XYZ Finance. PT XYZ Finance has also disbursed financing to related parties including PT ABC amounting to Rp450 billion. On 5 May 2022, PT ABC obtained a new financing ceiling valued at Rp100 billion with disbursement carried out in stages as follows:
First stage disbursed on 5 May 2022 amounting to Rp30 billion and Second stage disbursed on 12 May 2022 with a value of Rp70 billion.
In the first disbursement on 5 May 2022, PT XYZ Finance does not violate the BMPP provisions for all related parties with the following calculation:
Equity as of 30 April 2022 Rp1 trillion
BMPP for all related parties 50% x Rp1 trillion = Rp500 billion Total Outstanding Principal Balance as of 5 May 2022 = Rp450 billion + Rp30 billion = Rp480 billion (48% of Equity value).

In the second disbursement on 12 May 2022, PT XYZ Finance violates the BMPP provisions for all related parties with the following calculation:
Equity as of 30 April 2022 Rp1 trillion
BMPP for all related parties 50% x Rp1 trillion = Rp500 billion Total Outstanding Principal Balance as of 12 May 2022 = Rp450 billion + Rp30 billion + Rp70 billion = Rp550 billion (55% of Equity value).

Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Letter a
The term "controller" refers to a party that directly or indirectly has the ability to determine the board of directors, board of commissioners, or equivalent to the board of directors or board of commissioners in a legal entity in the form of a cooperative and/or influence the actions of the board of directors, board of commissioners, or equivalent to the board of directors or board of commissioners in a legal entity in the form of a cooperative.

Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
The term "family relationship up to the second degree both horizontally and vertically" refers to the following parties:

biological/step/adopted parents;
biological/step/adopted siblings;
biological/step/adopted children;
biological/step/adopted grandparents;
biological/step/adopted grandchildren;
biological/step/adopted siblings of parents;
husband or wife;
in-laws;
husband or wife of biological/step/adopted children;
grandparents of husband or wife;
husband or wife of biological/step/adopted grandchildren; and
biological/step/adopted siblings of husband or wife along with the husband or wife of the relevant sibling.

Letter g
The term "board of directors for business entities that are not in the form of a limited liability company or cooperative" refers to parties carrying out management functions as regulated in applicable legislation. The term "board of commissioners for business entities that are not in the form of a limited liability company or cooperative" refers to parties carrying out supervisory and advisory functions as regulated in applicable legislation.

Letter h
Clearly stated.
Letter i
Clearly stated.
Letter j
Clearly stated.

Paragraph (5)
Clearly stated.

Article 24
Paragraph (1)
Example calculation of BMPP per 1 (one) unrelated Debtor:
On 30 April 2022, PT MAS had a total Outstanding Principal Balance on PT XYZ Finance amounting to Rp140 billion. Based on Monthly Report data as of 30 April 2022, PT XYZ Finance has Equity valued at Rp1 trillion. PT MAS is not a related company with PT XYZ Finance. On 5 May 2022, PT MAS obtained a new financing ceiling valued at Rp100 billion with disbursement carried out in stages as follows:

first stage disbursed on 5 May 2022 amounting to Rp30 billion; and
second stage disbursed on 12 May 2022 with a value of Rp70 billion.
In the first disbursement on 5 May 2022, PT XYZ Finance does not violate the BMPP provisions per Debtor who is not a related party with the following calculation:
Equity as of 30 April 2022 Rp1 trillion
BMPP per Debtor who is not a related party 20% x Rp1 trillion = Rp200 billion Total Outstanding Principal Balance as of 5 May 2022 = Rp140 billion + Rp30 billion = Rp170 billion (17% of Equity value).

In the second disbursement on 12 May 2022, PT XYZ Finance violates the BMPP provisions per Debtor who is not a related party with the following calculation:
Equity as of 30 April 2022 Rp1 trillion
BMPP per Debtor who is not a related party 20% x Rp1 trillion = Rp200 billion.
Total Outstanding Principal Balance as of 12 May 2022 = Rp140 billion + Rp30 billion + Rp70 billion = Rp240 billion (24% of Equity value).

Paragraph (2)
Example of BMPP provisions for 1 (one) group of Debtors who are not related parties:
Based on monthly report data as of 30 April 2022, PT XYZ Finance has Equity valued at Rp1 trillion. PT MAS is not a related company with PT XYZ Finance. PT XYZ Finance has also disbursed financing to other companies in 1 group affiliated with PT MAS amounting to Rp450 billion.

On May 5, 2022, PT MAS obtained a new financing ceiling worth Rp100 billion, with disbursement carried out in stages as follows:

The first stage was disbursed on May 5, 2022, amounting to Rp30 billion; and
The second stage was disbursed on May 12, 2022, with a value of Rp70 billion.

In the first disbursement on May 5, 2022, PT XYZ Finance did not violate the BMPP (Maximum Financing Balance) regulations for the Debtor group that is not an affiliated party, calculated as follows:
Equity as of April 30, 2022: Rp1 trillion.
BMPP for the Debtor group that is not an affiliated party = 50% x Rp1 trillion = Rp500 billion.
Total Outstanding Principal Balance as of May 5, 2022 = Rp450 billion + Rp30 billion = Rp480 billion (48% of Equity value).

In the second disbursement on May 12, 2022, PT XYZ Finance violated the BMPP regulations for the Debtor group that is not an affiliated party, calculated as follows:
Equity as of April 30, 2022: Rp1 trillion.
BMPP for the Debtor group that is not an affiliated party = 50% x Rp1 trillion = Rp500 billion.
Total Outstanding Principal Balance as of May 12, 2022 = Rp450 billion + Rp30 billion + Rp70 billion = Rp550 billion (55% of Equity value).

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.

Article 25
The term "financing for the procurement of goods and/or services in government programs" refers to financing for:
a. food procurement; b. simple household procurement;
c. procurement/provision/management of oil and gas as well as other equivalent alternative energy sources;
d. procurement/processing of commodities oriented towards exports; e. procurement/provision/management of water; f. procurement/provision/management of electricity; and/or g. procurement of infrastructure supporting land, sea, and air transportation in the form of road, bridge, railway, other ports, and airport construction.

Article 26
Paragraph (1)
The term "financing risk mitigation" refers to efforts implemented by the Financing Company to reduce the risk borne by the Financing Company due to the Debtor's inability/failure to meet payment obligations to the Financing Company.

Paragraph (2)
Clearly stated.

Article 27
Clearly stated.

Article 28
Clearly stated.

Article 29
Clearly stated.

Article 30
Paragraph (1)
This provision applies when the financing agreement contains a fiduciary security burden clause, either in the principal financing agreement or in a separate document.

Paragraph (2)
Clearly stated.

Article 31
Clearly stated.

Article 32
Clearly stated.

Article 33
Clearly stated.

Article 34
Paragraph (1)
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
The term "cooperative financing" refers to cooperation with other parties through financing channeling or joint financing conducted in accordance with applicable legislation.

Letter d
Clearly stated.

Letter e
Clearly stated.

Letter f
Clearly stated.

Letter g
Clearly stated.

Letter h
Clearly stated.

Letter i
Clearly stated.

Letter j
Clearly stated.

Letter k
Clearly stated.

Letter l
Clearly stated.

Letter m
Clearly stated.

Letter n
Clearly stated.

Letter o
Clearly stated.

Letter p
Clearly stated.

Letter q
Clearly stated.

Letter r
Clearly stated.

Letter s
Clearly stated.

Letter t
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Article 35
Clearly stated.

Article 36
Clearly stated.

Article 37
Financing interest rates may be stated in the form of an effective interest rate or a flat interest rate.

Article 38
Clearly stated.

Article 39
Paragraph (1)
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
The term "channeling financing with recourse" refers to financing channeling from other parties to the Financing Company, requiring the Financing Company to bear all/partial financing risk.

The term "joint financing with recourse" refers to joint financing among Financing Companies and other parties, requiring the Financing Company to bear all/partial financing risk outside the risk portion that should be borne by the Financing Company based on the amount of funds disbursed.

Examples of joint financing with recourse include cases where the agreement with the fund provider stipulates that if the Financing Company's Debtor defaults, the Financing Company is obligated to replace that Debtor with another Debtor having a current financing receivable quality, or the Financing Company remains obligated to pay the fund provider as a replacement for the Debtor's installments.

Paragraph (4)
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Clearly stated.

Letter d
Clearly stated.

Letter e
Clearly stated.

Letter f
Clearly stated.

Letter g
The term "other institutions" includes, among others, savings and loan cooperatives.

Paragraph (5)
Clearly stated.

Article 40
Clearly stated.

Article 41
Clearly stated.

Article 42
The term "adequate information and technology system" refers to a technology system that has met the provisions of legislation regarding information and electronic transactions.

Article 43
Paragraph (1)
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
The term "risk mitigation" includes, among others, the Financing Company having a storage location for proof of ownership of the financing object that meets security standards or is deposited at a custodian.

Paragraph (4)
The term "security standards" includes, among others, fireproof safes, termite-proof safes, and rooms with fire prevention systems.

The term "custodian" includes, among others, custodian banks, pawn companies, and/or companies whose business field is storage services.

Article 44
Clearly stated.

Article 45
Clearly stated.

Article 46
Paragraph (1)
The term "financing receivable settlement" means the Debtor has paid all obligations to the Financing Company.

Paragraph (2)
Clearly stated.

Article 47
Paragraph (1)
The term "collection" refers to all efforts made by the Financing Company to obtain its rights over the Debtor's obligation to pay installments, including executing collateral in the event of Debtor default.

Paragraph (2)
Clearly stated.

Article 48
Paragraph (1)
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Clearly stated.

Paragraph (4)
The term "fully responsible" means the Financing Company is fully responsible for all impacts arising from cooperation with other parties, provided that the other parties act in accordance with the cooperation agreement.

Paragraph (5)
Clearly stated.

Article 49
Clearly stated.

Article 50
Paragraph (1)
Letter a
The term "default" refers to the Debtor's inability to meet obligations as stated in the Financing Agreement.

Letter b
Clearly stated.

Letter c
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Article 51
Clearly stated.

Article 52
Clearly stated.

Article 53
Paragraph (1)
The term "fraud" refers to intentional deviation or tolerance actions to deceive, trick, or manipulate the Financing Company, Debtor, or other parties, occurring within the Financing Company's environment and/or using the Financing Company's facilities, resulting in losses for the Financing Company, Debtor, or other parties and/or the fraud perpetrator obtaining financial benefits, directly or indirectly.

Paragraph (2)
Clearly stated.

Article 54
Clearly stated.

Article 55
Clearly stated.

Article 56
Paragraph (1)
Clearly stated.

Paragraph (2)
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Clearly stated.

Letter d
Clearly stated.

Letter e
Including data security, the Financing Company must have an adequate continuous program. This information system control must be accompanied by an accounting system to ensure accurate and consistent data usage in the Financing Company's financial recording and reporting, including through regular data reconciliation or verification.

Letter f
Clearly stated.

Article 57
Clearly stated.

Article 58
Paragraph (1)
Clearly stated.

Paragraph (2)
Letter a
Deviation actions by the Debtor include, among others, in the financing application process, installment payments, and/or collateral execution.

Letter b
Deviation actions by the internal Financing Company, acting alone or colluding with internal or external parties of the Financing Company.

Letter c
The term "other parties" includes, among others, motor vehicle dealers, insurance companies, and legal entities cooperating with the Financing Company to perform collection and/or collateral execution functions.

Deviation actions by other parties cooperating with the Financing Company to perform collection and/or collateral execution functions on the Debtor include, among others, embezzlement of executed collateral and/or destruction of collateral.

Article 59
Clearly stated.

Article 60
Letter a
Number 1
Examples of anti-fraud statement formulation and socialization include, among others, zero tolerance policy against fraud.

Number 2
Examples of employee awareness programs include, among others, organizing seminars or discussions on anti-fraud, training, and publications regarding understanding of fraud forms, transparency of investigation results, and follow-up on fraud in a continuous manner.

Number 3
Examples of customer awareness programs include, among others, creating anti-fraud brochures, written explanations or through other means to increase the concern and vigilance of policyholders, insured parties, or participants regarding the possibility of fraud.

Letter b
Number 1
Clearly stated.

Number 2
The term "interested parties" includes, among others, internal auditors, members of the Board of Commissioners, external auditors, and/or the Financial Services Authority.

Number 3
Clearly stated.

Letter c
Number 1
Through this system, it is expected to obtain a complete and accurate picture of prospective employees' (pre-employee screening) track records.

Number 2
The system must cover the implementation of promotions and transfers, including placement in positions with high fraud risk.

Number 3
The term "know your employee" includes, among others, recognition and monitoring of employee character, behavior, and lifestyle.

Article 61
Clearly stated.

Article 62
Clearly stated.

Article 63
Clearly stated.

Article 64
Paragraph (1)
Letter a
Provisions regarding the report on the implementation of good corporate governance for Financing Companies refer to the Financial Services Authority Regulation regarding good corporate governance for Financing Companies.

Letter b
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Article 65
Clearly stated.

Article 66
Paragraph (1)
Clearly stated.

Paragraph (2)
For example, if a Board of Directors member is approved by the Financial Services Authority as a Board of Directors member of PT ABC Finance on May 1, 2019, then the duration for fulfilling the continuity requirement for the first annual period is in the calendar period between January 1, 2020, and December 31, 2020.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.

Article 67
Clearly stated.

Article 68
Paragraph (1)
Letter a
Clearly stated.

Letter b
Companies related to the Financing Company's activities include, among others, motor vehicle dealers, credit information management institutions, outsourcing providers in the collection field, and/or surveyors.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.

Article 69
Paragraph (1)
Letter a
Clearly stated.

Letter b
The term "other institutions and/or business entities" can originate from:
a. Indonesian institutions and/or business entities; and/or b. Foreign institutions and/or business entities.

Letter c
Clearly stated.

Letter d
Clearly stated.

Letter e
Clearly stated.

Letter f
Clearly stated.

Paragraph (2)
The term "agreement" includes, among others, loan agreements, prospectuses, and/or information memoranda.

Article 70
Clearly stated.

Article 71
Clearly stated.

Article 72
Clearly stated.

Article 73
Clearly stated.

Article 74
Clearly stated.

Article 75
Clearly stated.

Article 76
Clearly stated.

Article 77
Clearly stated.

Article 78
Clearly stated.

Article 79
Paragraph (1)
Clearly stated.

Paragraph (2)
PT ABC Finance, which has Equity of Rp320 billion and paid-up capital of Rp160 billion, receives total funding as follows:

Loans received from Bank XYZ worth Rp400 billion;
Bond issuance worth Rp88 billion;
Subordinated loans received from shareholders worth Rp52 billion;
Medium-term notes issuance worth Rp100 billion.

PT ABC Finance also has an investment in PT XYZ worth Rp80 billion. Thus, the gearing ratio value of PT ABC Finance is calculated as follows:

Gearing ratio = (Loans from bank + Bond issuance + Subordinated loans + Medium-term notes issuance) / (Equity + Subordinated loans) - Investment

Gearing Ratio = (Rp400 billion + Rp88 billion + Rp52 billion + Rp100 billion) / ((Rp320 billion + Rp52 billion) - Rp80 billion)

PT ABC Finance Gearing ratio = 2.19

Paragraph (3)
Clearly stated.

Article 80
Paragraph (1)
Clearly stated.

Paragraph (2)
In the event that a Financing Company receives funding, disburses financing, and receives payment in the same foreign currency, it is categorized as having performed a natural hedge as one of the hedging efforts.

Article 81
Clearly stated.

Article 82
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Clearly stated.

Letter d
The term "promissory note" includes, among others, commercial paper with a maturity of up to 1 (one) year.

Letter e
Clearly stated.

Letter f
Clearly stated.

Article 83
Clearly stated.

Article 84
Clearly stated.

Article 85
Paragraph (1)
The term "funding" refers to the sum of loans, subordinated loans, and debt-like effects issued either through a public offering or not through a public offering.

Paragraph (2)
The term "realistically determined" refers to the ratio of Net Outstanding Principal Balance to total loans, prepared by considering external and internal factors that can affect the development of the Financing Company's business, prudential principles, and the principle of healthy financial service institutions, so that it is measurable and achievable.

Paragraph (3)
Clearly stated.

Article 86
Clearly stated.

Article 87
Clearly stated.

Article 88
Clearly stated.

Article 89
Clearly stated.

Article 90
Clearly stated.

Article 91
Financing receivable quality assessment is conducted on the Outstanding Principal Balance, not based on the amount of principal and/or interest installments that have become due.

Steps that Financing Companies can take to maintain financing receivables as good include, among others, the application of adequate standard procedures and operations and regular monitoring of receivable quality.

Article 92
Clearly stated.

Article 93
Clearly stated.

Article 94
Clearly stated.

Article 95
Clearly stated.

Article 96
Clearly stated.

Article 97
Clearly stated.

Article 98
Clearly stated.

Article 99
Clearly stated.

Article 100
Clearly stated.

Article 101
Clearly stated.

Article 102
Clearly stated.

Article 103
Clearly stated.

Article 104
Clearly stated.

Article 105
Paragraph (1)
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Paragraph (5)
Provisions regarding the registration of public accountants refer to the Financial Services Authority Regulation regarding the use of public accountants and public accounting firms in the activities of financial service institutions.

Paragraph (6)
Clearly stated.

Article 106
Clearly stated.

Article 107
Clearly stated.

Article 108
Clearly stated.

Article 109
Clearly stated.

Article 110
Clearly stated.

Article 111
Clearly stated.

Article 112
Clearly stated.

Article 113
Paragraph (1)
Clearly stated.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Paragraph (5)
Clearly stated.

Paragraph (6)
The term "business activities" includes, among others, the disbursement of new financing and the receipt of new funding.

Paragraph (7)
Clearly stated.

Paragraph (8)
Clearly stated.

Paragraph (9)
Clearly stated.

Paragraph (10)
Clearly stated.

Paragraph (11)
Clearly stated.

Paragraph (12)
Clearly stated.

Paragraph (13)
Clearly stated.

Article 114
Clearly stated.

Article 115
Clearly stated.

Article 116
Clearly stated.

Article 117
Clearly stated.

Article 118
Clearly stated.

Article 119
Clearly stated.

Article 120
Clearly stated.

Article 121
Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6286

APPENDIX
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 35 /POJK.05/2018
CONCERNING
THE CONDUCT OF BUSINESS OF FINANCING COMPANIES

FORMAT 1 EXAMPLE OF REPORTING PLAN FOR ISSUING SECURITIES THROUGH PUBLIC OFFERING

Number : ..... (place), .....(date/month/year) Attachment :
Subject : Reporting Plan
Issuance of Securities Through
Public Offering

PT/Cooperative.........
To
The Head of Executive Supervisor for Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions

u.p. Director of Financing Institution Supervision Wisma Mulia 2, 15th Floor Jalan Jenderal Gatot Subroto Number 42, South Jakarta

Referring to Financial Services Authority Regulation Number /POJK.05/2018 concerning the Conduct of Business of Financing Companies, we hereby submit a report on the plan to issue securities through a public offering. To complete the aforementioned reporting, we hereby attach the following documents:
a. details of the plan for the use of funds to be obtained from the public offering; b. history of previous security issuances (if any);
c. projected financial statements;
d. information regarding events and important transactions after the date of the financial statements audited by the public accounting firm; e. statement from the Board of Directors of the Financing Company; and f. management statement in the accounting field.

We can be contacted for this purpose through Mr./Ms....., via email.... or phone number....

Thus, this request is submitted, and for your attention, Sir/Madam, we express our gratitude.

Board of Directors of PT/Cooperative,
..............................................
(clear name and signature of authorized Board of Directors member)

FORMAT 2 EXAMPLE OF BOARD OF DIRECTORS STATEMENT FOR REPORTING PLAN FOR ISSUING SECURITIES THROUGH PUBLIC OFFERING

We, the undersigned, members of the Board of Directors, each representing the Board of Directors of:
Company Name : ............................................................................
Address : ............................................................................
Telephone and Fax : ............................................................................

In the plan to issue securities through a public offering amounting to ........................, we hereby state truthfully that:

The report on the plan to issue securities through a public offering .......(type of security) submitted to the Financial Services Authority on date .............................., is complete and in accordance with the requirements stated in the legislation in the field of Financing Companies.
We are confident that the issuance of securities through a public offering submitted does not contain untrue or misleading statements, information, or facts.
We are confident that all material information or facts required for prospective investors to make investment decisions have been fully disclosed, are correct, and are not misleading.
In the event that untrue, misleading information or facts are found, and/or information or facts that should have been disclosed are not disclosed, we promise to promptly correct and submit such information or facts to the Financial Services Authority, either before or after the issuance of securities through a public offering becomes effective.
We will take necessary actions to perfect or complete the documents submitted in the reporting plan for the issuance of securities through a public offering submitted to the Financial Services Authority.
In the event that untrue, misleading information or facts are found, or material information or facts that should have been disclosed are not disclosed, then upon the order of the Financial Services Authority, we are willing to do the following:
a. suspend the plan to issue securities through a public offering......... (specify the type of security offered); and/or b. cancel the plan to issue securities through a public offering.......... (specify the type of security offered).
We, as members of the Board of Directors, are responsible for all civil and criminal claims that may occur as a result of untrue, misleading information or facts, or failure to disclose material information or facts required, so that the information in the reporting plan for the issuance of securities through a public offering........ (specify the type of security offered) does not provide a misleading picture.
We promise to provide the same information or facts to both Indonesian and foreign prospective investors at the same time.
We are willing to submit all required and requested information or reports by the Financial Services Authority in accordance with the legislation in the field of Financing Companies.
We promise to manage the company as best as possible for the interest of all shareholders, fund providers, and/or Consumers.

……..…….. (place) , ………. (date/month/year)
Board of Directors of PT/Cooperative,
Stamp
........................................
(clear name and signature of authorized Board of Directors member)

FORMAT 3 EXAMPLE OF REPORTING PLAN FOR ISSUING DEBT SECURITIES NOT THROUGH PUBLIC OFFERING

Number : ..... (place), .....(date/month/year) Attachment :
Subject : Reporting Plan
Issuance of Debt
Securities Not Through
Public Offering

PT/Cooperative.........
To
The Head of Executive Supervisor for Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions

u.p. Director of Financing Institution Supervision Wisma Mulia 2, 15th Floor Jalan Jenderal Gatot Subroto Number 42, South Jakarta

Referring to Financial Services Authority Regulation Number /POJK.05/2018 concerning the Conduct of Business of Financing Companies, we hereby submit a report on the plan to issue debt securities not through a public offering. To complete the aforementioned reporting, we hereby attach the following documents:
a. example of debt security instrument; b. details of the plan for the use of funds to be obtained from the public offering;
c. plan for the information memorandum (information memorandum) to be offered;
d. history of previous security issuances (if any); e. prospective financial statements; f. information regarding events and important transactions after the date of the financial statements audited by the public accounting firm; g. statement from the Board of Directors of the Financing Company; h. plan for debt security rating agency and monitoring agent to be used; and
i. management statement in the accounting field.

We can be contacted for this purpose through Mr./Ms....., via email.... or phone number....

Thus, this request is submitted, and for your attention, Sir/Madam, we express our gratitude.

Board of Directors of PT/Cooperative,
..............................................
(clear name and signature of authorized Board of Directors member)

FORMAT 4 EXAMPLE OF BOARD OF DIRECTORS' STATEMENT LETTER FOR REPORTING PLAN FOR ISSUANCE OF DEBT SECURITIES NOT THROUGH PUBLIC OFFERING

We, the undersigned, members of the Board of Directors, each representing the Board of Directors of:
Company Name : ............................................................................
Address : ............................................................................
Telephone and facsimile : ............................................................................

In the plan to issue debt securities not through public offering in the amount of ........................, hereby state truly that:

The reporting letter regarding the plan to issue debt securities not through public offering submitted to the Financial Services Authority (Otoritas Jasa Keuangan) on date .............................. is complete and in accordance with the requirements stipulated in legislation in the field of Financing Companies.
We are convinced that the issuance of debt securities not through public offering submitted does not contain untrue, misleading statements, information, or facts.
We are convinced that all material information or facts required by potential investors for investment decisions have been fully disclosed, are correct, and are not misleading.
In the event that untrue, misleading information or facts are found, and/or information or facts that should have been disclosed are not revealed, we promise to promptly correct and submit such information or facts to the Financial Services Authority, both before and after the issuance of securities not through public offering becomes effective.
We will take necessary actions to perfect or complete the documents submitted in the reporting of the plan to issue debt securities not through public offering that has been submitted to the Financial Services Authority.
In the event that untrue, misleading information or facts are found, or material information or facts that should have been disclosed are not revealed, then upon the order of the Financial Services Authority, we are willing to take the following actions:
a. suspend the plan to issue debt securities not through public offering; and/or b. cancel the plan to issue debt securities not through public offering.
We, as members of the Board of Directors, are responsible for all civil and criminal claims that may arise as a result of untrue, misleading information or facts, or the failure to disclose material information or facts required, so that the information in the report on the plan to issue debt securities not through public offering does not provide a misleading picture.
We promise to provide the same information or facts to both Indonesian and foreign potential investors simultaneously.
We are able to submit all required information or reports requested by the Financial Services Authority in accordance with legislation in the field of Financing Companies.
We promise to manage the company as best as possible for the benefit of all shareholders, fund providers, and/or consumers.

……..…….. (place) , ………. (date/month/year)
Board of Directors of PT/Cooperative,
Stamp Duty
........................................
(clear name and signature of authorized Board of Directors members)

FORMAT 5 REPORT ON REALIZATION OF USE OF PROCEEDS FROM ISSUANCE OF DEBT SECURITIES NOT THROUGH PUBLIC OFFERING

No | Type of Security | Effective Date | Realization of Proceeds from Issuance of Securities | Plan for Use of Funds | Realization of Use of Funds | Remaining Funds from Issuance of Securities | Total Proceeds from Issuance of Securities | Issuance Costs of Securities | Net Proceeds from Issuance of Securities
..... | ..... | ..... | ..... | Total | ..... | ..... | ..... | Total | ..... | ..... | ..... | .....

This copy is consistent with the original
Legal Director 1
Legal Department signed
Yuliana

Notes:
a. The Column for Type of Security Issuance is Issuance of debt securities not through public offering. b. The Column for Plan for Use of Funds is disclosed based on the information memorandum.
c. The Column for Realization of Use of Funds is disclosed in accordance with the Column for Plan for Use of Funds.
d. The disclosure of details regarding costs incurred in the implementation of Public Offering is presented on a separate sheet. e. The description of the plan or realization of use of funds above should be submitted on a separate sheet which is an integral part of this report. f. The disclosure of details regarding the remaining funds from the Public Offering is presented on a separate sheet. g. *) filled with the date of the report.

Determined in Jakarta on date 27 December 2018 CHAIRMAN OF THE COMMISSIONERS BOARD FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed WIMBOH SANTOSO

Financial Services Authority Regulation Number 35/POJK.05/2018 Concerning the Conduct of Financing Company Business

Lineage: Superseded

Timeline