Financial Services Authority Regulation Number 37/POJK.04/2014 on Limited Participation Collective Investment Contract Mutual Funds

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 37/POJK.04/2014
CONCERNING
LIMITED PARTICIPATION COLLECTIVE INVESTMENT CONTRACT MUTUAL FUNDS BY THE GRACE OF GOD ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: a. that to support the growth of business activities in the real sector, a vehicle is needed to finance such business activities; b. that regulations regarding Limited Participation Collective Investment Contract Mutual Funds need to be refined to align with the objectives of such funds in supporting the development of the real sector;
c. that based on considerations as referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Limited Participation Collective Investment Contract Mutual Funds;
Recalling: 1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to State Gazette of the Republic of Indonesia Number 5253);
DECIDING...

DECIDING:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING LIMITED PARTICIPATION COLLECTIVE INVESTMENT CONTRACT MUTUAL FUNDS.
CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are defined:

Limited Participation Collective Investment Contract Mutual Fund, hereinafter referred to as Limited Participation Mutual Fund, is a vehicle used to gather funds from professional investors, which are subsequently invested by the Investment Manager into an Equity Portfolio based on Real Sector Activities.
Real Sector Activity is an activity, whether direct or indirect, related to the production of goods, provision of services in the real sector, including but not limited to in the context of goods production, and/or working capital from such activities.
Target Company is a company that issues Securities offered not through a Public Offering, which will become the Equity Portfolio of the Limited Participation Mutual Fund.
Participation Unit is a unit of measurement indicating the interest portion of each Party in the collective investment portfolio.
Collective Investment Contract is a contract between the Investment Manager and the Custodian Bank that binds the Participation Unit Holders, wherein the Investment Manager is authorized to manage the collective investment portfolio and the Custodian Bank is authorized to perform Collective Safekeeping.
Collective Safekeeping is the safekeeping service over Securities owned jointly by more than one Party, whose interests are represented by the Custodian.
Custodian Bank is a General Bank that has received approval from the Financial Services Authority as a Custodian Bank.
Net Asset Value is the fair market value of a Security and other assets of the Mutual Fund minus all its liabilities.
Info Memo is any written information containing Material Information or Facts related to the Target Company's Securities, created by the Target Company in the context of offering Target Company Securities not through a Public Offering, with the aim of having other Parties purchase said Securities.
Investment Committee is a committee tasked with directing and overseeing the Investment Management Team in implementing investment policies and strategies.
Investment Management Team is a team tasked with managing the Equity Portfolio of the Limited Participation Mutual Fund for the benefit of the Participation Unit Holders of the Limited Participation Mutual Fund.
Equity Portfolio is a collection of Securities owned by a Party.
CHAPTER II
MANAGEMENT OF LIMITED PARTICIPATION MUTUAL FUNDS
Article 2
The management guidelines for Limited Participation Mutual Funds must follow regulations regarding management guidelines for Collective Investment Contract Mutual Funds, unless otherwise provided in this Financial Services Authority Regulation.
Article 3
(1) Participation Units of the Limited Participation Mutual Fund may only be offered to and purchased by professional investors and are prohibited from being offered through a Public Offering.
(2) The transfer of Participation Units of the Limited Participation Mutual Fund may only be carried out insofar as it does not cause the fulfillment of criteria for a Public Offering.
Article 4
(1) The Equity Portfolio of the Limited Participation Mutual Fund consists of one or more Securities that serve as the underlying assets of the Limited Participation Mutual Fund, to finance one or several Real Sector Activities. (2) In the event that the Equity Portfolio of the Limited Participation Mutual Fund consists of more than one Security, it must meet the following provisions:
a. The Securities forming the Equity Portfolio of the Limited Participation Mutual Fund must be of the same type; and b. every addition of Securities in the Equity Portfolio of the Limited Participation Mutual Fund must obtain approval from all Participation Unit Holders through a general meeting of Participation Unit Holders mechanism.
Article 5
(1) The initial Net Asset Value of the Participation Units of the Limited Participation Mutual Fund must be set at IDR 1,000.00 (one thousand rupiah).
(2) In the event that the initial Net Asset Value of the Participation Units of the Limited Participation Mutual Fund is set in foreign currency denomination, the initial Net Asset Value of the Participation Units of the Limited Participation Mutual Fund must be set at US$ 1 (one United States Dollar) or EUR 1 (one Euro).
Article 6
(1) The minimum investment for each Participation Unit Holder of the Limited Participation Mutual Fund is 5,000,000 (five million) Participation Units with an initial investment value of IDR 5,000,000,000.00 (five billion rupiah). (2) In the event that Participation Units of the Limited Participation Mutual Fund are issued using foreign currency denomination, the minimum investment as referred to in paragraph (1) is equivalent to IDR 5,000,000,000.00 (five billion rupiah) using the prevailing central exchange rate of the Bank Indonesia. (3) The minimum investment value of the Limited Participation Mutual Fund as referred to in paragraph (1) is prohibited from being owned and/or agreed to be owned jointly by more than 1 (one) Party.
Article 7
The Investment Manager managing the Limited Participation Mutual Fund must fulfill the following provisions:
a. hold Participation Units from each Limited Participation Mutual Fund managed by it, with the following provisions:
for Investment Managers with assets under management of Limited Participation Mutual Funds up to IDR 500,000,000,000.00 (five hundred billion rupiah), must hold Participation Units of the Limited Participation Mutual Fund managed by it of at least 5,000,000 (five million) Participation Units;
for Investment Managers with assets under management of Limited Participation Mutual Funds more than IDR 500,000,000,000.00 (five hundred billion rupiah) up to IDR 1,000,000,000,000.00 (one trillion rupiah), must hold Participation Units of the Limited Participation Mutual Fund managed by it of at least 10,000,000 (ten million) Participation Units; and
for Investment Managers with assets under management of Limited Participation Mutual Funds more than IDR 1,000,000,000,000.00 (one trillion rupiah), must hold Participation Units of the Limited Participation Mutual Fund managed by it of at least 15,000,000 (fifteen million) Participation Units,
until the dissolution of the Limited Participation Mutual Fund. b. have at least 1 (one) employee who has expertise in the field of investment, proven by:
Chartered Financial Analyst (CFA) certificate; or
individual license as Deputy Investment Manager and having experience in managing Equity Portfolios of Mutual Funds for at least 5 (five) years,
who are directly involved in the management of the Limited Participation Mutual Fund.
c. have an Investment Committee tasked with:
establishing investment policies and strategies in Real Sector Activities; and
overseeing all investment activities of the Limited Participation Mutual Fund from the start of investment until divestment or during the validity period of the Collective Investment Contract;
d. conduct due diligence on the Target Company and the Real Sector Activity to be financed; e. monitor the development of investments of the Limited Participation Mutual Fund in the Real Sector Activity regularly; f. provide information to prospective Participation Unit Holders of the Limited Participation Mutual Fund regarding the product structure and investment risks in the disclosure document; g. ensure that Participation Unit Holders of the Limited Participation Mutual Fund understand and comprehend the product structure and investment risks of the Limited Participation Mutual Fund, evidenced by a written statement from the Participation Unit Holder of the Limited Participation Mutual Fund at the time of purchasing Participation Units; h. ensure the realization of the use of funds of the Limited Participation Mutual Fund in accordance with the fund usage plan as stated in the Info Memo of said Securities;
i. ensure that the Target Company submits reports on the realization of fund usage to the Investment Manager; and
j. store Participation Units of the Limited Participation Mutual Fund in collective safekeeping at the Settlement and Custody Institution.
Article 8
Provisions regarding prohibited actions by the Investment Manager as regulated in regulations regarding management guidelines for Collective Investment Contract Mutual Funds and prohibited actions for Mutual Funds as regulated in regulations regarding guidelines for Collective Investment Contract Mutual Funds do not apply to Limited Participation Mutual Funds.
Article 9
In carrying out the management of the Limited Participation Mutual Fund, the Investment Manager is prohibited from:
a. purchasing foreign Securities; b. purchasing Securities issued by parties affiliated with the Investment Manager, except for affiliations arising from government capital participation;
c. issuing debt-type Securities or equity-type Securities; and/or
d. engaging in various forms of loans.
Article 10
The Limited Participation Mutual Fund may have investor representatives as a communication link between the Participation Unit Holders and the Investment Manager regarding investment activities and the development of the Limited Participation Mutual Fund.
Article 11
(1) The Investment Manager managing the Limited Participation Mutual Fund must, in good faith and full responsibility, perform duties as best as possible solely for the benefit of the Participation Unit Holders of the Limited Participation Mutual Fund. (2) In the event that the Investment Manager fails to fulfill its obligations as referred to in paragraph (1), the Investment Manager is responsible for all losses arising from its actions.
Article 12
(1) The Custodian Bank must calculate the Net Asset Value of the Limited Participation Mutual Fund every 3 (three) months and submit it electronically to the Financial Services Authority through the electronic reporting system provided by the Financial Services Authority and made available to Participation Unit Holders of the Limited Participation Mutual Fund. (2) Further provisions regarding the electronic reporting system as referred to in paragraph (1) are regulated in a Circular Letter of the Financial Services Authority.
Article 13
Provisions regarding the purchase and repurchase (redemption) of Participation Units of Mutual Funds as regulated in regulations regarding management guidelines for Collective Investment Contract Mutual Funds do not apply to Limited Participation Mutual Funds.
Article 14
Provisions regarding the fulfillment of the time limit to have assets under management of at least IDR 25,000,000,000.00 (twenty-five billion rupiah) as regulated in regulations regarding management guidelines for Collective Investment Contract Mutual Funds do not apply to Limited Participation Mutual Funds.
Article 15
The obligation to submit Mutual Fund reports as referred to in regulations regarding Mutual Fund reports does not apply to Limited Participation Mutual Funds, except for reporting provisions regarding:
a. Mutual Fund asset and liability report; b. Mutual Fund operation report;
c. Mutual Fund net asset change report; and
d. Mutual Fund portfolio summary.
CHAPTER III
LIMITED PARTICIPATION MUTUAL FUND CONTRACT
Article 16
The Limited Participation Mutual Fund Contract must follow regulations regarding guidelines for Collective Investment Contract Mutual Fund contracts, unless otherwise provided in this Financial Services Authority Regulation.
Article 17
The Investment Manager managing the Limited Participation Mutual Fund must include in the Collective Investment Contract at least:
a. name and address of the Investment Manager; b. name and address of the Custodian Bank;
c. investment policy;
d. cost allocation borne by the Investment Manager, Custodian Bank, Limited Participation Mutual Fund, and investors; e. composition of the Equity Portfolio and investment restrictions of the Limited Participation Mutual Fund, as well as prohibited actions for the Investment Manager; f. obligations and responsibilities of the Investment Manager; g. obligations and responsibilities of the Custodian Bank; h. replacement of the Investment Manager or Custodian Bank;
i. rights of Participation Unit Holders, including the right to:
obtain information regarding the development of activities of the Limited Participation Mutual Fund and the Net Asset Value of the Limited Participation Mutual Fund every 3 (three) months; and
request the holding of a general meeting of Participation Unit Holders, in the event that Participation Unit Holders represent 1/10 (one-tenth) part or more of the total Participation Units of the Limited Participation Mutual Fund issued;
j. rights of the Investment Manager and Custodian Bank to request the holding of a general meeting of Participation Unit Holders; k. provisions regarding access to information about the Target Company and control of the Target Company, in the event that the Limited Participation Mutual Fund invests in equity-type Securities;
l. procedure for processing Participation Unit purchases;
m. procedure for transferring Participation Units; n. procedure for calculating fair market value as the basis for setting the Net Asset Value of the Limited Participation Mutual Fund; o. submission of annual financial reports of the Limited Participation Mutual Fund; p. force majeure circumstances beyond the ability of the Investment Manager and/or Custodian Bank or emergency conditions causing the Investment Manager and/or Custodian Bank to be unable to perform their tasks and obligations; q. dissolution and liquidation of the Limited Participation Mutual Fund; r. treatment of liquidation proceeds not yet taken by Participation Unit Holders and/or remaining funds; s. party responsible for the costs of dissolution and liquidation of the Mutual Fund; t. appointment of judicial institutions, alternative dispute resolution institutions in the Capital Market field, or other alternative dispute resolution institutions as institutions to resolve disputes and civil litigation between the Investment Manager, Custodian Bank, and/or Participation Unit Holders of the Limited Participation Mutual Fund; u. Real Sector Activities that are the target of investment of the Limited Participation Mutual Fund;
v. duration of the Collective Investment Contract;
w. minimum and maximum number of Participation Units to be issued;
x. mechanism for ending investment in Target Company Securities;
y. mechanism for settlement and/or return of funds collected from Participation Unit Holders of the Limited Participation Mutual Fund, if after the time period established in the Collective Investment Contract has passed, the Investment Manager managing the Limited Participation Mutual Fund cannot invest in Target Company Securities; and z. mechanism for general meetings of Participation Unit Holders.
CHAPTER IV
INVESTMENT OF LIMITED PARTICIPATION MUTUAL FUNDS
Article 18
Limited Participation Mutual Funds may only invest in:
a. debt-type Securities offered not through a Public Offering; or b. equity-type Securities issued by companies that are not Open Companies.
Article 19
(1) In the event that the Limited Participation Mutual Fund has not yet been able to invest in the Target Company, the Limited Participation Mutual Fund may place funds in deposits for a maximum of 6 (six) months since the Limited Participation Mutual Fund was registered. (2) Placement of funds in deposits as referred to in paragraph (1) may only be done in general banks that are not affiliated with the Investment Manager, except for affiliations arising from government capital participation, with the provision that placement of funds in deposits in one general bank is at most 10% (ten percent) of the total Net Asset Value of the Limited Participation Mutual Fund. (3) The plan for placement of funds in deposits as referred to in paragraph (1) must be submitted by the Investment Manager to the Financial Services Authority and Participation Unit Holders of the Limited Participation Mutual Fund no later than 5 (five) working days before the placement of funds, accompanied by reasons and its impact on the investment of Participation Unit Holders of the Limited Participation Mutual Fund.
Article 20
The Investment Manager managing the Limited Participation Mutual Fund must submit to the Financial Services Authority the following:
a. investment reports prepared by the Investment Manager each time the Limited Participation Mutual Fund invests in a Real Sector Activity; b. divestment reports prepared by the Investment Manager each time the Limited Participation Mutual Fund divests from a Real Sector Activity; and
c. periodic reports on the implementation of Real Sector Activities prepared by experts of the Limited Participation Mutual Fund every 6 (six) months.
Section One
Limited Participation Mutual Funds Investing in Debt-Type Securities
Article 21
In order to monitor investments in debt-type Securities, the Limited Participation Mutual Fund may appoint a Trustee registered with the Financial Services Authority to represent the interests of the Limited Participation Mutual Fund as the holder of debt-type Securities to oversee the implementation of the issuance agreement of debt-type Securities.
Article 22
(1) Debt-type Securities as referred to in Article 21 must be supported by collateral in the form of fiduciary guarantees and/or land mortgages worth at least 100% (one hundred percent) of the nominal value of said debt-type Securities, except for debt-type Securities that have been rated by a Securities Rating Agency that has obtained a business license from the Financial Services Authority with an investment grade rating. (2) The Custodian Bank of the Limited Participation Mutual Fund must register the land mortgage and/or fiduciary guarantee as referred to in paragraph (1) in the name of the Custodian Bank for the benefit of the Limited Participation Mutual Fund in accordance with laws and regulations governing land mortgages or fiduciary guarantees. (3) In the event that the Custodian Bank of the Limited Participation Mutual Fund cannot register Land Mortgage and/or Fiduciary Guarantee in accordance with the tangible collateral serving as security for debt-type Securities, the Custodian Bank must submit reasons and legal consequences to the Participation Unit Holders of the Limited Participation Mutual Fund and the Financial Services Authority. (4) The Investment Manager managing the Limited Participation Mutual Fund must submit to the Financial Services Authority a report on debt-type Securities in the Equity Portfolio of the Limited Participation Mutual Fund that will mature.
Section Two
Limited Participation Mutual Funds Investing in Equity-Type Securities
Article 23
(1) Limited Participation Mutual Funds investing in equity-type Securities must have an Investment Committee.
(2) The Investment Committee as referred to in paragraph (1) must have at least 1 (one) member experienced in the field of corporate financial valuation for at least 5 (five) years.
(3) Members of the Investment Committee as referred to in paragraph (2) may come from employees of the Investment Manager and/or third parties bound by an agreement with the Investment Manager.
(4) The agreement between the Investment Manager and members of the Investment Committee coming from third parties as referred to in paragraph (3) must at least contain the following provisions:
a. the term of the agreement must be at least equal to the investment term of the Limited Participation Mutual Fund; b. the agreement must follow Indonesian law provisions; and
c. termination of the agreement can only be done after obtaining approval from the Investment Manager solely for the benefit of the Limited Participation Mutual Fund.
(5) In the event that the agreement of a third-party member of the Investment Committee is terminated before the end of the agreement term, the Investment Manager must appoint a replacement member of the Investment Committee no later than 10 (ten) working days since the occurrence of said agreement termination.
Article 24
(1) In the event that the Investment Manager managing the Limited Participation Mutual Fund investing in equity-type Securities does not have knowledge regarding the business field of the Target Company, the Investment Manager must appoint experts who have abilities and expertise corresponding to the business field of the Target Company. (2) The Investment Manager managing the Limited Participation Mutual Fund investing in equity-type Securities may appoint representatives of the Limited Participation Mutual Fund as members of the Board of Directors and/or Supervisory Board of the Target Company. (3) Experts as referred to in paragraph (1) may come from employees of the Investment Manager or third parties. (4) In the event that the Investment Manager appoints a third party as an expert as referred to in paragraph (1) and/or as a member of the Board of Directors and/or Supervisory Board of the Target Company as referred to in paragraph (2), the Investment Manager must bind the third party with an agreement. (5) Agreements with third parties as referred to in paragraph (4) must at least contain the following provisions:
a. the term of the agreement must be at least equal to the investment term of the Limited Participation Mutual Fund; b. the agreement must follow Indonesian law provisions; and
c. termination of the agreement can only be done after obtaining approval from the Investment Manager.
(6) In the event that the agreement with the third party is terminated as referred to in paragraph (5) letter c before...

Before the contract period expires, the Investment Manager must appoint a replacement no later than 10 (ten) working days from the occurrence of the termination of said agreement.

Article 25
Limited Participation Mutual Funds that invest in Equity Effects must:
a. have information access to the Target Company; and b. control the Target Company.

Article 26
Limited Participation Mutual Funds that invest in Equity Effects of the Target Company must sell said Equity Effects if the Target Company conducts a Public Offering with the provisions:
a. at most 6 (six) months after the Registration Statement is declared effective by the Financial Services Authority; or b. at most 6 (six) months after the expiration of the prohibition period on transfer as regulated in regulations regarding restrictions on shares issued prior to the Public Offering.

CHAPTER V
REGISTRATION OF LIMITED PARTICIPATION MUTUAL FUNDS

Article 27
(1) The Investment Manager managing the Limited Participation Mutual Fund must submit an application for registration of the issuance of the Limited Participation Mutual Fund to the Financial Services Authority no later than 10 (ten) working days from the date of signing the Collective Investment Contract. (2) The registration application referred to in paragraph (1) is accompanied by:
a. Collective Investment Contract made with a notarial deed by a Notary registered with the Financial Services Authority; and b. supporting documents for the investment of the Limited Participation Mutual Fund in Debt Effects or Equity Effects.

Article 28
(1) In processing the registration application for the Limited Participation Mutual Fund as referred to in Article 27 paragraph (2), the Financial Services Authority reviews the completeness of the application documents. (2) In order to support the review of the Collective Investment Contract of the Limited Participation Mutual Fund, the Financial Services Authority has the authority:
a. to request the Investment Manager managing the Limited Participation Mutual Fund to present; and/or b. to conduct on-site examinations of Real Sector Activities and/or the Target Company.

First Section
Application for Registration of Limited Participation Mutual Funds Investing in Debt Effects

Article 29
(1) Supporting documents for the registration application of the Limited Participation Mutual Fund investing in Debt Effects as referred to in Article 27 paragraph (2) letter b consist of:
a. agreements related to the Limited Participation Mutual Fund; b. guarantee documents completed with Fiduciary Guarantee Deed and/or Mortgage Right Grant Deed... in the name of the Limited Participation Mutual Fund if guarantees are required (if documents already exist);
c. legal examination reports and legal opinions prepared by Legal Consultants registered with the Financial Services Authority regarding the issuance of:

Debt Effects that are the underlying assets of the Limited Participation Mutual Fund; and
the Limited Participation Mutual Fund.
d. due diligence results on the Target Company and Real Sector Activities signed by the Board of Directors of the Investment Manager; e. brief financial summaries of the Target Company issuing Debt Effects for the last 3 (three) years or since its establishment; f. valuation result reports prepared by Appraisers registered with the Financial Services Authority regarding Real Sector Activities to be financed (if any); g. Target Company Info Memo; h. disclosure documents of the Limited Participation Mutual Fund;
i. documents related to the issuance of Debt Effects including Debt Effect Issuance Agreements and other related agreements;
j. curriculum vitae list of Investment Manager employees directly involved in managing the Limited Participation Mutual Fund accompanied by:
photocopy of Chartered Financial Analyst (CFA) certificate; or
photocopy of individual license as Deputy Investment Manager and letter of experience statement in managing Mutual Fund Effect Portfolios for at least 5 (five) years from the company where the person worked.
k. declaration letter signed by prospective Unit Holder holders or Unit Holders stating at least that the prospective Unit Holder or Unit Holder of the Limited Participation Mutual Fund understands and comprehends the investment structure of the Limited Participation Mutual Fund and potential risks; and
l. declaration letter signed by the authorized party according to the Articles of Association/Bylaws stating that the investment in the Limited Participation Mutual Fund is conducted by the authorized party on behalf of the corporation, in case the prospective Unit Holder of the Limited Participation Mutual Fund is a corporation.
(2) The obligation to submit documents to the Financial Services Authority as referred to in paragraph (1) letters b, i, k, and l can be done no later than 30 (thirty) working days from the date the registration letter of the Limited Participation Mutual Fund is established by the Financial Services Authority.

Second Section
Application for Registration of Limited Participation Mutual Funds Investing in Equity Effects

Article 30
(1) Supporting documents for the registration application of the Limited Participation Mutual Fund investing in Equity Effects as referred to in Article 27 paragraph (2) letter b consist of:
a. agreements related to the Limited Participation Mutual Fund; b. agreements with members of the Investment Committee originating from third parties as referred to in Article 23 paragraph (3) (if any);
c. agreements with third parties representing the Limited Participation Mutual Fund as experts and/or members of the Board of Directors and/or Board of Commissioners at the Target Company as referred to in Article 24 paragraph (4);
d. legal examination reports and legal opinions prepared by Legal Consultants registered with the Financial Services Authority regarding the issuance of:

Equity Effects that are the underlying assets of the Limited Participation Mutual Fund; and
the Limited Participation Mutual Fund.
e. valuation result reports prepared by Appraisers registered with the Financial Services Authority regarding Real Sector Activities to be financed or Equity Effects; f. due diligence results on the Target Company and Real Sector Activities signed by the Board of Directors of the Investment Manager; g. brief financial summaries of the Target Company issuing Equity Effects for the last 3 (three) years or since its establishment; h. Target Company Info Memo;
i. disclosure documents of the Limited Participation Mutual Fund;
j. documents related to the issuance of Effects including Equity Effect Issuance Agreements and other related agreements; k. curriculum vitae list of Investment Manager employees directly involved in managing the Limited Participation Mutual Fund accompanied by:
photocopy of Chartered Financial Analyst (CFA) certificate; or
photocopy of individual license as Deputy Investment Manager and letter of experience statement in managing Mutual Fund Effect Portfolios for at least 5 (five) years from the company where the person worked.
l. Declaration Letter signed by prospective Unit Holders or Unit Holders stating at least that the prospective Unit Holder or Unit Holder of the Limited Participation Mutual Fund understands and comprehends the investment structure of the Limited Participation Mutual Fund and potential risks; and
m. declaration letter signed by the authorized party according to the Articles of Association stating that the investment in the Limited Participation Mutual Fund is conducted by the authorized party on behalf of the corporation, in case the prospective Unit Holder of the Limited Participation Mutual Fund is a corporation. (2) The obligation to submit documents to the Financial Services Authority as referred to in paragraph (1) letters j, l, and m can be done no later than 30 (thirty) working days from the date the registration letter of the Limited Participation Mutual Fund is established by the Financial Services Authority.

CHAPTER VI
FAIR MARKET VALUE OF EFFECTS IN THE PORTFOLIO OF LIMITED PARTICIPATION MUTUAL FUNDS

Article 31
The Investment Manager managing the Limited Participation Mutual Fund must calculate the Fair Market Value of Effects in the portfolio of the Limited Participation Mutual Fund and submit it to the Custodian Bank every 3 (three) months no later than on the 10th (tenth) day after the end of March, June, September, and December.

Article 32
(1) The calculation of Fair Market Value as referred to in Article 31 is not subject to regulations regarding Fair Market Value of Effects in Mutual Fund portfolios.
(2) In the event that the Limited Participation Mutual Fund has an Effect Portfolio consisting of Equity Effects recorded and traded on the Stock Exchange because the Target Company conducts a Public Offering, the calculation of Fair Market Value of said Equity Effects must refer to regulations regarding Fair Market Value of Effects in Mutual Fund portfolios. (3) In the event that the calculation of Net Asset Value of the Limited Participation Collective Investment Contract does not refer to regulations regarding Fair Market Value of Effects in Mutual Fund portfolios, the Investment Manager managing the Limited Participation Mutual Fund must establish a consistent method for calculating the Fair Market Value of Effects in the portfolio of the Limited Participation Mutual Fund as the basis for calculating Net Asset Value.

CHAPTER VII
GENERAL MEETING OF UNIT HOLDERS OF LIMITED PARTICIPATION MUTUAL FUNDS

Article 33
(1) The General Meeting of Unit Holders is convened by the Investment Manager managing the Limited Participation Mutual Fund.
(2) The General Meeting of Unit Holders may be convened based on:
a. initiative of the Investment Manager; b. request of the Custodian Bank; or
c. request of 1 (one) or more Unit Holders of the Limited Participation Mutual Fund who together represent 1/10 (one tenth) or more of the total number of Unit Holders of the Limited Participation Mutual Fund.

Article 34
(1) The Investment Manager managing the Limited Participation Mutual Fund may convene a General Meeting of Unit Holders in the event of, among others:
a. violation of agreements related to the Limited Participation Mutual Fund including violations of the Collective Investment Contract allegedly committed by the Custodian Bank; b. request for approval of changes to the Collective Investment Contract;
c. addition, reduction, and/or replacement of members of the Investment Committee;
d. request for approval of the plan for the Limited Participation Mutual Fund to add to the Portfolio of Effects of the Limited Participation Mutual Fund; e. request for approval of the plan for the Limited Participation Mutual Fund to divest from Equity Effects of Real Sector Activities; and/or f. dissolution and liquidation of the Limited Participation Mutual Fund. (2) The Custodian Bank may request the convening of a General Meeting of Unit Holders to the Investment Manager via registered letter accompanied by reasons with copies to Unit Holders of the Limited Participation Mutual Fund and the Financial Services Authority in the event of, among others:
a. violation of agreements related to the Limited Participation Mutual Fund including violations of the Collective Investment Contract allegedly committed by the Investment Manager; and/or b. request for approval of changes to the Collective Investment Contract. (3) Unit Holders of the Limited Participation Mutual Fund may request the convening of a General Meeting of Unit Holders to the Investment Manager via registered letter accompanied by reasons with copies to the Custodian Bank and the Financial Services Authority in the event of, among others:
a. violation of agreements related to the Limited Participation Mutual Fund including violations of the Collective Investment Contract allegedly committed by the Investment Manager and/or Custodian Bank; b. proposal for the plan to replace the Investment Manager;
c. proposal for the plan to replace the Custodian Bank; and/or
d. proposal for the addition, reduction, and/or replacement of members of the Investment Committee.

Article 35
The Investment Manager must call the General Meeting of Unit Holders within a period of no later than 15 (fifteen) days calculated from the date the request for convening the General Meeting of Unit Holders is received.

Article 36
(1) In the event that the Investment Manager does not call the General Meeting of Unit Holders as referred to in Article 35, the request for convening the General Meeting of Unit Holders as referred to in Article 34 paragraph (3) is submitted again to the Custodian Bank. (2) The Custodian Bank must call the General Meeting of Unit Holders as referred to in paragraph (1) within a period of no later than 15 (fifteen) days calculated from the date the request for convening the General Meeting of Unit Holders is received. (3) In the event that the Custodian Bank does not call the General Meeting of Unit Holders within the period as referred to in paragraph (2), Unit Holders of the Limited Participation Mutual Fund requesting the convening of the General Meeting of Unit Holders may submit an application to the Financial Services Authority to establish permission for the applicant to conduct the calling of the General Meeting of Unit Holders themselves. (4) After calling and hearing Unit Holders, the Investment Manager and/or Custodian Bank, the Financial Services Authority establishes permission to convene the General Meeting of Unit Holders if the applicant has proven the existence of reasons necessitating the convening of the General Meeting of Unit Holders and has a legitimate interest for the convening of the General Meeting of Unit Holders. (5) The determination of the Financial Services Authority as referred to in paragraph (4) also contains provisions regarding:
a. the form of the General Meeting of Unit Holders, the agenda of the General Meeting of Unit Holders according to the request of Unit Holders of the Limited Participation Mutual Fund, the time limit for calling the General Meeting of Unit Holders, attendance quorum, and/or provisions regarding decision-making requirements for the General Meeting of Unit Holders, as well as the appointment of the meeting chairperson, in accordance with or without being bound by provisions of the Law on Limited Liability Companies; and/or b. orders requiring the Investment Manager and/or Custodian Bank to attend the General Meeting of Unit Holders. (6) The Financial Services Authority has the authority to reject the application as referred to in paragraph (4) if the applicant cannot prove the existence of reasons necessitating the convening of the General Meeting of Unit Holders and does not have a legitimate interest for the convening of the General Meeting of Unit Holders. (7) The General Meeting of Unit Holders as referred to in paragraph (5) may only discuss the agenda items as determined by the Financial Services Authority.

Article 37
In the event that the Investment Manager does not call the General Meeting of Unit Holders upon the request of the Custodian Bank within the period as referred to in Article 35, the Custodian Bank may conduct the calling of the General Meeting of Unit Holders itself.

Article 38
(1) The Investment Manager must submit the agenda of the General Meeting of Unit Holders clearly and in detail to the Financial Services Authority no later than 7 (seven) days before the calling of the General Meeting of Unit Holders is communicated to Unit Holders. (2) The calling of the General Meeting of Unit Holders to Unit Holders is done no later than 14 (fourteen) days before the implementation of the General Meeting of Unit Holders accompanied by the submission of the agenda of the General Meeting of Unit Holders. (3) Provisions regarding the submission of agendas and calling of the General Meeting of Unit Holders as referred to in paragraph (1) and paragraph (2) apply mutatis mutandis for the convening of the General Meeting of Unit Holders conducted by the Custodian Bank or Unit Holders.

Article 39
(1) The General Meeting of Unit Holders may be held if attended by Unit Holders representing more than 2/3 (two thirds) part of the total number of Unit Holders of the Limited Participation Mutual Fund.
(2) In the event that the General Meeting of Unit Holders of the Limited Participation Mutual Fund is convened in relation to the request for approval of adding to the Portfolio of Effects of the Limited Participation Mutual Fund as referred to in Article 4 paragraph (2) letter b, the General Meeting of Unit Holders must be attended by Unit Holders of the Limited Participation Mutual Fund representing all Unit Holders of the Limited Participation Mutual Fund. (3) In the event that the quorum as referred to in paragraph (1) and paragraph (2) is not met, the Investment Manager must call a second General Meeting of Unit Holders to Unit Holders with provisions as referred to in Article 35 and state that the first General Meeting of Unit Holders was held and did not achieve quorum. (4) The Second General Meeting of Unit Holders is considered valid and entitled to make decisions if in the second General Meeting of Unit Holders attended by more than 1/2 (one half) part of the total number of Unit Holders. (5) The attendance quorum provisions for the second General Meeting of Unit Holders as referred to in paragraph (4) do not apply to General Meetings of Unit Holders convened in relation to the request for approval of adding to the Portfolio of Effects of the Limited Participation Mutual Fund. (6) In the event that the quorum for the second General Meeting of Unit Holders as referred to in paragraph (4) is not met, the Investment Manager or Custodian Bank may petition the Financial Services Authority to establish a quorum for the third General Meeting of Unit Holders. (7) The calling of the third General Meeting of Unit Holders must state that the second General Meeting of Unit Holders was held and did not achieve quorum and that the third General Meeting of Unit Holders will be held with the quorum established by the Financial Services Authority. (8) The calling of the second and third General Meetings of Unit Holders is done within a period of no later than 7 (seven) days before the second or third General Meeting of Unit Holders is held.

Article 40
(1) Replacement of the Investment Manager based on the results of the General Meeting of Unit Holders as referred to in Article 34 paragraph (3) letter b is implemented after obtaining approval from the Financial Services Authority. (2) Replacement of the Custodian Bank based on the results of the General Meeting of Unit Holders as referred to in Article 34 paragraph (3) letter c is implemented after obtaining approval from the Investment Manager and the Financial Services Authority.

Article 41
(1) Decisions of the General Meeting of Unit Holders are taken based on deliberation for consensus.
(2) In the event that decisions based on deliberation for consensus as referred to in paragraph (1) are not reached, the decision is valid if approved by more than 1/2 (one half) part of the number of votes of Unit Holders cast in the General Meeting of Unit Holders. (3) Unit Holders present at the General Meeting of Unit Holders as referred to in paragraph (2), but who do not cast a vote (abstain), are considered to cast votes equal to the majority votes of Unit Holders cast in the General Meeting of Unit Holders. (4) In the event that the General Meeting of Unit Holders of the Limited Participation Mutual Fund is convened in relation to the request for approval of adding to the Portfolio of Effects of the Limited Participation Mutual Fund as referred to in Article 4 paragraph (2) letter b, the Decision of the General Meeting of Unit Holders is valid if approved by all Unit Holders of the Limited Participation Mutual Fund.

Article 42
The Investment Manager, Custodian Bank, or Unit Holders of the Limited Participation Mutual Fund convening the General Meeting of Unit Holders must submit a report on the results of the General Meeting of Unit Holders to the Financial Services Authority with copies to each respective related party.

CHAPTER VIII
ANNUAL FINANCIAL REPORTS OF LIMITED PARTICIPATION MUTUAL FUNDS

Article 43
The Investment Manager together with the Custodian Bank must prepare the Annual Financial Reports of the Limited Participation Mutual Fund based on generally accepted accounting principles.

Article 44
The Annual Financial Reports of the Limited Participation Mutual Fund must be audited by Accountants registered with the Financial Services Authority.

Article 45
(1) The Investment Manager must submit the audited Annual Financial Reports of the Limited Participation Mutual Fund as referred to in Article 44 to the Financial Services Authority.
(2) The audited Annual Financial Reports of the Limited Participation Mutual Fund as referred to in Article 44 must be available to Unit Holders of the Limited Participation Mutual Fund.

CHAPTER IX
DISSOLUTION OF LIMITED PARTICIPATION MUTUAL FUNDS

Article 46
The Limited Participation Mutual Fund must be dissolved in the following cases:
a. ordered by the Financial Services Authority in accordance with capital market legislation; b. the Investment Manager and Custodian Bank agree to dissolve the Limited Participation Mutual Fund after first obtaining approval from all Unit Holders; or
c. the Limited Participation Mutual Fund does not invest in Target Company Effects for a period of 6 (six) months since the Limited Participation Mutual Fund was registered with the Financial Services Authority.

Article 47
In the event that the Limited Participation Mutual Fund is dissolved due to conditions as referred to in Article 46 letter a, the Investment Manager must:
a. submit...

a. submit the dissolution, liquidation, and plan for the distribution of liquidation proceeds of the Limited Participation Mutual Fund to all holders of Units of Participation of the Limited Participation Mutual Fund no later than 2 (two) working days since ordered by the Financial Services Authority, and on the same day notify in writing to the Custodian Bank to stop the calculation of the Net Asset Value of the Limited Participation Mutual Fund;

b. instruct the Custodian Bank to pay the liquidation proceeds that are the right of the holders of Units of Participation with the provision that the calculation is done proportionally from the Net Asset Value at the time of dissolution and the liquidation proceeds are received by the holders of Units of Participation no later than 20 (twenty) working days since the dissolution of the Limited Participation Mutual Fund was ordered by the Financial Services Authority; and

c. submit a report on the results of the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund to the Financial Services Authority no later than 60 (sixty) days since the dissolution was ordered by the Financial Services Authority with the following documents:

a report on the results of the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund accompanied by an opinion from a Legal Consultant registered with the Financial Services Authority;
financial reports related to the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund audited by an Accountant registered with the Financial Services Authority; and
the deed of dissolution and liquidation of the Limited Participation Mutual Fund from a Notary registered with the Financial Services Authority.

Article 48
In the event that the Limited Participation Mutual Fund is dissolved due to conditions as referred to in Article 46 letter b, the Investment Manager is required to:

a. submit to the Financial Services Authority within a period of no later than 2 (two) working days since the agreement to dissolve the Limited Participation Mutual Fund by the Investment Manager and the Custodian Bank was reached, attaching:

an agreement on the dissolution and liquidation of the Limited Participation Mutual Fund between the Investment Manager and the Custodian Bank;
approval from the holders of Units of Participation of the Limited Participation Mutual Fund;
reasons for dissolution; and
the latest financial condition of the Limited Participation Mutual Fund;

and on the same day submit a plan for the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund to the holders of Units of Participation and notify in writing to the Custodian Bank to stop the calculation of the Net Asset Value of the Limited Participation Mutual Fund;

b. instruct the Custodian Bank to pay or distribute the liquidation proceeds that are the right of the holders of Units of Participation of the Limited Participation Mutual Fund with the provision that the calculation is done proportionally from the Net Asset Value at the time the liquidation is completed and the liquidation proceeds are received by the holders of Units of Participation no later than 7 (seven) working days since the liquidation is completed; and

a report on the results of the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund accompanied by an opinion from a Legal Consultant registered with the Financial Services Authority;
financial reports related to the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund audited by an Accountant registered with the Financial Services Authority; and
the deed of dissolution and liquidation of the Limited Participation Mutual Fund from a Notary registered with the Financial Services Authority.

Article 49
In the event that the Limited Participation Mutual Fund is dissolved due to conditions as referred to in Article 46 letter c, the Investment Manager is required to:

a. submit a report on the conditions as referred to in Article 46 letter c and a plan for the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund to the Financial Services Authority and inform the holders of Units of Participation (if any) no later than 2 (two) working days since the end of the period as referred to in Article 46 letter c;

b. instruct the Custodian Bank to pay or distribute the liquidation proceeds that are the right of the holders of Units of Participation (if any) with the provision that the calculation is done proportionally from the Net Asset Value at the time of dissolution and the liquidation proceeds are received by the holders of Units of Participation no later than 7 (seven) working days since the liquidation is completed;

c. dissolve the Limited Participation Mutual Fund within a period of no later than 10 (ten) working days since the end of the period as referred to in Article 46 letter c; and

d. submit a report on the results of the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund to the Financial Services Authority no later than 60 (sixty) days since the dissolution of the Limited Participation Mutual Fund with the following documents:

a report on the results of the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund accompanied by an opinion from a Legal Consultant registered with the Financial Services Authority;
financial reports related to the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Mutual Fund audited by an Accountant registered with the Financial Services Authority; and
the deed of dissolution and liquidation of the Limited Participation Mutual Fund from a Notary registered with the Financial Services Authority.

CHAPTER X
REPORTING OF LIMITED PARTICIPATION MUTUAL FUNDS

Article 50
The Investment Manager managing the Limited Participation Mutual Fund or the Custodian Bank is required to submit reports on Material Information or Facts related to the Limited Participation Mutual Fund to the Financial Services Authority and the holders of Units of Participation of the Limited Participation Mutual Fund no later than 2 (two) working days since the occurrence of such Material Information or Facts.

Article 51
The report on the realization of fund usage as referred to in Article 7 letter i is required to be submitted by the Investment Manager managing the Limited Participation Mutual Fund to the Financial Services Authority and the holders of Units of Participation of the Limited Participation Mutual Fund every 3 (three) months no later than on the 12th (twelfth) day after the end of the months of March, June, September, and December.

Article 52
(1) The Custodian Bank of the Limited Participation Mutual Fund is required to submit:

a. Report on the assets and liabilities of the Limited Participation Mutual Fund;

b. Report on the operations of the Limited Participation Mutual Fund;

c. Report on the changes in the net assets of the Limited Participation Mutual Fund; and

d. Summary of the portfolio of the Limited Participation Mutual Fund,

to the Financial Services Authority and the holders of Units of Participation every 3 (three) months using the format as referred to in the attachment of the regulation regarding Mutual Fund reports.

(2) The reports as referred to in paragraph (1) are required to be submitted electronically through the reporting system provided by the Financial Services Authority no later than on the 12th (twelfth) day after the end of the months of March, June, September, and December.

(3) Further provisions regarding the electronic reporting system as referred to in paragraph (2) are regulated in a Circular Letter of the Financial Services Authority.

Article 53
The calculation of the Net Asset Value of the Limited Participation Mutual Fund as referred to in Article 12 is required to be submitted by the Custodian Bank to the Financial Services Authority no later than on the 12th (twelfth) day after the end of the months of March, June, September, and December.

Article 54
The investment report and divestment report as referred to in Article 20 letter a and letter b are required to be submitted by the Investment Manager to the Financial Services Authority and the holders of Units of Participation of the Limited Participation Mutual Fund no later than 5 (five) working days since the Limited Participation Mutual Fund conducts investment or divestment in a Real Sector Activity.

Article 55
The periodic report on the implementation of Real Sector Activities as referred to in Article 20 letter c is required to be submitted by the Investment Manager to the Financial Services Authority and the holders of Units of Participation of the Limited Participation Mutual Fund no later than 5 (five) working days since the end of the 6 (six) month period.

Article 56
The report on debt-type Securities in the portfolio of the Limited Participation Mutual Fund that will mature as referred to in Article 22 paragraph (4) is required to be submitted by the Investment Manager to the Financial Services Authority no later than 5 (five) working days before the maturity date of such debt-type Securities.

Article 57
The report on the results of the General Meeting of Unit Holders as referred to in Article 42 is required to be submitted by the Investment Manager, Custodian Bank, or holders of Units of Participation of the Limited Participation Mutual Fund that convene the General Meeting of Unit Holders to the Financial Services Authority no later than 2 (two) working days after the General Meeting of Unit Holders is held.

Article 58
The Annual Financial Report of the Limited Participation Mutual Fund that has been audited as referred to in Article 45 paragraph (1) is required to be submitted by the Investment Manager to the Financial Services Authority no later than at the end of the third month after the Annual Financial Report period ends.

Article 59
In the event that the deadline for submitting reports as referred to in Article 51, Article 52, Article 53, and Article 58 falls on a holiday, such reports are required to be submitted on the 1 (one) next working day.

CHAPTER XI
SANCTIONS

Article 60
(1) Without prejudice to criminal provisions in the Capital Market sector, the Financial Services Authority is authorized to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties that cause the violation to occur, in the form of:

a. Written warning;

b. Fine, namely the obligation to pay a certain amount of money;

c. Restriction of business activities;

d. Suspension of business activities;

e. Revocation of business license;

f. Cancellation of approval; and

g. Cancellation of registration.

(2) Administrative sanctions as referred to in paragraph (1) letter b, letter c, letter d, letter e, letter f, or letter g may be imposed with or without prior imposition of an administrative sanction in the form of a written warning as referred to in paragraph (1) letter a.

(3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letter c, letter d, letter e, letter f, or letter g.

Article 61
In addition to administrative sanctions as referred to in Article 60 paragraph (1), the Financial Services Authority may take certain actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 62
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 60 paragraph (1) and certain actions as referred to in Article 61 to the public.

CHAPTER XII
TRANSITIONAL PROVISIONS

Article 63
Investment Managers that have managed Limited Participation Mutual Funds and their Portfolios are Securities offered through a Public Offering are required to adjust to this Financial Services Authority Regulation no later than 3 (three) years since this Financial Services Authority Regulation is promulgated.

Article 64
In the event that the Financial Services Authority has not yet provided an electronic reporting system, reports as regulated in this Financial Services Authority Regulation are submitted to the Financial Services Authority in accordance with regulations regarding letters, reports, and other documents sent to the Financial Services Authority.

CHAPTER XIII
CLOSING PROVISIONS

Article 65
At the time this Financial Services Authority Regulation comes into force, the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number KEP-43/BL/2008 dated 14 February 2008 regarding Limited Participation Collective Investment Contract Mutual Funds together with Regulation Number IV.C.5 as its attachment is revoked and declared invalid.

Article 66
This Financial Services Authority Regulation comes into force on the date of its promulgation.

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

Determined in Jakarta
On 8 December 2014

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY,
Signed,
MULIAMAN D. HADAD

Promulgated in Jakarta
On 8 December 2014

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,
Signed,
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2014 NUMBER 379 A copy in accordance with the original Director of Law 1 Ministry of Law, Signed, Tini Kustini

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 37 /POJK.04/2014
REGARDING
LIMITED PARTICIPATION COLLECTIVE INVESTMENT CONTRACT MUTUAL FUNDS

I. GENERAL
Limited Participation Collective Investment Contract Mutual Funds, hereinafter referred to as Limited Participation Mutual Funds, are containers used to gather funds from professional investors, which are then invested by the Investment Manager into a Portfolio of Securities to support the development of the real sector. That Limited Participation Mutual Funds can invest in Portfolio Securities both offered through a Public Offering and those not offered through a Public Offering.

In the course of practice before the promulgation of this Financial Services Authority Regulation, the majority of Limited Participation Mutual Fund Portfolios were Securities offered through a Public Offering, so it was felt that they did not have a significant difference from existing Collective Investment Contract Mutual Funds. In relation to this matter, there is a need for regulatory efforts to reposition the Limited Participation Mutual Fund so that the purpose of the Limited Participation Mutual Fund is in accordance with common international practice, namely investing in Securities not offered through a Public Offering to finance real sector activities.

With the refinement of the regulations on Limited Participation Mutual Funds, it is hoped that the management carried out by the Investment Manager will become more accountable, professional, and can better protect the interests of investors, considering that in this Financial Services Authority Regulation, among others, provisions are made regarding the mechanism of the General Meeting of Unit Holders, the obligation of the Investment Manager to hold Units of Participation in a tiered manner according to the amount of funds managed, and the request for recording the issuance of Limited Participation Mutual Funds.

In addition, with the refinement of regulations regarding existing Limited Participation Mutual Funds with this Financial Services Authority Regulation, it is hoped that the role of Mutual Funds as an alternative source of funding for the business world and to encourage the growth of business activities, particularly in the real sector, can be increased.

II. ARTICLE BY ARTICLE

Article 1
It is clear enough.

Article 2
Regulations regarding the guidelines for the management of existing Collective Investment Contract Mutual Funds at the time this Financial Services Authority Regulation comes into force are Regulation Number IV.B.1, Attachment of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number KEP-552/BL/2010 dated 30 December 2010 regarding Guidelines for the Management of Collective Investment Contract Mutual Funds or regulations replacing it.

Article 3
Paragraph (1)
What is meant by "professional investor" is an investor who has the ability to purchase Units of Participation and conduct risk analysis on the Limited Participation Mutual Fund as regulated in this Financial Services Authority Regulation.

Paragraph (2)
What is meant by "Public Offering" is a Public Offering as referred to in Article 1 number 15 of Law Number 8 of 1995 concerning the Capital Market together with its explanation.

Article 4
Paragraph (1)
Examples of Real Sector Activities include:

a. Limited Participation Mutual Funds can invest in companies for the purpose of producing goods, such as buying vehicles to be rented out.

b. Limited Participation Mutual Funds can invest in Target Companies which are then re-lent by such companies, among others, to finance small and medium enterprises operating in the real sector.

Paragraph (2)
Letter a
What is meant by "similar Securities" is Securities that have the same nature of Securities, such as similar Securities that are equity or similar Securities that are debt.

Letter b
It is clear enough.

Article 5
It is clear enough.

Article 6
Paragraph (1)
Every holder of Units of Participation of the Limited Participation Mutual Fund is required to have an investment of at least 5,000,000 (five million) Units of Participation where the initial investment value is 5,000,000 (five million) multiplied by Rp1,000.00 (one thousand rupiah) which is the initial Net Asset Value of the Units of Participation of the Limited Participation Mutual Fund.

This minimum investment value will change according to changes in the Net Asset Value of the Units of Participation of the Limited Participation Mutual Fund that occur due to changes in the value of the Portfolio of Securities.

Investment in Units of Participation of the Limited Participation Mutual Fund cannot be reduced but can be increased to more than 5,000,000 (five million) Units of Participation of the Limited Participation Mutual Fund.

Paragraph (2)
It is clear enough.

Paragraph (3)
It is clear enough.

Article 7
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
Number 1
Examples of setting investment policies and strategies in Real Sector Activities include giving directions to accept or reject investment proposals in a real sector activity submitted by the Investment Management Team in the event that the Investment Management Team is unsure whether the investment to be made is in accordance with the established investment policy and strategy or not.

Number 2
It is clear enough.

Letter d
It is clear enough.

Letter e
It is clear enough.

Letter f
What is meant by "disclosure document" is any written information in the context of offering Limited Participation Mutual Funds that are not offered through a Public Offering with the aim for other parties to purchase Units of Participation of the Limited Participation Mutual Fund.

Letter g
It is clear enough.

Letter h
It is clear enough.

Letter i
It is clear enough.

Letter j
It is clear enough.

Article 8
It is clear enough.

Article 9
Letter a
What is meant by "foreign Securities" is Securities issued by foreign legal entity companies.

Letter b
It is clear enough.

Letter c
It is clear enough.

Letter d
It is clear enough.

Article 10
It is clear enough.

Article 11
Paragraph (1)
Considering that all funds managed by the Investment Manager are public funds, there is a need for maximum security by requiring the Investment Manager to carry out its duties as best as possible for the benefit of the Limited Participation Mutual Fund.

Paragraph (2)
The Investment Manager based on this paragraph is burdened with responsibility for losses of the Limited Participation Mutual Fund arising from management that is not conducted in good faith and not with full responsibility for the benefit of the Limited Participation Mutual Fund.

Article 12
It is clear enough.

Article 13
It is clear enough.

Article 14
It is clear enough.

Article 15
Regulations regarding Mutual Fund reports at the time this Financial Services Authority Regulation comes into force are Regulation Number X.D.1, Attachment of the Decision of the Chairman of the Capital Market Supervisory Board Number KEP-06/PM/2004 dated 09 February 2004 regarding Mutual Fund Reports or regulations replacing it.

Article 16
Regulations regarding guidelines for Collective Investment Contract Mutual Fund contracts at the time this Financial Services Authority Regulation comes into force are Regulation Number IV.B.2, Attachment of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number KEP-553/BL/2010 dated 30 December 2010 regarding Guidelines for Collective Investment Contract Mutual Fund Contracts or regulations replacing it.

Article 17
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
It is clear enough.

Letter d
It is clear enough.

Letter e
It is clear enough.

Letter f
It is clear enough.

Letter g
It is clear enough.

Letter h
It is clear enough.

Letter i
It is clear enough.

Letter j
It is clear enough.

Letter k
It is clear enough.

Letter l
It is clear enough.

Letter m
It is clear enough.

Letter n
It is clear enough.

Letter o
It is clear enough.

Letter p
It is clear enough.

Letter q
It is clear enough.

Letter r
It is clear enough.

Letter s
It is clear enough.

Letter t
At the time this Financial Services Authority Regulation is issued, the alternative dispute resolution institution in the Capital Market sector that exists is the Indonesia Capital Market Arbitration Body (BAPMI).

Letter u
It is clear enough.

Letter v
It is clear enough.

Letter w
It is clear enough.

Letter x
It is clear enough.

Letter y
It is clear enough.

Letter z
It is clear enough.

Article 18
It is clear enough.

Article 19
It is clear enough.

Article 20
It is clear enough.

Article 21
Examples of Trustees supervising the implementation of debt-type Securities issuance agreements include the Trustee supervising the use of funds from the issuance of debt-type Securities purchased by the Limited Participation Mutual Fund to be used in accordance with the agreement.

Article 22
Paragraph (1)
The party providing the guarantee is the Target Company or a Third Party acting for the benefit of the Target Company.

Paragraph (2)
It is clear enough.

Paragraph (3)
It is clear enough.

Paragraph (4)
It is clear enough.

Article 23
Paragraph (1)
It is clear enough.

Paragraph (2)
Experience in the field of corporate financial valuation includes experience in the field of corporate finance, investment banking, and/or private equity.

Paragraph (3)
It is clear enough.

Paragraph (4)
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
The termination of the agreement before the end of the agreement period can occur, among others, due to:

force majeure conditions;
investment committee members from third parties are incapable of performing their duties; or
investment committee members from third parties pass away.

Paragraph (5)
It is clear enough.

Article 24
Paragraph (1)
It is clear enough.

Paragraph (2)
It is clear enough.

Paragraph (3)
It is clear enough.

Paragraph (4)
It is clear enough.

Paragraph (5)
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
Termination of the agreement with experts, and/or members of the Board of Directors and/or Board of Commissioners at the Target Company from third parties before the end of the agreement period can occur, among others, due to:

force majeure conditions;
experts and/or members of the Board of Directors and/or Board of Commissioners from third parties are incapable of performing their duties; or
experts and/or members of the Board of Directors and/or Board of Commissioners from third parties pass away.

Paragraph (6)
It is clear enough.

Article 25
It is clear enough.

Article 26
Letter a
It is clear enough.

Letter b
Regulations regarding restrictions on shares issued before a Public Offering at the time this Financial Services Authority Regulation comes into force are Regulation Number IX.A.6, Attachment of the Decision of the Chairman of the Capital Market Supervisory Board Number KEP-06/PM/2001 dated 8 March 2001 regarding Restrictions on Shares Issued Before a Public Offering or regulations replacing it.

Article 27
Paragraph (1)
The request for recording in this paragraph includes recording for the issuance of new Limited Participation Mutual Funds or the addition of Portfolio Securities to the Limited Participation Mutual Fund.

Paragraph (2)
It is clear enough.

Article 28
Paragraph (1)
It is clear enough.

Paragraph (2)
It is clear enough.

Paragraph (2)
Letter a
The presentation referred to in this letter is intended to obtain a comprehensive explanation.
Letter b
The on-site examination referred to in this letter is intended to ensure the existence of Real Sector Activities and/or Target Companies.

Article 29
Paragraph (1)
Letter a
The term "agreements related to the Limited Participation Investment Fund" includes among others agreements with a Legal Consultant registered with the Financial Services Authority, agreements with a Notary registered with the Financial Services Authority, agreements with an Accountant registered with the Financial Services Authority, agreements on the issuance of medium term notes, and agreements related to collateral. Letter b Clearly sufficient. Letter c Clearly sufficient. Letter d Clearly sufficient. Letter e A condensed financial summary of the Target Company issuing debt securities for the last 3 (three) years or since its establishment, sourced from financial reports audited by an Accountant registered with the Financial Services Authority. Letter f...

Letter f
Clearly sufficient.
Letter g
Clearly sufficient.
Letter h
Clearly sufficient.
Letter i
The term "other related agreements" in this provision includes among others:

Agreement on the appointment of a Trustee; and
Agreement on the purchase of debt securities of the Target Company (if any).
Letter j
Clearly sufficient.
Letter k
Clearly sufficient.
Letter l
Clearly sufficient.
Paragraph (2)
Clearly sufficient.

Article 30
Paragraph (1)
Letter a
The term "agreements related to the Limited Participation Investment Fund" includes among others agreements on the purchase of shares of the Target Company, agreements with a Legal Consultant registered with the Financial Services Authority, agreements with a Notary registered with the Financial Services Authority, and agreements with an appraiser registered with the Financial Services Authority. Letter b ...

Letter b
Clearly sufficient.
Letter c
Clearly sufficient.
Letter d
Clearly sufficient.
Letter e
Clearly sufficient.
Letter f
Clearly sufficient.
Letter g
A condensed financial summary of the Target Company issuing equity securities for the last 3 (three) years or since its establishment, sourced from financial reports audited by an Accountant registered with the Financial Services Authority. Letter h Clearly sufficient. Letter i Clearly sufficient. Letter j The term "other related agreements" in this provision includes among others:

Agreement on the appointment of experts, members of the Board of Directors and/or Board of Commissioners from third parties to represent the Limited Participation Investment Fund at the Target Company (if any); and
Agreement on the purchase of shares of the Target Company.
Letter k
Clearly sufficient.
Letter l...

Letter l
Clearly sufficient.
Letter m
Clearly sufficient.
Paragraph (2)
Clearly sufficient.

Article 31
Clearly sufficient.

Article 32
Paragraph (1)
Clearly sufficient.
Paragraph (2)
Regulations regarding Fair Market Value of Securities in the portfolio of existing Investment Funds at the time this Financial Services Authority Regulation takes effect are Regulation Number IV.C.2, Appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number KEP-367/BL/2012 dated July 9, 2012 regarding Fair Market Value of Securities in Investment Fund Portfolios or regulations replacing it. Paragraph (3) Clearly sufficient.

Article 33
Clearly sufficient.

Article 34
Clearly sufficient.

Article 35
Clearly sufficient.

Article 36
Paragraph (1)
Clearly sufficient.
Paragraph (2)...
.. ...

Paragraph (2)
Clearly sufficient.
Paragraph (3)
Clearly sufficient.
Paragraph (4)
Requests for the convening of a General Meeting of Unit Holders made by Unit Holders to the Financial Services Authority are done by attaching proof of the request for the convening of the General Meeting of Unit Holders to the Investment Manager and Custodian Bank. Paragraph (5) Clearly sufficient. Paragraph (6) Clearly sufficient. Paragraph (7) Clearly sufficient.

Article 37
Clearly sufficient.

Article 38
Clearly sufficient.

Article 39
Clearly sufficient.

Article 40
Clearly sufficient.

Article 41
Clearly sufficient.

Article 42
Clearly sufficient.

Article 43...
...

Article 43
The term "generally accepted accounting principles" in this paragraph refers to the Financial Accounting Standards issued by the Indonesian Institute of Accountants and other accounting practices commonly applied in the Capital Market.

Article 44
Clearly sufficient.

Article 45
Clearly sufficient.

Article 46
Clearly sufficient.

Article 47
Letter a
Clearly sufficient.
Letter b
Clearly sufficient.
Letter c
That financial reports related to the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Investment Fund audited by an Accountant registered with the Financial Services Authority cover the period until the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Investment Fund have been carried out.

Article 48
Letter a
Clearly sufficient.
Letter b
Clearly sufficient.
Letter c
That financial reports related to the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Investment Fund audited by an Accountant registered with the Financial Services Authority...

Financial Services Authority cover the period until the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Investment Fund have been carried out.

Article 49
Letter a
Clearly sufficient.
Letter b
Clearly sufficient.
Letter c
Clearly sufficient.
Letter d
That financial reports related to the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Investment Fund audited by an Accountant registered with the Financial Services Authority cover the period until the dissolution, liquidation, and distribution of liquidation proceeds of the Limited Participation Investment Fund have been carried out.

Article 50
Material Information or Material Facts are important and relevant information or facts regarding events, occurrences, or facts that can affect the price of Securities and/or the decision of investors, prospective investors, or other Parties interested in such information or facts.

Article 51
Clearly sufficient.

Article 52
Clearly sufficient.

Article 53
Clearly sufficient.

Article 54
Clearly sufficient.

Article 55
Clearly sufficient.

Article 56...
…

Article 56
Clearly sufficient.

Article 57
Clearly sufficient.

Article 58
Clearly sufficient.

Article 59
Clearly sufficient.

Article 60
Clearly sufficient.

Article 61
The term "certain actions" includes among others orders to the Investment Manager managing the Limited Participation Investment Fund to carry out divestment of investments made in the Target Company.

Article 62
Clearly sufficient.

Article 63
Clearly sufficient.

Article 64
Regulations regarding letters, reports, and other documents sent to the Financial Services Authority existing at the time this Financial Services Authority Regulation takes effect are Regulation Number II.A.3, Appendix of the Decision of the Chairman of the Capital Market Supervisory Board Number KEP-41/PM/1997 dated December 26, 1997 regarding Letters, Reports, and Other Documents Sent to Bapepam or regulations replacing it.

Article 65
Clearly sufficient.

Article 66
Clearly sufficient.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5649 ---

Financial Services Authority Regulation Number 37/POJK.04/2014 on Limited Participation Collective Investment Contract Mutual Funds

Lineage: In force