Financial Services Authority Regulation Number 47/POJK.05/2020 Concerning Business Licensing and Institutional Organization of Financing Companies and Sharia Financing Companies

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 47/POJK.05/2020
CONCERNING
BUSINESS LICENSING AND INSTITUTIONAL ORGANIZATION OF FINANCING COMPANIES AND SHARIA FINANCING COMPANIES BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to implement the regulatory and supervisory duties 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 regulations governing financing companies and Sharia financing companies; b. that in order to enhance the resilience and competitiveness of the industry and support the development of financing companies and Sharia financing companies so that they can increase their role and contribution to the national economy;
c. that Financial Services Authority Regulation Number 28/POJK.05/2014 concerning Business Licensing and Institutional Organization of Financing Companies is no longer in line with legal needs to enhance the resilience and competitiveness of the industry in supporting the development of financing companies and Sharia financing companies, and therefore needs to be replaced;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning Business Licensing and Institutional Organization of Financing Companies and Sharia Financing Companies; 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 BUSINESS LICENSING AND INSTITUTIONAL ORGANIZATION OF FINANCING COMPANIES AND SHARIA FINANCING COMPANIES.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation:

1. Company means financing company and Sharia financing company.
2. Financing Company is a business entity that conducts financing activities for goods and/or services.
3. Sharia Financing Company is a Financing Company whose entire business activities conduct Sharia financing.
4. Sharia Financing is the disbursement of financing based on Sharia principles.
5. Sharia Principles are Islamic legal provisions based on fatwas and/or Sharia conformity statements from the National Sharia Board of the Indonesian Ulema Council.
6. Sharia Business Unit, hereinafter abbreviated as UUS, is a work unit of the head office of a Financing Company that conducts Sharia Financing and/or functions as the head office of offices that conduct Sharia Financing.
7. Controlling Shareholder, hereinafter abbreviated as PSP, is an individual, legal entity, and/or business group that owns shares or capital of the Company equal to 25% (twenty-five percent) or more of the issued shares and has voting rights, or owns shares or capital of the Company less than 25% (twenty-five percent) of the issued shares and has voting rights but can be proven to have controlled the Company, directly or indirectly.
8. Board of Directors is the organ of the company authorized and fully responsible for the management of the company for the interests of the company, in accordance with the purpose and objectives of the company and representing the company, both in and out of court in accordance with the articles of association.
9. Board of Commissioners is the organ of the company tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.
10. Sharia Supervisory Board, hereinafter abbreviated as DPS, is a board that has the task and function of supervision and providing advice to the Board of Directors regarding the implementation of the Company's activities to be in accordance with Sharia Principles.
11. General Meeting of Shareholders, hereinafter abbreviated as RUPS, is the general meeting of shareholders as referred to in laws concerning limited liability companies.
12. Equity is equity based on financial accounting standards applicable in Indonesia for the Company or the difference between the amount of assets and the sum of liabilities and temporary financing for the UUS.
13. Debtor is a business entity or individual who receives financing for goods and/or services from a Financing Company or a consumer, whether a business entity or individual, who enters into a Sharia Financing agreement with a Sharia Financing Company or a Financing Company that has a UUS.
14. Branch Office is a Company office that has the authority to approve financing to prospective Debtors and sign financing agreements or contracts with Debtors.
15. Sharia Business Unit Branch Office, hereinafter called Branch Office UUS, is an office that is directly responsible to the UUS and conducts Sharia Financing activities, and has the authority to approve Sharia Financing to prospective Debtors and sign Sharia Financing agreements or contracts with Debtors.
16. Merger is a legal act performed by 1 (one) or more Companies to merge with an existing Company, resulting in the assets, liabilities, and Equity of the merging Company transferring by operation of law to the receiving Company, and subsequently the legal status of the merging Company ends by operation of law.
17. Consolidation is a legal act performed by 2 (two) or more Companies to consolidate by establishing 1 (one) new Company, which by operation of law acquires the assets, liabilities, and Equity of the consolidating Companies, and the legal status of the consolidating Companies ends by operation of law.
18. Separation is a legal act performed by a Company to separate business, resulting in all assets, liabilities, and Equity of the Company transferring by operation of law to 2 (two) or more Companies or part of the assets, liabilities, and Equity of the Company transferring by operation of law to 1 (one) or more Companies.

CHAPTER II
LEGAL FORM, OWNERSHIP,
COMPANY NAME, PAID-UP CAPITAL AT THE TIME OF ESTABLISHMENT, AND FOREIGN OWNERSHIP First Section Legal Form
Article 2
Companies must be established in the form of a limited liability company.

Second Section
Ownership
Article 3
(1) Company shares are prohibited from being owned by parties other than:
a. Indonesian citizens; b. foreign citizens;
c. Indonesian legal entities;
d. foreign legal entities; e. the central government; and/or f. regional governments.
(2) Foreign citizens as referred to in paragraph (1) letter b can become Company owners only through transactions on the stock exchange.
(3) Share ownership provisions as referred to in paragraph (1) for Companies listed on the stock exchange follow regulations in the field of capital markets.

Article 4
(1) Funds for capital investment in Companies are prohibited from originating from:
a. money laundering, terrorism financing, and other financial crimes; and b. loans.
(2) PSPs in the form of legal entities must have operated for at least 2 (two) years before making capital investment in the Company.
(3) Provisions as referred to in paragraph (2) are exempted for new PSPs resulting from merger, consolidation, or separation.
(4) For shareholders in the form of legal entities, the amount of capital investment in the Company is set at a maximum of the shareholder's equity.
(5) Companies established specifically to conduct activities in the electricity and/or shipping sectors are exempted from the provisions regarding the amount of capital investment as referred to in paragraph (4). (6) The provisions regarding the amount of capital investment as referred to in paragraph (4) do not apply to Company shareholders that are financial services institutions under the supervision of the Financial Services Authority. (7) For shareholders that are financial services institutions under the supervision of the Financial Services Authority, the amount of capital investment in the Company must be carried out in accordance with regulations governing investment and/or participation. (8) Provisions as referred to in paragraph (2), paragraph (4), and paragraph (7) must be fulfilled when the shareholder:
a. pays the founding capital of the Company; b. purchases Company shares; and/or
c. increases the paid-up capital of the Company.

Article 5
(1) Companies must have at least 1 (one) PSP.
(2) In the event that shareholders meeting the criteria as PSP are more than 1 (one) party, the Company must designate all shareholders meeting the criteria as PSP.

Third Section
Company Name
Article 6
(1) Companies must use a Company name starting with the legal form and containing the word:
a. finance, financing, and/or words characterizing financing activities, for Financing Companies; or b. finance, financing, accompanied by the word Sharia and/or words characterizing financing or Sharia institutional activities, for Sharia Financing Companies. (2) In addition to meeting the provisions as referred to in paragraph (1), the use of Company names must comply with regulations concerning limited liability companies.

Article 7
Company names must be clearly stated on the Company office building.

Fourth Section
Paid-Up Capital at the Time of Establishment
Article 8
(1) Companies must have paid-up capital at the time of establishment of at least IDR 250,000,000,000.00 (two hundred fifty billion rupiah).
(2) Paid-up capital at the time of establishment must be paid in cash and in full, placed in the form of time deposits in the name of the Company at:
a. one of the general banks, Sharia general banks, or Sharia business units of general banks in Indonesia for Financing Companies; or b. one of the Sharia general banks or Sharia business units of general banks in Indonesia for Sharia Financing Companies.

Fifth Section
Foreign Ownership
Article 9
(1) Foreign ownership in Companies, both directly and indirectly, is prohibited from exceeding 85% (eighty-five percent) of the Company's paid-up capital.
(2) The limitation on foreign ownership in Companies as referred to in paragraph (1) does not apply to Companies that are public companies and trade their shares on the stock exchange. (3) In the event that Companies need to increase capital from foreign shareholders because:
a. they do not meet the minimum capital and equity ratio requirements; and/or b. there are liquidity problems, which can disrupt the Company's business continuity, the limitation on foreign ownership in Companies as referred to in paragraph (1) may be exceeded. (4) In the event of exceeding the foreign ownership limitation as referred to in paragraph (3), Companies must adjust the foreign ownership limit within a time frame according to the adjustment plan approved by the Financial Services Authority, with a maximum of 3 (three) years calculated from the date of reporting the implementation of ownership changes to the Financial Services Authority. (5) Provisions regarding the limitation on foreign ownership as referred to in paragraph (1) to paragraph (4) are exempted for Companies established specifically to conduct activities in the electricity and/or shipping sectors.

Article 10
In the event that Companies that have obtained business licenses at the time this Financial Services Authority Regulation is enacted:
a. have foreign ownership, directly and/or indirectly, exceeding 85% (eighty-five percent); and b. are not public companies and do not trade their shares on the stock exchange, Such Companies are exempted from the foreign ownership limitation as referred to in Article 9 paragraph (1) as long as they do not make changes to ownership.

CHAPTER III
ORGANIZATIONAL STRUCTURE
Article 11
(1) Companies must have an organizational structure that clearly describes at least the functions:
a. administration and accounting; b. marketing, financing feasibility analysis, and collection;
c. risk management, internal control, and compliance;
d. implementation of anti-money laundering and counter-terrorism financing programs; e. information system management; f. consumer complaint services; g. fraud control; and h. financial literacy and inclusion. (2) The organizational structure as referred to in paragraph (1) must be completed with written descriptions of duties, authorities, responsibilities, and work procedures. (3) The organizational structure as referred to in paragraph (1) must reflect good internal control. (4) Companies must have employees responsible for each function as referred to in paragraph (1). (5) The implementation of functions as referred to in paragraph (1) must be supported by at least data processing systems that can generate complete, accurate, up-to-date, complete, and accountable information for decision-making.

CHAPTER IV
BUSINESS LICENSING
Article 12
(1) Companies conduct business activities after obtaining a business license from the Financial Services Authority.
(2) To obtain a business license as referred to in paragraph (1), the Board of Directors must submit a business license application to the Financial Services Authority by attaching documents:
a. a copy of the deed of establishment of the legal entity accompanied by proof of approval by the competent authority, which must contain at least:

1. name and domicile;
2. purpose and objectives and business activities;
3. paid-up capital;
4. ownership; and
5. authorities, responsibilities, and term of office of Board of Directors members, Board of Commissioners members, and/or DPS members;
   b. a copy of the latest articles of association amendment accompanied by proof of approval, and/or a letter of receipt of notification from the competent authority;
   c. a list of shareholders including details of each share ownership up to the last shareholder and/or beneficial owner, as well as a list of other companies owned by shareholders;
   d. shareholder data other than PSP:
6. individuals, accompanied by:
   a) photocopy of identification in the form of an identity card or valid passport; b) photocopy of the tax identification number; c) curriculum vitae completed with a recent 4 x 6 cm color photo; and d) a statement letter from the concerned party stating that:

1. they do not have non-performing loans and/or financing;
2. they are not included in the list of parties prohibited from becoming shareholders or parties that manage, supervise, and/or have significant influence on financial services institutions;
3. they have never been sentenced for criminal offenses based on a court decision that has acquired permanent legal force within the last 5 (five) years;
4. they have never been declared bankrupt or guilty causing a company or enterprise to be declared bankrupt based on a court decision that has acquired permanent legal force within the last 5 (five) years; and
5. they have never been a PSP, Board of Directors member, Board of Commissioners member, or DPS member at a financial services company whose business license was revoked due to violations within the last 5 (five) years;

2. legal entities, accompanied by:
   a) a copy of the deed of establishment of the legal entity, including articles of association and amendments regarding business activities, capital, shareholder structure, and management, accompanied by proof of approval, approval, registration, and/or a letter of receipt of notification from the competent authority; b) audited financial statements and the latest non-consolidated financial statements before capital payment, signed by the directors or equivalents of the shareholders; c) photocopy of the tax identification number; and d) data of the legal entity's directors from shareholders other than PSP, including:

1. photocopy of identification in the form of an identity card or valid passport;
2. photocopy of the tax identification number;
3. curriculum vitae completed with a recent 4 x 6 cm color photo; and
4. a statement letter from the directors or equivalents of the legal entity stating that:
   (a) the shareholder does not have non-performing loans and/or financing; (b) the shareholder is not included in the list of parties prohibited from becoming shareholders or parties that manage, supervise, and/or have significant influence on financial services institutions; (c) the shareholder has never been sentenced for criminal offenses in the field of financial services and/or the economy based on a court decision that has acquired permanent legal force within the last 5 (five) years; (d) the shareholder has never been declared bankrupt or guilty causing a company or enterprise to be declared bankrupt based on a court decision that has acquired permanent legal force within the last 5 (five) years; and (e) the shareholder has never been a PSP at a financial services company whose business license was revoked due to violations within the last 5 (five) years;

3. central government, accompanied by a photocopy of government regulations regarding state capital investment for the establishment of the Company;
4. regional government, accompanied by a photocopy of regional regulations regarding regional capital investment for the establishment of the Company;
   e. a statement letter from shareholders stating that:
5. funds for capital investment do not originate from money laundering, terrorism financing, and other financial crimes; and
6. funds for capital investment do not originate from loans;
   f. photocopy of tax notification letters (SPT) for the last 2 (two) years before the capital investment and other documents showing financial capacity and fund sources, for prospective individual shareholders; g. a copy of the minutes of the General Meeting of Shareholders regarding the appointment of DPS members, for Sharia Financing Companies, accompanied by a letter of receipt of notification from the competent authority; h. photocopy of proof of paid-up capital settlement in the form:
7. proof of cash payment from shareholders;
8. Company bank statements from the date of capital payment from shareholders until the date of the business license application; and
9. photocopy of proof of placing paid-up capital in the form of time deposits in the name of the respective Company at:
   a) one of the general banks, Sharia general banks, or Sharia business units of general banks in Indonesia for Financing Companies; or b) one of the Sharia general banks or Sharia business units of general banks in Indonesia for Sharia Financing Companies, which is legalized by a bank that is still valid during the business license application process;
   i. certification proof for the Board of Directors, Board of Commissioners, and officials one level below the Board of Directors in accordance with the organizational structure at the time of the business license application;
   j. proof of operational readiness supporting business activities at least in the form:
10. organizational structure completed with descriptions of duties, authorities, responsibilities, and personnel;
11. work procedures;
12. list of fixed assets and inventory;
13. proof of ownership or control of the office building showing the Company's office address, along with photos of the exterior of the building and interior photos and room layout;
14. example of a financing agreement;
15. example of Sharia Financing agreements, for Sharia Financing Companies;
16. information system infrastructure; and
17. tax identification number;
    k. a business plan for the first 3 (three) years at least containing:
18. vision, mission, and business strategy;
19. policies and management plans, including:
    a) business activity plans; b) business activity development or expansion plans; c) capital plans; d) financing plans; e) office network or distribution channel development and/or change plans; f) organizational, human resources, and/or information technology development plans; and g) plans to increase financial literacy and inclusion;
20. initial financial position reports;
21. monthly projections of:
    a) financial position reports; b) comprehensive income statements; and c) cash flow statements, along with the assumptions used;
22. projections of certain ratios and items;
    l. photocopy of cooperation agreements between foreign legal entity shareholders and Indonesian shareholders, for Companies with participation from foreign legal entities, at least containing:
23. capital composition and details of authorities, at least containing provisions regarding voting rights, profit and loss distribution, and appointment of Board of Directors and Board of Commissioners members; and
24. obligations of foreign legal entity shareholders to formulate and implement education and training programs according to their fields of expertise;
    m. confirmation from the supervisory authority in the foreign party's country of origin, if there is direct participation by foreign legal entities that have a supervisory authority in their country of origin; n. photocopy of guidelines for implementing anti-money laundering and counter-terrorism financing programs; o. photocopy of good governance guidelines for Companies; and p. proof of payment of licensing fees for the issuance of business licenses. (3) Business license applications as referred to in paragraph (2) must be submitted simultaneously with applications for the assessment of competence and propriety for prospective Board of Directors members, Board of Commissioners members, PSPs, and/or DPS members.

Article 13
(1) The Financial Services Authority provides approval or rejection of business license applications as referred to in Article 12 paragraph (2) within a maximum period of 20 (twenty) working days from the date a complete business license application is received. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 12 paragraph (2); b. examination of capital deposits;
c. feasibility analysis of business plans as referred to in Article 12 paragraph (2) letter k;
d. assessment of competence and propriety for prospective Board of Directors members, Board of Commissioners members, PSPs, and/or DPS members; and e. analysis of compliance with regulations in the field of financing. (3) The Financial Services Authority may conduct inspections of Company offices to ensure the Company's operational readiness. (4) In the event that business license applications are approved, the Financial Services Authority establishes a decision on the issuance of business licenses. (5) In the event that business license applications are rejected, the rejection is done in writing and accompanied by reasons for rejection.

Article 14
Companies that have obtained business licenses from the Financial Services Authority must conduct business activities for a maximum of 3 (three) months calculated from the date the business license is established by the Financial Services Authority.

CHAPTER V
MEMBERSHIP IN OTHER ORGANIZATIONS
Article 15
(1) Companies must be registered as members of associations that oversee Companies in Indonesia.
(2) Companies that obtain business licenses after this Otoritas Jasa Keuangan Regulation is promulgated must fulfill the provisions referred to in paragraph (1) within a maximum of 6 (six) months from the date of the business license determination.

Article 16
(1) Companies must be registered as members of asset recording institutions.
(2) Companies that obtain business licenses after this Otoritas Jasa Keuangan Regulation is promulgated must fulfill the provisions referred to in paragraph (1) within a maximum of 6 (six) months from the date of the business license determination.

Article 17
In the event that a Company does not have collateral types managed within an asset recording institution, the Company may be exempted from the obligation to be registered as a member of an asset recording institution as referred to in Article 16 paragraph (1).

Article 18
(1) To be exempted from the obligation to be registered as a member of an asset recording institution as referred to in Article 17, the Company must obtain approval from Otoritas Jasa Keuangan. (2) To obtain approval for exemption from the obligation to be registered as a member of an asset recording institution as referred to in paragraph (1), the Board of Directors must submit an approval request to Otoritas Jasa Keuangan by attaching documents:
a. details of the types and values of collateral owned by the Company based on the latest monthly report position; and b. strategic plan for business development and types of collateral to be managed in the next 5 (five) years.

Article 19
(1) Otoritas Jasa Keuangan provides approval or rejection of the exemption request from the obligation to be registered as a member of an asset recording institution as referred to in Article 18 paragraph (2) within a maximum of 20 (twenty) working days from the date the complete approval request is received. (2) To provide approval or rejection as referred to in paragraph (1), Otoritas Jasa Keuangan conducts:
a. analysis and research on the completeness of documents as referred to in Article 18 paragraph (2); and b. analysis of compliance with financing legislation regulations. (3) In the event that the exemption request from the obligation to be registered as a member of an asset recording institution is approved, Otoritas Jasa Keuangan issues an approval letter for exemption from the obligation to be registered as a member of an asset recording institution to the respective Company. (4) In the event that the exemption request from the obligation to be registered as a member of an asset recording institution is rejected, the rejection is conducted in writing and accompanied by the reasons for rejection.

Article 20
Companies may become members of credit information management institutions.

CHAPTER VI
HUMAN RESOURCES
First Section
Human Resource Development
Article 21
(1) Companies must implement programs to develop the capabilities and knowledge of human resources every year.
(2) The development of capabilities and knowledge of human resources as referred to in paragraph (1) must be conducted in the form of education and training programs.
(3) Companies must allocate and realize at least 2.5% (two point five percent) of the Company's human resource costs for the development and training of human resources.

Second Section
Use of Foreign Workforce
Article 22
(1) Companies in which 25% (twenty-five percent) or more of the shares are owned by foreign citizens and/or foreign legal entities, whether directly or indirectly, may use foreign workforce. (2) Companies must include plans for the use of foreign workforce, other than the Board of Directors and Board of Commissioners, in the Company's business plan. (3) Foreign workforce as referred to in paragraph (1) is prohibited from being employed other than as:
a. Board of Directors; b. Board of Commissioners;
c. experts; or
d. consultants.

Article 23
(1) Foreign workforce employed as Board of Directors and/or Board of Commissioners must meet the requirements:
a. having knowledge about Indonesia, particularly regarding the economy, culture, and Indonesian language; and b. meeting legislation regulations regarding labor, including immigration. (2) Companies using foreign workforce employed as Board of Directors must have at least 50% (fifty percent) of Board of Directors members who are Indonesian citizens. (3) Companies using foreign workforce employed as Board of Commissioners must have at least 50% (fifty percent) of Board of Commissioners members who are Indonesian citizens.

Article 24
(1) Foreign workforce employed as experts and/or consultants is prohibited from handling functions other than:
a. information technology; b. risk management; and
c. other functions based on Otoritas Jasa Keuangan approval.
(2) Foreign workforce employed as experts and/or consultants must meet the requirements:
a. having expertise corresponding to the field of responsibility; b. the duration of use for each foreign worker is maximum 3 (three) years, and can be extended once for a maximum of 1 (one) year;
c. holding positions that cannot yet be filled by Indonesian workforce; and
d. meeting legislation regulations regarding labor, including immigration.
(3) Otoritas Jasa Keuangan has the authority to request Companies to dismiss foreign workforce who do not meet the requirements as referred to in paragraph (1) and/or paragraph (2). (4) Companies must fulfill Otoritas Jasa Keuangan's request as referred to in paragraph (3) to dismiss foreign workforce who do not meet the requirements as referred to in paragraph (1) and/or paragraph (2).

Article 25
(1) Companies employing foreign workforce as experts and/or consultants must implement knowledge transfer activities from foreign workforce, namely experts and/or consultants, to Indonesian workforce within the Company. (2) The knowledge transfer obligation as referred to in paragraph (1) is conducted through:
a. the appointment of 2 (two) Indonesian workforce members as assistants for 1 (one) foreign workforce member; b. work education and training for the assistant workforce as referred to in letter a according to the job qualifications held by the foreign workforce; and
c. the implementation of training or teaching by foreign workforce within a certain period, particularly for Indonesian workforce within the Company.

Article 26
(1) Candidates for foreign workforce to hold positions as Board of Directors and/or Board of Commissioners must obtain approval from Otoritas Jasa Keuangan before executing actions, duties, and functions as Board of Directors and/or Board of Commissioners. (2) Otoritas Jasa Keuangan's approval for the utilization of foreign workforce as Board of Directors and/or Board of Commissioners as referred to in paragraph (1) is conducted through an assessment of competence and propriety in accordance with legislation regulations regarding the assessment of competence and propriety for key parties of financial service institutions. (3) The request for approval for the utilization of foreign workforce as Board of Directors and/or Board of Commissioners as referred to in paragraph (1) is submitted to Otoritas Jasa Keuangan before the Company submits a request for a license to use foreign workforce to the agency handling labor affairs.

Article 27
(1) Companies intending to employ foreign workforce as experts and/or consultants must obtain approval from Otoritas Jasa Keuangan.
(2) To obtain approval to employ foreign workforce as referred to in paragraph (1), the Board of Directors must submit a request to Otoritas Jasa Keuangan by attaching documents:
a. photocopy of a valid passport; b. curriculum vitae of the employed foreign workforce, accompanied by photocopies of documents reflecting their field of expertise;
c. annual education and training program plan during the employment of the aforementioned foreign workforce; and
d. placement plan in the organizational structure and field of responsibility of the foreign workforce, accompanied by reasons for using the foreign workforce.
(3) The request for approval to employ foreign workforce as referred to in paragraph (2) is submitted to Otoritas Jasa Keuangan before the Company submits a request for a license to use foreign workforce to the agency handling labor affairs.

Article 28
(1) Otoritas Jasa Keuangan provides approval or rejection of the request for approval to employ foreign workforce as referred to in Article 27 paragraph (2) within a maximum of 20 (twenty) working days from the date the complete approval request is received. (2) To provide approval or rejection as referred to in paragraph (1), Otoritas Jasa Keuangan conducts:
a. analysis and research on the completeness of documents as referred to in Article 27 paragraph (2); b. clarification of the candidate foreign workforce if necessary; and
c. analysis of compliance with financing legislation regulations.
(3) In the event that the request for approval to employ foreign workforce is approved, Otoritas Jasa Keuangan issues an approval letter to employ foreign workforce to the respective Company. (4) In the event that the request for approval to employ foreign workforce is rejected, the rejection is conducted in writing and accompanied by the reasons for rejection.

CHAPTER VII
SHARIA BUSINESS UNITS
First Section
Establishment of SBU
Article 29
(1) Financing Companies conducting Sharia Financing activities based on Sharia Principles must establish an SBU.
(2) Financing Companies receiving funding based on Sharia Principles must disburse it based on Sharia Principles.
(3) The Articles of Association of Financing Companies having an SBU must include the purpose and objectives of the Company to conduct Sharia Financing activities in its Articles of Association. (4) SBU must have separate bookkeeping from the Financing Company.

Article 30
(1) SBU must have working capital at the time of establishment of at least IDR 100,000,000,000.00 (one hundred billion rupiah).
(2) SBU working capital as referred to in paragraph (1) must be set aside in the form of time deposits in the name of the Financing Company and placed in one of the Sharia commercial banks or Sharia business units of commercial banks in Indonesia. (3) Working capital as referred to in paragraph (1) must be stated in a Board of Directors decision approved by the Board of Commissioners.

Article 31
(1) The establishment of SBU as referred to in Article 29 paragraph (1) must obtain an SBU establishment license from Otoritas Jasa Keuangan.
(2) To obtain an SBU establishment license as referred to in paragraph (1), the Board of Directors must submit an SBU establishment license request to Otoritas Jasa Keuangan, by attaching documents:
a. copy of the amendment to the Articles of Association stating:

1. one of the purposes and objectives of the Company is to conduct Sharia Financing business activities; and
2. the authority and responsibilities of the Sharia Supervisory Board (DPS), accompanied by proof of approval and/or notification receipt from the competent agency;
   b. photocopy of proof of SBU working capital deposit in the form of time deposits in the name of the Financing Company at one of the Sharia commercial banks or Sharia business units of commercial banks in Indonesia, legalized by the bank, which remains valid during the SBU establishment license application process;
   c. Board of Directors decision approving the placement of working capital in SBU, accompanied by the amount of working capital placement;
   d. SBU leadership data, including:
3. photocopy of identification cards such as valid resident identity cards or passports;
4. photocopy of tax identification numbers;
5. curriculum vitae completed with the latest 4 x 6 cm color photos;
6. proof of appointment as SBU leadership;
7. statement letter stating:
   a) does not have non-performing loans and/or financing; and b) does not hold concurrent positions in other functions within the same Financing Company; and
8. proof of expertise, training, and/or experience in the field of Sharia finance;
   e. proof of ownership or control of the office building showing the SBU office address, along with photos of the building exterior and interior, as well as room layout; f. minutes of the General Meeting of Shareholders (GMS) regarding the appointment of the Sharia Supervisory Board (DPS); g. initial financial report of SBU separate from the Financing Company's business activities; h. documents reporting the use of agreements used in Sharia Financing activities and examples of Sharia Financing agreements; and
   i. work plan for the SBU to be formed, at least containing:
9. feasibility study regarding market opportunities and economic potential;
10. Sharia Financing disbursement targets and steps taken to achieve the aforementioned targets;
11. work systems and procedures;
12. number and composition of personnel; and
13. monthly projections for 12 (twelve) months regarding:
    a) financial position reports; b) comprehensive income statements; and c) cash flow reports, along with the assumptions used;

(3) The SBU establishment license request as referred to in paragraph (2) is submitted simultaneously with the request for the assessment of competence and propriety for candidate members of the Sharia Supervisory Board (DPS) of the Financing Company.

Article 32
(1) Otoritas Jasa Keuangan provides approval or rejection of the SBU establishment license request as referred to in Article 31 paragraph (2) within a maximum of 20 (twenty) working days from the date the complete SBU establishment license request is received. (2) To provide approval or rejection as referred to in paragraph (1), Otoritas Jasa Keuangan conducts:
a. analysis and research on the completeness of documents as referred to in Article 31 paragraph (2); b. inspection of SBU working capital deposits;
c. feasibility analysis of the SBU work plan as referred to in Article 31 paragraph (2) letter i;
d. assessment of competence and propriety for candidate members of the Sharia Supervisory Board (DPS); and e. analysis of compliance with Sharia Financing legislation regulations. (3) In the event that the SBU establishment license request is approved, Otoritas Jasa Keuangan:
a. determines the decision granting the SBU establishment license; and b. provides approval or recording of the agreements used by the SBU.
(4) In the event that the SBU establishment license request is rejected, the rejection is conducted in writing and accompanied by the reasons for rejection.

Article 33
SBU that has obtained a business license from Otoritas Jasa Keuangan must conduct Sharia Financing business activities within a maximum of 3 (three) months from the date the SBU establishment license is determined by Otoritas Jasa Keuangan.

Article 34
(1) Financing Companies having an SBU must have a Director responsible for managing the SBU.
(2) The Director responsible for managing the SBU as referred to in paragraph (1) must have knowledge in the field of Sharia finance or Sharia Financing Companies and commitment to the development of SBU.

Article 35
(1) SBU must be led by an SBU leader.
(2) The SBU leader as referred to in paragraph (1) must at least meet the requirements:
a. does not have non-performing loans and/or financing; b. is not included in the list of parties prohibited from being key parties; and
c. has expertise, training, and/or experience in the field of Sharia finance.

Article 36
(1) Companies must report changes in SBU leadership to Otoritas Jasa Keuangan within a maximum of 15 (fifteen) working days from the date of the SBU leader's appointment. (2) The report of SBU leadership changes as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents as referred to in Article 31 paragraph (2) letter d.

Second Section
Closure of SBU
Article 37
(1) Financing Companies intending to close SBU must obtain approval from Otoritas Jasa Keuangan.
(2) The closure of SBU is prohibited from harming the interests of Debtors and creditors.
(3) Financing Companies intending to close SBU must:
a. notify the plan to close SBU to Debtors and creditors; b. submit procedures for resolving the rights and obligations of Debtors and creditors;
c. resolve objections from Debtors and creditors, if there are objections from Debtors and creditors based on legislation regulations; and
d. resolve the rights and obligations of SBU owned based on legislation regulations.
(4) The procedures and implementation of provisions as referred to in paragraph (3) must consider the interests of the parties and other relevant stakeholders.
(5) To obtain approval for the closure of SBU as referred to in paragraph (1), the Board of Directors must submit a request to Otoritas Jasa Keuangan by attaching documents:
a. draft minutes of the General Meeting of Shareholders (GMS) approving the termination of Sharia Financing business activities; b. reasons for closing SBU;
c. list of Sharia Financing disbursements that have been conducted, accompanied by information on the names of Debtors, nominal amounts of Sharia Financing received, and the duration of Sharia Financing; and
d. procedures for resolving the rights and obligations of SBU Debtors and creditors.

Article 38
(1) Otoritas Jasa Keuangan provides approval or rejection of the request for approval for the closure of SBU as referred to in Article 37 paragraph (5) within a maximum of 20 (twenty) working days from the date the complete request for approval for the closure of SBU is received. (2) In processing the request for approval for the closure of SBU as referred to in paragraph (1), Otoritas Jasa Keuangan conducts:
a. analysis and research on the completeness of documents as referred to in Article 37 paragraph (5); and b. analysis of compliance with financing legislation regulations. (3) In the event that the request for the closure of SBU is approved, Otoritas Jasa Keuangan issues an approval letter for the plan to close SBU to the respective Financing Company. (4) In the event that the request for the closure of SBU is rejected, the rejection is conducted in writing and accompanied by the reasons for rejection.

Article 39
Financing Companies that have obtained approval for the plan to close SBU must:
a. implement a General Meeting of Shareholders (GMS) approving the termination of SBU business activities; b. halt all SBU business activities;
c. announce the plan to terminate SBU business activities and the plan to resolve SBU obligations in a daily newspaper with national circulation within a maximum of 15 (fifteen) working days from the date of the approval letter for the plan to close SBU; and
d. resolve all rights and obligations of SBU within a maximum of 1 (one) year from the date of the approval letter for the plan to close SBU.

Article 40
(1) Companies must report the termination of SBU business activities to Otoritas Jasa Keuangan within a maximum of 15 (fifteen) working days after all rights and obligations of SBU as referred to in Article 39 letter d are resolved. (2) The report of the termination of SBU business activities as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. copy of the decision regarding the granting of the SBU establishment license; b. SBU latest financial position report;
c. proof of the implementation of the announcement as referred to in Article 39 letter c;
d. proof of the resolution of all rights and obligations of SBU as referred to in Article 39 letter d; and e. statement letter from the Board of Directors of the Financing Company stating that all SBU obligations have been resolved and that if there are claims and lawsuits in the future, they become the responsibility of the Financing Company. (3) Based on the report as referred to in paragraph (1), Otoritas Jasa Keuangan conducts:
a. research on the report of the implementation of the SBU closure plan; and b. determines the decision to revoke the SBU establishment license.

Third Section
Separation of SBU
Article 41
(1) Financing Companies may separate SBU into Sharia Financing Companies.
(2) The separation of SBU as referred to in paragraph (1) must meet the requirements:
a. Financing Companies conducting SBU Separation and Sharia Financing Companies resulting from SBU Separation must meet a composite health rating of at least 2; and b. does not harm the interests of Debtors and creditors. (3) Companies conduct SBU Separation as referred to in paragraph (1) by establishing new Sharia Financing Companies.

Article 42
The fulfillment of paid-up capital as referred to in Article 8 paragraph (1) for Sharia Financing Companies resulting from Separation must be conducted in cash and full form as:
a. time deposits in the name of the Sharia Financing Company at one of the Sharia commercial banks or Sharia business units of commercial banks in Indonesia; and/or b. other forms permitted based on legislation regulations and in accordance with Sharia accounting standards.

Article 43
(1) Companies intending to conduct SBU Separation must obtain approval from Otoritas Jasa Keuangan.
(2) To obtain approval for SBU Separation as referred to in paragraph (1), the Board of Directors must submit a request to Otoritas Jasa Keuangan by attaching documents:
a. draft SBU Separation deed; b. draft deed of establishment of the new Sharia Financing Company;
c. plan for resolving the rights and obligations of SBU Debtors and creditors;
d. shareholder list plan including details of each share ownership up to the last shareholders and/or beneficial owners, as well as a list of other companies owned by the shareholders of the new Sharia Financing Company; e. data of shareholders other than PSP as referred to in Article 12 paragraph (2) letter d of the new Sharia Financing Company; f. statement letter from the shareholders of the new Sharia Financing Company stating that:

1. the source of funds for capital investment does not originate from money laundering, terrorism financing, and other financial crimes; and
2. the source of funds for capital investment does not originate from loans;
   g. business plan to be conducted for the first 3 (three) years after obtaining the business license for the Sharia Financing Company, at least containing:
3. vision, mission, and business strategy;
4. feasibility study of market opportunities and economic potential;
5. policies and management plans, including:
   a) business activity plans; b) plans for business development or expansion; c) capital plans;

d) funding plan; e) plan for development and/or changes to the office network or distribution channels; f) plan for organizational, human resource, and/or information technology development; and g) activity plan to increase financial literacy and inclusion;
4. monthly projections of:
a) financial position reports; b) comprehensive income statements; and c) cash flow statements, along with the assumptions used; h. certification evidence for the Board of Directors, Board of Commissioners, and officials one level below the Board of Directors according to the organizational structure at the time of submitting the business license application; and
i. organizational structure accompanied by descriptions of duties, authorities, responsibilities, and work procedures as referred to in Article 11 paragraph (1) and paragraph (2), for new Sharia Financing Companies resulting from the Separation of UUS.
(3) The application for approval of UUS Separation as referred to in paragraph (2) is submitted simultaneously with the application for assessment of competence and propriety for prospective members of the Board of Directors, members of the Board of Commissioners, PSP, and/or members of the DPS of the new Sharia Financing Company.

Article 44
(1) The Financial Services Authority (OJK) provides approval or rejection of the application for approval of UUS Separation as referred to in Article 43 paragraph (2) within a maximum period of 20 (twenty) working days since the application documents were received in complete form. (2) Companies conducting UUS Separation as referred to in Article 43 paragraph (1) may continue to conduct financing business activities and Sharia Financing business activities. (3) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 43 paragraph (2); b. examination of compliance with capital requirements;
c. feasibility analysis of the UUS Separation plan;
d. assessment of competence and propriety for prospective members of the Board of Directors, members of the Board of Commissioners, PSP, and/or members of the DPS of the Sharia Financing Company resulting from the UUS Separation; and e. analysis of compliance with regulations in the field of Sharia Financing. (4) The Financial Services Authority may conduct inspections at the offices of the Financing Company and/or the Sharia Financing Company resulting from the Separation to ensure readiness for the implementation of UUS Separation. (5) In the event that the UUS Separation application is approved, the Financial Services Authority issues a letter of approval for the UUS Separation plan to the relevant Financing Company. (6) In the event that the UUS Separation application is rejected, the rejection is done in writing and accompanied by the reasons for rejection.

Article 45
(1) Companies that have obtained approval for the UUS Separation plan from the Financial Services Authority must hold a General Meeting of Shareholders (GMS) approving the UUS Separation within a maximum of 60 (sixty) working days calculated from the date of the Financial Services Authority's approval letter. (2) In the event that the time limit as referred to in paragraph (1) has expired and the Company has not held a GMS approving the UUS Separation, the Financial Services Authority is authorized to cancel the previously granted approval for the UUS Separation plan.

Article 46
(1) Financing Companies conducting UUS Separation must report the implementation of the GMS approving the UUS Separation to the Financial Services Authority within a maximum of 15 (fifteen) working days calculated from the date of the GMS approving the UUS Separation. (2) The reporting of the implementation of the GMS approving the UUS Separation as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. copy of the minutes of the GMS approving the UUS Separation; b. copy of the UUS Separation deed;
c. copy of the establishment deed, at least containing:

1. name and domicile;
2. aims and objectives as well as business activities;
3. paid-up capital;
4. ownership; and
5. authorities, responsibilities, and term of office of members of the Board of Directors, members of the Board of Commissioners, and/or members of the DPS;
   d. copy of the minutes of the GMS of the new Sharia Financing Company resulting from the UUS Separation stating the appointment of the Board of Directors, Board of Commissioners, and DPS; e. photocopy of proof of settlement of paid-up capital of the new Sharia Financing Company resulting from the UUS Separation in the form of cash deposits from shareholders; f. photocopy of proof of placement of paid-up capital of the new Sharia Financing Company resulting from the UUS Separation in the form of time deposits in the name of the relevant Sharia Financing Company, if there are capital deposits from shareholders; g. initial or opening financial position report of the new Sharia Financing Company resulting from the UUS Separation; h. proof of operational readiness of the new Sharia Financing Company resulting from the UUS Separation as referred to in Article 12 paragraph (2) letter j; and
   i. proof of settlement of licensing fees for the issuance of business licenses.
   (3) Based on the reporting of the implementation of the GMS approving the UUS Separation as referred to in paragraph (1), the Financial Services Authority:
   a. conducts analysis and research on the completeness of documents as referred to in paragraph (2); b. revokes the license to establish the UUS in the event that the application for a business license to the new Sharia Financing Company resulting from the UUS Separation is approved; and
   c. provides approval or rejection of the application for a business license to the new Sharia Financing Company resulting from the UUS Separation, which becomes effective calculated from the date the articles of association are approved by the competent authority.
   (4) The Financial Services Authority provides approval for the business license as referred to in paragraph (3) letter c within a maximum period of 20 (twenty) working days after the reporting documents as referred to in paragraph (2) are received in complete form. (5) In the event that the Financial Services Authority rejects the establishment of a business license as referred to in paragraph (3) letter c, the rejection is done in writing and accompanied by the reasons.

Article 47
The new Sharia Financing Company resulting from the separation of UUS must report the implementation of the UUS Separation to the Financial Services Authority within a maximum of 15 (fifteen) working days calculated from the date the articles of association are approved by the competent authority, by attaching the articles of association approved by the competent authority.

CHAPTER VIII
OFFICES OUTSIDE THE HEAD OFFICE AND OFFICES OUTSIDE THE HEAD OFFICE OF THE SHARIA BUSINESS UNIT

First Section
Offices Outside the Head Office

Paragraph 1
General

Article 48
(1) Companies may open offices outside the head office within or outside the country.
(2) Offices outside the head office as referred to in paragraph (1) consist of Branch Offices and offices other than Branch Offices.
(3) Companies are fully responsible for every office they own or manage.

Paragraph 2
Branch Offices

Article 49
(1) To open a Branch Office as referred to in Article 48 paragraph (2), Companies must obtain an opening license for the Branch Office from the Financial Services Authority. (2) Companies intending to open a Branch Office must meet the requirements:
a. having included the plan to open a Branch Office in the business plan; b. having a health level with a minimum composite rating of 2; and
c. not currently subject to sanctions by the Financial Services Authority.
(3) To obtain an opening license for a Branch Office as referred to in paragraph (1), the Board of Directors must submit an application for an opening license for the Branch Office to the Financial Services Authority by attaching documents:
a. analysis of market potential and business competition; b. work plan for the Branch Office to be opened, at least containing:

1. financing targets and steps to achieve financing targets;
2. work systems and procedures;
3. organizational structure; and
4. monthly projections for 12 (twelve) months of:
   a) financial position reports; b) comprehensive income statements; and c) cash flow statements, along with the assumptions used;
   c. proof of ownership or control of the office building showing the address of the Branch Office along with photos of the exterior of the building and interior photos as well as room layout;
   d. data regarding human resources with experience and/or training in finance or Sharia finance for the Branch Office of the Sharia Financing Company; and e. proof of basic level certification in financing and/or Sharia Financing for the Head of the Branch Office.

Article 50
(1) The Financial Services Authority provides approval or rejection of the application for an opening license for a Branch Office as referred to in Article 49 paragraph (3) within a maximum period of 20 (twenty) working days since the application for an opening license for a Branch Office was received in complete form. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 49 paragraph (3); b. feasibility analysis of the work plan as referred to in Article 49 paragraph (3) letter b; and
c. analysis of compliance with regulations in the field of financing.
(3) In the event that the application for an opening license for a Branch Office is approved, the Financial Services Authority establishes a decision on the granting of an opening license for a Branch Office. (4) In the event that the application for an opening license for a Branch Office is rejected, the rejection is done in writing and accompanied by the reasons for rejection.

Article 51
Branch Offices that have obtained an opening license from the Financial Services Authority must conduct business activities within a maximum of 3 (three) months calculated from the date the opening license is established by the Financial Services Authority.

Article 52
Branch Offices of Financing Companies are prohibited from conducting Sharia Financing activities unless they have a license as a Sharia Business Unit Branch Office.

Article 53
(1) Companies intending to close a Branch Office must notify Debtors regarding:
a. the plan to close the Branch Office; and b. procedures for the transfer or settlement of rights and obligations.
(2) The procedures for the transfer or settlement of rights and obligations as referred to in paragraph (1) letter b must be carried out based on regulations and consider the interests of Debtors.

Article 54
(1) Companies must report the closure of Branch Offices to the Financial Services Authority within a maximum of 15 (fifteen) working days calculated from the date of the closure of the Branch Office. (2) The reporting of the closure of Branch Offices as referred to in paragraph (1) must be submitted by the Board of Directors to the Financial Services Authority by attaching documents:
a. proof of notification of the plan to close the Branch Office containing procedures for the transfer or settlement of Debtors' rights and obligations; b. proof of transfer or settlement of Debtors' rights and obligations; and
c. proof of transfer of services of the closed Branch Office to the head office or another Branch Office.
(3) Based on the reporting of the implementation of the plan to close Branch Offices as referred to in paragraph (2), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in paragraph (2); b. analysis of the transfer or settlement of Debtors' rights and obligations; and
c. analysis of compliance with regulations in the field of financing.
(4) Based on the reporting as referred to in paragraph (3), the Financial Services Authority revokes the opening license for the Branch Office.

Article 55
The Financial Services Authority is authorized to revoke the opening license for a Branch Office if, within a period of 6 (six) consecutive months, the Branch Office is proven not to conduct operational activities.

Article 56
(1) Companies are prohibited from changing the address of a Branch Office outside the district/city that is the scope of authority of the Branch Office.
(2) In the event that a change of address is caused by the expansion of a district/city territory, such change of address is exempted from the provisions as referred to in paragraph (1).

Paragraph 3
Offices Other Than Branch Offices

Article 57
(1) Companies may open offices other than Branch Offices.
(2) Offices other than Branch Offices as referred to in paragraph (1) are prohibited from:
a. approving financing for prospective Debtors; and b. signing financing agreements or contracts with Debtors.
(3) Offices other than Branch Offices as referred to in paragraph (1) are responsible to and coordinated by Branch Offices according to the operational area scope of the Branch Offices. (4) In the event that the Company does not yet have Branch Offices as referred to in paragraph (3), offices other than Branch Offices are responsible to and coordinated by other Branch Offices or the head office.

Article 58
(1) Companies intending to upgrade the status of offices other than Branch Offices to Branch Offices must obtain a license from the Financial Services Authority.
(2) Companies intending to upgrade the status of offices other than Branch Offices to Branch Offices must meet the provisions as referred to in Article 49 paragraph (2).
(3) To obtain a license for upgrading the status of offices other than Branch Offices to Branch Offices as referred to in paragraph (1), the Board of Directors must submit a license application to the Financial Services Authority by attaching documents:
a. analysis of market potential and business competition; b. work plan for the Branch Office to be opened, at least containing:

1. financing targets and steps to achieve financing targets;
2. work systems and procedures;
3. organizational structure; and
4. monthly projections for 12 (twelve) months of:
   a) financial position reports; b) comprehensive income statements; and c) cash flow statements, along with the assumptions used;
   c. proof of ownership or control of the office building showing the address of the Branch Office along with photos of the exterior of the building and interior photos as well as room layout;
   d. data regarding human resources with experience and/or training in finance or Sharia finance for the Branch Office of the Sharia Financing Company; and e. proof of basic level certification in financing and/or Sharia Financing for the Head of the Branch Office.

Article 59
The granting of approval or rejection of applications for opening licenses for Branch Offices as referred to in Article 50, the obligation to conduct business activities as referred to in Article 51, and the prohibition for Branch Offices as referred to in Article 56 paragraph (1) apply mutatis mutandis to the upgrading of the status of offices other than Branch Offices to Branch Offices as referred to in Article 58.

Second Section
Offices Outside the Head Office of the Sharia Business Unit

Paragraph 1
General

Article 60
(1) Financing Companies that have a Sharia Business Unit (UUS) may open offices outside the head office of the UUS within or outside the country.
(2) Offices outside the head office of the UUS as referred to in paragraph (1) consist of Sharia Business Unit Branch Offices and offices other than Sharia Business Unit Branch Offices.

Paragraph 2
Sharia Business Unit Branch Offices

Article 61
(1) To open a Sharia Business Unit Branch Office as referred to in Article 60 paragraph (2), Financing Companies must obtain an opening license for the Sharia Business Unit Branch Office from the Financial Services Authority. (2) Financing Companies that have a UUS intending to open a Sharia Business Unit Branch Office as referred to in Article 60 paragraph (2) must meet the requirements:
a. having included the plan to open a Sharia Business Unit Branch Office in the business plan; b. having a health level with a minimum composite rating of 2;
c. not currently subject to sanctions by the Financial Services Authority; and
d. having human resources with experience and/or training in Sharia finance.
(3) To obtain an opening license for a Sharia Business Unit Branch Office as referred to in Article 60 paragraph (1), the Board of Directors must submit an application for an opening license for the Sharia Business Unit Branch Office to the Financial Services Authority, by attaching documents:
a. analysis of market potential and business competition; b. work plan for the Sharia Business Unit Branch Office to be opened, at least containing:

1. Sharia Financing targets and steps to achieve Sharia Financing targets;
2. work systems and procedures;
3. organizational structure; and
4. monthly projections for 12 (twelve) months of:
   a) financial position reports; b) comprehensive income statements; and c) cash flow statements, along with the assumptions used;
   c. proof of ownership or control of the office building showing the address of the Sharia Business Unit Branch Office along with photos of the exterior of the building and interior photos as well as room layout;
   d. data on human resources with experience and/or training in Sharia finance; and e. proof of basic level certification in financing and/or Sharia Financing for the Head of the Sharia Business Unit Branch Office.

Article 62
(1) The Financial Services Authority provides approval or rejection of applications for opening licenses for Sharia Business Unit Branch Offices as referred to in Article 61 paragraph (3) within a maximum period of 20 (twenty) working days since the application for an opening license for a Sharia Business Unit Branch Office was received in complete form. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 61 paragraph (3); b. feasibility analysis of the work plan as referred to in Article 61 paragraph (3) letter b; and
c. analysis of compliance with regulations in the field of Sharia Financing.
(3) In the event that the application for an opening license for a Sharia Business Unit Branch Office is approved, the Financial Services Authority establishes a decision on the granting of an opening license for a Sharia Business Unit Branch Office. (4) In the event that the application for an opening license for a Sharia Business Unit Branch Office is rejected, the rejection is done in writing and accompanied by the reasons for rejection.

Article 63
Sharia Business Unit Branch Offices that have obtained an opening license from the Financial Services Authority must conduct business activities within a maximum of 3 (three) months calculated from the date the opening license is established by the Financial Services Authority.

Article 64
(1) Financing Companies that have a UUS intending to close a Sharia Business Unit Branch Office must notify Debtors regarding:
a. the plan to close the Sharia Business Unit Branch Office; and b. procedures for the transfer or settlement of rights and obligations.
(2) The procedures for the transfer or settlement of rights and obligations as referred to in paragraph (1) letter b must be carried out based on regulations and consider the interests of Debtors.

Article 65
(1) Companies must report the closure of Sharia Business Unit Branch Offices to the Financial Services Authority within a maximum of 15 (fifteen) working days calculated from the date of the closure of the Sharia Business Unit Branch Office in question. (2) The reporting of the closure of Sharia Business Unit Branch Offices as referred to in paragraph (1) must be submitted by the Board of Directors to the Financial Services Authority by attaching documents:
a. proof of notification of the plan to close the Sharia Business Unit Branch Office containing procedures for the transfer or settlement of Debtors' rights and obligations; b. proof of transfer or settlement of Debtors' rights and obligations; and
c. proof of transfer of services of the closed Sharia Business Unit Branch Office to the head office or another Sharia Business Unit Branch Office.
(3) Based on the reporting of the implementation of the plan to close Sharia Business Unit Branch Offices as referred to in paragraph (2), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in paragraph (2); b. analysis of the transfer or settlement of Debtors' rights and obligations; and
c. analysis of compliance with regulations in the field of financing.
(4) Based on the reporting as referred to in paragraph (3), the Financial Services Authority revokes the opening license for the Sharia Business Unit Branch Office.

Article 66
The Financial Services Authority is authorized to revoke the opening license for a Sharia Business Unit Branch Office if, within a period of 6 (six) consecutive months, the Sharia Business Unit Branch Office in question is proven not to conduct operational activities.

Article 67
(1) Companies are prohibited from changing the address of a Sharia Business Unit Branch Office outside the district/city that is the scope of authority of the Sharia Business Unit Branch Office. (2) In the event that a change of address is caused by the expansion of a district/city territory, such change of address is exempted from the provisions as referred to in paragraph (1).

Paragraph 3
Offices Other Than Sharia Business Unit Branch Offices

Article 68
(1) Financing Companies that have a UUS may open offices other than Sharia Business Unit Branch Offices.
(2) Offices other than Sharia Business Unit Branch Offices as referred to in paragraph (1) are prohibited from:
a. approving Sharia Financing for prospective Debtors; and b. signing Sharia Financing agreements or contracts with Debtors.
(3) Offices other than Sharia Business Unit Branch Offices as referred to in paragraph (1) are responsible to and coordinated by Sharia Business Unit Branch Offices according to the operational area scope of the Sharia Business Unit Branch Offices in question. (4) In the event that Financing Companies that have a UUS do not yet have Sharia Business Unit Branch Offices as referred to in paragraph (1), offices other than Sharia Business Unit Branch Offices are responsible to and coordinated by other Sharia Business Unit Branch Offices or the UUS head office.

Article 69
(1) Companies intending to upgrade the status of offices other than Sharia Business Unit Branch Offices to Sharia Business Unit Branch Offices must obtain a license from the Financial Services Authority. (2) Companies intending to upgrade the status of offices other than Sharia Business Unit Branch Offices to Sharia Business Unit Branch Offices must meet the provisions as referred to in Article 61 paragraph (2). (3) To obtain approval for upgrading the status of offices other than Sharia Business Unit Branch Offices to Sharia Business Unit Branch Offices as referred to in paragraph (1), the Board of Directors must submit an application to the Financial Services Authority by attaching documents:
a. analysis of market potential and business competition; b. work plan for the Sharia Business Unit Branch Office to be opened, at least containing:

1. financing targets and steps to achieve financing targets;
2. work systems and procedures;
3. organizational structure; and
4. monthly projections for 12 (twelve) months of:
   a) financial position reports; b) comprehensive income statements; and c) cash flow statements, along with the assumptions used;
   c. proof of ownership or control of the office building showing the address of the Sharia Business Unit Branch Office along with photos of the exterior of the building and interior photos as well as room layout; and
   d. data on human resources with experience and/or training in finance or Sharia finance; and e. proof of basic level certification in financing and/or Sharia Financing for the Head of the Branch Office.

Article 70
The granting of approval or rejection of applications for opening licenses for Sharia Business Unit Branch Offices as referred to in Article 62, the obligation to conduct business activities as referred to in Article 63, and the prohibition for Sharia Business Unit Branch Offices as referred to in Article 67 paragraph (1) apply mutatis mutandis to the upgrading of the status of offices other than Sharia Business Unit Branch Offices to Sharia Business Unit Branch Offices as referred to in Article 69.

CHAPTER IX
OWNERSHIP CHANGES
Article 71
(1) Every change in ownership of a Company must obtain approval from the Financial Services Authority.
(2) The plan for ownership changes as referred to in paragraph (1) must be included in the Company's business plan.
(3) Every change in ownership through takeover must obtain approval in the General Meeting of Shareholders after obtaining approval from the Financial Services Authority as referred to in paragraph (1). (4) In the event that ownership changes as referred to in paragraph (1) are caused by an increase in paid-up capital, the increase in paid-up capital is prohibited from being carried out except in the form of:
a. cash deposits; b. conversion of retained earnings;
c. conversion of loans; and/or
d. stock dividends.
(5) In the event that the Company trades its shares on the stock exchange, the obligation to obtain approval for ownership changes as referred to in paragraph (1) applies in the event of changes to Principal Shareholders.

Article 72
(1) Companies that have obtained business licenses at the time this Financial Services Authority Regulation is enacted and will carry out ownership changes through takeovers must adjust the provisions regarding paid-up capital to a minimum of IDR 250,000,000,000.00 (two hundred fifty billion). (2) Companies that will carry out ownership changes through takeovers resulting from inheritance are exempt from the obligation to adjust paid-up capital as referred to in paragraph (1).

Article 73
(1) To obtain approval for ownership changes as referred to in Article 71 paragraph (1), the Board of Directors must submit an application for approval of ownership changes to the Financial Services Authority by attaching documents:
a. a list of shareholders including details of the size of each shareholding up to the last shareholder and/or beneficial owner, and a list of other companies owned by the shareholders; b. a draft deed of minutes of the General Meeting of Shareholders approving the ownership change in the event that the ownership change requires General Meeting of Shareholders approval;
c. a draft deed of transfer of share rights, if there is a transfer of share rights other than due to a sale;
d. a draft deed of share sale, if there is a sale of shares between shareholders; e. data on prospective shareholders other than Principal Shareholders as referred to in Article 12 paragraph (2) letter d, if the ownership change results in new shareholders other than Principal Shareholders; f. a statement letter from prospective shareholders stating that:

1. the source of funds for capital participation does not come from money laundering, terrorism financing, and other financial crimes; and
2. the source of funds for capital participation does not come from loans;
   g. photocopies of tax return notices (SPT) for the last 2 (two) years prior to the capital participation and other documents showing the financial capacity and source of funds of prospective individual shareholders, if the ownership change results in new shareholders and/or Principal Shareholders who are individuals; h. photocopies of the Company's financial statements audited by a public accountant prior to the increase in paid-up capital, if the ownership change is caused by an increase in paid-up capital and will be carried out in the form of:
3. conversion of retained earnings as referred to in Article 71 paragraph (4) letter b;
4. conversion of loans as referred to in Article 71 paragraph (4) letter c; and/or
5. stock dividends as referred to in Article 71 paragraph (4) letter d;
   i. photocopies of the Company's bank statements showing loan receipts, if the ownership change is carried out in the form of loan conversion;
   j. proof of funds placement in an escrow account and/or time deposits, if the ownership change is carried out through cash deposits; k. photocopies of cooperation agreements between shareholders in the form of foreign legal entities and Indonesian shareholders as referred to in Article 12 paragraph (2) letter l, for applications for approval of ownership changes involving new shareholders in the form of foreign legal entities; and
   l. a plan for adjusting foreign ownership limits that has been approved by the Financial Services Authority if there is an exceedance of foreign ownership limits as referred to in Article 9 paragraph (4).
   (2) In the event that share ownership changes result in new Principal Shareholders, the Financial Services Authority conducts an assessment of capability and propriety for prospective Principal Shareholders. (3) In the event that share ownership changes by a Company that has obtained a business license at the time this Financial Services Authority Regulation is enacted and the ownership change is carried out through a takeover as referred to in Article 72 paragraph (1), the ownership change plan must also include a plan to increase paid-up capital to a minimum of IDR 250,000,000,000.00 (two hundred fifty billion rupiah). (4) Applications for approval of ownership changes as referred to in paragraph (1) are submitted simultaneously with applications for capability and propriety assessments for prospective Principal Shareholders of the Company.

Article 74
(1) The Financial Services Authority provides approval or rejection of applications for approval of ownership changes as referred to in Article 73 paragraph (1) within a maximum period of 20 (twenty) working days from the date the application is received in complete form. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 73 paragraph (1); b. feasibility analysis of the ownership change plan;
c. capability and propriety assessment of prospective Principal Shareholders, if the ownership change is through takeover; and
d. analysis of compliance with regulations in the financing sector.
(3) In the event that the ownership change application is approved, the Financial Services Authority issues a letter of approval for ownership changes to the relevant Company. (4) In the event that the ownership change application is rejected, the rejection is done in writing and accompanied by reasons for rejection.

Article 75
(1) In the event that the Company's ownership change requires General Meeting of Shareholders approval, the Company that has obtained approval for ownership changes as referred to in Article 74 paragraph (1) from the Financial Services Authority must hold a General Meeting of Shareholders approving the ownership change within a maximum of 60 (sixty) working days counted from the date of the Financial Services Authority's approval letter. (2) In the event that the time period as referred to in paragraph (1) has expired and the Company has not held a General Meeting of Shareholders approving the ownership change, the Financial Services Authority has the authority to revoke the previously granted approval for ownership changes.

Article 76
(1) The Company is required to report the implementation of ownership changes to the Financial Services Authority within a maximum of 15 (fifteen) working days counted from the date of receipt of the notification acceptance letter from the competent agency. (2) The reporting of the implementation of ownership changes as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. a copy of the deed of minutes of the General Meeting of Shareholders approving the ownership change, accompanied by a notification acceptance letter from the competent agency; b. a copy of the deed of transfer of share rights, if there is a transfer of share rights other than due to a sale;
c. a copy of the sale deed, if there is a sale of shares between shareholders;
d. photocopies of proof of deposit for the increase in paid-up capital, if the increase in paid-up capital is carried out in the form of cash deposits as referred to in Article 71 paragraph (4) letter a, in the form of:

1. the Company's bank statement; and
2. photocopies of proof of placement of paid-up capital in the name of the relevant Company at:
   a) one of the commercial banks or Sharia commercial banks in Indonesia for Financing Companies; or b) one of the Sharia commercial banks or Sharia business units of commercial banks in Indonesia for Sharia Financing Companies, which are legalized by the bank; and e. photocopies of the Company's financial statements after the increase in paid-up capital signed by the Company's Board of Directors, if the ownership change is accompanied by an increase in paid-up capital carried out in the form of:
3. conversion of retained earnings as referred to in Article 71 paragraph (4) letter b;
4. conversion of loans as referred to in Article 71 paragraph (4) letter c; and/or
5. stock dividends as referred to in Article 71 paragraph (4) letter d.

CHAPTER X
MERGERS AND CONSOLIDATIONS
Article 77
Companies may carry out:
a. Mergers; or b. Consolidations.

Article 78
(1) Companies that will carry out Mergers or Consolidations must obtain approval from the Financial Services Authority.
(2) To obtain approval for Mergers or Consolidations as referred to in paragraph (1), the following requirements must be met:
a. it has been included in the Company's business plan; b. the Merger or Consolidation does not reduce the rights of Debtors; and
c. the financial condition of the Company resulting from the Merger or Consolidation must meet the health level requirements with a minimum composite rating of 2.
(3) To obtain approval for Mergers or Consolidations as referred to in paragraph (1), the Board of Directors must submit an application to the Financial Services Authority by attaching documents:
a. a work plan for the implementation of Mergers or Consolidations, at least containing:

1. implementation steps;
2. the time frame for the implementation of Mergers and Consolidations; and
3. a plan to notify Debtors, creditors, and other stakeholders;
   b. a draft deed of minutes of the General Meeting of Shareholders approving the Merger or Consolidation;
   c. a draft deed of Merger or Consolidation;
   d. a draft deed of establishment of the Company resulting from the Consolidation; e. a list of shareholders including details of the size of each shareholding up to the last shareholder and/or beneficial owner, and a list of other companies owned by the shareholders of the Company resulting from the Merger or Consolidation; f. pro forma financial statements of the Company resulting from the Merger or Consolidation; g. a business plan for the first 3 (three) years of the Company resulting from the Merger or Consolidation as referred to in Article 12 paragraph (2) letter k; and h. the organizational structure of the Company resulting from the Merger or Consolidation. (4) Applications for approval of Mergers or Consolidations as referred to in paragraph (1) are submitted simultaneously with applications for capability and propriety assessments for prospective members of the Board of Directors, Board of Commissioners, Principal Shareholders, and/or members of the Sharia Supervisory Board of the Company resulting from the Merger or Consolidation.

Article 79
(1) The Financial Services Authority provides approval or rejection of applications for approval of Mergers or Consolidations as referred to in Article 78 paragraph (3) within a maximum period of 20 (twenty) working days from the date the application for approval of Mergers or Consolidations is received in complete form. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 78 paragraph (3); b. feasibility analysis of the implementation plan for Mergers or Consolidations;
c. capability and propriety assessment of prospective members of the Board of Directors, Board of Commissioners, Principal Shareholders, and/or members of the Sharia Supervisory Board; and
d. analysis of compliance with regulations in the financing sector.
(3) In the event that approval for Mergers or Consolidations is granted, the Financial Services Authority issues a letter of approval for the implementation plan of Mergers or Consolidations to the relevant Company. (4) In the event that approval for Mergers or Consolidations is rejected, the rejection is done in writing and accompanied by reasons for rejection.

Article 80
(1) Companies that have obtained approval for the implementation plan of Mergers or Consolidations from the Financial Services Authority must hold a General Meeting of Shareholders approving the Merger or Consolidation within a maximum of 60 (sixty) working days counted from the date of the Financial Services Authority's approval letter. (2) In the event that the time period as referred to in paragraph (1) has expired and the Company has not held a General Meeting of Shareholders approving the Merger or Consolidation, the Financial Services Authority has the authority to revoke the previously granted approval for the Merger.

Article 81
(1) Companies receiving Mergers are required to report the implementation of the General Meeting of Shareholders approving the Merger to the Financial Services Authority within a maximum of 15 (fifteen) working days counted from the date of the General Meeting of Shareholders. (2) The reporting of the implementation of the General Meeting of Shareholders approving the Merger as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. a copy of the deed of minutes of the General Meeting of Shareholders approving the Merger; b. a copy of the Merger deed; and
c. documents stating that the Company merging does not have tax debts to the competent agency.

Article 82
(1) For reporting the implementation of the General Meeting of Shareholders approving the Merger as referred to in Article 81 paragraph (1), the Company receiving the Merger may submit an application for a license to establish a Sharia Business Unit and/or a license to open Branch Offices previously owned by the Company merging in its name to the Financial Services Authority. (2) Applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices as referred to in paragraph (1) must be submitted by the Board of Directors, attaching the licenses to establish Sharia Business Units and/or licenses to open Branch Offices previously owned by the Company merging. (3) Companies receiving Mergers are prohibited from operating Sharia Business Units and/or Branch Offices previously owned by the Company merging before obtaining approval from the Financial Services Authority.

Article 83
(1) The Financial Services Authority provides approval or rejection of applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices as referred to in Article 82 paragraph (2) within a maximum period of 20 (twenty) working days from the date the applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices are received in complete form. (2) Based on the reporting of the implementation of the General Meeting of Shareholders approving the Merger as referred to in Article 81 paragraph (2) and in the event there are applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices as referred to in Article 82 paragraph (1), the Financial Services Authority conducts:
a. analysis and research on completeness as referred to in Article 81 paragraph (2) and Article 82 paragraph (2); b. revocation of business licenses, licenses to establish Sharia Business Units, and/or licenses to open Branch Offices from the Company merging (if any), which shall become effective counted from the date the Articles of Association are approved by, or notified to, the competent agency; and
c. approval or rejection of applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices to the Company resulting from the Merger (if any), which shall become effective counted from the date the Articles of Association are approved by, or notified to, the competent agency.
(3) In the event that applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices are approved, the Financial Services Authority establishes a decision granting licenses to establish Sharia Business Units and/or licenses to open Branch Offices. (4) In the event that applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices are rejected, the rejection is done in writing and accompanied by reasons for rejection.

Article 84
(1) Companies resulting from Mergers are required to report the implementation of Mergers to the Financial Services Authority within a maximum of 15 (fifteen) working days counted from the date the Articles of Association are approved by or notified to the competent agency. (2) The reporting of the implementation of Mergers as referred to in paragraph (1) must be submitted by the Board of Directors to the Financial Services Authority by attaching documents in the form of Articles of Association that have been approved by or notified to the competent agency.

Article 85
(1) Companies resulting from Consolidations are required to report the implementation of the General Meeting of Shareholders approving the Consolidation to the Financial Services Authority within a maximum of 15 (fifteen) working days counted from the date of the General Meeting of Shareholders. (2) The reporting of the implementation of the General Meeting of Shareholders approving the Consolidation as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. a copy of the deed of minutes of the General Meeting of Shareholders approving the Consolidation; b. a copy of the Consolidation deed;
c. a copy of the deed of establishment of the Company resulting from the Consolidation; and
d. documents stating that the Company does not have tax debts to the competent agency.

Article 86
(1) For reporting the implementation of the General Meeting of Shareholders approving the Consolidation as referred to in Article 85 paragraph (1), the Company resulting from the Consolidation may submit an application for licenses to establish Sharia Business Units and/or licenses to open Branch Offices previously owned by the Company consolidating in its name to the Financial Services Authority. (2) Applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices as referred to in paragraph (1) must be submitted by the Board of Directors, attaching the previous licenses to establish Sharia Business Units and/or licenses to open Branch Offices owned by the Company consolidating. (3) Companies resulting from Consolidations are prohibited from operating Sharia Business Units and/or Branch Offices previously owned by the Company consolidating before obtaining approval from the Financial Services Authority.

Article 87
(1) The Financial Services Authority provides approval or rejection of applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices as referred to in Article 86 paragraph (2) within a maximum period of 20 (twenty) working days from the date the applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices are received in complete form. (2) Based on the reporting of the implementation of the General Meeting of Shareholders approving the Consolidation as referred to in Article 85 paragraph (2) and in the event there are applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices as referred to in Article 86 paragraph (2), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 85 paragraph (2) and/or Article 86 paragraph (2); b. revocation of business licenses, licenses to establish Sharia Business Units, and/or licenses to open Branch Offices from the Company consolidating (if any), which shall become effective counted from the date the Articles of Association are ratified, approved by, or notified to the competent agency; and
c. approval or rejection of applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices to the Company resulting from the Consolidation (if any), which shall become effective counted from the date the Articles of Association are ratified, approved by, or notified to the competent agency.
(3) In the event that applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices are approved, the Financial Services Authority establishes a decision granting licenses to establish Sharia Business Units and/or licenses to open Branch Offices. (4) In the event that applications for licenses to establish Sharia Business Units and/or licenses to open Branch Offices are rejected, the rejection is done in writing and accompanied by reasons for rejection.

Article 88
(1) Companies resulting from Consolidations are required to report the implementation of Consolidations to the Financial Services Authority within a maximum of 15 (fifteen) working days counted from the date the Articles of Association are ratified to the competent agency. (2) The reporting of the implementation of Consolidations as referred to in paragraph (1) must be submitted by the Board of Directors to the Financial Services Authority by attaching documents in the form of Articles of Association that have been ratified by the competent agency to the Financial Services Authority.

CHAPTER XI
CONVERSION OF FINANCING COMPANIES INTO SHARIA FINANCING COMPANIES
Article 89
(1) Financing Companies may carry out conversion into Sharia Financing Companies.
(2) Financing Companies that will carry out conversion into Sharia Financing Companies as referred to in paragraph (1) must obtain conversion approval from the Financial Services Authority. (3) To obtain approval for the conversion of Financing Companies into Sharia Financing Companies as referred to in paragraph (1), the Board of Directors must submit an application to the Financial Services Authority by attaching documents:
a. a draft deed of minutes of the General Meeting of Shareholders approving the conversion into Sharia Financing Companies; b. a draft amendment to the Articles of Association containing:

1. the name of the Sharia Financing Company;
2. the purpose and objectives of the Sharia Financing Company to carry out Sharia Financing business activities; and
3. the authority and responsibility of the Sharia Supervisory Board;
   c. the latest audited financial statements;
   d. a list of offices outside the head office owned by the Financing Company and/or Sharia Business Units; e. certification proof for the Board of Directors, Board of Commissioners, and officials one level below the Board of Directors according to the organizational structure at the time of submitting the application for conversion approval; f. an organizational structure completed with personnel composition, job descriptions, authority, and responsibility; g. a plan for settling the rights and obligations of Debtors and creditors; h. projections of initial financial statements from the business activities of the Sharia Financing Company resulting from the conversion; and
   i. a work plan related to Sharia Financing activities to be carried out for the first 3 (three) years after obtaining a business license as a Sharia Financing Company, at least containing:
4. work systems and procedures;
5. examples of Sharia Financing agreements;
6. feasibility study of market opportunities and economic potential;
7. a plan for the disbursement of Sharia Financing and steps taken to realize the said plan; and
8. monthly projections of:
   a) financial position reports; b) comprehensive income statements; and c) cash flow reports, as well as the assumptions used.
   (4) Applications for approval of conversion as referred to in paragraph (3) are submitted simultaneously with applications for capability and propriety assessments for prospective members of the Board of Directors, Board of Commissioners, Principal Shareholders, and members of the Sharia Supervisory Board of the Sharia Financing Company.

Article 90
(1) The Financial Services Authority provides approval or rejection of applications for approval of conversion as referred to in Article 89 paragraph (3) within a maximum period of 20 (twenty) working days from the date the application is received in complete form. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 89 paragraph (3); b. feasibility analysis of the implementation plan for conversion;
c. capability and propriety assessment of prospective members of the Board of Directors, Board of Commissioners, Principal Shareholders, and members of the Sharia Supervisory Board; and

d. analysis of compliance with regulations in the field of financing.
(3) The Financial Services Authority may conduct inspections at the Company's office to ensure the operational readiness of a new Sharia Financing Company.
(4) In the event that the application for conversion approval is approved, the Financial Services Authority issues a conversion approval letter to the relevant Financing Company. (5) In the event that the application for conversion approval is rejected, the rejection must be done in writing and accompanied by the reasons for rejection.

Article 91
(1) A Financing Company that has obtained approval for the implementation plan for conversion from the Financial Services Authority must hold a General Meeting of Shareholders (GMS) no later than 60 (sixty) working days counted from the date of the Financial Services Authority's approval letter. (2) In the event that the time limit as referred to in paragraph (1) has expired and the Company has not held a GMS approving the conversion, the Financial Services Authority has the authority to cancel the conversion approval previously granted.

Article 92
(1) A Financing Company is required to report the implementation of the GMS approving the conversion into a Sharia Financing Company in writing to the Financial Services Authority no later than 15 (fifteen) working days counted from the date of the GMS. (2) The reporting of the implementation of the GMS approving the conversion into a Sharia Financing Company as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:

a. a copy of the minutes of the GMS approving the conversion into a Sharia Financing Company; b. a copy of the minutes of the GMS stating the appointment of members of the Board of Directors, members of the Board of Commissioners, and/or members of the Sharia Supervisory Board (DPS);
c. a photocopy of the amended Articles of Association containing:

1. the name of the Sharia Financing Company;
2. the purpose and objectives of the Sharia Financing Company to conduct Sharia Financing business activities; and
3. the authority and responsibility of the DPS; and
   d. a photocopy of the tax identification number under the name of the Sharia Financing Company resulting from the conversion.
   (3) For the reporting of the implementation of the GMS approving the conversion into a Sharia Financing Company as referred to in paragraph (2), the Financing Company may submit an application for a license to open Branch Offices previously owned by the Financing Company under its name to the Financial Services Authority. (4) The application for a license to open Branch Offices as referred to in paragraph (3) must be submitted by the Board of Directors, attaching documents consisting of the license to open Branch Offices previously owned by the Financing Company. (5) The application for a license to open Branch Offices previously owned by the Financing Company to the Financial Services Authority under its name as referred to in paragraph (3) is submitted simultaneously with the reporting of the implementation of the GMS approving the conversion into a Sharia Financing Company. (6) Based on the reporting of the implementation of the GMS approving the conversion as referred to in paragraph (2) and the application for a license to open Branch Offices previously owned by the Financing Company to the Financial Services Authority under its name as referred to in paragraph (4), the Financial Services Authority:
   a. conducts analysis and research on the completeness of documents as referred to in paragraph (2); b. grants approval or rejection of the change of business license as a Sharia Financing Company, which becomes effective counted from the date the Articles of Association are approved, agreed upon by, or notified to the competent authority;
   c. grants approval, recording, or rejection of the contracts used by the Sharia Financing Company resulting from the conversion; and
   d. grants approval or rejection of the license to open Branch Offices under the name of the Sharia Financing Company resulting from the conversion.
   (7) The Financial Services Authority provides:
   a. approval or rejection of the business license as referred to in paragraph (6) letter b; b. approval, recording, or rejection of the contracts used by the Sharia Financing Company resulting from the conversion as referred to in paragraph (6) letter c; and
   c. approval or rejection of the license to open Branch Offices under the name of the Sharia Financing Company resulting from the conversion as referred to in paragraph (6) letter d,
   within a maximum time limit of 20 (twenty) working days after the reporting documents as referred to in paragraph (2) are received completely.
   (8) In the event that the Financial Services Authority approves the granting of the business license as referred to in paragraph (7) letter a, approves or records the contracts used by the Sharia Financing Company resulting from the conversion as referred to in paragraph (7) letter b, and approves the license to open Branch Offices under the name of the Sharia Financing Company resulting from the conversion as referred to in paragraph (7) letter c, the Financial Services Authority:
   a. establishes a decision on the granting of the business license; b. issues a letter of approval or recording of the contracts used by the Sharia Financing Company; and/or
   c. establishes a decision on the license to open Branch Offices.
   (9) In the event that the Financial Services Authority rejects to:
   a. establish the business license; b. approve or record the contracts used by the Sharia Financing Company; and/or
   c. establish the decision on the license to open Branch Offices,
   the rejection must be done in writing and accompanied by the reasons.

Article 93
(1) A Sharia Financing Company resulting from conversion is required to report the implementation of the conversion to the Financial Services Authority no later than 15 (fifteen) working days counted from the date the Articles of Association are approved by, or notified to, the competent authority. (2) The reporting of the implementation of the conversion as referred to in paragraph (1) must be submitted by the Board of Directors to the Financial Services Authority by attaching documents consisting of the Articles of Association that have been approved by or notified to the competent authority.

CHAPTER XII
REPORTING OF CERTAIN CHANGES TO THE ARTICLES OF ASSOCIATION, MEMBERS OF THE BOARD OF DIRECTORS, MEMBERS OF THE BOARD OF COMMISSIONERS, MEMBERS OF THE SHARIA SUPERVISORY BOARD, AND ADDRESSES First Section Reporting of Certain Changes to the Articles of Association

Article 94
(1) A Company making certain changes to the Articles of Association is required to report to the Financial Services Authority no later than 15 (fifteen) working days since the approval or receipt of the notification letter from the competent authority. (2) Certain changes to the Articles of Association as referred to in paragraph (1) include changes:
a. to the purpose and objectives as well as business activities of the Company; b. to the name of the Company;
c. to the location of the Company's headquarters; and/or
d. to the status of the Company changing from a closed company to a public limited company or vice versa.
(3) In the event that changes to the purpose and objectives as well as business activities as referred to in paragraph (2) letter a require specific requirements as regulated in the Financial Services Authority Regulation regarding the conduct of financing company business and the Financial Services Authority Regulation regarding the conduct of Sharia financing company business and Sharia business units of financing companies, the Company is required to fulfill the said requirements.

Article 95
(1) Reporting of changes to the purpose and objectives as well as business activities of the Company as referred to in Article 94 paragraph (2) letter a must be submitted by the Board of Directors by attaching documents:
a. the amended Articles of Association accompanied by proof of approval or receipt of a notification letter from the competent authority; and b. a sample of the financing agreement or Sharia Financing contract to be used, if there is a change in business activities. (2) Reporting of changes to the name of the Company as referred to in Article 94 paragraph (2) letter b must be submitted by the Board of Directors by attaching documents:
a. the amended Articles of Association accompanied by proof of approval from the competent authority; and b. a photocopy of the tax identification number under the new name of the Company. (3) Reporting of changes to the location of the Company's headquarters as referred to in Article 94 paragraph (2) letter c must be submitted by the Board of Directors by attaching documents:
a. the amended Articles of Association accompanied by proof of approval from the competent authority; b. proof of ownership or control of the new office building; and
c. a photocopy of the tax identification number under the new address of the Company.
(4) Reporting of changes to the status of the Company changing from a closed company to a public limited company or vice versa as referred to in Article 94 paragraph (2) letter d must be submitted by the Board of Directors by attaching documents consisting of the amended Articles of Association accompanied by proof of approval from the competent authority.

Second Section
Reporting of Changes to Members of the Board of Directors, Members of the Board of Commissioners, and Members of the Sharia Supervisory Board

Article 96
(1) A Company making changes:
a. to members of the Board of Directors; b. to members of the Board of Commissioners; and/or
c. to members of the DPS,
is required to report to the Financial Services Authority no later than 15 (fifteen) working days after the changes are recorded by the competent authority.
(2) Reporting of changes to members of the Board of Directors, members of the Board of Commissioners, and/or members of the DPS of the Company as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents consisting of a copy of the GMS deed regarding the appointment of members of the Board of Directors, members of the Board of Commissioners, and/or members of the DPS accompanied by proof of the notification receipt letter from the competent authority.

Third Section
Reporting of Address Changes

Article 97
(1) A Company is required to report changes to the address of the headquarters, Branch Offices, and Sharia Branch Offices to the Financial Services Authority no later than 15 (fifteen) working days counted from the date of the implementation of the changes. (2) Reporting of changes as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents consisting of proof of ownership or control of the new office building showing the address of the Company's office along with photos of the exterior of the building and photos of the interior and room layout.

CHAPTER XIII
CEASATION OF BUSINESS ACTIVITIES AT THE REQUEST OF THE COMPANY

Article 98
(1) A Company that intends to cease business activities so that it is no longer a Company must obtain approval from the Financial Services Authority.
(2) A Company that intends to cease its business activities as referred to in paragraph (1) must meet the requirement of not being subject to sanctions of suspension of business activities. (3) To obtain approval for the cessation of business activities so that it is no longer a Company as referred to in paragraph (1), the Board of Directors must submit an application to the Financial Services Authority by attaching documents:
a. reasons for the cessation of business activities; b. a draft deed of the Articles of Association containing a plan for new business activities;
c. a description of the Company's condition, including data regarding the number of financings, number of Debtors, and the number of the Company's and/or Debtors' obligations;
d. a plan for settling rights and obligations related to the Company's financing business activities; and e. proof of settlement of Financial Services Authority levies and administrative fines due.

Article 99
(1) The Financial Services Authority provides approval or rejection of the application for approval of cessation of business activities as referred to in Article 98 paragraph (3) within a maximum time limit of 20 (twenty) working days since the application for approval of cessation of business activities is received completely. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts analysis and research on the completeness of documents of the application for approval of cessation of business activities as referred to in Article 98 paragraph (3). (3) In the event that the application for approval of cessation of business activities is approved, the Financial Services Authority issues a letter of approval for the cessation of business activities to the relevant Company. (4) In the event that the application for approval of cessation of business activities is rejected, the rejection must be done in writing and accompanied by the reasons for rejection.

Article 100
In the event that the Financial Services Authority provides approval for the cessation of business activities as referred to in Article 99 paragraph (1), the Company is required to:
a. cease all business activities of the Company; b. announce the plan for the cessation of business activities and the plan for settling the Company's obligations in a daily newspaper with national circulation for 3 (three) consecutive days no later than 15 (fifteen) working days since the date of the letter of approval for the plan to cease business activities;
c. settle all rights and obligations of the Company within a maximum time limit of 6 (six) months since the date of the letter of approval for the plan to cease business activities; and
d. appoint a public accountant to conduct an audit on the final financial position report including conducting verification to ensure the settlement of all rights and obligations of the Company.

Article 101
(1) A Company is required to report the implementation of the cessation of business activities to the Financial Services Authority no later than 20 (twenty) working days after:
a. all rights and obligations of the Company are settled; or b. the time limit as referred to in Article 100 letter c, whichever comes first.
(2) Reporting of the implementation of the cessation of business activities as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. proof of the implementation of the cessation of the Company's business activities; b. proof of the implementation of the announcement as referred to in Article 100 letter b;
c. proof of the implementation of the settlement of the Company's rights and obligations as referred to in Article 100 letter c;
d. a copy of the deed of the Articles of Association containing new business activities accompanied by proof of approval from the competent authority; e. the closing financial position report audited by a public accountant; and f. a statement letter from shareholders stating that all rights and obligations of the Company have been settled and that if there are claims and lawsuits in the future, they become the responsibility of the shareholders.

Article 102
(1) The Financial Services Authority conducts an analysis of the report on the cessation of the Company's business activities submitted by the Board of Directors as referred to in Article 101 paragraph (2). (2) To conduct the analysis as referred to in paragraph (1), the Financial Services Authority may conduct direct examinations against the Company applying for the cessation of business activities of the Company as referred to in Article 98 paragraph (3). (3) The Financial Services Authority issues a decision on the revocation of the Company's business license within a maximum time limit of 20 (twenty) working days since the complete report is received.

CHAPTER XIV
DEFERRAL OF DEBT PAYMENT OBLIGATIONS, BANKRUPTCY, AND DISSOLUTION First Section Deferral of Debt Payment Obligations

Article 103
(1) In the event that the Company is in the process of deferring debt payment obligations, whether upon its own request or upon the request of its creditors, the Company is required to report to the Financial Services Authority no later than 5 (five) working days since the request for deferral of debt payment obligations arises. (2) The reporting as referred to in paragraph (1) must be submitted by the Board of Directors containing a description of at least:
a. the name of the party submitting the request for the statement of deferral of debt payment obligations; b. a summary of the request for the statement of deferral of debt payment obligations; and
c. the action plan to be taken by the Company to follow up on the process of deferring debt payment obligations.

Second Section
Bankruptcy

Article 104
(1) In the event that the Company is in the process of bankruptcy, whether upon its own request or upon the request of its creditors, the Company is required to report to the Financial Services Authority no later than 5 (five) working days since the request for the statement of bankruptcy arises. (2) The reporting as referred to in paragraph (1) must be submitted by the Board of Directors containing a description of at least:
a. the name of the party submitting the bankruptcy request; b. a summary of the request for the statement of bankruptcy; and
c. the action plan to be taken by the Company to follow up on the bankruptcy process.

Third Section
Dissolution

Article 105
(1) A Company is dissolved because:
a. a GMS decision; b. based on a court decision; or
c. follow-up to the bankruptcy process as regulated in the law regarding bankruptcy and deferral of debt payment obligations.
(2) A Company that intends to dissolve due to a GMS decision as referred to in paragraph (1) letter a and due to a court decision as referred to in paragraph (1) letter b must meet the requirement of not being subject to sanctions of suspension of business activities.

Article 106
(1) A Company that intends to dissolve due to a GMS decision must obtain approval from the Financial Services Authority.
(2) To obtain approval for the dissolution of the Company due to a GMS decision as referred to in paragraph (1), the Board of Directors must submit an application to the Financial Services Authority by attaching documents:
a. a draft deed of dissolution; b. a plan for settling the rights and obligations of Debtors; and
c. a copy of the decision regarding the granting of the Company's business license.

Article 107
(1) The Financial Services Authority provides approval or rejection of the application for approval of dissolution due to a GMS decision as referred to in Article 106 paragraph (2) within a maximum time limit of 20 (twenty) working days since the application documents are received completely. (2) To provide approval or rejection as referred to in paragraph (1), the Financial Services Authority conducts:
a. analysis and research on the completeness of documents as referred to in Article 106 paragraph (2); b. feasibility analysis of the dissolution plan; and
c. analysis of compliance with regulations in the field of financing.
(3) In the event that the application for dissolution due to a GMS decision is approved, the Financial Services Authority issues a letter of approval for the dissolution plan to the relevant Company. (4) In the event that the application for dissolution due to a GMS decision is rejected, the rejection must be done in writing and accompanied by the reasons for rejection.

Article 108
A Company that has obtained approval for the implementation plan for dissolution from the Financial Services Authority may implement the said dissolution.

Article 109
(1) A Company that has carried out dissolution as referred to in Article 108 is required to report the implementation of the dissolution to the Financial Services Authority no later than 15 (fifteen) working days counted from the date the Articles of Association are approved, agreed upon by, or notified to the competent authority. (2) Reporting of the implementation of dissolution as referred to in paragraph (1) must be submitted by the Board of Directors by attaching documents:
a. the dissolution deed that has been notified to the competent authority; b. proof of the announcement of dissolution in a daily newspaper with national circulation for 3 (three) consecutive days no later than 15 (fifteen) working days since the date of the letter of approval for the plan to cease business activities; and
c. the closing financial position report that has been audited.
(3) Based on the reporting as referred to in paragraph (1), the Financial Services Authority revokes the Company's business license.

Article 110
(1) In the event that a Company is dissolved based on:
a. a court decision as referred to in Article 105 paragraph (1) letter b; or b. follow-up to the bankruptcy process as regulated in the law regarding bankruptcy and deferral of debt payment obligations as referred to in Article 105 paragraph (1) letter c, the liquidator must report the dissolution to the Financial Services Authority no later than 15 (fifteen) working days since the court decision that has permanent legal force. (2) Reporting of dissolution as referred to in paragraph (1) must be submitted by the liquidator by attaching documents:
a. a copy of the decision regarding the granting of the Company's business license; and b. the court decision that has permanent legal force.
(3) Based on the reporting as referred to in paragraph (1), the Financial Services Authority revokes the Company's business license.

CHAPTER XV
REVOCATION OF BUSINESS LICENSE

Article 111
(1) The revocation of a Company's business license is conducted by the Financial Services Authority.
(2) The revocation of a Company's business license as referred to in paragraph (1) is conducted against a Company that:
a. is dissolved because:

1. a GMS decision;
2. based on a court decision; or
3. follow-up to the bankruptcy process as regulated in the law regarding bankruptcy and deferral of debt payment obligations;
   as referred to in Article 105 paragraph (1); b. is subject to administrative sanctions of revocation of business license;
   c. ceases business activities so that it is no longer a Company based on the Company's request; or
   d. is dissolved as a result of a Merger or Consolidation.
   (3) Before the revocation of the business license caused by the criteria as referred to in paragraph (2) letter a number 1, letter c, and letter d is established by the Financial Services Authority, the Company is required to settle its obligations. (4) The procedure for settling obligations by a Company whose business license is revoked must be conducted based on regulations and considering the interests of Debtors.

Article 112
(1) A Company whose business license has been revoked is prohibited from using the words finance, pembiayaan, and/or words characterizing financing activities or Sharia institutions, in the Company's name. (2) A Company whose business license is revoked is required to cease business activities as a Company.

CHAPTER XVI
OTHER PROVISIONS

Article 113
(1) A Company may conduct integration with another Company having the same business activities.
(2) A Company intending to conduct integration submits an application for integration approval to the Financial Services Authority, by submitting documents consisting of:
a. an action plan regarding the integration to be conducted; b. a statement of willingness from the Company that will receive the integration;
c. the financial statements of the Company that will conduct and receive the integration;
d. proforma financial statements of the Company that will conduct and receive the integration; and e. approval from creditors in the event that the integrated item is a liability. (3) The Financial Services Authority conducts an analysis of the documents as referred to in paragraph (2). (4) Based on the analysis as referred to in paragraph (3), the Financial Services Authority approves or rejects the application for integration approval within a maximum time limit of 20 (twenty) working days since the application documents are received completely. (5) A Company is prohibited from conducting integration before obtaining approval from the Financial Services Authority as referred to in paragraph (4).

CHAPTER XVII
SUBMISSION OF APPLICATIONS FOR LICENSING, APPROVAL, AND REPORTING ELECTRONICALLY

Article 114
(1) In the event that the Financial Services Authority has provided an electronic service system (e-licensing), applications for licensing, approval, and reporting as referred to in Article 12 paragraph (2), Article 18 paragraph (2), Article 27 paragraph (2), Article 31 paragraph (2), Article 36 paragraph (2), Article 37 paragraph (5), Article 40 paragraph (2), Article 43 paragraph (2), Article 46 paragraph (2), Article 47, Article 49 paragraph (3), Article 54 paragraph (2), Article 58 paragraph (3), Article 61 paragraph (3), Article 65 paragraph (2), Article 69 paragraph (3), Article 73 paragraph (1), Article 76 paragraph (2), Article 78 paragraph (3), Article 81 paragraph (2), Article 82 paragraph (2), Article 84 paragraph (2), Article 85 paragraph (2), Article 86 paragraph (2), Article 88 paragraph (2), Article 89 paragraph (3), Article 92 paragraph (2) and paragraph (4),

Article 93 paragraph (2), Article 95, Article 96 paragraph (2), Article 97 paragraph (2), Article 98 paragraph (3), Article 101 paragraph (2), Article 103 paragraph (2), Article 104 paragraph (2), Article 106 paragraph (2), and Article 109 paragraph (2) must be submitted to the Financial Services Authority electronically through the Financial Services Authority's data communication network system.

(2) With the submission of licensing applications, approvals, and reports to the Financial Services Authority electronically as referred to in paragraph (1), the Company is not required to submit printed documents.

(3) The Company is responsible for ensuring that every document submitted electronically through the Financial Services Authority's data communication network system is authentic and corresponds to the original document.

(4) All documents submitted electronically through the Financial Services Authority's data communication network system and/or data stored in the database on the Financial Services Authority's data communication network system have legal force equivalent to printed documents.

(5) Further provisions regarding electronic services (e-licensing) as referred to in paragraph (1) shall be determined by the Financial Services Authority.

Article 115

(1) The Company is required to retain printed documents of licensing, approval, and reporting documents that have been submitted through the Financial Services Authority's data communication network system as referred to in Article 114 paragraph (1).

(2) The Financial Services Authority may conduct verification and/or validation of the truthfulness and fairness of the printed documents of licensing applications, approvals, and reports, as referred to in Article 114 paragraph (1), which have been submitted by the Company through the Financial Services Authority's data communication network system.

(3) The Company is required to provide printed documents of licensing applications, approvals, and reports, as referred to in Article 114 paragraph (1), which have been submitted by the Company through the Financial Services Authority's data communication network system, during the implementation of verification and/or validation by the Financial Services Authority as referred to in paragraph (2).

CHAPTER XVIII
COMPLIANCE ENFORCEMENT
First Section
Administrative Sanctions

Article 116

(1) A Company that violates the provisions as referred to in Article 3 paragraph (1), Article 4 paragraph (1) and paragraph (8), Article 5, Article 7, Article 9 paragraph (1) and paragraph (4), Article 11, Article 14, Article 15, Article 16, Article 18 paragraph (1), Article 21, Article 22 paragraph (2) and paragraph (3), Article 23 paragraph (2) and paragraph (3), Article 24 paragraph (1), paragraph (2), and paragraph (4), Article 25 paragraph (1), Article 26 paragraph (1), Article 27 paragraph (1), Article 29, Article 30 paragraph (2) and paragraph (3), Article 31 paragraph (1), Article 33, Article 34, Article 35, Article 36 paragraph (1), Article 37 paragraph (1), paragraph (2), paragraph (3), and paragraph (4), Article 39, Article 40 paragraph (1), Article 43 paragraph (1), Article 46 paragraph (1), Article 47, Article 49 paragraph (1), Article 51, Article 52, Article 53, Article 54 paragraph (1), Article 56 paragraph (1), Article 57 paragraph (2), Article 58 paragraph (1) and paragraph (2), Article 61 paragraph (1), Article 63, Article 64, Article 65 paragraph (1), Article 67 paragraph (1), Article 68 paragraph (2), Article 69 paragraph (1) and paragraph (2), Article 71 paragraph (1) and paragraph (4), Article 72 paragraph (1), Article 76 paragraph (1), Article 78 paragraph (1), Article 81 paragraph (1), Article 82 paragraph (3), Article 84 paragraph (1), Article 85 paragraph (1), Article 86 paragraph (3), Article 88 paragraph (1), Article 89 paragraph (2), Article 92 paragraph (1), Article 93 paragraph (1), Article 94 paragraph (1) and paragraph (3), Article 96 paragraph (1), Article 97 paragraph (1), Article 98 paragraph (1), Article 100, Article 101 paragraph (1), Article 103 paragraph (1), Article 104 paragraph (1), Article 106 paragraph (1), Article 109 paragraph (1), Article 111 paragraph (3) and paragraph (4), Article 112, Article 113 paragraph (5), Article 114 paragraph (3), and Article 115 paragraph (1) and paragraph (3) of this Financial Services Authority Regulation shall be subject to administrative sanctions in the form of a written warning.

(2) A Company that violates the provisions of Article 18 paragraph (1), Article 24 paragraph (1) letter c, Article 26 paragraph (1), Article 27 paragraph (1), Article 31 paragraph (1), Article 37 paragraph (1), Article 43 paragraph (1), Article 49 paragraph (1), Article 58 paragraph (1), Article 61 paragraph (1), Article 69 paragraph (1), Article 71 paragraph (1), Article 78 paragraph (1), Article 82 paragraph (3), Article 86 paragraph (3), Article 89 paragraph (2), Article 98 paragraph (1), and Article 106 paragraph (1) shall be subject to additional administrative sanctions in the form of an administrative fine of IDR 100,000,000.00 (one hundred million rupiah).

(3) A Company that violates the provisions of Article 36 paragraph (1), Article 40 paragraph (1), Article 46 paragraph (1), Article 47, Article 54 paragraph (1), Article 65 paragraph (1), Article 76 paragraph (1), Article 81 paragraph (1), Article 84 paragraph (1), Article 85 paragraph (1), Article 88 paragraph (1), Article 92 paragraph (1), Article 93 paragraph (1), Article 94 paragraph (1), Article 96 paragraph (1), Article 97 paragraph (1), Article 101 paragraph (1), Article 103 paragraph (1), Article 104 paragraph (1), and Article 109 paragraph (1) shall be subject to additional administrative sanctions in the form of an administrative fine of IDR 500,000.00 (five hundred thousand rupiah) per day of delay and at most IDR 25,000,000.00 (twenty-five million rupiah).

(4) In the event that a Company violates the provisions as referred to in paragraph (1) but the violation has been corrected, the Company shall be subject to a written warning sanction that ends automatically.

(5) In the event that a Company has fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority shall revoke the written warning sanction.

Second Section
Downgrade of Health Assessment Results and Re-evaluation of Principal Parties

Article 117

In the event that the Financial Services Authority has imposed administrative sanctions as referred to in Article 116 paragraph (1) and the Company does not fulfill the provisions that caused the administrative sanction to be imposed, the Financial Services Authority may:
a. downgrade the health assessment results; and/or b. conduct a re-evaluation of the principal parties.

CHAPTER XIX
TRANSITIONAL PROVISIONS

Article 118

(1) Business licenses of Companies that have been issued before this Financial Services Authority Regulation is established are declared to remain valid.

(2) Provisions regarding the use of names as referred to in Article 6 paragraph (1) do not apply to Companies that have obtained business licenses before this Financial Services Authority Regulation is established, provided that the Company does not change its name.

(3) Approval applications that have been received by the Financial Services Authority and have not yet obtained approval or rejection at the time this Financial Services Authority Regulation is promulgated shall be processed in accordance with Financial Services Authority Regulation Number 28/POJK.05/2014 concerning Business Licensing and Institutional Aspects of Financing Companies.

(4) Companies that have obtained business licenses at the time this Financial Services Authority Regulation is promulgated must fulfill provisions regarding the obligation to register as members of the asset recording institution as referred to in Article 16 paragraph (1) no later than 6 (six) months after this Financial Services Authority Regulation is promulgated.

(5) Companies whose shares are owned by foreign citizens and/or foreign legal entities, both directly and indirectly, less than 25% (twenty-five percent) and that employ foreign workers at the time this Financial Services Authority Regulation is promulgated may continue to employ the aforementioned foreign workers until the expiration of their employment contracts and cannot be extended.

(6) Companies that have obtained business licenses at the time this Financial Services Authority Regulation is promulgated and employ foreign workers who have not yet fulfilled provisions regarding:
a. types of positions for foreign workers as referred to in Article 22 paragraph (3); b. requirements for foreign workers employed as Directors or Board of Commissioners as referred to in Article 23 paragraph (1);
c. types of functions that can be handled by foreign workers employed as experts or consultants as referred to in Article 24 paragraph (1); and/or
d. requirements for foreign workers employed as experts or consultants as referred to in Article 24 paragraph (2), may continue to employ the aforementioned foreign workers until the expiration of their employment contracts and cannot be extended.

(7) Companies that have obtained business licenses at the time this Financial Services Authority Regulation is promulgated must fulfill provisions regarding the proportion of Board of Commissioners members who are Indonesian citizens as referred to in Article 23 paragraph (3) within a period of no later than 2 (two) years after this Financial Services Authority Regulation is promulgated.

(8) For Financing Companies that still receive funding based on Sharia Principles as referred to in Article 29 paragraph (2) at the time this Financial Services Authority Regulation takes effect and do not plan to establish a Sharia Business Unit (UUS), the funding that has been received may continue until the end of the funding period and cannot receive new funding based on Sharia Principles.

Article 119

(1) Every administrative sanction that has been imposed on a Company based on Financial Services Authority Regulation Number 28/POJK.05/2014 concerning Business Licensing and Institutional Aspects of Financing Companies is declared to remain valid and effective.

(2) Companies that have not been able to overcome the causes of the administrative sanctions as referred to in paragraph (1) shall be subject to further sanctions in accordance with the procedures for imposing sanctions as regulated in this Financial Services Authority Regulation.

CHAPTER XX
CLOSING PROVISIONS

Article 120

At the time this Financial Services Authority Regulation takes effect, provisions regarding business licensing and institutional aspects of Companies shall be subject to this Financial Services Authority Regulation.

Article 121

At the time this Financial Services Authority Regulation takes effect:

1. Financial Services Authority Regulation Number 28/POJK.05/2014 concerning Business Licensing and Institutional Aspects of Financing Companies (State Gazette of the Republic of Indonesia Year 2014 Number 363, Supplement to the State Gazette of the Republic of Indonesia Number 5637); and
2. Article 8 paragraph (4) of 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) as amended by Financial Services Authority Regulation Number 29/POJK.05/2020 concerning Amendment to Financial Services Authority Regulation Number 30/POJK.05/2014 concerning Good Corporate Governance for Financing Companies (State Gazette of the Republic of Indonesia Year 2020 Number 121, Supplement to the State Gazette of the Republic of Indonesia Number 6505),
   are repealed and declared invalid.

Article 122

This Financial Services Authority Regulation takes effect on the date of its promulgation.

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

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.

Established in Jakarta on 17 November 2020
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Promulgated in Jakarta on 26 November 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 264

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 47 /POJK.05/2020
CONCERNING
BUSINESS LICENSING AND INSTITUTIONAL ASPECTS OF FINANCING COMPANIES AND SHARIA FINANCING COMPANIES

I. GENERAL

The Financial Services Authority Regulation concerning Business Licensing and Institutional Aspects of Financing Companies is an improvement of Financial Services Authority Regulation Number 28/POJK.05/2014 concerning Business Licensing and Institutional Aspects of Financing Companies. In accordance with the authority regulated in Law Number 21 of 2011 concerning the Financial Services Authority, the Financial Services Authority has the authority to regulate and supervise Companies.

In order to encourage national economic growth and support the development of dynamic Company businesses, a healthy, strong, productive, and competitive Company industry is required to be able to serve the community.

Competition among Companies is becoming increasingly sharp, causing business actors to move faster, dynamically, and integratively to create synergy and efficiency opportunities. To follow up on the competitive business conditions and dynamic business developments, it is necessary to formulate comprehensive, clear, and legally certain adjustments to regulations regarding Company business licensing and institutional aspects, so that it is expected to improve the Financial Services Authority's service to Company industry actors.

The formulation of this Financial Services Authority Regulation is an effort to improve the material in the previously applicable regulations, including: increased paid-up capital at the time of establishment and improvement of licensing procedures, use of foreign workers, separation of Sharia Business Units (UUS), reporting, opening and closing offices outside the headquarters, mergers, consolidations, separations, and changes in ownership, as well as the application of sanctions.

The improvement of these regulations is also made in order to support the prime service program through the regulation of the use of information technology (e-licensing) in the licensing, approval, and reporting processes.

II. ARTICLE BY ARTICLE

Article 1

Sufficiently clear.

Article 2

Sufficiently clear.

Article 3

Paragraph (1)

Letter a

Sufficiently clear.

Letter b

Sufficiently clear.

Letter c

Sufficiently clear.

Letter d

The term "foreign legal entity" refers to a legal entity formed based on the legislation of another country and located outside the territory of Indonesia.

Letter e

Sufficiently clear.

Letter f

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 4

Paragraph (1)

Letter a

The term "other financial crimes" includes, among others, corruption and tax crimes.

Letter b

The term "loan" refers to all forms of provision of funds or receivables that can be equated therewith, based on an agreement or arrangement between the lender and the borrower, including those conducted based on Sharia Principles.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

The term "equity" for shareholders who are not limited liability companies refers to the excess of assets over liabilities.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

Sufficiently clear.

Paragraph (8)

Sufficiently clear.

Article 5

Paragraph (1)

The obligation to have a Payment System Operator (PSP) applies to both Financing Companies with closed company status and Financing Companies with open company status or those that have traded their shares on the stock exchange.

Paragraph (2)

Sufficiently clear.

Article 6

Sufficiently clear.

Article 7

Sufficiently clear.

Article 8

Sufficiently clear.

Article 9

Paragraph (1)

The term "direct foreign ownership" refers to the form of Company share ownership by a foreign legal entity.

The term "indirect foreign ownership" refers to the form of Company share ownership by an Indonesian legal entity, the shares of which are wholly or partially owned by a foreign legal entity. In the event of a change in share composition among shareholders, this provision must still be fulfilled.

For example, PT DEF Finance has the following ownership composition:

WNI 1: 50%
BHA 1: 50%
BHI 1: 30%
WNI 2: 50%
BHA 2: 20%
PT DEF Finance

• Direct foreign ownership = 20% (BHA 2)
• Indirect foreign ownership = 50% x 30% = 15% (BHA 1)
• Total foreign ownership 20% (BHA 2) + 15% (BHA 1) = 35%
• WNI = Indonesian citizen
• BHA = Foreign legal entity
• BHI = Indonesian legal entity

Paragraph (2)

The term "open company" refers to a company that conducts a public offering of shares in accordance with capital market legislation provisions.

Paragraph (3)

The term "needing additional capital from foreign shareholders" refers to a condition where domestic shareholders do not have the ability to provide additional capital.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Article 10

As an example, PT XYZ Finance has direct and indirect foreign ownership of 88.5%. Subsequently, on December 20, 2021, PT XYZ Finance made a capital change by adding new shareholders. Thus, PT XYZ Finance is required to fulfill the foreign ownership provisions as referred to in Article 9 paragraph (1).

Article 11

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

The term "having good internal control" includes the separation of functions and fulfillment of legislative provisions.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Article 12

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Letter a

Sufficiently clear.

Letter b

A copy of the latest deed of amendment to the articles of association is submitted if there is one.

Letter c

The last shareholder is known as the ultimate shareholder.

The beneficial owner is known as the beneficial owner.

Number 1

Sufficiently clear.

Number 2

Letter a)

Amendments to the articles of association regarding business activities, capital, shareholder structure, and management that were last submitted, if any.

Letter b)

Sufficiently clear.

Letter c)

Sufficiently clear.

Letter d)

Sufficiently clear.

Number 3

Sufficiently clear.

Number 4

Sufficiently clear.

Letter e

Sufficiently clear.

Letter f

Sufficiently clear.

Letter g

Sufficiently clear.

Letter h

Sufficiently clear.

Letter i

Provisions regarding certification follow the provisions as regulated in the Financial Services Authority Regulation concerning the conduct of Financing Company business and/or the Financial Services Authority Regulation concerning the conduct of Sharia Financing Company and Sharia Business Unit (UUS) business.

Letter j

The term "proof of operational readiness" refers to evidence supporting that the Company is ready to conduct operations upon obtaining a license in accordance with the business strategy and/or business activity plan to be carried out.

Letter k

Sufficiently clear.

Letter l

Sufficiently clear.

Letter m

Sufficiently clear.

Letter n

Provisions regarding guidelines for the implementation of anti-money laundering and counter-terrorism financing programs follow the provisions as regulated in the Financial Services Authority Regulation concerning the application of anti-money laundering and counter-terrorism financing programs in the financial services sector.

Letter o

Provisions regarding good corporate governance guidelines follow the provisions as regulated in the Financial Services Authority Regulation concerning good corporate governance for Financing Companies.

Letter p

The term "licensing costs" is as regulated in government regulations concerning levies by the Financial Services Authority.

Paragraph (3)

Provisions regarding the assessment of competence and propriety follow the provisions as regulated in the Financial Services Authority Regulation concerning the assessment of competence and propriety for principal parties of financial service institutions.

Article 13

Paragraph (1)

The term "complete" means complete and fulfilling the requirements and provisions in this Financial Services Authority Regulation.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Article 14

Sufficiently clear.

Article 15

Sufficiently clear.

Article 16

Sufficiently clear.

Article 17

Sufficiently clear.

Article 18

Sufficiently clear.

Article 19

Sufficiently clear.

Article 20

Sufficiently clear.

Article 21

Paragraph (1)

The implementation of human resource capability and knowledge development programs is conducted internally by the Company and/or by involving the Company's human resources in education and training programs conducted by parties other than the Company.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 22

Sufficiently clear.

Article 23

Sufficiently clear.

Article 24

Sufficiently clear.

Article 25

Sufficiently clear.

Article 26

Sufficiently clear.

Article 27

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Letter a

Sufficiently clear.

Letter b

The term "documents reflecting their field of expertise" includes, among others, photocopies of expertise certificates.

Letter c

Sufficiently clear.

Letter d

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 28

Sufficiently clear.

Article 29

Paragraph (1)

Sufficiently clear.

Paragraph (2)

The term "receiving funding based on Sharia Principles" refers to funding conducted using contracts that do not contradict Sharia Principles.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Article 30

Sufficiently clear.

Article 31

Sufficiently clear.

Article 32

Sufficiently clear.

Article 33

Sufficiently clear.

Article 34

Sufficiently clear.

Article 35

Sufficiently clear.

Article 36

Sufficiently clear.

Article 37

Sufficiently clear.

Article 38

Sufficiently clear.

Article 39

Sufficiently clear.

Article 40

Sufficiently clear.

Article 41

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Letter a

Provisions regarding health levels follow the provisions as regulated in the Financial Services Authority Regulation concerning the assessment of health levels of non-bank financial service institutions.

Letter b

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 42

Letter a

Sufficiently clear.

Letter b

As an example, other forms permitted based on legislative provisions and in accordance with Islamic financial accounting standards, such as the recognition of assets owned by the previously established Sharia Business Unit (UUS) as paid-up capital of the Sharia Financing Company, evidenced by the UUS closing financial position report and the Sharia Financing Company opening financial position report. Assets of the UUS that can be recognized as Paid-up Capital must be at least equal to the equity of the UUS.

Article 43

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Letter a

Sufficiently clear.

Letter b

Sufficiently clear.

Letter c

The plan for settling the rights and obligations of Debtors and Creditors of the UUS contains at least:

1. a draft notification of the UUS separation plan to Debtors and Creditors; and
2. procedures for settling rights and obligations to Debtors and Creditors.

Letter d

Sufficiently clear.

Letter e

Sufficiently clear.

Letter f

Sufficiently clear.

Letter g

Sufficiently clear.

Letter h

Sufficiently clear.

Letter i

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 44

Sufficiently clear.

Article 45

Sufficiently clear.

Article 46

Sufficiently clear.

Article 47

Sufficiently clear.

Article 48

Paragraph (1)

Sufficiently clear.

Paragraph (2)

The term "offices other than Branch Offices" includes, among others, marketing offices (point of sale) or collection offices.

Paragraph (3)

Sufficiently clear.

Article 49

Paragraph (1)

The term "Branch Office Opening License" includes a license as a Branch Office for Financing Companies or a Sharia Branch Office for Sharia Financing Companies.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 50

Sufficiently clear.

Article 51

Sufficiently clear.

Article 52

The term "conducting Sharia Financing activities" refers to marketing, administering, signing agreements, and other activities related to Sharia Financing.

Article 53

Sufficiently clear.

Article 54

Sufficiently clear.

Article 55

The term "not conducting operational activities" refers to the Branch Office not disbursing new financing.

Article 56

Sufficiently clear.

Article 57

Sufficiently clear.

Article 58

Sufficiently clear.

Article 59

Sufficiently clear.

Article 60

Paragraph (1)

Sufficiently clear.

Paragraph (2)

The term "offices other than UUS Branch Offices" includes, among others, marketing offices (point of sale) or collection offices.

Article 61

Sufficiently clear.

Article 62

Sufficiently clear.

Article 63

Sufficiently clear.

Article 64

Sufficiently clear.

Article 65

Sufficiently clear.

Article 66

Sufficiently clear.

Article 67

Sufficiently clear.

Article 68

Sufficiently clear.

Article 69

Sufficiently clear.

Article 70

Sufficiently clear.

Article 71

Paragraph (1)

The term "change in ownership" includes, among others:
a. change in share composition; b. takeover;
c. change in paid-up capital without resulting in a change in share composition; and
d. addition of new shareholders.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Article 72

Sufficiently clear.

Article 73

Paragraph (1)

Letter a

Sufficiently clear.

Letter b

Sufficiently clear.

Letter c

Sufficiently clear.

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
Placing funds in an escrow account and/or time deposits amounting to the estimated value of the paid-in capital increase.
Letter k
Clearly stated.
Letter l
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Article 74
Clearly stated.
Article 75
Clearly stated.
Article 76
Clearly stated.

Article 77
Clearly stated.
Article 78
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
The draft deed of Merger or Consolidation is prepared in accordance with the provisions of legislation regarding limited liability companies.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
Clearly stated.
Letter g
Clearly stated.
Letter h
Clearly stated.
Paragraph (4)
Clearly stated.
Article 79
Clearly stated.
Article 80
Clearly stated.

Article 81
Clearly stated.
Article 82
Clearly stated.
Article 83
Clearly stated.
Article 84
Clearly stated.
Article 85
Clearly stated.
Article 86
Clearly stated.
Article 87
Clearly stated.
Article 88
Clearly stated.
Article 89
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
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
Included in the plan for settling rights and obligations is, among others, the plan for settling the portfolio of conventional financing that has been held.
Letter h
Clearly stated.
Letter i
Clearly stated.
Paragraph (4)
Clearly stated
Article 90
Clearly stated.
Article 91
Clearly stated.
Article 92
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)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Approval or rejection of the license to open a Branch Office in the name of the converted Sharia Financing Company is communicated if applicable.
Paragraph (8)
Clearly stated.
Paragraph (9)
Clearly stated.
Article 93
Clearly stated.
Article 94
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
Provisions regarding changes in business activities follow the provisions as regulated in the Financial Services Authority Regulation regarding the conduct of business by Financing Companies and/or the Financial Services Authority Regulation regarding the conduct of business by Sharia Financing Companies and Financing Company UUS. Letter b Clearly stated. Letter c Clearly stated. Letter d Clearly stated. Paragraph (3) Clearly stated.

Article 95
Clearly stated.
Article 96
Clearly stated.
Article 97
Paragraph (1)
Changes to the company's address are based on the date of physical relocation communicated to the Financial Services Authority.
Paragraph (2)
Clearly stated.
Article 98
Paragraph (1)
What is meant by "ceasing business activities so as no longer to be a Company" is that the Company changes the purpose and objectives in its articles of association so that it is no longer a Company and is not followed by a dissolution process. Paragraph (2) Clearly stated. Paragraph (3) 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
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)
What is meant by "integration" is the transfer of part or all of the assets and/or liabilities of 1 (one) Company to 1 (one) other Company.

What is meant by "having the same business activities" is conducting the same business activities of conventional financing or Sharia Financing.
Paragraph (2)
Clearly stated.
Paragraph (3)
The analysis conducted is, among others, to assess whether the action plan regarding integration considers the interests of Debtors and creditors.
Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Article 114
Clearly stated.
Article 115
Clearly stated.
Article 116
Clearly stated.
Article 117
Letter a
What is meant by "downgrading the health assessment result" is that the Financial Services Authority may downgrade the Company's health level based on the composite health assessment result and/or the assessment result for each health assessment factor. Provisions regarding the assessment of the Company's health level follow the provisions as regulated in the Financial Services Authority Regulation regarding the assessment of the health level of non-bank financial service institutions. Letter b Clearly stated.

Article 118
Clearly stated.
Article 119
Clearly stated.
Article 120
Clearly stated.
Article 121
Clearly stated.
Article 122
Clearly stated.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6582 ---