FINANCIAL SERVICES AUTHORITY REGULATION

OF THE REPUBLIC OF INDONESIA

NUMBER 51 /POJK.04/2020

CONCERNING

DOCUMENT MAINTENANCE BY COMMERCIAL BANKS AS CUSTODIANS

BY THE GRACE OF GOD THE ALMIGHTY,

THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that with the transfer of functions, duties, and authorities for the regulation and supervision of financial services activities in the capital market sector, including regarding document maintenance by commercial banks as custodians, from the Capital Market and Financial Institution Supervisory Agency to the Financial Services Authority; b. that to provide clarity and certainty regarding document maintenance by commercial banks as custodians, existing regulations in the capital market sector concerning document maintenance by commercial banks as custodians established prior to the formation of the Financial Services Authority need to be changed into a Financial Services Authority Regulation;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Document Maintenance by Commercial Banks as Custodians;

Recalling:

1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);

DECIDING:
To establish:
A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING DOCUMENT MAINTENANCE BY COMMERCIAL BANKS AS CUSTODIANS.

CHAPTER I

GENERAL PROVISIONS

Article 1

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

1. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, units of participation in collective investment contracts, forward contracts over Securities, and any derivatives of Securities.
2. Commercial Bank is a bank that conducts business activities conventionally and/or based on Sharia principles, which in its activities provides services in the payment flow.
3. Custodian is a party that provides services for the deposit of Securities and other assets related to Securities, as well as other services, including receiving dividends, interest, and other rights, settling Securities transactions, and representing account holders who are its clients.
4. Custodian Bank is a Commercial Bank that has obtained approval from the Financial Services Authority to conduct business activities as a Custodian.

CHAPTER II

DOCUMENT MAINTENANCE BY COMMERCIAL BANKS AS CUSTODIANS

Article 2

(1) Custodian Banks are required to administer, store, and maintain records, books, data, and written information related to:
a. clients whose Securities are deposited with the Custodian Bank; b. the position of Securities deposited with the Custodian Bank;
c. the client list and its administration and the rights of clients attached to the deposited Securities; and
d. safe and separate storage locations.

(2) Documents as referred to in paragraph (1) letter a include at least:
a. contracts with clients for Custodian Bank services; and b. a list of fees for services provided.

(3) Documents as referred to in paragraph (1) letter b include at least:
a. the status of client Securities deposited; b. the confidentiality of Securities deposited; and
c. the form of Securities as certificates or other collective deposit receipts.

(4) Documents as referred to in paragraph (1) letter c include at least:
a. daily Securities transaction lists; b. dividend distribution, bonuses, exercise of preemptive rights or other rights over Securities, including the use of delegated voting rights; and
c. memoranda of dispute resolution among clients, Securities Administration Bureau, and Stock Exchange Members.

(5) Documents as referred to in paragraph (1) letter d include at least:
a. employees specifically responsible for the operation of Custodian services; b. changes in the person in charge of the Custodian Bank;
c. specifications of the Securities storage room, safes, or vaults; and
d. operational manuals.

Article 3

Documents as referred to in Article 2 must:
a. be stored in a safe and separate location from other Commercial Bank activities; and b. be available at all times for the purposes of Financial Services Authority inspections.

Article 4

Documents as referred to in Article 2 must be stored for a minimum period of 10 (ten) years.

CHAPTER III

ADMINISTRATIVE SANCTIONS

Article 5

(1) Any party that violates the provisions as referred to in Article 2 paragraph (1), Article 3, and Article 4, shall be subject to administrative sanctions.

(2) Sanctions as referred to in paragraph (1) are also imposed on parties that cause the occurrence of violations as referred to in paragraph (1).

(3) Sanctions as referred to in paragraph (1) and paragraph (2) are imposed by the Financial Services Authority.

(4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warnings; b. fines, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business licenses; f. cancellation of approvals; and/or g. cancellation of registrations.

(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (4) letter a.

(6) Administrative sanctions in the form of fines as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, f, or g.

(7) The procedure for imposing sanctions as referred to in paragraph (3) is carried out in accordance with applicable regulations.

Article 6

In addition to administrative sanctions as referred to in Article 5 paragraph (4), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 7

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 5 paragraph (4) and specific actions as referred to in Article 6 to the public.

CHAPTER IV

CLOSING PROVISIONS

Article 8

Upon the commencement of this Financial Services Authority Regulation, the Decision of the Chairman of the Capital Market Supervisory Agency Number Kep-74/PM/1996 dated January 17, 1996 concerning Document Maintenance by Commercial Banks as Custodians, along with Regulation Number X.G.2 which is its attachment, are repealed and declared invalid.

Article 9

This Financial Services Authority Regulation shall come into force upon its promulgation.

This copy is in accordance with the original.

Legal Director 1
Legal Department signed
Mufli Asmawidjaja

To ensure everyone is aware, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on December 3, 2020

CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

signed
WIMBOH SANTOSO

Promulgated in Jakarta on December 11, 2020

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 275

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

OF THE REPUBLIC OF INDONESIA

NUMBER 51 /POJK.04/2020

CONCERNING

DOCUMENT MAINTENANCE BY COMMERCIAL BANKS AS CUSTODIANS

I. GENERAL

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

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

Based on the background and aspects mentioned above, it is necessary to replace the existing regulations in the capital market sector governing document maintenance by Commercial Banks as Custodians, namely the Decision of the Chairman of the Capital Market Supervisory Agency Number Kep-74/PM/1996 dated January 17, 1996 concerning Document Maintenance by Commercial Banks as Custodians, along with Regulation Number X.G.2 which is its attachment, into a Financial Services Authority Regulation concerning Document Maintenance by Commercial Banks as Custodians.

II. ARTICLE BY ARTICLE

Article 1
Clearly stated.

Article 2
Documents that are administered, stored, and maintained may be in printed or written form or electronic documents.

Article 3
Clearly stated.

Article 4
Clearly stated.

Article 5
Clearly stated.

Article 6
The term "specific actions" includes among others actions by the Financial Services Authority to order the Custodian Bank to improve the document and/or Securities storage location.

Article 7
Clearly stated.

Article 8
Clearly stated.

Article 9
Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6588