FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 63/POJK.04/2017

REGARDING

REPORTS AND ANNOUNCEMENTS BY REGIONAL BOND AND/OR REGIONAL SUKUK ISSUERS

BY THE GRACE OF THE ALMIGHTY GOD,

THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to provide protection to investors in regional bonds and/or regional sukuk, it is necessary for issuers of regional bonds and/or regional sukuk to provide periodic information disclosure; b. that considering the uniqueness of regions, periodic information disclosure by regions as issuers of regional bonds and/or regional sukuk needs to be regulated differently;
c. that in order to provide a legal basis and certainty, regulations regarding disclosure by Regional Governments as issuers of regional bonds and/or regional sukuk are needed;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation on Reports and Announcements by Regional Bond and/or Regional Sukuk Issuers;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY

Considering:

1. Law Number 8 of 1995 concerning Capital Markets (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);

DECIDES:

Establish: FINANCIAL SERVICES AUTHORITY REGULATION ON REPORTS AND ANNOUNCEMENTS BY REGIONAL BOND AND/OR REGIONAL SUKUK ISSUERS.

CHAPTER I

GENERAL PROVISIONS

Article 1

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

1. Issuer is a Party that conducts a public offering.

2. Regional Bond is a regional bond as referred to in Government Regulations regarding regional loans.

3. Regional Sukuk is a Sharia effect in the form of certificates or proof of ownership with equal value representing an inseparable or undivided share (syuyu’/undivided share) of the underlying assets, issued by the Regional Government.

4. Information or Material Fact is important and relevant information or facts regarding events, occurrences, or facts that can influence the price of Effects on the stock exchange and/or the decision of investors, prospective investors, or other Parties interested in such information or facts.

5. Fund Utilization Realization Report, hereinafter abbreviated as FURR, is a report on the realization of funds from public offerings submitted by an Issuer whose registration statement has become effective.

6. Regional Government is the regional head as a component of regional government administration that leads the implementation of government affairs within the authority of autonomous regions.

7. Regional Head is the governor for provincial regions, or the regent for regency regions, or the mayor for city regions.

8. Website is a collection of web pages containing information or data that can be accessed through an internet network system.

9. Public Offering is the activity of offering Effects conducted by an Issuer to sell Effects to the public based on procedures regulated in Law Number 8 of 1995 concerning Capital Markets and its implementing regulations.

10. Stock Exchange is a Party that organizes and provides systems and/or facilities to match buy and sell offers of other Parties with the aim of trading Effects among them.

11. Activity is a part of a program consisting of a collection of actions involving the mobilization of resources, whether human resources, capital goods, including equipment and technology, funds, or a combination of several or all types of such resources as inputs to produce outputs in the form of goods or services.

Article 2

Regulations in the capital market sector applicable to Issuers regarding reporting and announcements, governance, and rating do not apply to Issuers issuing Regional Bonds and/or Regional Sukuk, unless regulated in this Financial Services Authority Regulation or explicitly stated to apply to Issuers issuing Regional Bonds and/or Regional Sukuk in statutory regulations.

CHAPTER II

REPORTING AND ANNOUNCEMENT OBLIGATIONS

Article 3

(1) Issuers are obligated to submit to the Financial Services Authority the audited financial statements of the Regional Government, the FURR for Regional Bonds and/or Regional Sukuk, and Information or Material Facts. (2) The Regional Government financial statements and Information or Material Facts referred to in paragraph (1) must be announced to the public. (3) Announcements as referred to in paragraph (2) must be made at least through:
a. 1 (one) daily newspaper in the Indonesian language with national circulation or the Stock Exchange Website; and b. The Issuer's Website.

CHAPTER III

SUBMISSION AND ANNOUNCEMENT OF REGIONAL GOVERNMENT FINANCIAL STATEMENTS

Article 4

(1) Regional Government financial statements as referred to in Article 3 must be submitted and announced no later than 9 (nine) months after the date of the financial statements. (2) Regional Government financial statements as referred to in paragraph (1) must be accompanied by:
a. a statement of responsibility by the Regional Head regarding the Regional Government financial statements; and b. the magnitude of the Issuer's financial ratio to repay loans.

Article 5

The submission of Regional Government financial statements as referred to in Article 4 must be done in the form of:
a. printed documents of at least 1 (one) copy; and b. electronic document copies.

Article 6

Announcements of Regional Government financial statements as referred to in Article 3 paragraph (3) must contain at least:
a. Regional Government budget realization report; b. operational report;
c. cash flow report;
d. opinion from the Board of Auditors of the Republic of Indonesia; and e. the magnitude of the Issuer's financial ratio to repay loans.

CHAPTER IV

FURR FOR REGIONAL BONDS AND/OR REGIONAL SUKUK

Article 7

(1) FURR for Regional Bonds and/or Regional Sukuk must be created periodically every 6 (six) months with report dates of June 30 and December 31.
(2) The format and content of FURR for Regional Bonds and/or Regional Sukuk must be prepared in accordance with the format for the Fund Utilization Realization Report for Regional Bonds and/or Regional Sukuk as contained in the Appendix, which is an integral part of this Financial Services Authority Regulation.

Article 8

(1) FURR for Regional Bonds and/or Regional Sukuk as referred to in Article 3 paragraph (1) must be submitted no later than on the 15th of the following month after the report date until all funds from the Public Offering have been realized. (2) The submission of FURR as referred to in paragraph (1) must be done in the form of electronic document copies.

Article 9

(1) Issuers intending to change the use of funds from Public Offering of Regional Bonds and/or Regional Sukuk must:
a. submit plans and reasons for changing the use of funds from Public Offering of Regional Bonds and/or Regional Sukuk to the Financial Services Authority no later than 21 (twenty-one) days before the convening of the general meeting of Regional Bond and/or Regional Sukuk holders; and b. obtain approval from the general meeting of Regional Bond and/or Regional Sukuk holders. (2) In the event that the change in fund use requires approval from other competent agencies, the general meeting of Regional Bond and/or Regional Sukuk holders must be held before submitting the approval request to such other agencies. (3) Changes in the use of funds from Public Offering as referred to in paragraph (1) include:
a. material changes to each element of fund use; and/or b. changes in the location of Activities to be financed by funds from Public Offering that have economic impact.

CHAPTER V

SUBMISSION AND ANNOUNCEMENT OF INFORMATION OR MATERIAL FACTS

Article 10

(1) Information or Material Facts as referred to in Article 3 must be submitted and announced as soon as possible, no later than the end of the 2nd (second) working day after the existence of such Information or Material Fact. (2) The submission of Information or Material Facts as referred to in paragraph (1) must be done in the form of electronic document copies.

Article 11

Information or Material Facts as referred to in Article 3 include:
a. changes in the Regional Head, leadership of the Regional Bond and/or Regional Sukuk management unit; b. changes in Regional Regulations regarding the issuance of Regional Bonds and/or Regional Sukuk;
c. repurchase and resale of Regional Bonds and/or Regional Sukuk;
d. changes in the Issuer's territorial boundaries or changes in the Issuer's name; e. replacement of the trustee; f. delays in the realization of interest/yield payments, and/or principal; g. changes in the rating of Regional Bonds and/or Regional Sukuk, if any; and h. other Information or Material Facts related to Activities to be financed by Regional Bonds and/or Regional Sukuk.

Article 12

Announcements of Information or Material Facts as referred to in Article 11 must contain at least:
a. the date of the event; b. the type of Information or Material Fact;
c. the description of Information or Material Fact; and
d. the impact of the Information or Material Fact event.

CHAPTER VI

TASKS AND RESPONSIBILITIES OF THE REGIONAL BOND AND/OR REGIONAL SUKUK MANAGEMENT UNIT

Article 13

(1) Issuers must have a unit that performs the management functions for Regional Bonds and/or Regional Sukuk.
(2) The Regional Bond and/or Regional Sukuk management unit as referred to in paragraph (1) performs at least the following tasks:
a. keeping up with capital market developments, particularly statutory regulations applicable in the capital market sector; b. providing input to the Regional Government to comply with statutory regulations in the capital market sector;
c. assisting the Regional Government in the implementation of accountability for Regional Bonds and/or Regional Sukuk, including at least:

1. information disclosure to the public, including the availability of information on the Issuer's Website; and
2. timely submission of reports to the Financial Services Authority; and
   d. acting as a liaison between the Issuer and Regional Bond and/or Regional Sukuk holders, the Financial Services Authority, and other stakeholders.
   (3) In performing its tasks as referred to in paragraph (2), the head of the management unit may submit reports and information disclosure to the Financial Services Authority and the public as long as it does not conflict with statutory regulations.

CHAPTER VII

OTHER PROVISIONS

Article 14

The submission of electronic document copies as referred to in Article 5 letter b, Article 8 paragraph (2), and Article 10 paragraph (2) must be submitted through the Financial Services Authority's electronic reporting system.

Article 15

(1) In the event that the deadline for submitting Regional Government financial statements as referred to in Article 4 paragraph (1), FURR for Regional Bonds and/or Regional Sukuk as referred to in Article 7 paragraph (1), and Information or Material Facts as referred to in Article 10 paragraph (1) to the Financial Services Authority falls on a holiday, such submission must be made on 1 (one) working day following the holiday. (2) In the event that an Issuer submits reports beyond the deadline as referred to in paragraph (1), the calculation of the number of days of delay in submitting reports is calculated from the first day after the final submission deadline as referred to in paragraph (1).

CHAPTER VIII

SANCTION PROVISIONS

Article 16

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

Article 17

In addition to administrative sanctions as referred to in Article 16 paragraph (1), the Financial Services Authority may take specific actions against any Party violating the provisions of this Financial Services Authority Regulation.

Article 18

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 16 paragraph (1) and specific actions as referred to in Article 17 to the public.

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

CHAPTER IX

CLOSING PROVISIONS

Article 19

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

To be known by everyone, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 21 December 2017

CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signed
WIMBOH SANTOSO

Enacted in Jakarta on 22 December 2017

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

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 284

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 63/POJK.04/2017

REGARDING

REPORTS AND ANNOUNCEMENTS BY REGIONAL BOND AND/OR REGIONAL SUKUK ISSUERS

I. GENERAL

Regional Bonds and/or Regional Sukuk are one of the alternatives for regional development financing conducted through the capital market. Regional Governments, with the approval of the Regional House of Representatives and the Minister of Finance as well as the consideration of the Minister of Home Affairs, may issue Regional Bonds and/or Regional Sukuk to finance Activities.

As per the definition of Issuer in Law Number 8 of 1995 concerning Capital Markets, every Regional Government whose registration statement has been declared effective is called an Issuer. As an Issuer issuing Regional Bonds and/or Regional Sukuk, the Regional Government has the obligation to provide periodic information disclosure regarding data on Regional Bonds and/or Regional Sukuk, as well as information disclosure regarding material events, as regulated in statutory regulations in the capital market sector. Nevertheless, the information disclosure practice required of Regional Governments as issuers of Regional Bonds and/or Regional Sukuk cannot be equated with the information disclosure practice required of companies or corporations as issuers of corporate bonds. This is because Regional Governments have units that perform the management functions for Regional Government bonds differently from corporate Issuers. Therefore, it is necessary to formulate information disclosure regulations in the form of reports and announcements that must be carried out by Regional Governments.

This Financial Services Authority Regulation has accommodated various provisions regarding the submission of reports and announcements by Regional Governments as issuers of Regional Bonds and/or Regional Sukuk. With this Financial Services Authority Regulation, it is hoped that the quality of information disclosure practices by Regional Governments as issuers of Regional Bonds and/or Regional Sukuk will improve.

II. ARTICLE BY ARTICLE

Article 1

Sufficiently clear.

Article 2

Regulations in the capital market sector applicable to Issuers regarding reporting and announcements, governance, and rating include:
a. Regulation Number X.K.2, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number Kep-346/BL/2011 concerning the Submission of Periodic Financial Reports by Issuers or Public Companies; b. Regulation Number IX.C.11, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number Kep-712/BL/2012 concerning the Rating of Debt-Related Effects and/or Sukuk;
c. Financial Services Authority Regulation Number 33/POJK.04/2014 concerning the Board of Directors and Board of Commissioners of Issuers or Public Companies;
d. Financial Services Authority Regulation Number 34/POJK.04/2014 concerning the Nomination and Remuneration Committee of Issuers or Public Companies; e. Financial Services Authority Regulation Number 35/POJK.04/2014 concerning the Company Secretary of Issuers or Public Companies; f. Financial Services Authority Regulation Number 8/POJK.04/2015 concerning the Website of Issuers or Public Companies; g. Financial Services Authority Regulation Number 30/POJK.04/2015 concerning Fund Utilization Realization Reports from Public Offerings; h. Financial Services Authority Regulation Number 31/POJK.04/2015 concerning Disclosure of Information or Material Facts by Issuers or Public Companies;
i. Financial Services Authority Regulation Number 55/POJK.04/2015 concerning the Formation and Implementation of Audit Committees;
j. Financial Services Authority Regulation Number 56/POJK.04/2015 concerning the Formation and Preparation of Internal Audit Units; k. Financial Services Authority Regulation Number 29/POJK.04/2016 concerning Annual Reports of Issuers or Public Companies;
l. Financial Services Authority Regulation Number 26/POJK.04/2017 concerning Information Disclosure for Issuers or Public Companies Applying for Bankruptcy Declaration; and
m. Circular Letter of the Capital Market Supervisory Board and Financial Institutions Number SE.02/BL/2009 concerning the Submission of Debts or Liabilities in Foreign Currency.

Article 3

Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Letter a
Announcements in daily newspapers in the Indonesian language with national circulation are made in the event that Regional Bonds and/or Regional Sukuk are not listed on the Stock Exchange.

Announcements on the Stock Exchange Website are made in the event that Regional Bonds and/or Regional Sukuk are listed on the Stock Exchange.

Letter b
Sufficiently clear.

Article 4

Paragraph (1)
Sufficiently clear.

Paragraph (2)
Letter a
The term "statement of responsibility" by the Regional Head refers to the statement of responsibility as referred to in the Minister of Home Affairs Regulation Number 4 of 2008 concerning Guidelines for the Implementation of Review of Regional Government Financial Statements.

Letter b
In practice, the Issuer's financial ratio to repay loans is also known as the debt service coverage ratio.

Article 5

Sufficiently clear.

Article 6

Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Letter e
In practice, the Issuer's financial ratio to repay loans is also known as the debt service coverage ratio.

Article 7

Sufficiently clear.

Article 8

Sufficiently clear.

Article 9

Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Letter a
The term "material changes" refers to:
a. changes to one element of fund use where the amount of change is 20% (twenty percent) or more of the total Public Offering; and/or b. changes in fund use that differ from the planned use of funds in the Prospectus or the results of the general meeting of Regional Bond and/or Regional Sukuk holders, even if the value is below 20% (twenty percent) of the total Public Offering.

Letter b
Sufficiently clear.

Article 10

Sufficiently clear.

Article 11

Sufficiently clear.

Article 12

Sufficiently clear.

Article 13

The term "unit that performs the management functions for Regional Bonds and/or Regional Sukuk" refers to the unit as regulated in the Minister of Finance Regulation governing the procedures for the issuance and accountability of Regional Bonds.

Article 14

The term "electronic reporting system" refers to the Electronic Reporting System for Issuers or Public Companies (SPE).

Article 15

Sufficiently clear.

Article 16

Sufficiently clear.

Article 17

The term "specific actions" includes, among others, the postponement of the granting of effective statements for Registration Statements in the context of Public Offerings of Regional Bonds and/or Regional Sukuk.

Article 18

Announcements by the Financial Services Authority regarding the imposition of administrative sanctions and specific actions can be made, among others, through the Financial Services Authority Website or the Financial Services Authority annual report.

Article 19

Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6152