Financial Services Authority Regulation Number 7/POJK.04/2021 on Policies to Maintain Capital Market Performance and Stability Due to the Spread of Coronavirus Disease 2019

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 7/POJK.04/2021
CONCERNING
POLICIES TO MAINTAIN CAPITAL MARKET PERFORMANCE AND STABILITY DUE TO THE SPREAD OF CORONAVIRUS DISEASE 2019 BY THE GRACE OF GOD THE ALMIGHTY THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: a. that the global spread of the corona virus disease 2019 (COVID-19) has placed pressure on the performance of capital market industry players, capital market stability, and Indonesia's economic growth; b. that the pressure on the performance of capital market industry players, capital market stability, and Indonesia's economic growth as referred to in letter a is still potentially occurring in 2021;
c. that dynamics in handling the COVID-19 pandemic can cause volatility for the capital market industry, which must be responded to quickly and accurately;
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 Policies to Maintain Capital Market Performance and Stability Due to the Spread of Coronavirus Disease 2019;

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:
Establishing: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING POLICIES TO MAINTAIN CAPITAL MARKET PERFORMANCE AND STABILITY DUE TO THE SPREAD OF CORONAVIRUS DISEASE 2019.

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

1. Capital Market is activities related to public offerings and trading of securities, public companies related to the securities they issue, as well as institutions and professions related to securities.
2. Stock Exchange is a party that organizes and provides systems and/or facilities to bring together offers to sell and buy securities from other parties with the aim of trading securities among them.
3. Clearing and Guaranteeing Institution is a party that organizes clearing and guaranteeing services for the settlement of exchange transactions.
4. Depository and Clearing Institution is a party that organizes central custodian activities for custodian banks, securities companies, and other parties.

CHAPTER II
POLICIES IN THE CAPITAL MARKET FIELD
Article 2
(1) The Financial Services Authority has the authority to establish policies in the Capital Market field with the objectives:
a. reducing pressure and maintaining Capital Market stability; b. providing relaxations to industry players in the Capital Market field; and
c. facilitating the process of licensing applications, registration, and/or approval as well as the submission of reports and information,
to handle and/or anticipate the impact of COVID-19 on the Capital Market industry and to encourage national economic recovery.
(2) The establishment of policies as referred to in paragraph (1) is carried out through the Head of the Capital Market Supervisory Executive.

Article 3
(1) Policies as referred to in Article 2 include:
a. establishing procedures for carrying out activities in the Capital Market; b. establishing procedures and deadlines for the submission of periodic and incidental reports by Capital Market industry players;
c. establishing procedures for granting licenses, approvals, and/or registrations in the Capital Market field;
d. establishing the validity period of licenses, approvals, registrations, and the use of documents in the Capital Market field; e. conducting assessments of the competence and propriety of prospective main parties in the Capital Market industry; f. issuing orders to the Stock Exchange, Clearing and Guaranteeing Institution, and/or Depository and Clearing Institution to establish regulations and/or policies that support the realization of Capital Market stability; and/or g. establishing other policies. (2) The implementation of policies as referred to in paragraph (1) is carried out while still paying attention to the application of the principles of transparency, prudence, risk management, good corporate governance, and in accordance with current Capital Market conditions. (3) In the context of policy-making and evaluating established policies to anticipate the impact of COVID-19, the Financial Services Authority has the authority to request additional data and information from Capital Market industry players beyond the reporting obligations as referred to in existing regulations in the Capital Market field.

CHAPTER III
POLICY VALIDITY PERIOD
Article 4
The implementation of policies to maintain capital market performance and stability due to the spread of COVID-19 is valid until March 31, 2022.

CHAPTER IV
TRANSITIONAL PROVISIONS
Article 5
Policies established by the Financial Services Authority to maintain capital market performance and stability due to the spread of COVID-19 prior to the implementation of this Financial Services Authority Regulation are declared to remain valid as long as they have not been revoked.

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

CHAPTER V
CLOSING PROVISIONS
Article 6
This Financial Services Authority Regulation takes effect on the date of its promulgation.
To ensure everyone is aware of it, 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 March 16, 2021
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Promulgated in Jakarta on March 19, 2021
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 81

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 7/POJK.04/2021
CONCERNING
POLICIES TO MAINTAIN CAPITAL MARKET PERFORMANCE AND STABILITY DUE TO THE SPREAD OF CORONAVIRUS DISEASE 2019

I. GENERAL
The Corona Virus Disease 2019 (COVID-19) pandemic has impacted economic activities and brought significant implications for the economies of most countries worldwide, including Indonesia. Social restrictions to anticipate the further spread of COVID-19 have affected economic conditions in society, thereby impacting the performance of companies, including players in the Capital Market industry, both directly and indirectly. This has also placed pressure on Capital Market stability and economic growth in Indonesia. The impact of the COVID-19 pandemic on company performance and pressure on Capital Market stability and economic growth is still potentially occurring in 2021. Along with the Government's handling of COVID-19, the vaccination program is expected to be one of the determining factors for the success of national economic recovery. As the regulator in the financial sector, specifically in the Capital Market sector, the Financial Services Authority needs to respond to these issues by issuing various policies that provide relaxations with the aim of encouraging the optimization of company performance, maintaining Capital Market stability, and supporting national economic recovery. To maintain good governance in establishing policies and to accelerate the policy establishment process, regulations are needed that provide space for the Financial Services Authority to improve the performance of Capital Market industry players, maintain Capital Market stability and Indonesia's economic growth, while still paying attention to the principles of transparency, prudence, risk management, good corporate governance, and in accordance with current Capital Market conditions.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.

Article 2
Sufficiently clear.

Article 3
Paragraph (1)
Letter a
Policies related to procedures for carrying out activities in the Capital Market include:

1. procedures for holding General Meetings of Shareholders (GMS) by establishing conditions that allow the GMS to be held entirely electronically in accordance with Financial Services Authority Regulations regarding the electronic holding of general meetings of shareholders of public companies;
2. adjustment of the rating of debt securities and/or sukuk as portfolios of collective investment contracts;
3. timeframes for portfolio adjustments and dissolution of collective investment contracts;
4. extension of the initial offering period for public offerings; and/or
5. conditions that can serve as the basis for postponing and/or canceling public offerings.

Letter b
Policies related to procedures and deadlines for the submission of periodic and incidental reports by Capital Market industry players include:

1. deadlines for the submission of annual financial reports and annual reports;
2. deadlines for the submission of changes in data and/or information;
3. postponement of the implementation and submission of continuous financial reports; and
4. utilization of electronic information systems and the establishment of electronic mail (email) for the submission of reports and information replacing printed hardcopy documents.

Letter c
Policies related to procedures for granting licenses, approvals, and/or registrations in the Capital Market field include the utilization of electronic signatures in granting licenses, approvals, and/or registrations in the Capital Market field.

Letter d
Policies related to the validity period of the use of documents in the Capital Market field include the validity period of financial reports, appraiser reports, and feasibility study reports used in the process of public offerings or corporate actions of issuers.

Letter e
Sufficiently clear.

Letter f
Orders from the Financial Services Authority to the Stock Exchange, Clearing and Guaranteeing Institution, and/or Depository and Clearing Institution include orders to:

1. prohibit short selling transactions for all stock exchange members;
2. adjust the upper and/or lower limits of auto rejection in Stock Exchange trading regulations;
3. adjust Stock Exchange regulations regarding trading halts for a certain period if the Indonesia Composite Index (IHSG) experiences a decline within certain limits;
4. adjust the haircut value of shares for the calculation of collateral and adjusted working capital (MKBD) of clearing members;
5. elimination of shares tradable in the pre-opening session at the Stock Exchange; and/or
6. adjust trading hours at the Stock Exchange.

Letter g
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 4
Sufficiently clear.

Article 5
Sufficiently clear.

Article 6
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6671