Form and Content of Prospectus and Short Prospectus for Regional Bond and/or Regional Sukuk Public Offerings

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FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 62 /POJK.04/2017
CONCERNING
THE FORM AND CONTENT OF THE PROSPECTUS AND SHORT PROSPECTUS IN THE FRAMEWORK OF PUBLIC OFFERINGS OF REGIONAL BONDS AND/OR REGIONAL SUKUK BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to support the improvement of the national economy through comprehensive infrastructure development in the Indonesian region, Regional Governments need to utilize funding sources from the capital market; b. that the utilization of funding sources from the capital market, which can be done through the issuance of regional bonds and/or regional sukuk, requires harmonizing the form and content of the prospectus and short prospectus in the framework of public offerings of regional bonds and/or regional sukuk with the form and content of the prospectus and short prospectus in public offerings that are generally applicable;
c. that in order to provide a legal basis and legal certainty for Regional Governments that will conduct public offerings of regional bonds and/or regional sukuk, regulations regarding the form and content of the prospectus and short prospectus in the framework of public offerings of regional bonds and/or regional sukuk are needed;
d. that based on the considerations as referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation on the Form and Content of the Prospectus and Short Prospectus in the Framework of Public Offerings of Regional Bonds and/or Regional Sukuk; Recalling:

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);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHABILITY REGULATION ON THE FORM AND CONTENT OF THE PROSPECTUS AND SHORT PROSPECTUS IN THE FRAMEWORK OF PUBLIC OFFERINGS OF REGIONAL BONDS AND/OR REGIONAL SUKUK.

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

1. Prospectus is any written information in connection with a public offering with the aim for another party to purchase Securities.
2. Initial Regional Bond and/or Regional Sukuk Prospectus, hereinafter referred to as Initial Prospectus, is a written document containing all information in the Prospectus submitted to the Financial Services Authority as part of the registration statement, except for information regarding nominal value, quantity, and offering price of securities, underwriting of securities issuance, interest rate of bonds and/or yield of sukuk, or other matters related to offering requirements that have not yet been determined.
3. Short Prospectus is a summary of the content of the Initial Prospectus.
4. Public Offering is a securities offering activity conducted by the issuer to sell securities to the public in accordance with the procedures regulated in Law Number 8 of 1995 concerning Capital Markets and its implementing regulations.
5. Regional Bond is a regional bond as referred to in Government Regulations regarding regional loans.
6. Regional Sukuk is a Sharia-compliant security in the form of certificates or ownership evidence of equal value representing an inseparable or undivided share (syuyu’/undivided share) over the underlying assets, issued by the Regional Government.
7. Registration Statement is a document that must be submitted to the Financial Services Authority by the issuer in the context of a Public Offering.
8. Issuer is the party conducting the Public Offering.
9. 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.
10. Regional Head is the governor for a provincial region, the regent for a regency region, or the mayor for a city region.
11. Regional Government is the Regional Head as an element of regional government administration that leads the implementation of government affairs within the authority of autonomous regions.
12. Activity is a part of a program consisting of a collection of actions mobilizing resources, whether human resources, capital goods, including equipment and technology, funds, or a combination of some or all types of such resources as inputs to produce outputs in the form of goods or services.
13. Material Information or Material Fact is important and relevant information or facts regarding events, occurrences, or facts that can influence the price of Securities on the stock exchange and/or the decision of investors, prospective investors, or other interested parties regarding such information or facts.
14. Legal Consultant is a legal expert who provides legal opinions to other parties and is registered with the Financial Services Authority.
15. Securities Issuance Underwriter is a party that enters into a contract with the Issuer to conduct a Public Offering for the benefit of the Issuer with or without the obligation to purchase unsold Securities.
16. Trustee is a party representing the interests of holders of debt-type Securities.
17. Trust Agreement is an agreement between the Issuer and the Trustee in the context of issuing debt-type securities and/or sukuk, made in the form of a notarial deed.
18. Stock Exchange is a party that organizes and provides systems and/or facilities to match buy and sell offers of Securities from other parties with the aim of trading Securities among them.
19. Capital Market Sharia Principles are Islamic legal principles in Sharia activities in the Capital Market based on fatwas of the National Sharia Council - Indonesian Ulema Council, insofar as such fatwas do not conflict with Financial Services Authority Regulations regarding the application of Sharia principles in the Capital Market and/or other Financial Services Authority Regulations based on fatwas of the National Sharia Council - Indonesian Ulema Council.
20. Party is an individual, company, joint venture, association, or organized group.
21. Sharia Contract is a written agreement or contract between parties containing the rights and obligations of each party that does not conflict with Capital Market Sharia Principles.
22. Sharia Expert Team is a team responsible for the Sharia compliance of Sharia products or services in the Capital Market issued or released by companies.
23. Website is a collection of web pages containing information or data that can be accessed through an internet network system.

Article 2
(1) The form and content of the Prospectus and Short Prospectus in the framework of Public Offerings of Regional Bonds and/or Regional Sukuk must follow the provisions as regulated in this Financial Services Authority Regulation. (2) The Prospectus and Short Prospectus must contain details of Material Information or Material Facts regarding the Public Offering and information and/or statements that can influence investor decisions, which are known or should be known by the Issuer. (3) The Prospectus and Short Prospectus are prohibited from containing incorrect statements about material facts or omitting correct statements about material facts necessary so that the Prospectus does not provide a misleading picture. (4) The Prospectus and Short Prospectus must be drafted in such a way that they are clear and communicative. (5) The presentation and delivery of important information in the Prospectus and Short Prospectus must not be obscured by less important information resulting in the important information being overlooked by readers. (6) The most important facts and considerations must be summarized and disclosed in the early part of the Prospectus and Short Prospectus. (7) The disclosure of Material Information or Material Facts and/or the use of photos, diagrams, and/or tables in the Prospectus and Short Prospectus is prohibited from providing a misleading picture. (8) The disclosure of Material Information or Material Facts in the Prospectus and Short Prospectus must be done clearly with emphasis appropriate to the Issuer's condition so that the Prospectus is not misleading.

Article 3
In preparing the Prospectus and Short Prospectus as referred to in Article 2, the Issuer may make adjustments to the disclosure of Material Information or Material Facts, not limited only to Material Information or Material Facts already regulated in this Financial Services Authority Regulation.

Article 4
The Regional Head and the securities issuance underwriter, if using a securities issuance underwriter, at the time the Registration Statement becomes effective, market supporting institutions and professions, or other Parties who provide opinions or statements and whose inclusion in the Prospectus is agreed to, individually or jointly, are responsible for ensuring that the Prospectus has met the provisions as referred to in Article 2 paragraph (2).

Article 5
(1) The Issuer must disclose all parts contained in the Prospectus and Short Prospectus and prepare the Prospectus and Short Prospectus in the order as regulated in this Financial Services Authority Regulation. (2) The disclosure of all parts contained in the Prospectus and Short Prospectus as referred to in paragraph (1) may be excluded if the disclosure is not relevant or cannot be applied by the Issuer.

CHAPTER II
FORM OF PROSPECTUS
Article 6
The Prospectus as referred to in Article 2 must at least contain the following sections:
a. information on the front cover of the Prospectus; b. table of contents;
c. prospectus summary;
d. Public Offering; e. use of funds obtained from the results of the Public Offering of Regional Bonds and/or Regional Sukuk; f. debt statement; g. summary of important financial data; h. analysis and discussion by the Regional Government;
i. risk factors;
j. significant events after the date of the audit report of the Republic of Indonesia's State Audit Agency; k. Regional Regulations related to the issuance of Regional Bonds and/or Regional Sukuk;
l. information about the Issuer;
m. information about the Activities to be financed with Regional Bonds and/or Regional Sukuk; n. taxation; o. securities issuance underwriting, if any; p. market supporting institutions and professions and other Parties; q. information about the Trustee; r. information about guarantors, if any; s. ordering procedures for Regional Bonds and/or Regional Sukuk; t. dissemination of the Prospectus and ordering forms for purchasing Regional Bonds and/or Regional Sukuk; u. legal opinion; and
v. Sharia compliance statement, in the event of issuing Regional Sukuk.

CHAPTER III
CONTENT OF PROSPECTUS
First Section
Information on the Front Cover of the Prospectus
Article 7
Information on the outer front cover of the Prospectus must at least contain or disclose:
a. the effective date of the Registration Statement from the Financial Services Authority; b. offering period;
c. allocation date;
d. date of return of ordering funds; e. distribution date of Regional Bonds and/or Regional Sukuk; f. listing date, if Regional Bonds and/or Regional Sukuk will be listed on a Stock Exchange; g. full name of the region, address, regional emblem, telephone number, fax number, email address, and Website; h. name of the Stock Exchange, if Regional Bonds and/or Regional Sukuk will be listed on a Stock Exchange;
i. type of offering, including descriptions regarding:

1. type and quantity of Regional Bonds and/or Regional Sukuk;
2. brief description of the offered Regional Bonds and/or Regional Sukuk;
3. Activities to be financed with Regional Bonds and/or Regional Sukuk;
4. nominal amount, offering price, and total offering value;
5. maturity date;
6. interest rate and/or yield;
7. interest payment date and/or yield;
8. provisions regarding early repayment;
9. Trustee;
10. guarantees, if any;
11. guarantors, if any;
12. repayment fund reserves; and
13. rating results of Regional Bonds and/or Regional Sukuk from securities rating companies, if any;
    j. name of the securities issuance underwriter and Securities Issuance Underwriter, if any; k. place and date the Prospectus was issued;
    l. the following statements in capital letters that immediately attract the reader's attention:
14. “THE FINANCIAL SERVICES AUTHORITY DOES NOT ISSUE A STATEMENT APPROVING OR DISAPPROVING THE PUBLIC OFFERING OF THESE REGIONAL BONDS AND REGIONAL SUKUK, NOR DOES IT STATE THE TRUTH OR ADEQUACY OF THE CONTENT OF THIS PROSPECTUS. ANY STATEMENT CONTRARY TO THESE MATTERS IS AN ILLEGAL ACT”
    “THIS PROSPECTUS IS IMPORTANT AND REQUIRES IMMEDIATE ATTENTION. IF THERE IS DOUBT ABOUT THE ACTION TO BE TAKEN, IT IS BETTER TO CONSULT WITH COMPETENT PARTIES”;
15. “THE FINANCIAL SERVICES AUTHORITY DOES NOT ISSUE A STATEMENT APPROVING OR DISAPPROVING THE PUBLIC OFFERING OF THESE REGIONAL BONDS, NOR DOES IT STATE THE TRUTH OR ADEQUACY OF THE CONTENT OF THIS PROSPECTUS. ANY STATEMENT CONTRARY TO THESE MATTERS IS AN ILLEGAL ACT”
    “THIS PROSPECTUS IS IMPORTANT AND REQUIRES IMMEDIATE ATTENTION. IF THERE IS DOUBT ABOUT THE ACTION TO BE TAKEN, IT IS BETTER TO CONSULT WITH COMPETENT PARTIES”; or
16. “THE FINANCIAL SERVICES AUTHORITY DOES NOT ISSUE A STATEMENT APPROVING OR DISAPPROVING THE PUBLIC OFFERING OF THESE REGIONAL SUKUK, NOR DOES IT STATE THE TRUTH OR ADEQUACY OF THE CONTENT OF THIS PROSPECTUS. ANY STATEMENT CONTRARY TO THESE MATTERS IS AN ILLEGAL ACT”
    “THIS PROSPECTUS IS IMPORTANT AND REQUIRES IMMEDIATE ATTENTION. IF THERE IS DOUBT ABOUT THE ACTION TO BE TAKEN, IT IS BETTER TO CONSULT WITH COMPETENT PARTIES”; m. a statement in capital letters that the Issuer and securities issuance underwriter (if any) are fully responsible for the truth of all information and honesty of opinions expressed in the Prospectus as follows:
    “THE ISSUER AND SECURITIES ISSUANCE UNDERWRITER (if any) ARE FULLY RESPONSIBLE FOR THE TRUTH OF ALL INFORMATION, FACTS, DATA, OR REPORTS AND THE HONESTY OF OPINIONS CONTAINED IN THIS PROSPECTUS”; and n. a brief statement, in capital letters that immediately attracts the reader's attention, regarding:
17. the main risks faced by the Issuer; and
18. the risk of illiquidity of the offered Regional Bonds and/or Regional Sukuk, if any.

Article 8
An Issuer conducting a Public Offering of Regional Bonds and/or Regional Sukuk in phases, in addition to containing information as referred to in Article 7, must state on the outer front cover of the Prospectus:
a. “Phased Public Offering Prospectus of Regional Bonds and/or Regional Sukuk”, also stating the name of the Regional Bonds and/or Regional Sukuk; and b. the total amount of funds to be raised from the issuance of Regional Bonds and/or Regional Sukuk during the phased Public Offering of Regional Bonds and/or Regional Sukuk period.

Article 9
Information on the inner front cover of the Prospectus must at least contain or disclose:
a. information that the Registration Statement has been submitted to the Financial Services Authority by referring to applicable laws and regulations in the Capital Market sector; b. a statement that all market supporting institutions and professions mentioned in the Prospectus are fully responsible for the data presented according to their functions and positions, in accordance with applicable laws and regulations in the Capital Market sector and the respective codes of ethics, norms, and professional standards;
c. a statement that in connection with the Public Offering of Regional Bonds and/or Regional Sukuk, every Party involved in the Public Offering of Regional Bonds and/or Regional Sukuk is prohibited from providing statements or opinions regarding data not disclosed in the Prospectus, without written consent from the Issuer and securities issuance underwriter (if any);
d. in the event that Regional Bonds and/or Regional Sukuk will be listed on a Stock Exchange, the Issuer must provide information regarding the listing plan; e. in the event that the Prospectus states the name of a Party assisting the Issuer in preparing the Prospectus, the Party must make a statement that it has provided written consent regarding the inclusion of the Party's name in the Prospectus and will not withdraw such consent; and f. information that the Regional Government's financial reports are available on the Issuer's Website.

Second Section
Table of Contents
Article 10
The table of contents as referred to in Article 6 letter b must include descriptions of sections and pages.

Third Section
Prospectus Summary
Article 11
In the prospectus summary section as referred to in Article 6 letter c, at least the following important information must be contained or disclosed:
a. information about the Issuer; b. information about the offered Regional Bonds and/or Regional Sukuk;
c. information about outstanding Regional Bonds and/or Regional Sukuk, if any;
d. plan for the use of funds from the Public Offering of Regional Bonds and/or Regional Sukuk; e. important financial data; f. main risks faced by the Issuer; and g. type of Sharia Contract, in the event of issuing Regional Sukuk.

Fourth Section
Public Offering
Article 12
In the Public Offering section as referred to in Article 6 letter d, at least the following must be contained or disclosed:
a. information about Regional Bonds and/or Regional Sukuk, at least containing or disclosing:

1. nominal amount and type of offered Regional Bonds and/or Regional Sukuk;
2. assets underlying Regional Sukuk do not conflict with Capital Market Sharia Principles and the Issuer guarantees that during the Regional Sukuk period, the assets underlying Regional Sukuk will not conflict with Capital Market Sharia Principles, in the event of issuing Regional Sukuk;
3. type of Sharia Contract and Sharia transaction scheme, as well as an explanation of the Sharia transaction scheme used in the issuance of Regional Sukuk, in the event of issuing Regional Sukuk;
4. summary of Sharia Contracts conducted by the Parties, in the event of issuing Regional Sukuk;
5. revenue sources that form the basis for calculating profit sharing, margin, or remuneration according to the characteristics of the Sharia Contract, in the event of issuing Regional Sukuk;
6. funds used to make payments for profit sharing, margin, or remuneration according to the characteristics of the Sharia Contract, in the event of issuing Regional Sukuk;
7. transfer units and trading units of Regional Bonds and/or Regional Sukuk to be offered in the framework of the Public Offering of Regional Bonds and/or Regional Sukuk, including limitations on transferring;
8. summary of the rights of holders of Regional Bonds and/or Regional Sukuk;
9. summary of the nature of Regional Bonds and/or Regional Sukuk that allows for early repayment at the choice of the Issuer or holders of Regional Bonds and/or Regional Sukuk;
10. requirements and/or restrictions on early repayment of Regional Bonds and/or Regional Sukuk, if any;
11. price, interest rate, or other remuneration set for Regional Bonds and/or yield for Regional Sukuk, including the determination method, with the provision that if floating interest rates are used, a complete explanation of the determination method for such floating interest rates is provided;
12. date of principal repayment and the amount of principal to be paid on that date;
13. interest payment date or other remuneration date; and
14. schedule plan and procedures for distribution and/or payment of yield, in the event of issuing Regional Sukuk;
    b. information regarding debt guarantee (if any) at least covering:
15. name and address of the guarantor;
16. information regarding the guarantee scheme;
17. guarantor replacement, if any;
18. guarantee period; and
19. details of other important guarantee agreement terms;
    c. name, address, and description of the Party acting as Trustee;
    d. summary of the main requirements in the Trust Agreement; e. rating results of Regional Bonds and/or Regional Sukuk, if any; f. Activities to be financed with Regional Bonds and/or Regional Sukuk, along with the Issuer's assets attached to such Activities that will serve as collateral for Regional Bonds and/or Regional Sukuk (if any); g. information regarding repayment fund reserves; h. approval from the Minister in charge of financial affairs regarding the issuance of Regional Bonds and/or Regional Sukuk;
    i. other requirements related to the issuance of Regional Bonds and/or Regional Sukuk;
    j. restrictions or prohibitions aimed at protecting holders of Regional Bonds and/or Regional Sukuk, if any; and k. full name of the region, address, regional emblem, telephone number, fax number, email address, and Website.

Article 13
The summary of the main requirements in the Trust Agreement as referred to in Article 12 letter d must at least include information about:
a. matters related to the priority (seniority) rights of debt relatively compared to other outstanding debts of the Issuer and additional debt that can be created by the Issuer in the future (if any), at least covering:

1. priority (seniority) level of Regional Bonds and/or Regional Sukuk; and
2. total amount of debt with priority (seniority) rights and limitations on issuing additional debt with priority (seniority) rights;
   b. conditions that can cause default, including settlement methods;
   c. repurchase of Regional Bonds and/or Regional Sukuk; and
   d. reasons and procedures for holding a general meeting of holders of Regional Bonds and/or Regional Sukuk, quorum attendance and decisions, and requirements to attend the meeting.

Article 14
In the event that the Issuer issues Regional Sukuk, in addition to information as referred to in Article 13, the Issuer must add information:
a. replacement of assets underlying Regional Sukuk if events occur causing their value to no longer match the value of the issued Regional Sukuk, if necessary according to the characteristics of the Sharia Contract; b. conditions and provisions in the event that the Issuer will change the type of Sharia Contract, content of the Sharia Contract, and/or assets underlying Regional Sukuk, containing:

1. such changes can only be made after prior approval by the general meeting of holders of Regional Sukuk;
2. mechanism for fulfilling the rights of holders of Regional Sukuk who do not agree to such changes; and
3. changes can only be made if there is a Sharia compliance statement from the Sharia Expert Team;
   c. provisions regarding the Issuer's failure to fulfill its obligations;
   d. handling and/or settlement mechanisms in the event that the Issuer fails to fulfill its obligations as referred to in letter c, taking into account Capital Market Sharia Principles; and e. provisions regarding sanctions related to the non-fulfillment of obligations in the Trust Agreement, in the event of issuing Regional Sukuk.

Part Five
Use of Funds Obtained from the Results of the Public Offering of Regional Bonds and/or Regional Sukuk

Article 15
In the section on the use of funds obtained from the results of the Public Offering of Regional Bonds and/or Regional Sukuk as referred to in Article 6 letter e, it must at least contain or disclose:
a. information regarding the purpose of the Public Offering of Regional Bonds and/or Regional Sukuk and the Activities to be financed with funds obtained from the results of the Public Offering of Regional Bonds and/or Regional Sukuk, both directly and indirectly, stated in detail in the form of amounts and/or percentages; and b. information regarding other sources of funds to be used to finance an Activity if the funds from the Public Offering of Regional Bonds and/or Regional Sukuk are insufficient.

Article 16
In the event that the Issuer issues Regional Sukuk, the Issuer is obligated to use the funds from the Public Offering of Regional Sukuk to finance Activities or make investments that do not contradict Sharia Principles in the Capital Market.

Article 17
In the event that there is no Underwriter or the Underwriter does not guarantee the offering in full, the Issuer must contain or disclose:
a. the minimum amount of funds that can be obtained through the Public Offering of Regional Bonds and/or Regional Sukuk based on the Regional Government's confidence; b. the priority of use of funds obtained from the Public Offering of Regional Bonds and/or Regional Sukuk; and
c. risks and the Issuer's plans in the event that the offered Regional Bonds and/or Regional Sukuk are not sold as planned.

Article 18
The Issuer must disclose information regarding the estimated detailed costs incurred by the Issuer in the context of the Public Offering of Regional Bonds and/or Regional Sukuk, whether in the form of a specific percentage or absolute value, which must at least include:
a. underwriting service costs; b. organization service costs;
c. sales service costs;
d. supporting Capital Market profession service costs; e. supporting Capital Market institution service costs; f. financial consulting service costs; and g. other costs.

Part Six
Debt Statement

Article 19
In the debt statement section as referred to in Article 6 letter f, it must at least contain or disclose:
a. a statement regarding the position of all liabilities on the date of the Regional Government's financial statements for the last audited year; b. the Regional Government's financial statements for the last audited year which serve as the data source, accompanied by the opinion provided;
c. an explanation of the details of each liability in accordance with the liabilities in the financial position report;
d. commitments and contingencies according to the Regional Government's financial statements for the last audited year; and e. liabilities that have matured but have not yet been settled (if any), accompanied by the cause or reason.

Part Seven
Summary of Important Financial Data

Article 20
(1) In the summary of important financial data section as referred to in Article 6 letter g, it must at least contain or disclose:
a. information on the audited financial statements of the Regional Government which serve as the data source, the opinion obtained, and an explanation of the period of the Regional Government's financial statements covered; b. financial data for the last 2 (two) fiscal years, including the budget realization report, the report on changes in budget surplus balances, the balance sheet, the operational report, the cash flow report, and the equity change report; and
c. the form and content of the reports as referred to in letter b must be the same as those presented in the Regional Government's financial statements.
(2) The summary of important financial data presented as referred to in paragraph (1) must be consistent with the Regional Government's financial statements, including the account names used.

Part Eight
Analysis and Discussion by the Regional Government

Article 21
In the analysis and discussion section by the Regional Government as referred to in Article 6 letter h, the Issuer must provide a brief description discussing and analyzing the Regional Government's financial statements and other information or facts stated in the Prospectus.

Article 22
The discussion, analysis, and information as referred to in Article 21 must at least contain or disclose:
a. a comprehensive financial performance analysis covering the comparison of financial performance in the last 2 (two) fiscal years, an explanation of the causes of changes and the impact of those changes, at least covering:

1. budget realization report;
2. report on changes in budget surplus balances;
3. balance sheet;
4. operational report;
5. cash flow report; and
6. equity change report;
   b. discussion regarding important components of other revenues or expenditures deemed necessary by the Issuer to determine the Issuer's financial capacity;
   c. discussion in the event that the Regional Government's financial statements disclose a material increase or decrease in regional revenue, accompanied by a discussion on the extent to which such changes can be linked to original regional revenue, if any;
   d. discussion regarding the amount of outstanding loans on the date of the Regional Government's financial statements for the last audited year, analysis of loan maturities, loan facilities from banks, and restrictions on the use of loans and guarantees, if any; and e. changes in legislation that have a significant impact on the Issuer and its impact on the Regional Government's financial statements, if any.

Part Nine
Risk Factors

Article 23
In the risk factor section as referred to in Article 6 letter i, it must at least contain or disclose:
a. main risks; b. other risks related to the Issuer;
c. risks that have a significant impact on the Activities to be financed with Regional Bonds and/or Regional Sukuk;
d. risks for investors; and e. a statement that general risk factors are compiled based on the risk weight faced by the Issuer.

Part Ten
Important Events After the Date of the Audit Report of the Supreme Audit Agency of the Republic of Indonesia

Article 24
In the section on important events after the date of the audit report of the Supreme Audit Agency of the Republic of Indonesia as referred to in Article 6 letter j, it must at least contain or disclose:
a. information on all important events that occurred after the date of the audit report of the Supreme Audit Agency of the Republic of Indonesia until the effective date of the Registration Statement; or b. a statement by the Regional Government regarding the non-existence of important events after the date of the audit report of the Supreme Audit Agency of the Republic of Indonesia until the effective date of the Registration Statement, in the event that no important events exist.

Part Eleven
Regional Regulations Related to the Issuance of Regional Bonds and/or Regional Sukuk

Article 25
In the section on Regional Regulations related to the issuance of Regional Bonds and/or Regional Sukuk as referred to in Article 6 letter k, it must at least contain or disclose:
a. name, number, date, and year of the Regional Regulation; b. the nominal amount of Regional Bonds and/or Regional Sukuk to be issued;
c. the use of funds from the Public Offering of Regional Bonds and/or Regional Sukuk;
d. responsibility for the payment of principal, interest, and other costs arising as a result of the issuance of Regional Bonds; e. responsibility for the payment of principal or remaining lease remuneration, and/or remuneration arising as a result of the issuance of Regional Sukuk, in the event of issuing Regional Sukuk; f. annual issuance schedule, in the event that Regional Bonds and/or Regional Sukuk are issued in stages; and g. the Issuer's assets that serve as collateral for the issuance of Regional Bonds and/or Regional Sukuk, in the event that the Issuer's assets attached to the Activities to be financed with Regional Bonds and/or Regional Sukuk are used as collateral for the issuance of Regional Bonds and/or Regional Sukuk.

Part Twelve
Information Regarding the Issuer

Article 26
In the section on information regarding the Issuer as referred to in Article 6 letter l, it must at least contain or disclose:
a. brief information about the Issuer; b. geographical and demographic conditions;
c. natural resources owned or controlled by the Issuer;
d. information regarding the name, number of regional-owned enterprises, and ownership percentage; e. Regional Government, at least including:

1. name and photo of the Head of the Region and the Deputy Head of the Region;
2. biography description of the Head of the Region and the Deputy Head of the Region, at least including:
   a) age; b) current term of office and previous positions; c) work and business experience previously and currently conducted; and d) final education including school, field of study, and year of graduation; and f. leaders of the Regional Bond and/or Regional Sukuk management unit, at least including:
3. name, age, and photo of the leader of the Regional Bond and/or Regional Sukuk management unit;
4. current and previous positions;
5. work experience; and
6. final education including school, field of study, and year of graduation.

Part Thirteen
Information Regarding Activities to be Financed with Regional Bonds and/or Regional Sukuk

Article 27
In the section on information regarding Activities to be financed with Regional Bonds and/or Regional Sukuk as referred to in Article 6 letter m, it must at least contain or disclose:
a. information regarding the Parties carrying out the Activities to be financed with Regional Bonds and/or Regional Sukuk; b. general information, at least including:

1. name;
2. location;
3. background;
4. purpose and benefits;
5. value;
6. permits for the implementation of Activities; and
7. duration; and
   c. information regarding the operational plan for Activities to be financed with Regional Bonds and/or Regional Sukuk, at least including:
8. commencement of Activity operations;
9. operational unit for the Activity;
10. estimated capacity and results or revenue from the Activity; and
11. information regarding the business prospects of the Activity.

Part Fourteen
Taxation

Article 28
In the taxation section as referred to in Article 6 letter n, it must contain or disclose information regarding applicable taxes for both investors and the Issuer, as well as special tax facilities obtained, if any.

Part Fifteen
Underwriting of Securities Issuance

Article 29
In the section on underwriting of securities issuance as referred to in Article 6 letter o, it must contain or disclose a description of the important provisions and requirements of the underwriting agreement, at least including:
a. name of the executing underwriter; b. name of the Underwriter;
c. form of underwriting;
d. percentage and value of underwriting; and e. description of the approach or method in determining the price of the Public Offering of Regional Bonds and/or Regional Sukuk, including factors and parameters used in price determination.

Part Sixteen
Capital Market Supporting Institutions and Professions and Other Parties

Article 30
In the section on capital market supporting institutions and professions and other parties as referred to in Article 6 letter p, it must at least contain or disclose:
a. name, address, and description of the duties and responsibilities of capital market supporting institutions and professions and other parties involved in the Public Offering of Regional Bonds and/or Regional Sukuk; b. professional qualifications, for Parties other than those registered in the Capital Market, if any;
c. information regarding the membership of supporting capital market professions in associations;
d. a statement by the Issuer regarding the existence or non-existence of creditor-debtor relationships between the Issuer and the Trustee; and e. in the event that the Issuer has a creditor-debtor relationship with the Trustee, information must be disclosed regarding the amount, duration, and other requirements.

Part Seventeen
Trustee

Article 31
In the section on information regarding the Trustee as referred to in Article 6 letter q, it must at least contain or disclose information about the Trustee including:
a. name and complete address; b. capital structure;
c. board of commissioners and board of directors;
d. business activities and permits; e. main duties of the Trustee; f. replacement of the Trustee; g. summary of important financial data of the Trustee with a comparison of at least the last 2 (two) fiscal years or since establishment if less than 2 (two) fiscal years; and h. affiliation relationships between the Issuer and the Trustee arising from regional equity participation ownership.

Article 32
In the event that the Issuer issues Regional Sukuk, in addition to the information as referred to in Article 31, the Issuer must add a description of the Trustee's obligation to take all necessary actions:
a. to ensure the Issuer's compliance with Sharia Agreements; b. to ensure that the assets underlying the issuance of Regional Sukuk do not contradict Sharia Principles in the Capital Market;
c. in the event that the Issuer violates compliance with the application of Sharia Principles in the Capital Market or violates obligations in Sharia Agreements and/or Trust Agreements; and
d. to continue representing the interests of Regional Sukuk holders until the fulfillment of all the Issuer's obligations to them.

Part Eighteen
Guarantor

Article 33
In the section on information regarding the guarantor (if any) as referred to in Article 6 letter r, it must at least contain or disclose:
a. information about the guarantor including:

1. name and complete address;
2. capital structure;
3. board of commissioners and board of directors;
4. business activities and permits;
5. main duties of the guarantor;
6. replacement of the guarantor;
7. summary of important financial data of the guarantor with a comparison of at least the last 2 (two) fiscal years or since establishment if less than 2 (two) fiscal years; and
8. affiliation relationships between the Issuer and the guarantor, including the type and nature of the affiliation relationship; and
   b. a statement from the guarantor that:
9. the guarantor is able to guarantee in accordance with the obligations or capabilities of the guarantee stated in the guarantee agreement; and
10. the existence or non-existence of financial legal proceedings currently being pursued by the guarantor.

Part Nineteen
Order Placement Procedures for Regional Bonds and/or Regional Sukuk

Article 34
In the section on order placement procedures for Regional Bonds and/or Regional Sukuk, as referred to in Article 6 letter s, it must at least contain or disclose:
a. submission of orders for the purchase of Regional Bonds and/or Regional Sukuk; b. acceptable order placement requirements;
c. the minimum amount that can be ordered for each order;
d. submission of order forms; e. the duration of the Public Offering of Regional Bonds and/or Regional Sukuk; f. allocation date; g. payment requirements including payment deadlines; h. receipts for order forms;
i. allocation method for Regional Bonds and/or Regional Sukuk;
j. order cancellation criteria; k. refund of order money including:

1. interest rate and/or penalty value to be used as the basis for calculating compensation for delays in the refund of order money for the purchase of Regional Bonds and/or Regional Sukuk, stating the interest rate percentage or other measure; and
2. procedures to be used in refunding order money for the purchase of Regional Bonds and/or Regional Sukuk and compensation, at least regarding:
   a) type of payment instrument; and b) payment method; and
   l. distribution of Regional Bonds and/or Regional Sukuk.

Part Twenty
Dissemination of Prospectus and Order Forms for the Purchase of Regional Bonds and/or Regional Sukuk

Article 35
In the section on the dissemination of the prospectus and order forms for the purchase of Regional Bonds and/or Regional Sukuk as referred to in Article 6 letter t, it must at least contain or disclose:
a. an explanation regarding the name, address, and telephone number of the Issuer, Underwriter, and sales agents for Regional Bonds and/or Regional Sukuk or Parties performing the function as sales agents for Regional Bonds and/or Regional Sukuk; b. an explanation regarding the method and deadline for disseminating the Prospectus;
c. the location where the Prospectus and order forms for the purchase of Regional Bonds and/or Regional Sukuk or other documents related to the Public Offering of Regional Bonds and/or Regional Sukuk or copies thereof mentioned in the Prospectus can be obtained; and
d. the location and Parties that can be contacted to obtain the Prospectus.

Part Twenty-One
Legal Opinion

Article 36
In the section on legal opinion as referred to in Article 6 letter u, the opinion from the Legal Consultant must at least contain or disclose:
a. the validity of agreements in the context of the Public Offering of Regional Bonds and/or Regional Sukuk and other important agreements related to Activities to be financed with Regional Bonds and/or Regional Sukuk; b. approvals required for the issuance of Regional Bonds and/or Regional Sukuk;
c. permits and main approvals required for the implementation of Activities to be financed with Regional Bonds and/or Regional Sukuk;
d. ownership or control status and disputes (if any) regarding the Issuer's assets related to Activities to be financed with Regional Bonds and/or Regional Sukuk; and e. other legal aspects concerning the Public Offering of Regional Bonds and/or Regional Sukuk and Activities to be financed with Regional Bonds and/or Regional Sukuk.

Part Twenty-Two
Sharia Compliance Statement

Article 37
In the section on Sharia compliance statement as referred to in Article 6 letter v, the Sharia compliance statement must at least contain or disclose:
a. Sharia opinion; b. the Sharia Expert Team that signed the Sharia compliance statement; and
c. the date of the opinion.

CHAPTER IV
FORM OF THE SHORT PROSPECTUS

Article 38
The Short Prospectus must at least contain the following information:
a. information regarding the Public Offering of Regional Bonds and/or Regional Sukuk; b. information regarding the use of funds obtained from the results of the Public Offering of Regional Bonds and/or Regional Sukuk;
c. information regarding the summary of important financial data;
d. information regarding the analysis and discussion by the Regional Government; e. information regarding risk factors; f. information regarding important events after the date of the audit report of the Supreme Audit Agency of the Republic of Indonesia; g. brief information regarding the Issuer; h. information regarding the order placement procedures for Regional Bonds and/or Regional Sukuk; and
i. information regarding the dissemination of the Prospectus and order forms for the purchase of Regional Bonds and/or Regional Sukuk.

CHAPTER V
CONTENT OF THE SHORT PROSPECTUS

Article 39
Information regarding the Public Offering of Regional Bonds and/or Regional Sukuk as referred to in Article 38 letter a must at least contain the following information:
a. date of the announcement approval for the Short Prospectus; b. initial offering period;
c. estimated effective date of the Registration Statement from the Financial Services Authority;
d. estimated offering period; e. estimated allocation date; f. estimated date for the refund of order money; g. estimated date for securities distribution; h. estimated listing date, if Regional Bonds and/or Regional Sukuk will be listed on the Stock Exchange;
i. full name of the region, address, regional emblem, telephone number, facsimile number, email address, and Website;
j. name of the Stock Exchange, if Regional Bonds and/or Regional Sukuk will be listed on the Stock Exchange; k. type of offering, including a description of the nature, brief description of the Regional Bonds and/or Regional Sukuk offered, nominal value, and description of the estimated quantity and estimated price, or approach and/or method in determining the price of Regional Bonds and/or Regional Sukuk, including factors and parameters used in price determination;
l. in the event of floating interest rates, a complete description of the method for determining floating interest rates;
m. range of the quantity of Regional Bonds and/or Regional Sukuk as well as the range of interest rates and/or remuneration or return, or approach and method in determining interest rates and/or remuneration or return for Regional Bonds and/or Regional Sukuk, including factors and parameters used in determining interest rates and/or remuneration or return by other means established for Regional Bonds and/or Regional Sukuk; n. bookkeeping unit and trading unit of the Regional Bonds and/or Regional Sukuk to be offered in the context of the Public Offering of Regional Bonds and/or Regional Sukuk, including restrictions on bookkeeping; o. summary of the rights of Regional Bonds and/or Regional Sukuk holders; p. summary of the characteristics of Regional Bonds and/or Regional Sukuk that allow for early payment at the option of the Issuer or Regional Bonds and/or Regional Sukuk holders; q. requirements and/or restrictions on early settlement of Regional Bonds and/or Regional Sukuk, if any; r. price, interest rate, or other remuneration established for Regional Bonds and/or remuneration for Regional Sukuk, including the determination method, with the provision that if floating interest rates apply, a complete description of the method for determining such floating interest rates is provided; s. date of principal debt payment and the amount of principal debt to be paid on that date; t. date of interest or other remuneration payment; u. schedule plan and procedures for the distribution and/or payment of remuneration, in the event of issuing Regional Sukuk;
v. details of the guarantee agreement principal, name and address of the guarantor, including information regarding the provided guarantee, replacement of the guarantor, and duration of the guarantee, if any;
w. name, address, and description of Parties acting as Trustee;
x. summary of main requirements in the Trust Agreement;
y. Activities financed with Regional Bonds and/or Regional Sukuk along with the Issuer's assets attached to such Activities that will serve as collateral for Regional Bonds and/or Regional Sukuk (if any); z. information regarding the redemption fund reserves; aa. approval from the Minister responsible for government affairs in the field of finance regarding the issuance of Regional Bonds and/or Regional Sukuk;

bb. other requirements related to the issuance of Regional Bonds and/or Regional Sukuk;
cc. Regional Regulations related to the issuance of Regional Bonds and/or Regional Sukuk;
dd. the rating results of Regional Bonds and/or Regional Sukuk, if any; ee. a summary of restrictions or prohibitions aimed at protecting holders of Regional Bonds and/or Regional Sukuk, if any; ff. the estimated full name of the Issuing Underwriter and Underwriter, if any; gg. the estimated full name of Capital Market supporting institutions and professions, as well as other parties; hh. the estimated name and complete address of the Sales Agent for Regional Bonds and/or Regional Sukuk;
ii. the estimated place and date of the Prospectus issuance;
jj. statements in capital letters, bold typeface, that immediately attract the reader's attention, namely:

1. “INFORMATION IN THIS DOCUMENT MAY STILL BE COMPLETED AND/OR CHANGED. THE REGISTRATION STATEMENT FOR REGIONAL BONDS AND REGIONAL SUKUK HAS BEEN SUBMITTED TO THE FINANCIAL SERVICES AUTHORITY BUT HAS NOT YET OBTAINED AN EFFECTIVE STATEMENT FROM THE FINANCIAL SERVICES AUTHORITY. THIS INFORMATION MAY ONLY BE USED IN THE FRAMEWORK OF THE INITIAL OFFERING OF THESE REGIONAL BONDS AND REGIONAL SUKUK. THESE REGIONAL BONDS AND REGIONAL SUKUK CANNOT BE SOLD BEFORE THE REGISTRATION STATEMENT SUBMITTED TO THE FINANCIAL SERVICES AUTHORITY BECOMES EFFECTIVE. ORDERING TO PURCHASE THESE REGIONAL BONDS AND REGIONAL SUKUK MAY ONLY BE CARRIED OUT AFTER THE POTENTIAL BUYER OR ORDERER RECEIVES OR HAS THE OPPORTUNITY TO READ THE PROSPECTUS”
   “COMPLETE INFORMATION REGARDING THE PUBLIC OFFERING IS CONTAINED IN THE PROSPECTUS”;
2. “INFORMATION IN THIS DOCUMENT MAY STILL BE COMPLETED AND/OR CHANGED. THE REGISTRATION STATEMENT FOR REGIONAL BONDS HAS BEEN SUBMITTED TO THE FINANCIAL SERVICES AUTHORITY BUT HAS NOT YET OBTAINED AN EFFECTIVE STATEMENT FROM THE FINANCIAL SERVICES AUTHORITY. THIS INFORMATION MAY ONLY BE USED IN THE FRAMEWORK OF THE INITIAL OFFERING OF THESE REGIONAL BONDS. THESE REGIONAL BONDS CANNOT BE SOLD BEFORE THE REGISTRATION STATEMENT SUBMITTED TO THE FINANCIAL SERVICES AUTHORITY BECOMES EFFECTIVE. ORDERING TO PURCHASE THESE REGIONAL BONDS MAY ONLY BE CARRIED OUT AFTER THE POTENTIAL BUYER OR ORDERER RECEIVES OR HAS THE OPPORTUNITY TO READ THE PROSPECTUS”
   “COMPLETE INFORMATION REGARDING THE PUBLIC OFFERING IS CONTAINED IN THE PROSPECTUS”; or
3. “INFORMATION IN THIS DOCUMENT MAY STILL BE COMPLETED AND/OR CHANGED. THE REGISTRATION STATEMENT FOR REGIONAL SUKUK HAS BEEN SUBMITTED TO THE FINANCIAL SERVICES AUTHORITY BUT HAS NOT YET OBTAINED AN EFFECTIVE STATEMENT FROM THE FINANCIAL SERVICES AUTHORITY. THIS INFORMATION MAY ONLY BE USED IN THE FRAMEWORK OF THE INITIAL OFFERING OF THESE REGIONAL SUKUK. THESE REGIONAL SUKUK CANNOT BE SOLD BEFORE THE REGISTRATION STATEMENT SUBMITTED TO THE FINANCIAL SERVICES AUTHORITY BECOMES EFFECTIVE. ORDERING TO PURCHASE THESE REGIONAL SUKUK MAY ONLY BE CARRIED OUT AFTER THE POTENTIAL BUYER OR ORDERER RECEIVES OR HAS THE OPPORTUNITY TO READ THE PROSPECTUS”
   “COMPLETE INFORMATION REGARDING THE PUBLIC OFFERING IS CONTAINED IN THE PROSPECTUS”; kk. the following statements in capital letters that immediately attract the reader's attention:
4. “THE FINANCIAL SERVICES AUTHORITY DOES NOT GIVE A STATEMENT APPROVING OR DISAPPROVING THE PUBLIC OFFERING OF THESE REGIONAL BONDS AND REGIONAL SUKUK, NOR DOES IT STATE THE TRUTH OR ADEQUACY OF THE CONTENT OF THIS SHORT PROSPECTUS. ANY STATEMENT CONTRARY TO THESE MATTERS IS AN ILLEGAL ACT”
   “THE ISSUER AND THE ISSUING UNDERWRITER (if any) ARE FULLY RESPONSIBLE FOR THE TRUTH OF ALL INFORMATION OR MATERIAL FACTS AND THE HONESTY OF OPINIONS CONTAINED IN THIS SHORT PROSPECTUS”;
5. “THE FINANCIAL SERVICES AUTHORITY DOES NOT GIVE A STATEMENT APPROVING OR DISAPPROVING THE PUBLIC OFFERING OF THESE REGIONAL BONDS, NOR DOES IT STATE THE TRUTH OR ADEQUACY OF THE CONTENT OF THIS SHORT PROSPECTUS. ANY STATEMENT CONTRARY TO THESE MATTERS IS AN ILLEGAL ACT”
   “THE ISSUER AND THE ISSUING UNDERWRITER (if any) ARE FULLY RESPONSIBLE FOR THE TRUTH OF ALL INFORMATION OR MATERIAL FACTS AND THE HONESTY OF OPINIONS CONTAINED IN THIS SHORT PROSPECTUS”; or
6. “THE FINANCIAL SERVICES AUTHORITY DOES NOT GIVE A STATEMENT APPROVING OR DISAPPROVING THE PUBLIC OFFERING OF THESE REGIONAL SUKUK, NOR DOES IT STATE THE TRUTH OR ADEQUACY OF THE CONTENT OF THIS SHORT PROSPECTUS. ANY STATEMENT CONTRARY TO THESE MATTERS IS AN ILLEGAL ACT”
   “THE ISSUER AND THE ISSUING UNDERWRITER (if any) ARE FULLY RESPONSIBLE FOR THE TRUTH OF ALL INFORMATION OR MATERIAL FACTS AND THE HONESTY OF OPINIONS CONTAINED IN THIS SHORT PROSPECTUS”; and
   ll. a statement that in connection with the Public Offering of Regional Bonds and/or Regional Sukuk, every Affiliated Party is prohibited from providing information or statements regarding data not disclosed in the Prospectus without written approval from the Issuer and the Issuing Underwriter (if any).

Article 40
Information regarding the use of funds obtained from the results of the Public Offering of Regional Bonds and/or Regional Sukuk as referred to in Article 38 letter b must contain a summary of information regarding matters as referred to in Article 15 letter a.

Article 41
Information regarding the summary of important financial data as referred to in Article 38 letter c must at least contain or disclose:
a. budget realization report; b. report on changes in surplus budget balance;
c. balance sheet;
d. operational report; e. cash flow statement; and f. statement of changes in equity.

Article 42
Information regarding the analysis and discussion by the Regional Government as referred to in Article 38 letter d must contain a brief discussion of matters as referred to in Article 21 and Article 22.

Article 43
Information regarding risk factors as referred to in Article 38 letter e must contain a summary of matters as referred to in Article 23.

Article 44
Information regarding significant events after the date of the audit report of the Supreme Audit Agency of the Republic of Indonesia as referred to in Article 38 letter f includes information regarding all material facts occurring after the date of the audit report of the Supreme Audit Agency of the Republic of Indonesia.

Article 45
Brief information regarding the Issuer as referred to in Article 38 letter g must at least contain and disclose:
a. regional administration consisting of the name of the Regional Head, Deputy Regional Head, and leaders of the Regional Bond and/or Regional Sukuk management unit; b. facilities and/or infrastructure owned;
c. natural resources; and
d. the name of regional-owned enterprises owned by the Issuer and the amount or percentage of ownership.

Article 46
Information regarding the ordering procedure for Regional Bonds and/or Regional Sukuk as referred to in Article 38 letter h must contain a summary of matters as referred to in Article 34.

Article 47
Information regarding the dissemination of the Prospectus and purchase order forms for Regional Bonds and/or Regional Sukuk as referred to in Article 38 letter i must contain a summary of matters as referred to in Article 35.

CHAPTER VI
SANCTION PROVISIONS

Article 48
(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 that violates 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 a fine as referred to in paragraph (1) letter b may be imposed separately or concurrently with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 49
In addition to administrative sanctions as referred to in Article 48 paragraph (1), the Financial Services Authority may take certain actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 50
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 48 paragraph (1) and certain actions as referred to in Article 49 to the public.

CHAPTER VII
CLOSING PROVISIONS

Article 51
Upon the entry into force of this Financial Services Authority Regulation:

1. Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Institution Number Kep-67/BL/2007 concerning Guidelines on the Form and Content of the Prospectus in the Framework of the Public Offering of Regional Bonds, along with Regulation Number IX.C.13 which is its appendix; and
2. Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Institution Number Kep-68/BL/2007 concerning Guidelines on the Form and Content of the Short Prospectus in the Framework of the Public Offering of Regional Bonds, along with Regulation Number IX.C.14 which is its appendix,
   are repealed and declared invalid.

Article 52
This Financial Services Authority Regulation enters into force upon its enactment.

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

In order that everyone may know it, 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 COMMISSIONERS BOARD
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 283

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 62 /POJK.04/2017
CONCERNING
THE FORM AND CONTENT OF THE PROSPECTUS AND SHORT PROSPECTUS IN THE FRAMEWORK OF THE PUBLIC OFFERING OF REGIONAL BONDS AND/OR REGIONAL SUKUK

I. GENERAL
One of the sources of information required by investors in making investment decisions is the Prospectus. The Prospectus is one of the main documents in the framework of the Public Offering, providing comprehensive information regarding the Public Offering of Regional Bonds and/or Regional Sukuk. Therefore, the information contained in the Prospectus must reflect the actual condition of the region and the offering of Regional Bonds and/or Regional Sukuk being conducted, so that if the information presented is untrue regarding material facts, or does not disclose true information regarding material facts, it may result in investors making inappropriate investment decisions.

In practice, disclosures in the Prospectus have undergone significant development, both in terms of transaction schemes and the need for more comprehensive information openness to fulfill the principle of openness as regulated in Law Number 8 of 1995 concerning the Capital Market and to provide protection to the public. Furthermore, while still emphasizing the quality of information openness, some simplifications, particularly historical information, are necessary to improve the quality of the Prospectus.

Currently, provisions regarding openness in the Prospectus or Short Prospectus for the Public Offering of Regional Bonds are regulated in Regulation Number IX.C.13, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Institution Number Kep-67/BL/2007 concerning Guidelines on the Form and Content of the Prospectus in the Framework of the Public Offering of Regional Bonds, and Regulation Number IX.C.14, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Institution Number Kep-68/BL/2007 concerning Guidelines on the Form and Content of the Short Prospectus in the Framework of the Public Offering of Regional Bonds.

The main provisions in regulations concerning guidelines on the form and content of the Prospectus and Short Prospectus in the framework of the Public Offering of Regional Bonds and/or Regional Sukuk include, among others:
a. information openness in the Prospectus and Short Prospectus for Regional Bonds and/or Regional Sukuk is restructured while still referring to the relevance and adequacy of information. This is done to make it easier for regions to compile the Prospectus and Short Prospectus and provide more comprehensive information to potential investors. The aforementioned additions include, among others:

1. information related to the terms of reference, Regional Regulations regarding the repayment fund reserve and coupon and principal payments, as well as explanations regarding default conditions in Regional Bonds and/or Regional Sukuk;
2. information related to the Public Offering of Regional Sukuk, including the Sukuk scheme and contract; and
3. information related to phased or simultaneous Public Offerings.
   b. adding other information openness specifically related to the Public Offering of Regional Bonds and/or Regional Sukuk.

II. ARTICLE BY ARTICLE

Article 1
Sufficiently clear.

Article 2
Sufficiently clear.

Article 3
Sufficiently clear.

Article 4
The term “responsible” refers to responsibility as referred to in Law Number 8 of 1995 concerning the Capital Market.

Article 5
Sufficiently clear.

Article 6
Sufficiently clear.

Article 7
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Letter e
Sufficiently clear.

Letter f
Sufficiently clear.

Letter g
In practice, electronic mail is called e-mail.

Letter h
Sufficiently clear.

Letter i
Number 1
Sufficiently clear.

Number 2
Sufficiently clear.

Number 3
Sufficiently clear.

Number 4
Sufficiently clear.

Number 5
Sufficiently clear.

Number 6
Disclosure of remuneration includes margin, service fee, or profit-sharing ratio according to the characteristics of the Shariah Contract.

Number 7
Sufficiently clear.

Number 8
Sufficiently clear.

Number 9
Sufficiently clear.

Number 10
Sufficiently clear.

Number 11
Sufficiently clear.

Number 12
In practice, the repayment fund reserve is called a sinking fund.

Number 13
Sufficiently clear.

Letter j
Sufficiently clear.

Letter k
Sufficiently clear.

Letter l
Sufficiently clear.

Letter m
Number 1
The term “main risks faced by the Issuer” refers to the most dominant risks faced by the Issuer.

Number 2
Sufficiently clear.

Article 8
Sufficiently clear.

Article 9
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Letter e
Examples of parties assisting in the preparation of the Prospectus include financial advisors.

Letter f
Sufficiently clear.

Article 10
Sufficiently clear.

Article 11
Sufficiently clear.

Article 12
Letter a
Number 1
Sufficiently clear.

Number 2
The term “assets” refers to activities that form the basis for the issuance of Regional Sukuk.

Number 3
Sufficiently clear.

Number 4
Sufficiently clear.

Number 5
Sufficiently clear.

Number 6
Sufficiently clear.

Number 7
Sufficiently clear.

Number 8
Sufficiently clear.

Number 9
Sufficiently clear.

Number 10
Sufficiently clear.

Number 11
Disclosure of remuneration includes margin, service fee, or profit-sharing ratio according to the characteristics of the Shariah Contract.

Number 12
The principal repayment date may differ from the maturity date if the principal of the Regional Bonds is not paid all at once upon maturity.

Number 13
Sufficiently clear.

Number 14
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Letter e
Sufficiently clear.

Letter f
Sufficiently clear.

Letter g
In practice, the repayment fund reserve is called a sinking fund.

Letter h
Sufficiently clear.

Letter i
The term “other requirements” includes, among others, considerations from the Minister in charge of domestic affairs.

Letter j
Sufficiently clear.

Letter k
In practice, electronic mail is called e-mail.

Article 13
Letter a
Sufficiently clear.

Letter b
In practice, a state of negligence is called an event of default.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Article 14
Sufficiently clear.

Article 15
Sufficiently clear.

Article 16
Sufficiently clear.

Article 17
Sufficiently clear.

Article 18
Letter a
In practice, underwriting service fees are called underwriting fees.

Letter b
In practice, management service fees are called management fees.

Letter c
In practice, sales service fees are called selling fees.

Letter d
Sufficiently clear.

Letter e
Sufficiently clear.

Letter f
In practice, financial consulting service fees are called financial advisory fees.

Letter g
Sufficiently clear.

Article 19
Sufficiently clear.

Article 20
Paragraph (1)
Letter a
Sufficiently clear.

Letter b
The budget realization report presents a summary of sources, allocation, and use of financial resources managed by the central/regional government, describing the comparison between the budget and its realization in one reporting period. The budget realization report consists of revenue, expenditure, transfers, and financing.

Letter c
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Article 21
This brief description aims to provide an explanation of financial conditions, changes in financial conditions at the time the Prospectus is issued, and expected conditions in the future.

Article 22
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
In practice, amounts still owed are called outstanding.

Letter e
Sufficiently clear.

Article 23
Letter a
The term “main risks” refers to risks that have a significant influence on the regional revenue and expenditure budget.

Letter b
Examples of other risks related to the Issuer include regional expansion, unmet revenue targets for the Issuer, central government policies or regulations, geographical conditions, and demographic conditions.

Letter c
Sufficiently clear.

Letter d
Examples of risks for investors include the illiquidity risk of bonds offered by the region and the decline in the price of Regional Bonds.

Letter e
Sufficiently clear.

Article 24
Sufficiently clear.

Article 25
Sufficiently clear.

Article 26
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Letter e
Sufficiently clear.

Letter f
The Regional Bond and/or Regional Sukuk management unit may be an existing unit with the addition of a new function, namely managing Regional Bonds and/or Regional Sukuk.

Article 27
Information regarding activities financed by Regional Bonds and/or Regional Sukuk refers to the terms of reference as referred to in the Regulation of the Minister of Finance concerning the procedures for issuance and accountability of Regional Bonds. In cases where there is more than one activity, each must be disclosed.

Letter a
Sufficiently clear.

Letter b
Number 1
Sufficiently clear.

Number 2
Sufficiently clear.

Number 3
Sufficiently clear.

Number 4
Sufficiently clear.

Number 5
The term “value” refers to funds allocated to complete the activity.

Number 6
Sufficiently clear.

Number 7
Sufficiently clear.

Letter c
Number 1
The term “start of activity operation” refers to the time when the activity is completed and ready for use.

Number 2
Sufficiently clear.

Number 3
Sufficiently clear.

Number 4
Sufficiently clear.

Article 28
Sufficiently clear.

Article 29
Sufficiently clear.

Article 30
The term “Capital Market supporting institution” includes, among others, securities administration bureaus.

The term “Capital Market supporting professions” includes, among others:

1. Legal Consultants;
2. Appraisers;
3. Notaries; and
4. Other professions determined by Government Regulations.

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
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Letter e
Sufficiently clear.

Letter f
Sufficiently clear.

Letter g
Sufficiently clear.

Letter h
Sufficiently clear.

Letter i
In practice, electronic mail is called e-mail.

Letter j
Sufficiently clear.

Letter k
Sufficiently clear.

Letter l
Sufficiently clear.

Letter m
The range of interest rates and/or remuneration or returns is not the final interest rate and/or remuneration or returns. The interest rate and/or remuneration or returns may be outside the range.

Letter n
Sufficiently clear.

Letter o
Sufficiently clear.

Letter p
Sufficiently clear.

Letter q
Sufficiently clear.

Letter r
Sufficiently clear.

Letter s
Sufficiently clear.

Letter t
Sufficiently clear.

Letter u
Sufficiently clear.

Letter v
Sufficiently clear.

Letter w
Sufficiently clear.

Letter x
Sufficiently clear.

Letter y
Sufficiently clear.

Letter z
In practice, the repayment fund reserve is called a sinking fund.

Letter aa
Sufficiently clear.

Letter bb
The term “other requirements” includes, among others, considerations from the Minister in charge of domestic affairs.

Letter cc
Sufficiently clear.

Letter dd
Sufficiently clear.

Letter ee
Sufficiently clear.

Letter ff
Sufficiently clear.

Letter gg
Sufficiently clear.

Letter hh
Sufficiently clear.

Letter ii
The purpose of the Issuer estimating the date of Prospectus issuance is to provide information about changes and/or additional information to potential investors.

Letter jj
Sufficiently clear.

Letter kk
Sufficiently clear.

Letter ll
Sufficiently clear.

Article 40
Sufficiently clear.

Article 41
Sufficiently clear.

Article 42
Sufficiently clear.

Article 43
Sufficiently clear.

Article 44
Sufficiently clear.

Article 45
Sufficiently clear.

Article 46
Sufficiently clear.

Article 47
Sufficiently clear.

Article 48
Sufficiently clear.

Article 49
The term “certain actions” includes, among others, the postponement of granting an effective statement, for example, an effective statement for the Public Offering of Regional Bonds and/or Regional Sukuk.

Article 50
The announcement of the imposition of administrative sanctions and certain actions by the Financial Services Authority may be conducted, among others, through the Financial Services Authority Website or the Financial Services Authority annual report.

Article 51
Sufficiently clear.

Article 52
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6151