Guidelines for the Electronic Opening of Customer Securities Accounts and Customer Fund Accounts through Securities Companies Acting as Securities Trading Intermediaries

To:

1. The Board of Directors of Securities Companies conducting business as Securities Trading Intermediaries;
2. Customer Fund Account Administrator Banks,
   At their respective locations.

COPY
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 6 /SEOJK.04/2019 REGARDING GUIDELINES FOR THE ELECTRONIC OPENING OF CUSTOMER SECURITIES ACCOUNTS AND CUSTOMER FUND ACCOUNTS THROUGH SECURITIES COMPANIES CONDUCTING BUSINESS AS SECURITIES TRADING INTERMEDIARIES

In connection with the provisions of Item 7 letter a number 2) of Regulation Number V.D.3, Appendix of the Decision of the Chairman of the Capital Market Supervisory Agency and Financial Institutions Body Number Kep-548/BL/2010 dated December 28, 2010 regarding Internal Control of Securities Companies Conducting Securities Trading Intermediary Business, and the provisions of Article 4 and Article 41 of Financial Services Authority Regulation Number 12/POJK.01/2017 regarding the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs in the Financial Services Sector, and to support the acceleration of securities account opening to increase the investor base in the Capital Market, it is necessary to regulate technical guidelines for the electronic opening of Customer Securities Accounts and Customer Fund Accounts in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

1. In this Financial Services Authority Circular Letter, the following terms are defined:
   a. Securities Company, hereinafter abbreviated as PE, is a Party conducting business as an Underwriter of Securities, Securities Trading Intermediary, and/or Investment Manager. b. Customer Securities Account, hereinafter abbreviated as REN, is a record showing the position of Securities and/or Customer funds at the Custodian.
   c. Sub-Securities Account, hereinafter abbreviated as SRE, is the securities account of each customer recorded in the securities account under the name of the Securities Company or Custodian Bank that has opened the main securities account at the Depository and Clearing Institution.
   d. Customer Fund Account, hereinafter abbreviated as RDN, is a fund account under the name of the customer at the RDN Bank designated by the Depository and Clearing Institution in accordance with statutory regulations, administered by the Securities Trading Intermediary based on power of attorney or instructions from the customer. e. Single Investor Identification (SID) is a unique and specific code issued by the Depository and Clearing Institution and used by customers, investors, and/or other Parties in accordance with statutory regulations to conduct activities related to Securities transactions and/or use other services provided by the Depository and Clearing Institution, parties designated by the Depository and Clearing Institution, or statutory regulations. f. Customer Fund Account Bank, hereinafter referred to as Bank RDN, is a bank that has received approval from the Depository and Clearing Institution as an RDN administrator bank. g. Cooperation Agreement, hereinafter abbreviated as PKS, is an agreement made by the PE and Bank RDN containing an understanding between the PE and Bank RDN to cooperate in implementing customer due diligence (CDD). h. Individual Customer is an Indonesian citizen individual using the services of the PE and/or Bank RDN for Securities trading activities in the Capital Market.
   i. Customer Due Diligence (CDD), hereinafter referred to as CDD, is an activity involving identification, verification, and monitoring conducted by the PE or Bank RDN to ensure transactions are in accordance with the profile, characteristics, and/or transaction patterns of prospective customers or customers.
   j. Enhanced Due Diligence (EDD), hereinafter referred to as EDD, is a more in-depth CDD action conducted by the PE or Bank RDN against prospective customers or customers classified as high-risk, including Politically Exposed Persons (PEP) and/or those in high-risk areas. k. Depository and Clearing Institution is a Party organizing Central Custodian activities for Custodian Banks, Securities Companies, and other Parties.

2. The Guidelines for the Electronic Opening of REN and RDN through Securities Companies consist of:
   a. guidelines for the electronic opening of REN and RDN; b. guidelines for the implementation of CDD by third parties for the opening of REN and RDN between the PE and Bank RDN; and
   c. guidelines for the REN and RDN opening forms for Individual Customers.

3. Securities Companies required to comply with the provisions of this Financial Services Authority Circular Letter are Securities Companies conducting business as Securities Trading Intermediaries that conduct the electronic opening of REN and RDN.

II. GUIDELINES FOR THE ELECTRONIC OPENING OF CUSTOMER SECURITIES ACCOUNTS AND CUSTOMER FUND ACCOUNTS THROUGH SECURITIES COMPANIES

1. In the implementation of the electronic opening of REN and RDN, the PE must comply with the following provisions:
   a. The electronic opening of REN and RDN is only valid for Individual Customers. b. The implementation of electronic opening of REN must comply with provisions regarding electronic documents, electronic information, and electronic signatures as referred to in statutory regulations governing electronic information and transactions.
   c. Before opening REN and RDN, the PE must conduct CDD on the prospective customer in accordance with the provisions of Financial Services Authority Regulations governing the implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs in the Financial Services Sector and other related regulations, with the following provisions:

1. Implementation of verification through direct meeting (face to face) is conducted with the following provisions:
   a. Implementation of verification through direct meeting (face to face) electronically using electronic devices or facilities owned by the PE or Bank RDN that allow the prospective customer to interact directly (online) with officers from the PE or Bank RDN (e.g., video call or similar media); or b. Implementation of verification through direct meeting (face to face) using the results of direct meeting (face to face) verification conducted by the Bank RDN based on a third-party CDD usage agreement.
2. The process of verification through direct meeting (face to face) as referred to in number 1) may be exempted with the following provisions:
   a) verification is conducted through electronic processes and facilities owned by the PE or Bank RDN and/or the prospective customer; and b) verification must utilize population data meeting 2 (two) authentication factors, namely:
   (1) "What You Have" factor authentication, namely identity documents owned by the prospective customer, namely Electronic Identity Card (KTP) or other documents showing the Population Identification Number (NIK); and (2) "What You Are" factor authentication, namely biometric data including but not limited to fingerprints. d. In the event that the customer is classified as a customer requiring EDD as referred to in Financial Services Authority Regulations governing the implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs in the Financial Services Sector, the PE must implement EDD procedures. e. RDN opening documents and/or CDD results are submitted to the Bank RDN and stored electronically. f. The CDD results as referred to in letter e consist of classification results based on risk levels, including customer identity, beneficial owner, and other information related to the prospective customer or customer. g. Management of electronic documents refers to the provisions of statutory regulations governing electronic information and transactions. h. The flow of electronic REN opening:
3. The prospective customer accesses the official website or registration application of the PE to conduct the electronic opening of REN.
4. The prospective customer fills in personal profile data containing at least the data and information as referred to in Financial Services Authority Regulations governing the implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs in the Financial Services Sector and accommodates matters explained in the REN Opening Form and RDN Form.
5. The PE conducts electronic CDD on the prospective customer, opens the REN, and submits an application for the creation of SRE and SID to the Depository and Clearing Institution.
6. After receiving the SID number and SRE number from the Depository and Clearing Institution, the PE sends the prospective customer's information and data, CDD results, SID number, SRE number, and the RDN opening form to the Bank RDN through an agreed electronic system to open the RDN.
7. The Bank RDN verifies the prospective customer's data and information submitted by the PE and verifies the SID and SRE data with the Depository and Clearing Institution, subsequently opens and activates the customer's RDN, and informs the RDN number to the PE.
8. The PE provides the REN number, SID number, and RDN number to the prospective customer.
9. The prospective customer can independently open the RDN by including proof of electronic REN opening through:
   a. the Bank RDN office; or b. digital banking services in the event the Bank RDN has digital banking services.
10. In the event that the PE's prospective customer already has a Bank account at the Bank RDN, the PE may use the CDD results of the prospective customer at the Bank RDN based on the PKS between the PE and Bank RDN to open the REN and RDN.

2. In the implementation of electronic REN opening, the PE must possess:
   a. an organizational structure supporting the electronic opening of REN and RDN, including supervision by management; b. a business process flowchart regarding the electronic opening process of REN and RDN;
   c. policies, systems, procedures, and authority arrangements in the implementation of the electronic opening of REN and RDN;
   d. the implementation of risk management, specifically security controls, to ensure the fulfillment of:

1. confidentiality principle;
2. integrity;
3. availability;
4. authentication;
5. authorization control in systems and applications;
6. non-repudiation; and
7. maintenance of audit trails.

III. GUIDELINES FOR THE IMPLEMENTATION OF CUSTOMER DUE DILIGENCE (CDD) BY THIRD PARTIES FOR THE OPENING OF REN AND RDN BETWEEN PE AND BANK RDN

1. In the implementation of the electronic opening of REN and RDN for prospective customers, the PE and Bank RDN may cooperate in the use of third-party CDD conducted by the PE and Bank RDN.

2. The implementation of third-party CDD conducted by the PE or Bank RDN must comply with the following principles:
   a. The PE and Bank RDN must have a PKS made to clarify the roles, functions, and responsibilities of each party in the implementation of customer due diligence (CDD); b. the implementation of third-party CDD is limited to the identification and verification stages of prospective customers for CDD users, while the transaction monitoring stage and customer data updating are conducted by each PE and Bank RDN where the customer conducts transactions according to their respective authorities;
   c. the PE must ensure that the Bank RDN has CDD procedures and is subject to supervision by competent authorities in accordance with statutory regulations;
   d. the Bank RDN must ensure that the PE has CDD procedures and is subject to supervision by competent authorities in accordance with statutory regulations; e. the PE and Bank RDN must promptly obtain the necessary information related to prospective customer CDD data and information, including CDD results; f. the PE or Bank RDN as the CDD user conducted by a third party must take adequate steps to ensure the willingness of the third party to promptly fulfill requests for information and copies of supporting documents, both in printed and electronic form, if needed by the PE or Bank RDN in the implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs; and g. the PE and/or Bank RDN must have a risk profile classification for prospective customers, to ensure that prospective customers open business relationships or conduct transactions acting for themselves or for the interests of the Beneficial Owner.

3. The PKS as referred to in number 2 letter a must contain at least the following:
   a. scope and definitions; b. purpose and objectives of cooperation;
   c. status of PE and Bank RDN as providers or users of third-party CDD;
   d. cooperation mechanisms including agreed facilities and media; e. rights and obligations of each party, including:

1. obligation to understand the customer's profile, purpose, and objectives of the business relationship and transactions;
2. obligation and mechanism of the PE and Bank RDN to monitor the business relationship with customers and update data, information, and/or supporting documents in the event of known changes;
3. obligation of the PE and Bank RDN to manage documents and information related to prospective customers, both in printed and electronic form;
4. obligation of the PE and Bank RDN to provide data, information, and/or documents managed if requested by the Financial Services Authority and/or other competent authorities;
5. obligation of the PE and Bank RDN to have CDD guidelines;
6. CDD responsibility remains with the PE or Bank RDN as the CDD user;
7. obligation of the CDD provider to identify and verify prospective customers to determine the prospective customer's profile through data and information requests in accordance with statutory regulations;
   f. handling of customer complaints; g. procedures for dispute resolution between parties; h. obligation to maintain the confidentiality of customer data and transaction data occurring or other data obtained as a result of this agreement, except to competent parties in accordance with statutory regulations;
   i. term of validity of the agreement; and
   j. force majeure conditions.

IV. GUIDELINES FOR REN AND RDN OPENING FORMS FOR INDIVIDUAL CUSTOMERS

1. The REN and RDN Opening Forms for Individual Customers may be separate forms for each REN and RDN or a combined form for REN and RDN.

2. The REN and RDN opening forms must contain at least the data and information to determine the prospective customer's profile as referred to in Financial Services Authority Regulations governing the implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs in the Financial Services Sector, namely:
   a. Identity containing:

1. full name including alias;
2. population identification number (NIK);
3. residential address according to identity documents and other residential addresses if having another residence;
4. place and date of birth;
5. nationality;
6. occupation;
7. name, address, and telephone number of the workplace;
8. gender; and
9. marital status.
   b. Attachment of identity documents and specimen signatures; In this case, the prospective customer's signature may be a specimen signature, a sample signature, or a signature created in the PE or Bank RDN application.
   c. source of funds;
   d. average annual income; and e. purpose and objectives of the business relationship or transactions to be conducted by the prospective customer.

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

V. CLOSING

This Financial Services Authority Circular Letter takes effect on the date of determination.

Determined in Jakarta on March 20, 2019
EXECUTIVE HEAD
CAPITAL MARKET SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signed
HOESEN