Implementation of Conventional Pawnshop Business by Pawn Companies

To:
The Board of Directors of Pawn Companies
At your office.

COPY
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 52 /SEOJK.05/2017 ON THE IMPLEMENTATION OF PAWN COMPANY BUSINESS THAT CARRIES OUT BUSINESS ACTIVITIES ON A CONVENTIONAL BASIS

In accordance with the mandate of Article 13 paragraph (5), Article 17 paragraph (3), Article 21 paragraph (2), Article 22 paragraph (4), and Article 27 paragraph (3) of Financial Services Authority Regulation Number 31/POJK.05/2016 concerning Pawn Business (State Gazette of the Republic of Indonesia Year 2016 Number 152, Supplement to the State Gazette of the Republic of Indonesia Number 5913), it is necessary to regulate implementation provisions regarding the implementation of pawn company business that carries out business activities on a conventional basis in a Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

Pawn Business is any business concerning the provision of loans with movable property collateral, consignment services, appraisal services, and/or other services, including those conducted based on Sharia principles.
Conventional Pawn Business is Pawn Business conducted on a conventional basis.
Pawn Company is a private pawn company and a government pawn company regulated and supervised by the Financial Services Authority.
Company means a Pawn Company that carries out business activities on a conventional basis.
Board of Directors:
a. for a Pawn Company in the form of a limited liability company is the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies; or b. for a Pawn Company in the form of a cooperative legal entity is the management as referred to in Law Number 25 of 1992 concerning Cooperatives.
Pawn Certificate is a document evidencing a loan agreement with collateral signed by the Pawn Company and the customer.
Loan Money is money lent by the Pawn Company to the customer.
Collateral is any movable property pledged by the customer to the Pawn Company.
Surplus Money is the excess of the proceeds from the sale of Collateral minus the amount of Loan Money, interest/service charges, costs for auction, and costs to save the goods.
Day means working day.
Customer means an individual or business entity that receives Loan Money with Collateral as security and/or utilizes other available services at the Pawn Company.

II. OTHER ACTIVITIES NOT RELATED TO CONVENTIONAL PAWN BUSINESS THAT PROVIDE FEE-BASED INCOME

The Company may carry out other activities not related to Conventional Pawn Business that provide fee-based income as long as they do not conflict with financial services laws and regulations.
Other activities not related to Conventional Pawn Business that provide fee-based income as referred to in number 1 include:
a. marketing products from financial service institutions that have received permission from the Financial Services Authority; b. financial service agents without offices in the context of inclusive finance; and/or
c. money transfer service agents (remittance).
The Company's income from other activities not related to Conventional Pawn Business that provide fee-based income is at most 20% (twenty percent) of the Company's total assets.
The total assets used to calculate fee-based income are obtained from the Company's latest periodic report balance sheet and do not include the subsidiary's balance sheet (non-consolidated).

III. OTHER BUSINESS ACTIVITIES OF THE COMPANY WITH THE APPROVAL OF THE FINANCIAL SERVICES AUTHORITY

A. CRITERIA FOR OTHER BUSINESS ACTIVITIES OF THE COMPANY WITH THE APPROVAL OF THE FINANCIAL SERVICES AUTHORITY

The Company may carry out other business activities with the approval of the Financial Services Authority.
The criteria for other business activities as referred to in number 1 are carried out in the context of:
a. government assignments; b. development of Conventional Pawn Business products; and/or
c. cooperation in the context of business acquisition.
Development of Conventional Pawn Business products as referred to in number 2 letter b is carried out by changing or modifying the features of Conventional Pawn Business products in accordance with laws and regulations.
Cooperation in the context of business acquisition as referred to in number 2 letter c is carried out by meeting the following provisions:
a. stipulated in a written cooperation agreement; b. not aimed at market domination; and
c. does not have conflicts of interest with parties cooperating with the Company.
Requests for approval of other business activities with criteria for cooperation in the context of business acquisition as referred to in number 2 letter c may be submitted 1 (one) time as long as the cooperation scheme does not differ even if cooperation is conducted with different parties.

B. REQUIREMENTS FOR REQUESTS FOR APPROVAL OF OTHER BUSINESS ACTIVITIES OF THE COMPANY

Companies that will carry out other business activities as referred to in letter A number 1 must meet the requirement of not currently being subject to sanctions by the Financial Services Authority.
In addition to the requirements as referred to in number 1, Companies that will carry out other business activities must have:
a. adequate human resources to carry out other business activities:
For example, a Company that will receive goods XYZ must have an appraiser who can appraise the economic value of goods XYZ; b. adequate infrastructure to carry out other business activities;
c. methods for implementing other business activities (standard operating procedure); and
d. financial conditions that are not loss-making in the latest periodic reports.

C. REQUESTS FOR APPROVAL OF OTHER BUSINESS ACTIVITIES OF THE COMPANY

Requests for approval of other business activities are submitted to the Financial Services Authority accompanied by documents containing at least the following descriptions:
a. other business activities to be carried out, including procedures and schemes for other business activities to be carried out; b. draft agreements to be used;
c. rights and obligations of the parties;
d. analysis of the prospects of other business activities to be carried out; and e. risk mitigation for other business activities to be carried out.
Submission of requests for approval of other business activities to the Financial Services Authority as referred to in number 1 must use:
a. format 1 as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter, addressed to the Executive Head of Supervision of Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions u.p. Director of Institutional Affairs and IKNB Products, for Companies whose headquarters are located in the DKI Jakarta and Banten region; or b. format 2 as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter, addressed to the Executive Head of Supervision of Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions u.p. Head of the Financial Services Authority Regional or Head of the Financial Services Authority according to the location of the Company's headquarters with a copy to the Director of Institutional Affairs and IKNB Products, for Companies whose headquarters are located outside the DKI Jakarta and Banten region.
Submission of requests for approval of other business activities to the Financial Services Authority as referred to in number 2 is accompanied by forms as contained in format 3 of the Appendix which is an integral part of this Financial Services Authority Circular Letter.
Submission of requests for approval of other business activities as referred to in number 2 refers to the submission procedures in accordance with the provisions in this Financial Services Authority Circular Letter.

D. GRANTING APPROVAL OF OTHER BUSINESS ACTIVITIES OF THE COMPANY

The Financial Services Authority grants approval or rejection of requests for approval of other business activities within a maximum of 20 (twenty) Days since the complete request documents for approval of other business activities are received in accordance with the requirements in this Financial Services Authority Circular Letter.
The maximum period of 20 (twenty) Days as referred to in number 1 does not include the time given to the Company to complete, add, and/or improve the required documents.
The Financial Services Authority grants approval or rejection of requests for approval of other business activities as referred to in number 1 based on:
a. examination of the completeness and conformity of documents; b. analysis of the business activities to be carried out, including procedures and schemes for other business activities to be carried out;
c. analysis of draft agreements to be used;
d. analysis of the rights and obligations of the parties; e. analysis of the prospects of other business activities to be carried out; and f. analysis of risk mitigation for other business activities to be carried out.
If necessary, the Financial Services Authority may request further information from the Company regarding the other business activities submitted.
Examination of document completeness as referred to in number 3 letter a includes the completeness of content and format of documents in accordance with format 1 or format 2 for the submission of requests for approval of other business activities of the Company as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter.
In the event that the submitted request documents for approval of other business activities are deemed complete and the proposed other business activities are deemed feasible, the Financial Services Authority issues a letter of approval for other business activities that can be carried out by the Company.
In the event that the submitted request documents for approval of other business activities are deemed incomplete, the Financial Services Authority sends a letter requesting document completeness to the Company.
The Company must submit the completion of missing documents as referred to in number 7 within a maximum of 20 (twenty) Days since the date of the letter requesting document completeness from the Financial Services Authority.
In the event that the Company cannot complete the missing documents within the time limit as referred to in number 8, the Company's request for approval of other business activities is declared void.
Companies whose requests for approval of other business activities are declared void by the Financial Services Authority as referred to in number 9 may submit a new request for approval of other business activities to the Financial Services Authority.
In the event that the Company has completed the missing documents within the time limit as referred to in number 8 and based on the assessment of the Financial Services Authority, the submitted request documents for approval of other business activities are deemed complete and the proposed other business activities are deemed feasible, the Financial Services Authority issues a letter of approval for other business activities that can be carried out by the Company.
The Financial Services Authority may reject requests for approval of other business activities if the assessment of the proposed other business activities is deemed unfeasible even though the submitted request documents for approval of other business activities are complete and in accordance with the requirements in this Financial Services Authority Circular Letter.

E. IMPLEMENTATION OF OTHER BUSINESS ACTIVITIES OF THE COMPANY

The Company must implement other business activities within a maximum of 20 (twenty) Days since the date of the letter of approval for other business activities from the Financial Services Authority.
The Company must submit reports on the implementation of other business activities as referred to in number 1 to the Financial Services Authority within a maximum of 15 (fifteen) Days since the date of the start of other business activities.
Submission of reports on the implementation of other business activities as referred to in number 2 must use:
a. format 4 as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter, addressed to the Executive Head of Supervision of Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions u.p. Director of Institutional Affairs and IKNB Products, for Companies whose headquarters are located in the DKI Jakarta and Banten region; or b. format 5 as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter, addressed to the Executive Head of Supervision of Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions u.p. Head of the Financial Services Authority Regional or Head of the Financial Services Authority according to the location of the Company's headquarters with a copy to the Director of Institutional Affairs and IKNB Products, for Companies whose headquarters are located outside the DKI Jakarta and Banten region, and attached with:
a. photocopies of agreements; and b. forms as contained in format 6 of the Appendix which is an integral part of this Financial Services Authority Circular Letter.
Submission of reports on the implementation of other business activities as referred to in number 3 refers to the submission procedures in accordance with the provisions in this Financial Services Authority Circular Letter.

F. PROCEDURES FOR SUBMITTING REQUESTS FOR APPROVAL OF OTHER BUSINESS ACTIVITIES AND REPORTS ON THE IMPLEMENTATION OF OTHER BUSINESS ACTIVITIES

Submission of requests for approval of other business activities as referred to in letter C number 4 and reports on the implementation of other business activities as referred to in letter E number 4 are submitted to the Financial Services Authority online through the Financial Services Authority's data communication network system.
In the event that the Financial Services Authority's data communication network system as referred to in number 1 is not yet available or technical difficulties occur during the submission of requests for approval of other business activities or reports on the implementation of other business activities, the requests for approval of other business activities or reports on the implementation of other business activities are submitted to the Financial Services Authority offline in one of the following ways:
a. submitted directly to the Financial Services Authority; or b. sent through a courier service company.
In the event of technical difficulties as referred to in number 2, the Financial Services Authority announces the occurrence of such technical difficulties through the Financial Services Authority's website.
Requests for approval of other business activities or reports on the implementation of other business activities as referred to in number 2 must be submitted in printed form (hardcopy) or in electronic data form using media such as compact disc (CD) or other electronic data storage media.
In the event that technical difficulties have been resolved and the Financial Services Authority's data communication network system has returned to normal, requests for approval of other business activities or reports on the implementation of other business activities are submitted again online.
Submission of requests for approval of other business activities or reports on the implementation of other business activities as referred to in number 2 must be accompanied by a printed (hardcopy) cover letter signed by the Company's Board of Directors and submitted in writing by the Company's Board of Directors.
The Company is deemed to have submitted requests for other business activities or reports on the implementation of other business activities with the following provisions:
a. for online submission through the Financial Services Authority's data communication network system, evidenced by a receipt from the Financial Services Authority; or b. for offline submission, evidenced by:

a receipt letter from the Financial Services Authority, if the report is submitted directly as referred to in number 2 letter a; or
a delivery receipt from the courier service company, if the report is sent through a courier service company as referred to in number 2 letter b.

IV. COLLATERAL

A. CRITERIA FOR COLLATERAL

Criteria for goods that can be accepted as Collateral are stipulated in the Company's guidelines.
The Company's guidelines containing criteria for acceptable Collateral as referred to in number 1 are prepared in accordance with the provisions in this Financial Services Authority Circular Letter.
Criteria for goods that can be accepted as Collateral as referred to in number 1 include:
a. having economic value; and b. not violating laws and regulations.
Goods that can be accepted as Collateral as referred to in number 3 include:
a. jewelry such as gold, diamonds, gemstones, and diamonds; b. vehicles such as cars, motorcycles, and bicycles;
c. household goods such as furniture, pottery, and electronic equipment;
d. movable machines such as tractors, water pumps, generators, and chainsaws; e. textiles such as clothing materials, fabrics, sarongs, bed sheets, and carpets/ambals; f. accessories such as watches, bags, wallets, hats, shoes, and glasses; and/or g. securities, ownership certificates, important documents, and other documents that have economic value.
Companies cannot accept Collateral with criteria including:
a. government-owned goods such as equipment of the Indonesian National Armed Forces (TNI) and the Indonesian National Police (POLRI); b. goods that are easily perishable, shrink, and/or expired, such as food, drinks, and medicines;
c. dangerous and flammable goods such as lighters, firecrackers (petasan), gunpowder, gasoline, kerosene, gas cylinders, and firearms;
d. goods whose circulation is prohibited such as narcotics (marijuana, opium, heroin, methamphetamine, and similar); and/or e. goods that are prohibited from being traded based on laws and regulations.

B. SECURITY AND SAFETY OF COLLATERAL

In maintaining the security and safety of Collateral, the Company must refer to the Company's guidelines in accordance with the provisions in this Financial Services Authority Circular Letter.
In maintaining the security and safety of Collateral, the Company must maintain cleanliness and perform regular maintenance on Collateral in accordance with the characteristics of the Collateral.

C. REQUIREMENTS FOR COLLATERAL STORAGE PLACES

Requirements for Collateral storage places are determined based on the type of Collateral as follows:
a. jewelry such as gold, diamonds, gemstones, and diamonds; accessories such as watches, bags, wallets, hats, shoes, and glasses; and securities, ownership certificates, important documents, and other documents that have economic value must be stored in storage rooms (vaults) and/or safes; b. vehicles such as cars, motorcycles, and bicycles can be stored in buildings and/or outdoors with protective roofs and/or covers for vehicles, considering the confidentiality of the identity of the Collateral; and
c. household goods such as furniture, pottery, and electronic equipment; movable machines such as tractors, water pumps, generators, and chainsaws; and textiles such as clothing materials, fabrics, sarongs, bed sheets, and carpets/ambals must be stored in warehouses.
Collateral storage places as referred to in number 1 letter a can be rooms constructed to meet minimum security and safety standards having at least:
a. building structures that are not easily collapsed, destroyed, or broken into; b. perimeter walls built permanently;
c. doors made of iron doors using combination locks; and
d. partition walls that separate the Collateral storage area and the customer service area, in the event that the Collateral storage area is located in the same location as the customer service area.
Collateral storage places as referred to in number 1 letter b and c can be rooms constructed to meet minimum security and safety standards covering at least being able to protect Collateral from weather hazards and theft risks.
Collateral as referred to in number 1 before being stored in storage rooms (vaults) and/or safes must first be placed in bags or boxes and must be equipped with additional security in the form of seals or security marks.
Sealing of Collateral is done by placing or attaching seals or security marks on the bags or boxes for storing Collateral.
Seals or security marks as referred to in number 5 can be made of paper, plastic, metal, lacquer, and/or other materials with specific forms such as sheets, ribbons, keys, buttons, and/or other forms that can be equipped with electronic devices.
Seals or security marks as referred to in number 5 consist of:
a. paper seals or security marks in the form of adhesive or non-adhesive paper sheets, with the Company's marks or logos and registered mark numbers or business licenses from the Financial Services Authority, with specific shapes, colors, and sizes determined by the Company; b. bag clips made of aluminum with types and shapes determined by the Company;
c. ribbons made of adhesive or non-adhesive paper or plastic, with the Company's marks or logos and registered mark numbers or business licenses from the Financial Services Authority, with specific shapes, colors, and sizes determined by the Company; or
d. electronic seals or security marks in the form of barcodes made of paper, ribbons, buttons, keys, or other forms with permanently printed barcodes.
In order to meet the standards of security and safety levels for Collateral, the Company must at least

using 2 (two) combinations of security equipment as follows:
a. additional lock; b. alarm monitoring system;
c. closed circuit television (CCTV);
d. door contact; and/or e. panic button.
9. The storage place for Collateral as referred to in item 1 must be equipped with security personnel in accordance with the standards for security personnel based on applicable legislation.
10. In order to protect the Collateral, the Company must insure the Collateral at least against the risks of break-in and fire.
11. The Company may use:
a. 1 (one) storage place to store Collateral originating from several service units (outlets) (clustering system); or b. a storage place for Collateral provided by another party (outsourcing).
12. The use of a Collateral storage place as referred to in item 11 must:
a. be regulated in the Company's guidelines in accordance with the provisions in this Circular Letter of the Financial Services Authority; and b. meet the standards for the level of security and safety of Collateral as regulated in this Circular Letter of the Financial Services Authority.
13. In managing the Collateral storage place, the Company must refer to the Company's guidelines in accordance with the provisions in this Circular Letter of the Financial Services Authority.
14. In the event that the Collateral storage place is located outside the service unit (outlet), the Company must meet the standards for the level of security and safety of Collateral as regulated in this Circular Letter of the Financial Services Authority.

D. REQUIREMENTS FOR STORAGE PLACE OF VAULT SERVICE FOR VALUABLE ITEMS

Companies conducting vault service business for valuable items as referred to in Article 13 paragraph (1) letter c of Financial Services Authority Regulation Number 31/POJK.05/2016 concerning Pawnshop Business must meet the requirements for the storage place of vault service for valuable items.
Requirements for the storage place of vault service for valuable items refer to the provisions regarding requirements for the storage place of Collateral as referred to in letter C.

V. MINIMUM VALUE RATIO OF LOAN AMOUNT AND APPRAISED VALUE OF COLLATERAL

The Company is obligated to meet the minimum ratio between the Loan Amount and the appraised value of Collateral when providing a Loan Amount to Customers, unless the Customer explicitly states in writing that they desire a lower Loan Amount.
The minimum value ratio between the Loan Amount and the appraised value of Collateral as referred to in item 1 is established as follows:
a. for Collateral in the form of jewelry goods, the Loan Amount provided to the Customer is at least 75% (seventy-five percent) of the appraised value of the relevant Collateral; For example:

Collateral in the form of gold weighing 5 grams.
Appraised value of gold Collateral = Rp2,000,000.00 (two million rupiah).
Loan Amount provided by the Company to the Customer is at least = 75% x Rp2,000,000.00 = Rp1,500,000.00 (one million five hundred thousand rupiah).
b. for Collateral in the form of motor vehicles, the Loan Amount provided to the Customer is at least 70% (seventy percent) of the appraised value of the relevant Collateral; For example:
Collateral in the form of a motorcycle.
Appraised value of motorcycle Collateral = Rp7,000,000.00
(seven million rupiah).
Loan Amount provided by the Company to the Customer is at least = 70% x Rp7,000,000.00 =
Rp4,900,000.00 (four million nine hundred thousand rupiah).
c. for Collateral in the form of electronic equipment, the Loan Amount provided to the Customer is at least 60%
(sixty percent) of the appraised value of the relevant Collateral; For example:
Collateral in the form of a mobile phone.
Appraised value of mobile phone Collateral =
Rp4,000,000.00 (four million rupiah).
Loan Amount provided by the Company to the Customer is at least = 60% x Rp4,000,000.00 =
Rp2,400,000.00 (two million four hundred thousand rupiah). d. for Collateral other than Collateral as referred to in letters a, b, and c, the Loan Amount provided to the Customer is at least 50% (fifty percent) of the appraised value of the relevant Collateral. For example:
Collateral in the form of a stove.
Appraised value of Collateral in the form of a stove =
Rp300,000.00 (three hundred thousand rupiah).
Loan Amount provided by the Company to the Customer is at least = 50% x Rp300,000.00 =
Rp150,000.00 (one hundred fifty thousand rupiah).

In the event that the Customer agrees, the Company may provide a Loan Amount lower than the minimum ratio of Loan Amount to the appraised value of Collateral as referred to in item 2.
For example, Budi pawns his motor vehicle at the Company. The Company appraises Budi's motor vehicle at Rp8,000,000.00 (eight million rupiah). According to the provisions in this Circular Letter of the Financial Services Authority, the Company must provide a Loan Amount to Budi of at least 70% (seventy percent) of the appraised value, amounting to Rp5,600,000.00 (five million six hundred thousand rupiah). However, due to various reasons, Budi only needs money amounting to Rp3,000,000.00 (three million rupiah) and communicates this need to the Company. Considering that the Customer desires a Loan Amount lower than the Loan Amount established by the Company and the Company approves, the Company may provide a Loan Amount to Budi that is lower than the established Loan Amount.
The Customer's agreement to accept a Loan Amount lower than the minimum value as referred to in item 3 must be recorded in the Pawn Receipt signed by the relevant Customer.
In providing a Loan Amount, the Company must refer to the Company's guidelines regarding the minimum provision of Loan Amount based on the ratio of Loan Amount to the appraised value of Collateral in accordance with the provisions in this Circular Letter of the Financial Services Authority.

VI. PROCEDURE FOR RETURNING SURPLUS FUNDS

The Company is obligated to return Surplus Funds resulting from the sale of Collateral via auction or based on the power of sale to the Customer.
In order to return Surplus Funds, the Company must notify the nominal amount of Surplus Funds to the Customer no later than 10 (ten) Days after the sale of Collateral or the auction process, accompanied by information consisting of:
a. Pawn Receipt number; b. nominal Loan Amount;
c. rental cost;
d. auction sale results or sale of Collateral; e. costs; f. procedure for taking Surplus Funds; and g. information on the time limit after which Surplus Funds are declared expired.
Notification to the Customer as referred to in item 2 must be done through an announcement board at the service unit (outlet) where the Customer pawned the item, which is easily readable by the Customer and placed for at least 20 (twenty) Days.
In addition to the notification as referred to in item 3, the Company may deliver notifications through:
a. letters sent directly to the Customer's address or sent via a courier service company; and/or b. other media such as telephone, short message service (SMS), or email.
Return of Surplus Funds can be done by the Company to the Customer via:
a. cash; or b. non-cash, carried out by transferring the nominal Surplus Funds to the Customer's account.
Non-cash return of Surplus Funds as referred to in item 5 letter b must be done no later than 20 (twenty) Days since the announcement as referred to in item 3.
Costs for notification and delivery of Surplus Funds to the Customer may be offset against the Surplus Funds returned to the Customer.
Imposition of notification and delivery costs for Surplus Funds by the Company as referred to in item 7 must be included in the Pawn Receipt.
The Company must administer all Surplus Funds according to the sequence number of the Pawn Receipt of Collateral that was auctioned or sold under the Customer's power of sale during a specific period.
The Company must administer the return of Surplus Funds that have been returned to the Customer.
In order to notify and return Surplus Funds to the Customer, the Company must refer to the Company's guidelines in accordance with the provisions in this Circular Letter of the Financial Services Authority.
Surplus Funds are declared expired if more than 1 (one) year has passed since the date of notification to the Customer as referred to in item 3.
In the event that the Customer desires a different time limit from the time limit as referred to in item 12, the Company must agree to the time limit desired by the Customer.
For example, Putra pawns a watch at the Company. At the time of filling out the Pawn Receipt, Putra desires that the time limit for Surplus Funds to be declared expired be exceeded by 6 (six) months since the date of notification to the Customer through the announcement board at the service unit (outlet). According to the provisions in this Circular Letter of the Financial Services Authority, the Company must agree to the time limit desired by Putra.
In the event that Surplus Funds cannot be returned to the Customer or have expired, Surplus Funds may be distributed to social care funds or similar entities, in accordance with agreements with the Customer stated in the Pawn Receipt.

VII. GUIDELINES FOR CONDUCTING CONVENTIONAL PAWNSHOP BUSINESS ACTIVITIES

The Company must compile and implement Company guidelines in conducting Conventional Pawnshop Business Activities.
Guidelines as referred to in item 1 must contain:
a. criteria for goods that can be accepted as Collateral as referred to in Roman numeral IV letter A item 3, which must at least contain:

goods that can be accepted; and
specifications or criteria for goods that can be accepted;
b. security and safety of Collateral as referred to in Roman numeral IV letter B item 1, which must at least contain:
administration of Collateral;
mechanism for periodic maintenance of Collateral;
mechanism for retrieving Collateral upon settlement;
mechanism for handling damaged, lost, and/or problematic Collateral;
mechanism for handling Collateral in the auction process; and
mechanism for retrieving auction Collateral;

c. management of Collateral storage places as referred to in Roman numeral IV letter C item 13, which must at least contain information about:

mechanism for storing Collateral;
mechanism for securing Collateral stored at service units (outlets);
mechanism for using Collateral storage places, in the event the Company uses 1 (one) storage place to store Collateral originating from several service units (outlets) (clustering system) as referred to in Roman numeral IV letter C item 11 letter a;
mechanism for securing Collateral when Collateral is transported from service units (outlets) to storage places for Collateral provided by another party (outsourcing), in the event the Company uses storage places for Collateral provided by another party (outsourcing) as referred to in Roman numeral IV letter C item 11 letter b;
mechanism for access to Collateral storage places;
mechanism for monitoring stock checks of Collateral at storage places;
prohibition of using storage places other than for Collateral; and
mechanism for security by security personnel;
d. minimum provision of Loan Amount based on the ratio of Loan Amount to the appraised value of Collateral as referred to in Roman numeral V item 5, which must at least contain information about:
procedure for calculating the appraisal of Collateral;
procedure for calculating the amount of Loan Amount; and
size of minimum and maximum appraised values; and
e. mechanism for notification and return of Surplus Funds as referred to in Roman numeral VI item 11, which must at least contain information about:
mechanism for notifying Customers;

This copy matches the original
Legal Director
Legal Department signed
Yuliana
2) mechanism for returning Surplus Funds to Customers; and
3) administration of Surplus Funds.
3. The Company may apply a review mechanism for the Company's guidelines as referred to in item 1 by considering economic conditions and the Company's capabilities.

VIII. CLOSING
Provisions in this Circular Letter of the Financial Services Authority shall take effect on the date of determination.
Determined in Jakarta on September 28, 2017
EXECUTIVE HEAD OF INSURANCE, PENSION FUND,
CREDIT INSTITUTION, AND
OTHER FINANCIAL SERVICES INSTITUTIONS SUPERVISOR FINANCIAL SERVICES AUTHORITY, signed RISWINANDI

APPENDIX
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 52 /SEOJK.05/2017 CONCERNING MANAGEMENT OF PAWNSHOP BUSINESS THAT CONDUCTS BUSINESS ACTIVITIES IN A CONVENTIONAL MANNER

FORMAT 1 APPLICATION FOR APPROVAL OF OTHER BUSINESS ACTIVITIES OF COMPANIES WHOSE HEAD OFFICE IS LOCATED IN THE SPECIAL CAPITAL REGION OF JAKARTA AND BANTEN To The Executive Head of Insurance, Pension Fund, Credit Institution, and Other Financial Services Institutions Supervisor Attention: Director of Institutional Affairs and IKNB Products I Menara Merdeka Building Jl. Budi Kemuliaan No. 2 Jakarta 10110

Referring to Circular Letter of the Financial Services Authority Number .../SEOJK.05/2017 concerning Management of Pawnshop Business that Conducts Business Activities in a Conventional Manner, we hereby submit an application to obtain approval to conduct other business activities:
Name : PT/Cooperative*) .....
Business License from OJK : Number.......... Date........
Address : Street........ Village/Sub-district..... District.....
City/Regency.... Province....
Phone/Fax No. : ..........................................................................
Email : ..........................................................................
To complete the aforementioned application, we hereby submit documents containing descriptions of at least the following:
a. other business activities to be conducted, including procedures and schemes for other business activities to be conducted; b. draft agreements to be used;
c. rights and obligations of the parties;
d. prospect analysis of other business activities to be conducted; and e. risk mitigation for other business activities to be conducted.
We would like to inform that for the purposes of this approval application, you may contact Mr./Ms.) ......, via email.....
or telephone number.....
Thus this application, and for your attention, Sir/Madam, we express our gratitude.
Board of Directors
PT/Cooperative)......
.............................
*) Strike out what is not needed

FORMAT 2 APPLICATION FOR APPROVAL OF OTHER BUSINESS ACTIVITIES OF COMPANIES WHOSE HEAD OFFICE IS LOCATED OUTSIDE THE AREA OF THE SPECIAL CAPITAL REGION OF JAKARTA AND BANTEN To The Executive Head of Insurance, Pension Fund, Credit Institution, and Other Financial Services Institutions Supervisor Attention: Head of Regional Financial Services Authority/Head of Financial Services Authority*) ..........................) ..........................)) Referring to Circular Letter of the Financial Services Authority Number .../SEOJK.05/2017 concerning Management of Pawnshop Business that Conducts Business Activities in a Conventional Manner, we hereby submit an application to obtain approval to conduct other business activities:
Name : PT/Cooperative) .....
Business License from OJK : Number.......... Date........
Address : Street........ Village/Sub-district..... District.....
City/Regency.... Province....
Phone/Fax No. : ..........................................................................
Email : ..........................................................................
To complete the aforementioned application, we hereby submit documents containing descriptions of at least the following:
a. other business activities to be conducted, including procedures and schemes for other business activities to be conducted; b. draft agreements to be used;
c. rights and obligations of the parties;
d. prospect analysis of other business activities to be conducted; and e. risk mitigation for other business activities to be conducted.
We would like to inform that for the purposes of this approval application, you may contact Mr./Ms.) ......, via email.....
or telephone number.....
Thus this application, and for your attention, Sir/Madam, we express our gratitude.
Board of Directors
PT/Cooperative)......
.............................
*) Strike out what is not needed
) Fill in the name of the Regional Office of the Financial Services Authority or the name of the Financial Services Authority Office according to the Company's head office *) Fill in the address of the Regional Office of the Financial Services Authority or the name of the Financial Services Authority Office according to the Company's head office

FORMAT 3 FORM FOR APPLICATION FOR APPROVAL OF OTHER BUSINESS ACTIVITIES OF COMPANIES Form Application for Approval of Other Business Activities Company Name :
Letter Number of Application :
Date of Application Letter :
Number & Date of Business License :
Brief Description of
Other Business Activities to be
Conducted
:
Contact Person (Name, Phone/ e-mail)
:
Description Yes No Legal Basis Notes

Is the application letter
signed by the Board of Directors/managers and in accordance with Format 1 or Format 2
Appendix of OJK Circular Letter
Number .../SEOJK.05/2017?
Is the company currently
not subject to sanctions by the Financial Services Authority?
Article 14 POJK
Number
31/POJK.05/2016
Does the Company have:
a. adequate human resources to carry out other business activities?
Mention.
Mention the number of employees who will handle other business activities.
In case there are special qualifications for carrying out other business activities then attach certification proof or other documents supporting the field of other business activities to be conducted. b. adequate infrastructure to carry out other business activities? Mention. Mention the infrastructure that has been prepared for carrying out other business activities
c. method of organizing other
business activities
(standard operating procedure)? Mention.
Attach standard operating procedure that will be used d. financial condition is not loss-making in the latest periodic report?
Period of periodic report:
Net profit amount:
Has the application attached documents containing descriptions of at least:
a. other business activities to be conducted, including procedures and schemes for other business activities to be conducted? b. draft agreements to be used?
c. rights and obligations of the
parties? d. prospect analysis of other business activities to be conducted? e. risk mitigation for other business activities to be conducted?
In the event that other business activities
are conducted as part of cooperation for business acquisition, has it met the provisions:
a. stipulated in a written cooperation agreement? b. not aimed at market domination?
c. does not have conflicts of interest with parties cooperating with the Company?
Other documents (if any, mention)
We, the undersigned, hereby declare that:
the above form has corresponded to the actual situation and has been completed
with documents as referred to in the Circular Letter of the Financial Services Authority Number .../SEOJK.05/2017 concerning Management of Pawnshop Business that Conducts Business Activities in a Conventional Manner; and
the documents submitted online are identical to the original documents.
(filled in city name, date, month, and year)
Board of Directors
PT/Cooperative*) ..........
signature
(Full Name)
*) Strike out what is not needed
For the Interests of the Financial Services Authority Note:
Date Initial
Received by Analyst
Completed by Analyst
Reviewed by Head
Sub-division
Reviewed by Head Division

FORMAT 4 REPORT ON IMPLEMENTATION OF OTHER BUSINESS ACTIVITIES OF COMPANIES WHOSE HEAD OFFICE IS LOCATED IN THE AREA OF THE SPECIAL CAPITAL REGION OF JAKARTA AND BANTEN To The Executive Head of Insurance, Pension Fund, Credit Institution, and Other Financial Services Institutions Supervisor Attention: Director of Institutional Affairs and IKNB Products I Menara Merdeka Building Jl. Budi Kemuliaan No. 2 Jakarta 10110

FORMAT 5 REPORT ON IMPLEMENTATION OF OTHER BUSINESS ACTIVITIES OF COMPANIES WHOSE HEAD OFFICE IS LOCATED OUTSIDE THE AREA OF THE SPECIAL CAPITAL REGION OF JAKARTA AND BANTEN To The Executive Head of Insurance, Pension Fund, Credit Institution, and Other Financial Services Institutions Supervisor Attention: Head of Regional Financial Services Authority/Head of Financial Services Authority*) ..........................) ..........................)*) Menara Merdeka Building Jl. Budi Kemuliaan No. 2 Jakarta 10110

Referring to the Financial Services Authority approval letter Number .... dated .... regarding the granting of approval for other business activities of the Pawnshop Company that Conducts Business Activities in a Conventional Manner to PT/Cooperative*) ...., we hereby report that we have started
other business activities of the Pawnshop Company that Conducts Business Activities in a Conventional Manner on date .....
As a completion for the report, we hereby submit a photocopy of the agreement that has been signed by the Company and the Customer.
Thus this report is submitted, and for your attention, Sir/Madam, we express our gratitude.
Board of Directors
PT/Cooperative*)......
.............................
*) Strike out what is not needed
) Fill in the name of the Regional Office of the Financial Services Authority or the name of the Financial Services Authority Office according to the Company's head office *) Fill in the address of the Regional Office of the Financial Services Authority or the name of the Financial Services Authority Office according to the Company's head office

FORMAT 6 FORM FOR REPORT ON THE IMPLEMENTATION OF OTHER BUSINESS ACTIVITIES OF THE COMPANY

Form
Report on the Implementation of Other Business Activities of the Company

Company Name :
Report Letter Number :
Report Letter Date :
License Number & Date :
Date when other business activities began :
Contact Person (Name, Phone/ e-mail) :

Description | Yes | No | Legal Basis | Remarks --- | --- | --- | --- | ---

Is the report letter signed by the Board of Directors/management and in accordance with Format 4 or Format 5 of the Annex of OJK Circular Number .../SEOJK.05/2017? | | | |
Has the submission of the report been in accordance with the established deadline? | | | |
Does the report include a photocopy of the agreement signed by the Company and the Customer? | | | Attach a photocopy of the agreement signed by the Company and the Customer. |
Other documents (if any, specify) | | | |

We, the undersigned, hereby declare that:

the above form is in accordance with the actual situation and has been completed with documents as referred to in the Financial Services Authority Circular Number .../SEOJK.05/2017 concerning the Conduct of Business by Pawnshop Companies Conducting Conventional Business Activities; and
the documents submitted online are the same as the original documents.

(Filled with city name, date, month, and year)
Board of Directors of PT/Cooperative ....
signature
(Full Name)

This copy is in accordance with the original
Legal Director 1
Legal Department signed
Yuliana
For the Interest of the Financial Services Authority

Notes:
Received by Analyst
Analyst Completed
Reviewed by Head of Sub-division
Reviewed by Head of Division

Established in Jakarta on 28 September 2017
EXECUTIVE HEAD OF SUPERVISOR
OF INSURANCE, PENSION FUNDS,
LENDING INSTITUTIONS, AND
OTHER FINANCIAL SERVICE INSTITUTIONS
FINANCIAL SERVICES AUTHORITY, signed
RISWINANDI

Implementation of Conventional Pawnshop Business by Pawn Companies

Lineage: In force