Implementation of Sharia Principles in the Capital Market on Investment Managers

FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 61 /POJK.04/2016
CONCERNING
THE IMPLEMENTATION OF SHARIA PRINCIPLES IN THE CAPITAL MARKET ON INVESTMENT MANAGERS BY THE GRACE OF THE ALMIGHTY GOD THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to provide a legal basis for Parties whose business activities manage Securities Portfolios or collective investment portfolios based on Sharia Principles in the Capital Market, it is necessary to establish a Financial Services Authority Regulation regarding the Implementation of Sharia Principles in the Capital Market on Investment Managers; Recalling: 1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE IMPLEMENTATION OF SHARIA PRINCIPLES IN THE CAPITAL MARKET ON INVESTMENT MANAGERS.
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY

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

1. Investment Manager is a Party whose business activities manage Securities Portfolios for clients or manage collective investment portfolios for a group of clients, except insurance companies, pension funds, and banks that conduct their own business activities based on applicable laws and regulations.
2. Sharia Investment Manager is an Investment Manager that states in its articles of association that:
   a. business activities and types of business; b. management methods; and/or
   c. services provided,
   are conducted based on Sharia Principles in the Capital Market.
3. Securities are securities, namely debt acknowledgment letters, commercial papers, stocks, bonds, debt certificates, Units of Participation in collective investment contracts, futures contracts over Securities, and any derivatives of Securities.
4. Party is an individual, company, joint venture, association, or organized group.
5. Securities Portfolio is a collection of Securities owned by a Party.
6. Sharia Activities in the Capital Market are activities related to the public offering of Sharia Securities, trading of Sharia Securities, management of Sharia investments in the Capital Market, and Issuers or Public Companies related to the Sharia Securities they issue, securities companies whose business is based on Sharia principles, as well as institutions and professions related to Sharia Securities.
7. Sharia Investment Management Unit is a part of an Investment Manager that has the duty and responsibility to manage Securities Portfolios or collective investment portfolios that do not contradict Sharia Principles in the Capital Market, and to develop and market Sharia investment management services or products.
8. Sharia Supervisory Board is a board responsible for providing advice and suggestions and supervising the fulfillment of Sharia Principles in the Capital Market for Parties conducting Sharia Activities in the Capital Market.
9. Sharia Investment Management Team is an investment management team as referred to in the Financial Services Authority Regulation concerning Investment Managers, which is tasked with managing Sharia Securities Portfolios or collective investment portfolios that do not contradict Sharia Principles in the Capital Market.
10. Sharia Investment Committee is an investment committee as referred to in the Financial Services Authority Regulation concerning Investment Managers, which is tasked with directing and supervising the Sharia Investment Management Team in implementing investment policies and strategies that do not contradict Sharia Principles in the Capital Market.
11. Sharia Principles in the Capital Market are Islamic legal principles in Sharia Activities in the Capital Market based on the fatwa of the National Sharia Board - Indonesian Ulema Council, provided that such fatwa does not contradict the Financial Services Authority Regulation concerning the Implementation of Sharia Principles in the Capital Market and/or other Financial Services Authority Regulations based on the fatwa of the National Sharia Board - Indonesian Ulema Council.
12. Sharia Securities are Securities as referred to in the Law on Capital Market and its implementing regulations that:
    a. the contract, management method, and business activities; b. the assets underlying the contract, management method, and business activities; and/or
    c. the assets related to the aforementioned Securities and the issuer,
    do not contradict Sharia Principles in the Capital Market.
13. Capital Market Sharia Expert, hereinafter abbreviated as ASPM, is:
    a. an individual who has knowledge and experience in the field of Sharia; or b. a business entity whose directors and employees have knowledge and experience in the field of Sharia, which provides advice and/or supervises the implementation of Sharia Principles in the Capital Market in business activities and/or provides Sharia compliance statements for Sharia products or services in the Capital Market.
14. Deputy Investment Manager is an individual acting on behalf of the interests of a Securities Company conducting business as an Investment Manager.

CHAPTER II
IMPLEMENTATION OF SHARIA PRINCIPLES IN THE CAPITAL MARKET ON INVESTMENT MANAGERS
Article 2
The implementation of Sharia Principles in the Capital Market on Investment Managers must be carried out by:
a. establishing a Sharia Investment Manager; or b. establishing a Sharia Investment Management Unit within an Investment Manager.
Article 3
Sharia Investment Managers or Investment Managers that establish a Sharia Investment Management Unit as referred to in Article 2 must have a Sharia Supervisory Board that holds an ASPM license as regulated in the Financial Services Authority Regulation concerning Capital Market Sharia Experts.
Article 4
Parties implementing Sharia Principles in the Capital Market on Investment Managers must follow laws and regulations in the Capital Market sector concerning Investment Managers, except as specifically regulated in this Financial Services Authority Regulation.

CHAPTER III
SHARIA INVESTMENT MANAGERS
First Section
Requirements and Licensing
Article 5
(1) Sharia Investment Managers must first obtain a business license from the Financial Services Authority as regulated in laws and regulations in the Capital Market sector concerning the licensing of Securities Companies conducting business as Investment Managers and this Financial Services Authority Regulation. (2) Sharia Investment Managers must state in their articles of association that:
a. business activities and types of business; b. management methods; and/or
c. services provided,
are conducted based on Sharia Principles in the Capital Market.
Article 6
The Board of Directors of Sharia Investment Managers must:
a. meet the requirements for members of the Board of Directors and Board of Commissioners of Investment Managers as regulated in laws and regulations in the Capital Market sector concerning the licensing of Securities Companies conducting business as Investment Managers, except:

1. the requirement to have experience and expertise in the Capital Market and/or financial field for at least 1 (one) year in a managerial position at institutions operating in the Capital Market and/or financial field, for Board of Directors members overseeing functions other than investment; and
2. the requirement to have experience and expertise in the Capital Market and/or financial field for at least 1 (one) year in a managerial position whose duties involve managing client funds or companies invested in Securities Portfolios or collective investment portfolios at institutions operating in the Capital Market and/or financial field, for Board of Directors members overseeing the investment function at Investment Managers;
   b. have at least 1 (one) Board of Directors member who has:
3. knowledge in the field of Sharia finance; and/or
4. work experience in the field of Sharia finance for at least 1 (one) year.
   Article 7
   In addition to meeting the provisions regulated in the Financial Services Authority Regulation concerning investment committees and/or investment management teams, the Sharia Investment Committee and/or Sharia Investment Management Team must have at least 1 (one) person who has:
   a. knowledge in the field of Sharia finance; and/or b. work experience in the field of Sharia finance for at least 1 (one) year.

Second Section
Business Activities
Article 8
(1) Sharia Investment Managers may conduct business activities including:
a. managing Securities Portfolios for specific clients based on bilateral and individual fund management agreements prepared in accordance with laws and regulations in the Capital Market sector concerning guidelines for managing Securities Portfolios for individual clients and not contradicting Sharia Principles in the Capital Market; b. managing collective investment portfolios for a group of clients through containers or products as regulated in the Financial Services Authority Regulation concerning collective investment products in the Capital Market and not contradicting Sharia Principles in the Capital Market;
c. issuing lists of Sharia Securities as referred to in laws and regulations in the Capital Market sector concerning the issuance of lists of Sharia Securities; and/or
d. other activities in accordance with provisions established by the Financial Services Authority and not contradicting Sharia Principles in the Capital Market.
(2) In the event that Sharia Investment Managers will conduct activities as Parties issuing lists of Sharia Securities as referred to in paragraph (1) letter c, Sharia Investment Managers must meet the provisions as referred to in laws and regulations in the Capital Market sector concerning the issuance of lists of Sharia Securities, except as specifically regulated in this Financial Services Authority Regulation. (3) Sharia Investment Managers that will conduct activities as Parties issuing lists of Sharia Securities as referred to in paragraph (1) letter c are not required to submit approval requests as Parties issuing lists of Sharia Securities to the Financial Services Authority as referred to in laws and regulations in the Capital Market sector concerning the issuance of lists of Sharia Securities.
Article 9
In the event that Sharia Investment Managers use financial services, Sharia Investment Managers must use financial services that do not contradict Sharia Principles in the Capital Market.

Third Section
Capital
Article 10
Sharia Investment Managers must have paid-up capital of at least IDR 10,000,000,000.00 (ten billion rupiah).

Fourth Section
Functions of Sharia Investment Managers
Article 11
In conducting their activities, Sharia Investment Managers must have and implement the following functions:
a. investment and research function; b. trading function;
c. securities transaction settlement function;
d. risk management, compliance, and internal audit function; e. marketing and customer complaint handling function; f. information technology function; g. accounting and finance function; and h. human resource development function.
Article 12
The implementation of the functions of Sharia Investment Managers as referred to in Article 11 must follow the Financial Services Authority Regulation concerning Guidelines for the Implementation of Investment Manager Functions, except:
a. the implementation of the investment and research function must be coordinated by a coordinator who is an employee holding a Deputy Investment Manager license and has work experience in investment management for at least 2 (two) years; b. the implementation of the trading function must be coordinated by a coordinator who is an employee holding a Deputy Securities Company license from the Financial Services Authority and has work experience in the Capital Market and/or financial field for at least 1 (one) year;
c. the implementation of the securities transaction settlement function must be coordinated by a coordinator who is an employee holding a Deputy Securities Company license from the Financial Services Authority and has work experience in the Capital Market and/or financial field for at least 1 (one) year;
d. the implementation of the risk management, compliance, and internal audit function must be coordinated by a coordinator who is a unit leader, Board of Directors member, or official at a level below the Board of Directors holding a Deputy Investment Manager license from the Financial Services Authority and has work experience holding managerial positions at institutions operating in the Capital Market and/or financial field for at least 1 (one) year; and e. the implementation of the marketing and customer complaint handling function must be coordinated by a coordinator who is an employee holding a Deputy Securities Company license from the Financial Services Authority and has work experience in the Capital Market and/or financial field for at least 1 (one) year.

Fifth Section
Procedure for Submitting Business License Applications
Article 13
(1) The procedure for submitting business license applications for Sharia Investment Managers must follow laws and regulations in the Capital Market sector concerning the licensing of Securities Companies conducting business as Investment Managers. (2) In addition to being accompanied by documents as referred to in laws and regulations in the Capital Market sector concerning the licensing of Securities Companies conducting business as Investment Managers, business license applications for Sharia Investment Managers must be accompanied by complete documents:
a. evidence related to knowledge and/or experience in the field of Sharia finance from at least 1 (one) Board of Directors member; b. evidence related to knowledge and/or experience in the field of Sharia finance from at least 1 (one) member of the Sharia Investment Committee;
c. evidence related to knowledge and/or experience in the field of Sharia finance from at least 1 (one) member of the Sharia Investment Management Team;
d. photocopy of the ASPM license of Sharia Supervisory Board members; and e. proof of payment of business licensing fees for Sharia Investment Managers.

Sixth Section
Reporting
Article 14
(1) Sharia Investment Managers must submit reports to the Financial Services Authority as referred to in laws and regulations in the Capital Market sector concerning the reporting obligations of Investment Managers.
(2) In addition to reporting as referred to in paragraph (1), Sharia Investment Managers must submit annual activity reports to the Financial Services Authority by January 15 at the latest.
(3) Annual activity reports as referred to in paragraph (2) are prepared using the format of the Annual Activity Report of Sharia Investment Managers as stated in the Appendix which is an integral part of this Financial Services Authority Regulation. (4) In the event that the deadline for submitting annual activity reports as referred to in paragraph (2) falls on a holiday, annual activity reports must be submitted by 1 (one) working day thereafter. (5) In the event that Sharia Investment Managers submit annual activity reports past the deadline as referred to in paragraph (4), the calculation of the number of days of delay in submitting annual activity reports is calculated from the first day after the final submission deadline for annual activity reports as referred to in paragraph (4).

CHAPTER IV
SHARIA INVESTMENT MANAGEMENT UNITS
Article 15
(1) Investment Managers managing Sharia investment products must establish a Sharia Investment Management Unit.
(2) In carrying out their activities, Sharia Investment Management Units may use functions existing within the Investment Manager.
Article 16
(1) Sharia Investment Management Units must have at least 1 (one) person acting as the unit head and 1 (one) person acting as the executor.
(2) The positions of Head of Sharia Investment Management Unit and executor of Sharia Investment Management Unit may be held concurrently.
(3) Concurrent holding of the position of Head of Sharia Investment Management Unit as referred to in paragraph (2) may only be done by Board of Directors members or officials 1 (one) level below the Board of Directors.
Article 17
(1) The Head of Sharia Investment Management Unit must have knowledge and/or experience in the field of Sharia finance.
(2) The Head of Sharia Investment Management Unit is appointed and appointed by the Board of Directors.
Article 18
Sharia Investment Management Units have the following duties and responsibilities:
a. drafting standard operating procedures related to the management of Sharia investment products; b. monitoring and ensuring that Sharia investment products are managed based on Sharia Principles in the Capital Market;
c. developing Sharia investment management products; and
d. marketing Sharia investment management products.
Article 19
Investment Managers that have established a Sharia Investment Management Unit may conduct activities as Parties issuing lists of Sharia Securities.
Article 20
(1) In the event that Investment Managers that have established a Sharia Investment Management Unit will conduct activities as Parties issuing lists of Sharia Securities as referred to in Article 19, Investment Managers must meet the provisions as referred to in laws and regulations in the Capital Market sector concerning the issuance of lists of Sharia Securities, except as specifically regulated in this Financial Services Authority Regulation. (2) Investment Managers as referred to in paragraph (1) that will conduct activities as Parties issuing lists of Sharia Securities are not required to submit approval requests as Parties issuing lists of Sharia Securities to the Financial Services Authority as referred to in laws and regulations in the Capital Market sector concerning the issuance of lists of Sharia Securities.
Article 21
(1) Investment Managers must report the establishment of Sharia Investment Management Units by 10 (ten) working days after the establishment of the Sharia Investment Management Unit.
(2) Reports on the establishment of Sharia Investment Management Units are prepared using the format of the Report on the Establishment of Sharia Investment Management Units as stated in the Appendix which is an integral part of this Financial Services Authority Regulation.
Article 22
(1) Investment Managers having Sharia Investment Management Units must submit annual activity reports of Sharia Investment Management Units by January 15 at the latest.
(2) Annual activity reports of Sharia Investment Management Units as referred to in paragraph (1) are prepared using the format of the Annual Activity Report of Sharia Investment Management Units as stated in the Appendix which is an integral part of this Financial Services Authority Regulation. (3) In the event that the deadline for submitting annual activity reports of Sharia Investment Management Units as referred to in paragraph (1) falls on a holiday, annual activity reports of Sharia Investment Management Units must be submitted by 1 (one) working day thereafter. (4) In the event that Sharia Investment Management Units submit annual activity reports past the deadline as referred to in paragraph (3), the calculation of the number of days of delay in submitting annual activity reports is calculated from the first day after the final submission deadline for annual activity reports as referred to in paragraph (3).

CHAPTER V
ELECTRONIC LICENSING AND REPORTING SYSTEM
Article 23
(1) In the event that the Financial Services Authority has provided an electronic licensing and reporting system, the submission of business license applications for Sharia Investment Managers and the submission of annual activity reports for Sharia Investment Managers, reports on the establishment of Sharia Investment Management Units and/or reports on the annual activity of Sharia Investment Management Units may be conducted electronically. (2) Provisions concerning the submission of business license applications for Sharia Investment Managers and the submission of annual activity reports for Sharia Investment Managers, reports on the establishment of Sharia Investment Management Units and/or reports on the annual activity of Sharia Investment Management Units electronically are further regulated in Financial Services Authority Circular Letters.

CHAPTER VI
SANCTION PROVISIONS
Article 24
(1) Without prejudice to criminal provisions in the Capital Market sector, the Financial Services Authority has the authority to impose administrative sanctions on any Party violating the provisions of this Financial Services Authority Regulation, including Parties causing the violation, in the form of:
a. written warnings; b. fines, namely the obligation to pay a certain amount of money;
c. business activity restrictions;
d. business activity suspension; e. business license revocation; f. approval cancellation; and g. registration cancellation.
(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 written warnings as referred to in paragraph (1) letter a. (3) Administrative sanctions in the form of fines as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.
Article 25
In addition to administrative sanctions as referred to in Article 24 paragraph (1), the Financial Services Authority may take specific actions against any Party violating the provisions of this Financial Services Authority Regulation.
Article 26
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 24 paragraph (1) and specific actions as referred to in Article 25 to the public.

CHAPTER VII
TRANSITIONAL PROVISIONS
Article 27
Investment Managers that have managed Sharia investment products before the implementation of this Financial Services Authority Regulation must establish Sharia Investment Management Units by 1 (one) year from the implementation of this Financial Services Authority Regulation to continue managing Sharia investment products.

CHAPTER VIII
CLOSING PROVISIONS
Article 28
This Financial Services Authority Regulation takes effect on the date of enactment.

In order that everyone knows 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 December 20, 2016
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signature
MULIAMAN D. HADAD
Enacted in Jakarta on December 27, 2016
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signature
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 293 Copy in accordance with the original Legal Director 1 Legal Department signature Yuliana

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 61 /POJK.04/2016
ABOUT
IMPLEMENTATION OF SHARIA PRINCIPLES IN THE CAPITAL MARKET ON INVESTMENT MANAGERS

I. GENERAL
Strengthening regulations regarding products, institutions, and professions related to the Sharia Capital Market is one of the steps that can be taken to develop the Sharia Capital Market so that it can grow stably and sustainably. Strengthening regulations supported by the provision of specific regulations in the field of Sharia Capital Market is very important as a legal basis, both for market players and the public in carrying out activities in the field of Sharia Capital Market. Currently, there are several regulations and fatwas in the field of Sharia Capital Market. However, among the existing regulations, there are no regulations regarding the Implementation of Sharia Principles in the Capital Market on Investment Managers. Investment Managers are one of the functions and business activities that can be carried out by Securities Companies in addition to as Underwriters of Securities, Securities Brokers, and other activities in accordance with applicable regulations. These three activities of Securities Companies have been regulated both in the Capital Market Law, Government Regulations, and Financial Services Authority Regulations. Currently, Securities Companies carrying out business activities as Investment Managers play a role in managing Securities Portfolios, both conventional Securities and Sharia Securities. However, there is no difference in the management, development, and marketing activities of these two types of Securities. In addition, most Investment Managers managing Sharia investment products do not yet have a special unit to manage and develop Sharia investment products. So far, compliance with Sharia principles in the management of Sharia investment products has been fulfilled by appointing a Sharia Supervisory Board. Considering the importance of implementing Sharia Principles in the Capital Market on Investment Managers, it is deemed necessary to create regulations regarding the Implementation of Sharia Principles in the Capital Market on Investment Managers. The aforementioned regulation can serve as a legal basis, a guide for market players and the public, and can serve as infrastructure that supports the development of the Sharia Capital Market.

II. ARTICLE BY ARTICLE
Article 1
It is clear enough.

Article 2
It is clear enough.

Article 3
It is clear enough.

Article 4
At the time this Financial Services Authority Regulation comes into force, the legislation in the Capital Market sector regulating Investment Managers that are in force include:
a. Regulation Number V.A.3, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number: Kep-479/BL/2009 dated December 31, 2009 regarding Licensing of Securities Companies Carrying Out Business Activities as Investment Managers; b. Regulation Number X.N.1, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number: Kep-283/BL/2012 dated May 24, 2012 regarding Monthly Activity Reports of Investment Managers;
c. Financial Services Authority Regulation Number 24/POJK.04/2014 regarding Guidelines for the Implementation of Investment Manager Functions; and
d. Financial Services Authority Regulation Number 43/POJK.04/2015 regarding Investment Manager Code of Conduct.

Article 5
Paragraph (1)
At the time this Financial Services Authority Regulation comes into force, the legislation in the Capital Market sector regulating the licensing of Securities Companies carrying out business activities as Investment Managers that is in force is Regulation Number V.A.3, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-479/BL/2009 dated December 31, 2009 regarding Licensing of Securities Companies Carrying Out Business Activities as Investment Managers. Paragraph (2) It is clear enough.

Article 6
Letter a
It is clear enough.
Letter b
Number 1
Knowledge in the field of Sharia finance can be proven with a certificate showing participation in education or training related to Sharia finance, whether in the form of seminars, workshops, and continuing education programs. Number 2 Work experience in the field of Sharia finance can be proven with a statement of having worked in a field related to Sharia finance.

Article 7
At the time this Financial Services Authority Regulation comes into force, the Financial Services Authority Regulations regulating investment committees and/or investment management teams that are in force are:
a. Financial Services Authority Regulation Number 24/POJK.04/2014 regarding Guidelines for the Implementation of Investment Manager Functions; and b. Financial Services Authority Regulation Number 43/POJK.04/2015 regarding Investment Manager Code of Conduct. One (1) person who has knowledge and/or experience in the field of Sharia finance can be the chairman and/or member of the Sharia Investment Committee and/or Sharia Investment Management Team. Letter a Knowledge in the field of Sharia finance can be proven with a certificate showing participation in education or training related to Sharia finance, whether in the form of seminars, workshops, and continuing education programs. Letter b Work experience in the field of Sharia finance can be proven with a statement of having worked in a field related to Sharia finance.

Article 8
Paragraph (1)
Letter a
At the time this Financial Services Authority Regulation comes into force, the legislation in the Capital Market sector regulating guidelines for managing Securities Portfolios for the benefit of customers individually that is in force is Regulation Number V.G.6, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-112/BL/2010 dated April 16, 2010 regarding Guidelines for Managing Securities Portfolios for the Benefit of Customers Individually. Letter b At the time this Financial Services Authority Regulation comes into force, the Financial Services Authority Regulations regulating collective investment products in the Capital Market that are in force include:
a. Financial Services Authority Regulation Number 19/POJK.04/2015 regarding Issuance and Requirements of Sharia Mutual Funds; b. Financial Services Authority Regulation Number 20/POJK.04/2015 regarding Issuance and Requirements of Sharia Asset-Backed Securities; and
c. Financial Services Authority Regulation Number 30/POJK.04/2016 regarding Real Estate Investment Funds in the Form of Collective Investment Contracts.
Letter c
It is clear enough.
Letter d
It is clear enough.
Paragraph (2)
The term "Sharia Securities List" refers to the Sharia Securities List as referred to in the legislation in the Capital Market sector regulating the Sharia Securities List.
The term "Issuer of the Sharia Securities List" refers to the Issuer of the Sharia Securities List as referred to in the legislation in the Capital Market sector regulating the Issuer of the Sharia Securities List.
At the time this Financial Services Authority Regulation comes into force, the legislation in the Capital Market sector regulating the issuer of the Sharia Securities List that is in force is Regulation Number II.K.1, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-208/BL/2012 dated April 24, 2012 regarding Criteria and Issuance of Sharia Securities Lists. Paragraph (3) It is clear enough.

Article 9
The term "financial services that do not contradict Sharia principles" refers to financial services provided by Sharia financial institutions or conventional financial institutions as long as the financial services do not contradict Sharia principles. An example of financial services from conventional financial institutions that do not contradict Sharia principles is custodian services provided by conventional commercial banks.

Article 10
It is clear enough.

Article 11
It is clear enough.

Article 12
Letter a
It is clear enough.
Letter b
Deputy Securities Companies consist of Deputy Underwriters, Deputy Securities Brokers, and Deputy Investment Managers.
Letter c
It is clear enough.
Letter d
It is clear enough.
Letter e
It is clear enough.

Article 13
Paragraph (1)
At the time this Financial Services Authority Regulation comes into force, the legislation in the Capital Market sector regulating the licensing of Securities Companies carrying out business activities as Investment Managers that is in force is Regulation Number V.A.3, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number: Kep-479/BL/2009, dated December 31, 2009 regarding Licensing of Securities Companies Carrying Out Business Activities as Investment Managers. Paragraph (2) It is clear enough.

Article 14
Paragraph (1)
At the time this Financial Services Authority Regulation comes into force, the legislation in the Capital Market sector regulating Investment Manager reporting obligations that is in force includes:

1. Regulation Number X.D.1, appendix of the Decision of the Chairman of the Capital Market Supervisory Board Number Kep-06/PM/2004 dated February 9, 2004 regarding Mutual Fund Reports.
2. Regulation Number X.N.1, appendix of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-283/BL/2012 dated May 24, 2012 regarding Monthly Activity Reports of Investment Managers; and
3. Regulation Number V.D.5, appendix of the Decision of the Capital Market Supervisory Board Number Kep-20/PM/2003 dated May 8, 2003 regarding Maintenance and Reporting of Working Capital Adjusted.
   Paragraph (2)
   It is clear enough.
   Paragraph (3)
   It is clear enough.
   Paragraph (4)
   It is clear enough.
   Paragraph (5)
   It is clear enough.

Article 15
It is clear enough.

Article 16
It is clear enough.

Article 17
Paragraph (1)
Knowledge and/or experience in the field of Sharia finance can be proven with a certificate showing participation in education or training related to Sharia finance, whether in the form of seminars, workshops, and continuing education programs, or a statement of having worked in a field related to Sharia finance. Paragraph (2) It is clear enough.

Article 18
It is clear enough.

Article 19
It is clear enough.

Article 20
It is clear enough.

Article 21
It is clear enough.

Article 22
It is clear enough.

Article 23
It is clear enough.

Article 24
It is clear enough.

Article 25
The term "certain actions" includes, among others, the postponement of the business license for Sharia Investment Managers.

Article 26
It is clear enough.

Article 27
It is clear enough.

Article 28
It is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5983