OJK Regulation No. 22/POJK.04/2020 on the Procedure for Preparing and Submitting the Annual Budget and Profit Utilization of the Depository and Clearing Institution

EXTRACT
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 22 /POJK.04/2020
CONCERNING
THE PROCEDURE FOR PREPARING AND SUBMITTING THE BUDGET PLAN AND PROFIT UTILIZATION OF DEPOSITORY AND CLEARING INSTITUTIONS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that with the transfer of functions, duties, and authorities for the regulation and supervision of financial services activities in the capital market sector, including the procedure for preparing and submitting the budget plan and profit utilization of depository and clearing institutions, from the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority; b. that to provide clarity and certainty regarding the procedure for preparing and submitting the budget plan and profit utilization of depository and clearing institutions, the existing regulations in the capital market sector regarding this procedure, issued prior to the establishment of the Financial Services Authority, need to be converted into a Financial Services Authority Regulation;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Depository and Clearing Institutions;
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 PROCEDURE FOR PREPARING AND SUBMITTING THE BUDGET PLAN AND PROFIT UTILIZATION OF DEPOSITORY AND CLEARING INSTITUTIONS.

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

1. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, Units of Collective Investment Contracts, futures contracts over Securities, and any derivative of Securities.
2. Party refers to an individual, company, joint venture, association, or organized group.
3. Custodian is a Party that provides safekeeping services for Securities and other assets related to Securities, as well as other services, including receiving dividends, interest, and other rights, settling Securities transactions, and representing account holders who are its clients.
4. Depository and Clearing Institution is a Party that conducts Central Custodian activities for Custodian Banks, Securities Companies, and other Parties.
5. Stock Exchange is a Party that organizes and provides systems and/or facilities to match buy and sell offers of Securities from other Parties with the aim of trading Securities among them.
6. Exchange Transaction is a contract made by members of the Stock Exchange in accordance with requirements determined by the Stock Exchange regarding the sale and purchase of Securities, lending and borrowing of Securities, or other contracts regarding Securities or the price of Securities.
7. Board of Directors is the organ of the Depository and Clearing Institution authorized and fully responsible for the management of the Depository and Clearing Institution for the benefit of the Depository and Clearing Institution, in accordance with the purpose and objectives of the Depository and Clearing Institution, and representing the Depository and Clearing Institution, both inside and outside of court, in accordance with the Articles of Association.
8. Board of Commissioners is the organ of the Depository and Clearing Institution tasked with conducting general and/or specific supervision in accordance with the Articles of Association and providing advice to the Board of Directors.

CHAPTER II
ANNUAL BUDGET PLAN AND PROFIT UTILIZATION OF DEPOSITORY AND CLEARING INSTITUTIONS
Article 2
(1) The annual budget plan and profit utilization of the Depository and Clearing Institution shall be prepared with the following provisions:
a. The Depository and Clearing Institution is established with the objective of providing Central Custodian services and orderly, fair, and efficient transaction settlement; and b. The amount of costs and fees established by the Depository and Clearing Institution must be based on the needs for the implementation of the functions of the Depository and Clearing Institution. (2) In the event that the funds required for the implementation of the functions of the Depository and Clearing Institution are sufficient, the costs and fees referred to in paragraph (1) letter b may be reduced.

Article 3
(1) The budget plan and profit utilization of the Depository and Clearing Institution shall be submitted to the Financial Services Authority in the form of the annual work plan and budget of the Depository and Clearing Institution to obtain approval. (2) The submission of the annual budget and profit utilization of the Depository and Clearing Institution as referred to in paragraph (1) shall be conducted in the form of printed documents or electronic documents.

Article 4
The annual budget plan and profit utilization of the Depository and Clearing Institution must adhere to the principle of capital market efficiency and be directed towards:
a. conducting the improvement of Central Custodian services and orderly, fair, and efficient transaction settlement; b. increasing book-entry settlement of Exchange Transactions safely; and
c. developing security systems for the storage of Securities.

CHAPTER III
ANNUAL WORK PLAN AND BUDGET OF DEPOSITORY AND CLEARING INSTITUTIONS
Article 5
The annual work plan and budget of the Depository and Clearing Institution must be prepared systematically, accurately, and on time, and must explicitly contain the following:
a. objectives achieved; b. overview of the realization of the current year's budget;
c. obstacles faced; and
d. assumptions and benchmarks underlying the budget.

Article 6
The annual work plan and budget of the Depository and Clearing Institution must at least contain:
a. the work plan of the Depository and Clearing Institution detailing the activities of the Depository and Clearing Institution for:

1. Central Custodian service activities;
2. increasing Exchange Transaction settlement activities;
3. developing book-entry transaction settlement systems;
4. developing service systems for investors, including activities related to services concerning investor rights;
5. increasing human resource capabilities; or
6. developing other activities;
   b. the revenue budget of the Depository and Clearing Institution sourced at least from:
7. Securities storage activities;
8. Exchange Transaction settlement activities; and
9. Central Custodian activities;
   c. the expense budget of the Depository and Clearing Institution prepared based on functions according to the organizational structure of the Depository and Clearing Institution, covering the following:
10. settlement;
11. Custodian services;
12. financial management;
13. internal audit;
14. information technology; and
15. human resources;
    d. investment budget; e. expense plans in the form of salaries, other benefits, and facilities for the Board of Directors and Board of Commissioners; and f. information regarding contracts with material value, including contracts between the Depository and Clearing Institution and/or subsidiaries of the Depository and Clearing Institution with:
16. Parties affiliated with the Board of Directors and Board of Commissioners; and
17. Parties affiliated with the Depository and Clearing Institution or subsidiaries of the Depository and Clearing Institution.

Article 7
(1) The annual work plan and budget of the Depository and Clearing Institution must be prepared for at least 1 (one) fiscal year starting from January 1 to December 31 of the following year. (2) The annual budget of the Depository and Clearing Institution must be presented comparatively with the current year's budget and its realization.

Article 8
(1) The Depository and Clearing Institution must hold a General Meeting of Shareholders to approve the work plan and budget for the following year submitted by the Board of Directors no later than October 31. (2) The submission of the work plan and budget for the following year by the Board of Directors in the General Meeting of Shareholders as referred to in paragraph (1) must first obtain approval from the Board of Commissioners. (3) The Depository and Clearing Institution must submit the budget plan and profit utilization for the following year of the Stock Exchange, which has been approved by the General Meeting of Shareholders, to the Financial Services Authority no later than November 5. (4) The Financial Services Authority shall notify the Board of Directors of changes to the annual work plan and budget of the Depository and Clearing Institution no later than November 15. (5) The Board of Directors must resubmit the annual work plan and budget of the Depository and Clearing Institution, having obtained prior approval from the Board of Commissioners, no later than November 25. (6) The Financial Services Authority shall provide approval or rejection of the annual work plan and budget of the Depository and Clearing Institution no later than December 5. (7) In the event that the majority of shares of the Depository and Clearing Institution are owned by the Stock Exchange, the work plan and budget of the Depository and Clearing Institution shall be part of the work plan and budget of the Stock Exchange, and the procedure for submission to the Financial Services Authority shall follow the provisions in the Financial Services Authority Regulation regarding the procedure for preparing and submitting the budget plan and profit utilization of the Stock Exchange.

Article 9
The Depository and Clearing Institution must submit budget realization reports to the Financial Services Authority through the Board of Commissioners, with the provision that such reports are submitted cumulatively on a quarterly basis and received by the Financial Services Authority no later than the 12th (twelfth) day after the end of the respective quarter.

Article 10
Notes on the financial statements of the Depository and Clearing Institution must at least contain:
a. expenses related to Parties affiliated with the Board of Directors and Board of Commissioners or the directors and board of commissioners of subsidiaries of the Depository and Clearing Institution; b. expenses related to Parties affiliated with the Depository and Clearing Institution or subsidiaries of the Depository and Clearing Institution; and
c. expenses in the form of salaries, other benefits, and facilities provided to the Board of Directors and Board of Commissioners or the directors and board of commissioners of subsidiaries of the Depository and Clearing Institution.

CHAPTER IV
OTHER PROVISIONS
Article 11
The provisions in this Financial Services Authority Regulation must be included as provisions in the Articles of Association of the Depository and Clearing Institution.

CHAPTER V
ADMINISTRATIVE SANCTIONS
Article 12
(1) Any Party that violates the provisions as referred to in Article 4, Article 5, Article 7 paragraph (2), Article 8 paragraph (1), paragraph (2), paragraph (3), and paragraph (5), Article 9, Article 10, and Article 11 shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) shall also be imposed on parties who cause the occurrence of violations as referred to in paragraph (1). (3) Sanctions as referred to in paragraph (1) and paragraph (2) shall be imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fines, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and/or g. cancellation of registration.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of fines as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, f, or g. (7) The procedure for imposing sanctions as referred to in paragraph (3) shall be conducted in accordance with applicable regulations.

Article 13
In addition to administrative sanctions as referred to in Article 12 paragraph (4), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 14
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 12 paragraph (4) and specific actions as referred to in Article 13 to the public.

CHAPTER VI
CLOSING PROVISIONS
Article 15
Upon the commencement of this Financial Services Authority Regulation, the Decision of the Chairman of the Capital Market Supervisory Agency Number Kep-15/PM/1996 concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Depository and Clearing Institutions, along with Regulation Number III.C.4 which is its attachment, is repealed and declared invalid.

Article 16
This Financial Services Authority Regulation shall come into force on the date of its enactment.

This extract is in accordance with the original Deputy Director of Legal Consultation and Harmonization of Banking Regulations 1 Legal Directorate 1 Legal Department signed Wiwit Puspasari

To ensure that everyone is aware, 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 April 22, 2020
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Enacted in Jakarta on April 23, 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 112

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 22 /POJK.04/2020
CONCERNING
THE PROCEDURE FOR PREPARING AND SUBMITTING THE BUDGET PLAN AND PROFIT UTILIZATION OF DEPOSITORY AND CLEARING INSTITUTIONS

I. GENERAL
That since December 31, 2012, the functions, duties, and authorities for the regulation and supervision of financial services activities in the capital market, insurance, pension funds, financing institutions, and other financial service institutions have been transferred from the Minister of Finance and the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority. In relation to the above, it is necessary to reorganize the existing regulatory structure, particularly those related to the capital market sector, by converting Capital Market Supervisory Agency and Financial Institutions Regulations related to the capital market sector into Financial Services Authority Regulations. This reorganization is conducted so that there is a Financial Services Authority Regulation related to the capital market sector that is consistent with Financial Services Authority Regulations in other sectors. Based on the background and aspects mentioned, it is necessary to replace the existing regulations in the capital market sector regulating the procedure for preparing and submitting the budget plan and profit utilization of Depository and Clearing Institutions, namely the Decision of the Chairman of the Capital Market Supervisory Agency Number Kep-05/PM/1996 concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Depository and Clearing Institutions, along with Regulation Number III.C.4 which is its attachment, into a Financial Services Authority Regulation concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Depository and Clearing Institutions.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.
Article 2
Sufficiently clear.
Article 3
Sufficiently clear.
Article 4
Sufficiently clear.
Article 5
Sufficiently clear.
Article 6
Sufficiently clear.
Article 7
Sufficiently clear.
Article 8
Sufficiently clear.
Article 9
Sufficiently clear.
Article 10
Sufficiently clear.
Article 11
Sufficiently clear.
Article 12
Sufficiently clear.
Article 13
The term "specific actions" includes, among others, orders to improve the Budget Plan of the Depository and Clearing Institution.
Article 14
Sufficiently clear.
Article 15
Sufficiently clear.
Article 16
Sufficiently clear.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6498