POJK on Customer Due Diligence Principles by Capital Market Financial Service Providers

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
EXTRACT
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 22/POJK.04/2014
CONCERNING
CUSTOMER DUE DILIGENCE PRINCIPLES BY CAPITAL MARKET FINANCIAL SERVICE PROVIDERS BY THE GRACE OF GOD ALMIGHTY THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to create a healthy Capital Market industry and protect it from money laundering practices and as a means of terrorism financing, continuous efforts are required to enhance the prevention and eradication of money laundering and terrorism financing crimes by Capital Market Financial Service Providers; b. that regulations regarding Customer Due Diligence Principles by Capital Market Financial Service Providers need to be adjusted to international standards regarding the application of anti-money laundering programs and the prevention of terrorism financing;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation regarding Customer Due Diligence Principles by Capital Market Financial Service Providers;
Recalling:

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);
Law Number 8 of 2010 concerning the Prevention and Eradication of Money Laundering Crimes (State Gazette of the Republic of Indonesia Year 2010 Number 122, Supplement to the State Gazette of the Republic of Indonesia Number 5164);
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);
Law Number 9 of 2013 concerning the Prevention and Eradication of Terrorism Financing Crimes (State Gazette of the Republic of Indonesia Year 2013 Number 50, Supplement to the State Gazette of the Republic of Indonesia Number 5406);
DECIDING:
Establish: FINANCIAL SERVICES AUTHABILITY REGULATION ON CUSTOMER DUE DILIGENCE PRINCIPLES BY CAPITAL MARKET FINANCIAL SERVICE PROVIDERS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation:

Capital Market Financial Service Provider means a Securities Company conducting business as an Underwriter of Securities, Securities Broker, and/or Investment Manager, as well as a Commercial Bank acting as a Custodian.
Money Laundering means money laundering as referred to in laws regulating the prevention and eradication of money laundering crimes.
Terrorism Financing means terrorism financing as referred to in laws regulating the prevention and eradication of terrorism financing crimes.
Customer means a Party using the services of a Capital Market Financial Service Provider for investment activities in the Capital Market, whether accompanied by or without opening a Securities Account.
Customer Due Diligence Principle is a principle applied by Capital Market Financial Service Providers to:
a. know the background and identity of the Customer; b. monitor Securities Accounts and Customer transactions; and
c. report Suspicious Financial Transactions and cash transactions,
according to Capital Market regulations and laws related to the prevention and eradication of money laundering and/or terrorism financing crimes.
Customer Due Diligence (CDD) is an activity involving identification, verification, and monitoring conducted by Capital Market Financial Service Providers to ensure transactions align with the Customer's profile, characteristics, and/or transaction patterns.
Enhanced Due Diligence (EDD) is a deeper CDD action conducted by Capital Market Financial Service Providers regarding prospective Customers or Customers classified in high-risk areas.
Suspicious Financial Transaction means suspicious financial transactions as referred to in laws regulating the prevention and eradication of money laundering and/or terrorism financing crimes.
Financial Transaction Reports and Analysis Centre (PPATK) is the PPATK as referred to in laws regulating the prevention and eradication of money laundering crimes.
Beneficial Owner means any party, directly or indirectly through agreements or any other means:
a. entitled to and/or receiving certain benefits related to:
Securities Accounts at Capital Market Financial Service Providers; or
business relationships with Capital Market Financial Service Providers;
b. being the actual owner of funds and/or Securities at Capital Market Financial Service Providers (ultimate account owner);
c. controlling Customer transactions;
d. granting power of attorney to conduct transactions; and/or e. controlling non-individual Customers.
Politically Exposed Person (PEP) is a person who has or has had public authority, including State Officials as referred to in regulations governing State Officials, and/or persons recorded or formerly recorded as members of political parties influencing policy and operations, whether Indonesian or foreign nationals.
High Risk Customer means a Customer whose identity background and history are considered to have a high risk of involvement in Money Laundering and/or Terrorism Financing.
High Risk Countries means countries or territories potentially used as:
a. places where Money Laundering occurs or as instruments for Money Laundering; b. places where predicate offenses are committed; and/or
c. places where Terrorism Financing activities are conducted.
High Risk Business means business fields potentially used as instruments for Money Laundering and/or Terrorism Financing.
State Institution means an institution with authority in the executive, judicial, and legislative fields.
Government Agency is a collective term for government organizational units performing duties and functions according to applicable regulations, including:
a. Coordinating Ministries; b. State Ministries;
c. Ministries;
d. Non-Ministerial Government Institutions; e. Provincial Governments; f. City Governments; g. Regency Governments; h. State institutions established by laws; or
i. government institutions performing government functions using the State Budget and/or Regional Budgets.

Article 2
Capital Market Financial Service Providers are required to implement Customer Due Diligence Principles and possess guidelines for implementing Customer Due Diligence Principles.

CHAPTER II
ACTIVE SUPERVISION BY THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS
Section One
Active Supervision by the Board of Directors
Article 3
(1) The Board of Directors of Capital Market Financial Service Providers is required to conduct active supervision at least:
a. ensuring that Capital Market Financial Service Providers have guidelines for implementing Customer Due Diligence Principles; b. proposing guidelines for implementing Customer Due Diligence Principles to the Board of Commissioners;
c. ensuring that the implementation of Customer Due Diligence Principles is carried out according to the established guidelines;
d. ensuring that the guidelines for implementing Customer Due Diligence Principles align with changes and developments in products, services, and technologies of Capital Market Financial Service Providers, as well as with developments in money laundering and/or terrorism financing modus operandi; and e. ensuring that all employees involved in implementing Customer Due Diligence Principles have undergone periodic training related to the implementation of Customer Due Diligence Principles. (2) In the event that a Capital Market Financial Service Provider is a Custodian Bank which is a Branch of a Foreign Bank, active supervision is conducted by the management of that Foreign Bank Branch.

Section Two
Active Supervision by the Board of Commissioners
Article 4
The Board of Commissioners of Capital Market Financial Service Providers is required to conduct active supervision at least:
a. approving the guidelines for implementing Customer Due Diligence Principles proposed by the Board of Directors; b. supervising the implementation of the Board of Directors' responsibilities regarding the implementation of Customer Due Diligence Principles; and
c. ensuring discussions regarding Money Laundering and Terrorism Financing occur in Board of Directors and Board of Commissioners meetings.

CHAPTER III
RESPONSIBLE PARTIES FOR THE IMPLEMENTATION OF CUSTOMER DUE DILIGENCE PRINCIPLES AT FINANCIAL SERVICE PROVIDERS
Section One
General
Article 5
(1) In the implementation of Customer Due Diligence Principles, Capital Market Financial Service Providers are required to form a special working unit or appoint an official as the responsible party for implementing Customer Due Diligence Principles. (2) The responsible party for implementing Customer Due Diligence Principles as referred to in paragraph (1) is established as part of the organizational structure of Capital Market Financial Service Providers. (3) Capital Market Financial Service Providers are required to ensure that the responsible party for implementing Customer Due Diligence Principles as referred to in paragraph (1) has adequate capabilities and authority to access all Customer data and related information. (4) The President Director of Capital Market Financial Service Providers cannot serve as the responsible party for implementing Customer Due Diligence Principles. (5) In the event that a Capital Market Financial Service Provider is a Securities Company conducting business as an Underwriter of Securities, Securities Broker, and/or Investment Manager within a single legal entity, the Capital Market Financial Service Provider may have only one responsible party for implementing Customer Due Diligence Principles. (6) In the event that a Capital Market Financial Service Provider is a Custodian Bank, the responsible party for implementing Customer Due Diligence Principles may be assigned to the responsible party of the Custodian Bank or concurrently held by the responsible party for implementing Customer Due Diligence Principles at a Commercial Bank.

Section Two
Special Working Unit
Article 6
In the event that Capital Market Financial Service Providers form a special working unit as the responsible party for implementing Customer Due Diligence Principles, the following provisions apply:
a. the special working unit consists of at least 1 (one) person acting as the leader and 1 (one) person acting as the executor; b. the leader and executor of the special working unit are prohibited from concurrently performing other functions;
c. the leader of the special working unit is appointed/selected by the President Director;
d. the special working unit is under the direct coordination of the President Director in the organizational structure of Capital Market Financial Service Providers; and e. the special working unit is independent from other functions.

Section Three
Appointment of Officials
Article 7
In the event that Capital Market Financial Service Providers appoint an official as the responsible party for implementing Customer Due Diligence Principles, such official must be appointed or selected by the President Director and may only concurrently perform risk management functions, compliance functions, and/or internal audit functions.

Section Four
Tasks, Authority, and Responsibilities
Paragraph 1
Tasks
Article 8
The responsible party for implementing Customer Due Diligence Principles as referred to in Article 5 paragraph (1) has at least the following tasks:
a. drafting and maintaining guidelines for implementing Customer Due Diligence Principles; b. ensuring that Customer identification, verification, and monitoring procedures remain adequate;
c. ensuring that forms related to Customers accommodate the data required for implementing Customer Due Diligence Principles;
d. monitoring Securities Accounts and the execution of Customer transactions; e. evaluating the results of monitoring and Customer transaction analysis to ensure the presence or absence of Suspicious Financial Transactions and/or cash transactions according to laws related to Money Laundering and/or Terrorism Financing; f. documenting the results of monitoring and evaluation; g. monitoring the updating of Customer data and profiles; h. supervising the implementation of Customer Due Diligence Principles by related working units;
i. receiving and analyzing reports of Suspicious Financial Transactions and/or cash transactions reported by assigned working units; and
j. drafting reports of Suspicious Financial Transactions and/or cash transactions according to laws related to Money Laundering and/or Terrorism Financing, which must be reported to PPATK.

Paragraph 2
Authority
Article 9
The responsible party for implementing Customer Due Diligence Principles as referred to in Article 5 paragraph (1) has at least the following authority:
a. obtaining access to necessary information available in all organizational units of Capital Market Financial Service Providers; b. coordinating and monitoring the implementation of Customer Due Diligence Principles by related working units;
c. proposing officials and/or employees of related working units to assist in the implementation of Customer Due Diligence Principles; and
d. reporting Suspicious Financial Transactions conducted by the Board of Directors, Board of Commissioners, or Affiliated Parties with the Board of Directors or Board of Commissioners, directly to PPATK.

Paragraph 3
Responsibilities
Article 10
The responsible party for implementing Customer Due Diligence Principles as referred to in Article 5 paragraph (1) has at least the following responsibilities:
a. ensuring all activities regarding the implementation of Customer Due Diligence Principles are carried out; b. monitoring, analyzing, and recommending training needs regarding the implementation of Customer Due Diligence Principles for officials and/or employees of Capital Market Financial Service Providers; and
c. maintaining the confidentiality of information related to the implementation of Customer Due Diligence Principles.

CHAPTER IV
POLICIES AND PROCEDURES
Article 11
(1) Guidelines for implementing Customer Due Diligence Principles as referred to in Article 2 contain written policies and procedures at least covering:
a. identification and verification; b. Beneficial Owner;
c. Third-party CDD;
d. risk management; e. high-risk areas; f. monitoring of Securities Accounts, Customer transactions, and updating Customer data; g. document management; and h. reporting. (2) Guidelines for implementing Customer Due Diligence Principles possessed by Capital Market Financial Service Providers as referred to in paragraph (1) must refer to this Financial Services Authority Regulation and related laws on the prevention and eradication of money laundering and/or terrorism financing crimes.
Article 12
Capital Market Financial Service Providers are required to implement guidelines for implementing Customer Due Diligence Principles as referred to in Article 11 consistently and continuously.
Article 13
Guidelines for implementing Customer Due Diligence Principles as referred to in Article 11 must receive approval from the Board of Commissioners.

Section One
Identification and Verification
Article 14
(1) Capital Market Financial Service Providers are required to conduct CDD procedures when:
a. establishing a business relationship with a prospective Customer; b. establishing a business relationship with a Customer;
c. there is doubt regarding the truthfulness of data, information, and/or supporting documents provided by the Customer and/or Beneficial Owner; and/or
d. there are indications of suspicious financial transactions related to Money Laundering and Terrorism Financing.
(2) CDD as referred to in paragraph (1) consists of Simple CDD, Standard CDD, and EDD.
Article 15
(1) Capital Market Financial Service Providers are required to request data and information from prospective Customers.
(2) Data and information of prospective Customers as referred to in paragraph (1) are as follows:
a. For individual prospective Customers:

data according to identity documents, namely:
a) name; b) identity number; c) address; d) place and date of birth; e) gender; and f) nationality;
current residential address (if different from identity documents);
telephone number;
marital status;
occupation;
workplace address and telephone number (if any);
average annual income;
source of funds;
purpose and objectives of investment;
Beneficial Owner identity (if any); and
bank name and account number.
b. For non-individual prospective Customers:
name;
license number or business license number from the competent authority;
business field/activity;
domicile address;
telephone number;
place and date of establishment;
Beneficial Owner identity (if any);
source of funds;
purpose and objectives of investment; and
bank name and account number.
(3) Data and information as referred to in paragraph (2) must be accompanied by at least specimen signatures and supporting documents as follows:
a. For individuals
photocopy of Identity Card (KTP), for Indonesian Citizens; or
photocopy of Passport, for Foreign Citizens.
b. For non-individuals
Legal Entities
a) photocopy of company statutes; b) photocopy of business license from the competent authority; c) specimen signature of the authorized representative; d) power of attorney from the competent official to the authorized representative, to act on behalf of the prospective Customer or Customer in investing in the Capital Market, including providing instructions regarding the prospective Customer's Securities Account; e) photocopy of Taxpayer Identification Number (NPWP); f) financial statements or business activity descriptions; g) photocopy of domicile letter; h) management or organizational structure; i) ownership or founder structure; j) photocopy of identity documents of authorized Directors/Managers representing the prospective Customer; and k) documents regarding ultimate controllers.
Foundations
a) photocopy of foundation activity license; b) foundation activity description; c) structure and names of foundation managers; and d) photocopy of identity documents of authorized members of the foundation management representing the foundation to establish a business relationship with Capital Market Financial Service Providers.
Other Legal Entities
a) photocopy of registration proof with the competent authority; b) name of the organizer; and c) photocopy of identity documents of the competent party representing the legal entity to establish a business relationship with Capital Market Financial Service Providers.
Organized Groups, Associations, and Other Non-Legal Entity Associations
a) photocopy of registration proof with the competent authority; b) name of the organizer; c) photocopy of establishment deed and/or statutes and house rules (AD/ART); and d) photocopy of identity documents of the competent party representing the organized group, association, or non-legal entity association to establish a business relationship with Capital Market Financial Service Providers. (4) In the event that a prospective Customer is a State Institution, Government Agency, or International Institution, Capital Market Financial Service Providers are required to request data and information at least as referred to in paragraph (2) letter b numbers 1 and 4, and supporting documents as referred to in paragraph (3) letter b numbers 1 letter c) and letter d). (5) Approval to open a Securities Account or establish a business relationship may be granted by Capital Market Financial Service Providers after verifying the truthfulness of the prospective Customer's identity and completeness of documents, and considering factors that may enable the prospective Customer to engage in Money Laundering and/or Terrorism Financing. (6) Capital Market Financial Service Providers are prohibited from opening or maintaining Securities Accounts if:
a. the Securities Account uses a fictitious name; b. the prospective Customer or Customer refuses to comply with Customer Due Diligence Principles; or
c. Capital Market Financial Service Providers cannot verify the truthfulness of the prospective Customer's or Customer's identity and completeness of documents.
Article 16
(1) Capital Market Financial Service Providers are required to classify prospective Customers or Customers based on the level of risk of Money Laundering or Terrorism Financing. (2) Classification of prospective Customers or Customers as referred to in paragraph (1) consists of at least 3 (three) risk classifications, namely:
a. low; b. medium; and
c. high.
(3) Capital Market Financial Service Providers are required to apply CDD based on the risk level of prospective Customers or Customers.
Article 17
(1) Prospective Customers or Customers fall into the low-risk group if they meet the following criteria:
a. having the following profiles:
recipients of Securities under Employee Stock Ownership Program (ESOP) and/or Management Stock Ownership Program (MSOP) from Issuers or Public Companies;
Issuers or Public Companies;
companies where the majority of shares are owned by the Government;
State Institutions or Government Agencies; or
International Institutions where the Government or representatives are members;
b. parties ordering Securities in the primary market totaling at most Rp100,000,000.00 (one hundred million Rupiah); or
c. not meeting the medium-risk level criteria.
(2) Regarding prospective Customers or Customers meeting the low-risk level criteria as referred to in paragraph (1), Capital Market Financial Service Providers are required to:
a. verify the truthfulness of data and information provided by prospective Customers or Customers based on supporting documents; and b. ensure that such data and information are current. (3) In the event that Customers do not meet the criteria as referred to in paragraph (1), Capital Market Financial Service Providers are required to conduct Standard CDD or EDD procedures.
Article 18
(1) Prospective Customers or Customers fall into the medium-risk group if they meet the following criteria:
a. not included in low-risk criteria; b. not included in high-risk criteria;
c. for Investment Manager prospective Customers or Customers who:
purchase (subscribe) Mutual Fund Securities and other investment products;
hold Mutual Fund Securities and other investment products at the end of the month; or
have...
having an accumulation of purchase (subscription) and resale (redemption) transactions of Mutual Fund Securities and other investment products within a period of 1 (one) month, exceeding IDR 100,000,000.00 (one hundred million rupiah); or

d. for Prospective Customers or Customers who are Intermediary Brokers who:

make deposits of funds exceeding IDR 10,000,000.00 (ten million rupiah) in 1 (one) day;
have funds and/or Securities with a total value exceeding IDR 50,000,000.00 (fifty million rupiah) at the end of the month; or
have an accumulation of Securities transactions exceeding IDR 100,000,000.00 (one hundred million rupiah) within a period of 1 (one) month.

(2) Capital Market Financial Service Providers are required to verify the data and information of Prospective Customers or Customers as referred to in paragraph (1) by:
a. comparing the data and information of Prospective Customers or Customers with supporting documents before establishing a business relationship with the Prospective Customer; b. conducting a direct meeting (face to face) with the Prospective Customer or Customer and comparing the data and information of the Prospective Customer or Customer with the original documents, subject to the following provisions:

conducted directly by employees of Capital Market Financial Service Providers, evidenced by a written statement in a free format stating that the employee…

…has conducted a direct meeting (face to face) with the Prospective Customer or Customer;
2. represented by another party that has an agreement with the Capital Market Financial Service Provider (outsourcing), subject to the provision that the other party representing the Capital Market Financial Service Provider must know the basic principles of CDD; or
3. replaced by using electronic media, subject to the provision that such electronic media can provide electronic information and/or electronic documents as valid evidence based on applicable laws and can be accounted for;
c. conducting an interview with the Prospective Customer or Customer to examine and verify the authenticity and truthfulness of documents, in case there is doubt regarding the data, information, and/or supporting documents received; and
d. conducting confirmation regarding the truthfulness of the authority of the party representing or acting for and on behalf of the Beneficial Owner, if the Prospective Customer or Customer acts as an agent for or represents the Beneficial Owner.

(3) For Customers who were previously in the low-risk group but who, during simple CDD, have had a direct meeting (face to face), Capital Market Financial Service Providers do not need to conduct another direct meeting (face to face) when the Customer meets the criteria for the medium-risk group.

(4) The implementation of activities as referred to in paragraph (2) letter b must be carried out within a period of 1 (one)…

(1) year since the Customer meets the criteria in the medium-risk Customer group.

Article 19
(1) Prospective Customers or Customers are included in the high-risk group if they meet the following criteria:
a. the Prospective Customer or Customer and/or Beneficial Owner are included in high-risk areas; b. there are significant changes in profile or important information, causing the Customer to be included in high-risk areas;
c. transaction orders are made by the securities account holder without a valid legal basis; and/or
d. Customers who conduct transactions that do not match their profile, characteristics, and transaction pattern habits.

(2) Regarding Prospective Customers or Customers who meet the provisions as referred to in paragraph (1), Capital Market Financial Service Providers are required to conduct EDD, among others, by:
a. comparing the data and information of Prospective Customers or Customers with supporting documents before establishing a business relationship with the Prospective Customer; b. verifying the data and information of Prospective Customers or Beneficial Owners based on the truthfulness of the information, the truthfulness of the information source, and the type of related information, if the Prospective Customer acts on behalf of the Beneficial Owner;
c. verifying the business relationship conducted…

conducted by the Prospective Customer with third parties, if the Prospective Customer acts for and on behalf of the Beneficial Owner; d. conducting confirmation regarding the truthfulness of the authority of the party representing or acting for and on behalf of the Beneficial Owner, if the Prospective Customer or Customer acts as an agent for or represents the Beneficial Owner; e. conducting a direct meeting (face to face) before establishing a business relationship and comparing the data and information of Prospective Customers or Customers with original documents; f. conducting an interview with the Prospective Customer to examine and verify the authenticity and truthfulness of documents, in case there is doubt regarding the information and/or supporting documents received; and g. conducting CDD periodically, at least comprising an analysis of information regarding Customers, sources of funds, investment purposes, and business relationships with related parties.

Article 20
In determining the grouping of Prospective Customers or Customers based on risk levels, Capital Market Financial Service Providers must, at a minimum, comply with the grouping and criteria as established in this Otoritas Jasa Keuangan Regulation.

Article 21
(1) In the event of a change in Customer risk level from low to medium, Capital Market Financial Service Providers are required to conduct the verification process as referred to in Article 18 paragraph (2) letters c and d within a period of 30 (thirty) days since the Customer…

Customer meets the medium-risk level criteria as referred to in Article 18 paragraph (1).

(2) In the event of a change in Customer risk level from low or medium to high, Capital Market Financial Service Providers are required to conduct the verification process as referred to in Article 19 paragraph (2) letters b, c, d, e, and f before continuing the business relationship with the Customer.

Article 22
Capital Market Financial Service Providers may request other data, information, and/or supporting documents to ensure the truthfulness of the profile of Prospective Customers or Customers in the context of identification and verification, considering:
a. the likelihood of Money Laundering and/or Terrorist Financing occurring; and/or b. the products, services, and/or technologies used by Prospective Customers or Customers.

Article 23
(1) Capital Market Financial Service Providers must, at a minimum, conduct simple CDD procedures against Prospective Customers or Customers with a low risk level.

(2) Capital Market Financial Service Providers must, at a minimum, conduct standard CDD procedures against Prospective Customers or Customers with a medium risk level.

(3) Capital Market Financial Service Providers are required to conduct EDD procedures against Prospective Customers or Customers with a high risk level.

(4) If there is an inconsistency between transactions and/or Customer profiles with the criteria at the established risk level, Capital Market Financial Service Providers are required to re-group the Customer into the appropriate risk level and apply:
a. standard CDD procedures for Customers originally classified as low risk who change to medium risk according to the new risk level determination; or b. EDD procedures for Customers originally classified as low or medium risk who change to high risk.

Second Section
Beneficial Owner

Article 24
(1) Capital Market Financial Service Providers are required to ensure that Prospective Customers act for themselves or for the benefit of the Beneficial Owner.

(2) In the event that Prospective Customers act for the benefit of the Beneficial Owner, Capital Market Financial Service Providers are required to conduct CDD against the Beneficial Owner.

(3) In the event that there is a difference in risk levels between Prospective Customers or Customers and the Beneficial Owner, the application of CDD follows the higher risk level.

(4) The obligation to conduct CDD against the Beneficial Owner as referred to in paragraph (2) does not apply to Prospective Customers or Customers with a low risk level.

Article 25
(1) Capital Market Financial Service Providers are required to obtain…

obtain evidence of identity and/or other information regarding the Beneficial Owner.

(2) Evidence of identity and/or other information as referred to in paragraph (1) includes, among others:
a. for Beneficial Owners who are individuals:

data and information as referred to in Article 15 paragraph (2) letter a;
identity documents as referred to in Article 15 paragraph (3) letter a;
legal relationship between the Prospective Customer and the Beneficial Owner, shown by an agreement, power of attorney, or other forms;
a statement from the Prospective Customer regarding the truthfulness of the identity and source of funds of the Beneficial Owner; and
a statement from the Beneficial Owner that they are the actual owner of the Prospective Customer's or Customer's funds.
b. for Beneficial Owners who are non-individuals:
data and information as referred to in Article 15 paragraph (2) letter b;
identity documents as referred to in Article 15 paragraph (3) letter b;
a statement from the Prospective Customer regarding the truthfulness of the identity and source of funds of the Beneficial Owner; and
a statement from the Beneficial Owner that they are the actual owner of the Prospective Customer's or…

or Customer's funds.

(3) In the event that the Prospective Customer is another financial service provider in the domestic Capital Market sector acting for and on behalf of the Beneficial Owner, documents regarding the Beneficial Owner may consist of a written statement from the Prospective Customer.

(4) In the event that the Prospective Customer is a Capital Market financial service provider outside the country acting for and on behalf of the Beneficial Owner and applies Customer Due Diligence Principles based on regulations in the Beneficial Owner's country that are at least equivalent to this Otoritas Jasa Keuangan Regulation, documents regarding the Beneficial Owner may consist of a written statement from the Prospective Customer.

(5) In the event that the application of Customer Due Diligence Principles by Capital Market financial service providers outside the country as referred to in paragraph (4) is not equivalent to this Otoritas Jasa Keuangan Regulation, Capital Market Financial Service Providers are required to apply Customer Due Diligence Principles based on this Otoritas Jasa Keuangan Regulation.

(6) In the event that Capital Market Financial Service Providers doubt or cannot verify the identity of the Beneficial Owner, Capital Market Financial Service Providers are required to refuse to establish a business relationship with the Prospective Customer.

Article 26
The obligation to submit data, information, and/or identity documents of the Beneficial Owner as referred to in Article 25 paragraph (2) letter b does not apply to Beneficial Owners who are:
a. state institutions or government agencies; b. companies with majority shares owned by the Government; or
c. Public Companies or Emitters.

Third Section
CDD by Third Parties

Article 27
(1) Capital Market Financial Service Providers may appoint third parties to carry out identification and verification as part of the implementation of CDD.

(2) Third parties as referred to in paragraph (1) are as follows:
a. other financial service providers in the country; b. financial service providers in the Capital Market sector outside the country; or
c. other parties in the country that are not financial service providers,
who cooperate with Capital Market Financial Service Providers.

(3) In the event that Capital Market Financial Service Providers appoint third parties to carry out CDD, Capital Market Financial Service Providers may use the CDD results already conducted by the third party.

(4) Third parties as referred to in paragraph (2) are required to meet the following requirements:
a. have CDD procedures in accordance with applicable regulations; b. have a cooperation contract with Capital Market Financial Service Providers in the form of a written agreement;
c. be willing to promptly fulfill requests for data, information, and…

and supporting documents when needed by Capital Market Financial Service Providers in the context of applying Customer Due Diligence Principles; and d. not be located in High Risk Countries.

(5) In the event that the third party is located outside the country as referred to in paragraph (2) letter b, they are required to meet the criteria that the third party has effectively implemented Customer Due Diligence Principles in accordance with the recommendations of the Financial Action Task Force (FATF).

(6) In the event that the third party is not a financial service provider as referred to in paragraph (2) letter c, CDD procedures are established by and under the coordination of Capital Market Financial Service Providers.

(7) In the event that Capital Market Financial Service Providers appoint third parties, Capital Market Financial Service Providers are required to:
a. have and implement feasibility testing and supervision procedures against third parties in the application of CDD; b. ensure that the CDD implementation by third parties complies with the CDD procedures established by Capital Market Financial Service Providers;
c. implement the archiving of CDD results conducted by third parties; and
d. be responsible for the CDD results conducted by third parties.

Article 28
(1) In the event that Capital Market Financial Service Providers act as sales agents for products of other financial service providers, Capital Market Financial Service Providers are required to fulfill requests for CDD result information and copies of supporting documents whenever needed by the other financial service providers in the context of implementing Customer Due Diligence Principles.

(2) The procedure for fulfilling requests for CDD result information and copies of supporting documents is stipulated in the cooperation agreement between Capital Market Financial Service Providers and the other financial service providers.

Fourth Section
Risk Management

Article 29
Risk management policies and procedures related to the implementation of Customer Due Diligence Principles are an inseparable part of the overall risk management policies and procedures of Capital Market Financial Service Providers.

Article 30
Risk management policies and procedures related to the implementation of Customer Due Diligence Principles as referred to in Article 29 must, at a minimum, include:
a. supervision by the Board of Directors and Board of Commissioners of Capital Market Financial Service Providers; b. delegation of authority;
c. segregation of duties; and
d. internal supervision systems including internal audit.

Article 31
(1) Capital Market Financial Service Providers are required to test the effectiveness of the implementation of Customer Due Diligence Principles.

(2) Testing as referred to in paragraph (1) is conducted by taking random samples.

(3) Capital Market Financial Service Providers are required to document the testing as referred to in paragraph (1).

Article 32
Capital Market Financial Service Providers are required to document and update the types, indicators, and examples of suspicious financial transactions arising in various related work units.

Fifth Section
High Risk Areas

Article 33
Prospective Customers or Customers are considered and/or grouped into high-risk areas if:
a. the background or profile of the Prospective Customer or Customer and the controllers of the Prospective Customer or Customer are PEPs or High Risk Customers; b. the business field of the Prospective Customer or Customer is a High Risk Business;
c. the country or territory of origin, domicile, or where the transaction of the Prospective Customer or Customer is conducted is a High Risk Country;
d. are listed in terrorist name lists; and/or e. transactions conducted are suspected to be related to criminal acts in the Capital Market sector, Money Laundering criminal acts, and/or Terrorist Financing criminal acts.

Article 34
Actions by Capital Market Financial Service Providers must first obtain approval from members of the Board of Directors, officials below the Board of Directors level, or senior managers in the event that:
a. Capital Market Financial Service Providers will establish a business relationship with Prospective Customers who are considered and/or grouped as having high risk as referred to in Article 19 paragraph (1); and/or b. decision-making to continue or terminate the business relationship with Customers who are considered and/or grouped as having high risk as referred to in Article 19 paragraph (1).

Sixth Section
Account Monitoring and Customer Data Updates

Article 35
(1) Capital Market Financial Service Providers are required to continuously monitor Customer data to ensure that transactions conducted by Customers match their profile, characteristics, and/or transaction pattern habits.

(2) In implementing monitoring as referred to in paragraph (1), Capital Market Financial Service Providers must have a monitoring system that can:
a. identify, analyze, monitor, and effectively provide reports regarding the profile, characteristics, and/or transaction pattern habits conducted by Customers; and b. trace every transaction, if necessary, including tracing Customer identity, transaction form, transaction date, transaction amount and denomination, and the source of funds used for the transaction.

(3) Capital Market Financial Service Providers are required to monitor Securities accounts and Customer transactions, including analysis related to the possibility…

possibility of predicate offenses and Terrorist Financing.

(4) Capital Market Financial Service Providers may request further data and/or information from Customers regarding transactions that do not match their profile, characteristics, and/or transaction pattern habits.

(5) Capital Market Financial Service Providers are required to evaluate the results of monitoring Securities accounts and Customer transactions as referred to in paragraph (3) to ensure the presence or absence of suspicious financial transactions.

(6) In the event of suspicious financial transactions, Capital Market Financial Service Providers are required to request further data and/or information from Customers as referred to in paragraph (4).

(7) In the event that the data and/or information submitted by Customers does not provide a convincing explanation, Capital Market Financial Service Providers are required to report such Suspicious Financial Transactions to PPATK.

(8) In the event that there is a name and other information match for a Customer with names and information listed in terrorist name lists, Capital Market Financial Service Providers are required to report such Customers in Suspicious Financial Transaction reports.

Article 36
(1) Capital Market Financial Service Providers are required to update data, information, and/or supporting documents as referred to in Article 15 paragraph (2) and paragraph (3) in the event of known changes from the monitoring of Capital Market Financial Service Providers against Customers or other information that can be accounted for…

accounted for.

(2) Periodic monitoring regarding Customer profiles for data update purposes is conducted at least 1 (one) time within a period of:

3 (three) years for Customers classified as low risk;
1 (one) year for Customers classified as medium risk; and/or
6 (six) months for Customers classified as high risk.

(3) Capital Market Financial Service Providers are required to document data update efforts as referred to in paragraph (1).

Seventh Section
Document Archiving

Article 37
(1) Capital Market Financial Service Providers are required to create and document a list of Customers according to their risk levels.

(2) Capital Market Financial Service Providers are required to archive documents as referred to in Article 15 paragraph (3).

(3) The archiving of documents as referred to in paragraph (1) and paragraph (2) is carried out for a period of at least 5 (five) years since the end of the business relationship with the Customer.

(4) Capital Market Financial Service Providers are required to store records and documents regarding the entire process of identifying Suspicious Financial Transactions in accordance with applicable legislation.

(5) Capital Market Financial Service Providers are required to provide data, information, and/or documents that are archived when requested by the Otoritas Jasa Keuangan and/or other competent authorities as…

as regulated by law.

Eighth Section
Reporting

Article 38
(1) Capital Market Financial Service Providers are required to submit reports on Suspicious Financial Transactions, reports on cash financial transactions, and/or other reports to PPATK as regulated in provisions and legislation governing the prevention and eradication of Money Laundering and/or Terrorist Financing criminal acts.

(2) The submission of reports as referred to in paragraph (1) is conducted with reference to provisions issued by PPATK.

CHAPTER V
INFORMATION SYSTEM

Article 39
(1) Capital Market Financial Service Providers are required to have an information system capable of storing Customer data and information and Customer transaction data.

(2) Data and information as referred to in paragraph (1) must be used as one of the parameters in monitoring Customer transactions.

(3) The information system as referred to in paragraph (1) must provide facilities for indicators of financial transactions that are potentially suspicious.

(4) The information system as referred to in paragraph (1) must include details of persons, business fields, and countries that meet high-risk area criteria and must be updated regularly.

(5) Capital Market Financial Service Providers are required to ensure…

ensure…

ensuring that the monitoring of Customer transactions using information systems can be carried out effectively and continuously.

CHAPTER VI
HUMAN RESOURCES AND TRAINING

Article 40
Capital Market Financial Service Providers must conduct screening procedures in the context of employee recruitment.

Article 41
Capital Market Financial Service Providers must implement a training program on the application of Customer Due Diligence Principles to all employees related to the application of Customer Due Diligence Principles, carried out as follows:
a. formulate a training program that is implemented at least 1 (one) time in 2 (two) years; b. implement the training program according to the schedule of the formulated program; and
c. report the implementation of the training program to the Financial Services Authority no later than in the following year after the year of the training program implementation.

CHAPTER VII
OTHER PROVISIONS

Article 42
Capital Market Financial Service Providers must take necessary actions to prevent the abuse of technology development in Money Laundering and/or Terrorism Financing schemes.

Article 43
Capital Market Financial Service Providers must cooperate with law enforcement and competent authorities in...

in order to eradicate Money Laundering and/or Terrorism Financing.

CHAPTER VIII
SANCTIONS

Article 44
(1) Without prejudice to criminal provisions in the Capital Market sector, the Financial Services Authority is authorized to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties who cause the violation to occur, in the form of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and g. cancellation of registration.
(2) Administrative sanctions as referred to in paragraph (1) letter b, letter c, letter d, letter e, letter f, or letter g may be imposed with or without prior imposition of administrative sanctions in the form of a written warning as referred to in paragraph (1) letter a. (3) Administrative fine sanctions as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of sanctions as referred to in paragraph (1) letter c, letter d, letter e, letter f, or letter g.

Article 45
In addition to administrative sanctions as referred to in Article 44 paragraph (1), the Financial Services Authority may take certain actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 46...

Article 46
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 44 paragraph (1) and certain actions as referred to in Article 45 to the public.

CHAPTER IX
TRANSITIONAL PROVISIONS

Article 47
Capital Market Financial Service Providers must submit guidelines for the application of Customer Due Diligence Principles as referred to in Article 2 to the Financial Services Authority no later than 6 (six) months from the effective date of this Financial Services Authority Regulation.

CHAPTER IX
CLOSING PROVISIONS

Article 48
At the time this Financial Services Authority Regulation comes into force:
a. The Decision of the Chairman of Bapepam and LK Number Kep-476/BL/2009 dated December 23, 2009 concerning Customer Due Diligence Principles by Financial Service Providers in the Capital Market Sector together with Regulation Number V.D.10 which is its appendix, is repealed and declared invalid; and b. Financial Services Authority Circular Letter Number 7/SEOJK.04/2014 dated April 24, 2014 concerning the Implementation of Direct Meetings (Face To Face) in the Acceptance of Mutual Fund Shareholders Through Electronic Account Opening as well as Procedures for Selling (Subscription) and Buying Back (Redemption) Mutual Fund Shares Electronically, remains in force as long as it is not contrary to and has not been replaced based on this Financial Services Authority Regulation.

Article 49...

Article 49
This Financial Services Authority Regulation comes into force upon being promulgated.
To ensure that everyone knows it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta
On November 18, 2014
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY,
Signed,
MULIAMAN D. HADAD

Promulgated in Jakarta
On November 19, 2014
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,
Signed,
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2014 NUMBER 353 A copy in accordance with the original Director of Legal Affairs I Ministry of Law, Signed, Tini Kustini

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 22/POJK.04/2014
CONCERNING
CUSTOMER DUE DILIGENCE PRINCIPLES BY CAPITAL MARKET FINANCIAL SERVICE PROVIDERS

I. GENERAL

Along with the development of the Indonesian Capital Market both in terms of products, services, and the use of information technology in increasingly complex trading, the potential risk of utilizing the Capital Market industry as a means of Money Laundering and Terrorism Financing, with more sophisticated modus operandi, is potentially increasing. Therefore, the capacity and capability of Capital Market Financial Service Providers need to be continuously improved, one of which is through the improvement of the application of risk management related to Customer Due Diligence Principles.

The Financial Services Authority as the highest regulator in the Capital Market sector has regulations regarding Customer Due Diligence Principles in the Capital Market Sector, namely Regulation Number V.D.10, Appendix of the Decision of the Chairman of Bapepam and LK Number Kep-476/BL/2009 dated December 23, 2009 concerning Customer Due Diligence Principles by Financial Service Providers in the Capital Market Sector. However, these regulations need to be adjusted with Law Number 8 of 2010 concerning the Prevention and Eradication of Money Laundering Criminal Acts as well as Law Number 9 of 2013 concerning the Prevention and Eradication of Terrorism Financing Criminal Acts.

In addition, Regulation Number V.D.10 concerning Customer Due Diligence Principles by Financial Service Providers in the Capital Market Sector also needs to be harmonized with the latest international standards set by The Financial Action Task Force on Money Laundering (FATF) in February 2012. In these international standards, FATF recommends that in the application of anti-Money Laundering and Terrorism Financing regimes, a risk-based approach in the formulation of policies and procedures should be prioritized. This approach means that if the level of Money Laundering and Terrorism Financing risk is assessed to be higher, stricter policies and procedures need to be established, whereas if the level of Money Laundering and Terrorism Financing risk is assessed to be lower, simpler policies and procedures can be applied.

Considering this and in order to harmonize with legislation and align with applicable international standards, it is necessary to improve regulations regarding customer due diligence principles by Capital Market Financial Service Providers. The improvement of these regulations includes among others:
a. Regulations regarding active supervision by members of the Board of Directors and Board of Commissioners of Capital Market Financial Service Providers over the application of Customer Due Diligence Principles; b. Regulations regarding customer grouping and the application of Customer Due Diligence Principles based on Money Laundering and Terrorism Financing risk assessment;
c. Regulations on simplified Customer Due Diligence (CDD) specifically for Customers classified as low risk; and
d. Regulations on the implementation of CDD by other financial service providers for the benefit of Capital Market Financial Service Providers.

With the application of Customer Due Diligence Principles by Capital Market Financial Service Providers carried out by the Capital Market industry more effectively, it is hoped that Capital Market Financial Service Providers can operate healthily and be globally competitive, while domestic investor growth can still be increased.

II. ARTICLE BY ARTICLE EXPLANATION

Article 1
Clearly stated.

Article 2
What is meant by the guidelines for the application of Customer Due Diligence Principles as referred to in this Article are written policies and/or procedures formulated based on this Financial Services Authority Regulation and established by each Capital Market Financial Service Provider to become technical instructions for the person in charge of Customer Due Diligence Principles in applying Customer Due Diligence Principles at the respective Capital Market Financial Service Provider.

Article 3
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
What is meant by periodic refers to the provisions regarding human resources and training in this Financial Services Authority Regulation.
Paragraph (2)
What is meant by Foreign Bank Branch is a branch office of a bank located outside the country.

Article 4
Letter a
Clearly stated.
Letter b
The form of supervision over the implementation of the Board of Directors' responsibilities for the application of Customer Due Diligence Principles is not intended to mean that the Board of Commissioners supervises daily operational activities. The form of supervision can be adjusted to the complexity of the business of Capital Market Financial Service Providers. Letter c Discussions in the meeting referred to can be proven by meeting documentation that can be accounted for, such as meeting minutes or other documents that can prove the material discussed in the meeting and the parties present in the meeting. The frequency of holding meetings within a certain period can be adjusted to the complexity of the business of Capital Market Financial Service Providers, the likelihood of Money Laundering and Terrorism Financing risks occurring, and the existence of new regulations or issues related to Money Laundering and Terrorism Financing.

Article 5
Paragraph (1)
The formation of a special work unit or assignment of officials as the person in charge of Customer Due Diligence Principles is adjusted to the needs of Capital Market Financial Service Providers. What is meant by official is the Board of Directors or officials at a level below the Board of Directors. Paragraph (2) Clearly stated. Paragraph (3) Adequate capability includes among others experience and/or knowledge regarding the application of Customer Due Diligence Principles and the development of anti-Money Laundering and anti-Terrorism Financing regimes. Paragraph (4) The provisions in this paragraph are to anticipate if the actor of Suspicious Financial Transactions is the Chief Executive of the Capital Market Financial Service Provider, where the reporting of Suspicious Financial Transactions must be known by the Chief Executive, so as to avoid conflicts of interest, the Chief Executive cannot serve as the person in charge of Customer Due Diligence Principles. Paragraph (5) Clearly stated. Paragraph (6) Capital Market Financial Service Providers must ensure the effectiveness of monitoring of Customer transactions, especially if the person in charge of applying Customer Due Diligence Principles is concurrently held by the person in charge of applying Customer Due Diligence Principles at a Commercial Bank conducting Custodian Bank activities at that Commercial Bank.

Article 6
Clearly stated.

Article 7
Clearly stated.

Article 8
Clearly stated.

Article 9
Clearly stated.

Article 10
Clearly stated.

Article 11
Clearly stated.

Article 12
Clearly stated.

Article 13
Clearly stated.

Article 14
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Unusual financial transactions are transactions that meet one of the criteria for suspicious financial transactions but still require further investigation to ensure whether the transaction is classified as a Suspicious Financial Transaction that must be reported to PPATK. Paragraph (2) Clearly stated.

Article 15
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
Number 1
Letter a)
Clearly stated.
Letter b)
What is meant by identity number for Indonesian Citizens is the Population Identity Number (NIK), while for Foreign Citizens it is the Passport Number.
Letter c)
Clearly stated.
Letter d)
Clearly stated.
Letter e)
Clearly stated.
Letter f)
Clearly stated.
Number 2
Clearly stated.
Number 3
Clearly stated.
Number 4
Clearly stated.
Number 5
Clearly stated.
Number 6
Clearly stated.
Number 7
Filled in for those who have worked or have income. For example, students and housewives do not need to state average income because they do not work or have no income. Number 8 Clearly stated.

Number 9
Clearly stated.

Number 10
Clearly stated.

Number 11
Clearly stated.

Letter b
Clearly stated.

Paragraph (3)
Letter a
Number 1
What is meant by Identity Card in these provisions is the Identity Card as referred to in regulations related to population administration. For Customers of Capital Market Financial Service Providers who have not provided the Identity Card document as referred to in the aforementioned population administration regulations, it should be adjusted during data updating. Number 2 Clearly stated.

Letter b
Number 1
Letter a)
Clearly stated.
Letter b)
Clearly stated.
Letter c)
Clearly stated.
Letter d)
Clearly stated.
Letter e)
Clearly stated.
Letter f)
Clearly stated.
Letter g)
A domicile letter can be replaced by another independent document stating the domicile of the prospective non-individual Customer.
Example, a letter from the building management party.
Letter h)
Clearly stated.
Letter i)
Clearly stated.
Letter j)
For prospective Customers who are foreign companies, the identity documents of the managers can be replaced by using a list of managers authorized to represent the company that has been verified by the corporate secretary of that company. Letter k) Clearly stated.

Number 2
Clearly stated.

Number 3
Other legal entities include Non-Governmental Organizations, religious associations, political parties, and non-profit organizations.

Number 4
Letter a)
Clearly stated.
Letter b)
Clearly stated.
Letter c)
Clearly stated.
Letter d)
CDD is also conducted against Parties representing organized groups, associations, and non-legal entity associations in conducting business relations with Capital Market Financial Service Providers. The said Parties are also requested to submit data and information as referred to in paragraph (2).

Paragraph (4)
What is meant by international institution is a non-profit and/or social institution operating in various countries and known to the general public, including but not limited to institutions under the auspices of the United Nations (UN).

Paragraph (5)
Clearly stated.

Paragraph (6)
Letter a
Included in the definition of using a fictitious name for a Securities Account is a Customer account using a name that does not match the name stated in the Customer's identity document. Letter b Clearly stated. Letter c Clearly stated.

Article 16
Paragraph (1)
For the effectiveness of customer grouping, information is needed from the Customer themselves as well as other related customer information that is available and can be obtained from anywhere. Paragraph (2) Clearly stated. Paragraph (3) Clearly stated.

Article 17
Paragraph (1)
Letter a
Criteria for prospective Customers or Customers with a low risk level based on the profile as referred to in number 1), number 2), number 3), number 4), and number 5) are not bound by value limits. Number 1 If a Customer only sells Securities received from ESOP and/or MSOP and does not receive or buy other Securities, simplified CDD can be applied. However, if the Customer actively trades Securities, simplified CDD can only be applied if the Customer meets the provisions as referred to in letter c. Number 2 Clearly stated. Number 3 Clearly stated. Number 4 Clearly stated. Number 5 Clearly stated. Letter b Ordering in the primary market applies to prospective Customers without followed by the opening of a Securities Account and immediately selling on the trading day in the secondary market begins for the said Securities. Letter c Clearly stated.

Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.

Article 18
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Number 1
Clearly stated.
Number 2
Other investment products as referred to in these provisions include but are not limited to Asset-Backed Securities Collective Investment Contracts and Real Estate Investment Fund Collective Investment Contracts. Number 3 Clearly stated. Letter d Number 1 What is meant by fund deposit is a certain amount of funds entering the Customer's Fund Account that does not originate from the results of the Customer's transactions and/or other assets related to the Securities owned by the Customer. In this definition, funds obtained from the sale of Securities, dividends, and/or other transactions related to the Customer's Securities are not considered fund deposits. This applies to the same Customer within one Securities Company. Number 2 Clearly stated. Number 3 What is meant by 1 (one) month is from the beginning of the month to the end of the month in the same month.

Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.

Article 19
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
The definition of profile, characteristics, and habitual patterns of Customer transactions refers to PPATK regulations regarding the identification of Suspicious Financial Transactions for Financial Service Providers.

Paragraph (2)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
Clearly stated.
Letter g
Periodic CDD will be implemented by Capital Market Financial Service Providers at least 1 (one) time in 6 (six) months.

Article 20
Clearly stated.

Article 21
Clearly stated.

Article 22
Examples of data, information, and/or supporting documents referred to in this article include:

for foreign citizens:
a) Residence Permit, in accordance with immigration regulations; b) reference letters from:

an Indonesian citizen or Indonesian company/institution/government regarding the profile of the prospective foreign citizen Customer; or
a financial service provider in the country or jurisdiction where the prospective Customer is located and that country or jurisdiction is not classified as high risk.

for Customers receiving financing facilities:
a) data regarding employment:

letter of employment from the workplace; or
workplace identity card.
b) data regarding income:
payslip; or
bank savings statement for the last 3 (three) months.
Other necessary data, information, and/or supporting documents, such as Taxpayer Identification Number (NPWP), Driver's License (SIM), family card, and birth certificate.

Article 23
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Inconsistency in this paragraph occurs if there is a change in the Customer's risk level based on transactions and/or Customer profile, for example from low risk level to medium risk level, from medium risk level to high risk level, or from low risk level directly to high risk level without first going through the medium risk level. If procedures at a higher risk level have been carried out by the Capital Market Financial Service Provider, then those procedures do not need to be carried out again when there is a change in the Customer's risk level from a higher risk level to a lower risk level.

Article 24
Clearly stated.

Article 25
Paragraph (1)
The obligation to obtain proof of identity and/or information regarding Beneficial Owners is part of CDD, so this obligation does not apply to prospective Customers or Customers with a low risk level as referred to in Article 24 paragraph (4). Paragraph (2) Clearly stated. Paragraph (3) Other financial service providers in the domestic Capital Market sector include Capital Market Financial Service Providers, Trustees, and Investment Advisors. A written statement as referred to in this paragraph contains among others a statement that the prospective Customer has undergone the CDD process for the Beneficial Owner and is willing to provide data, information, and/or copies of supporting documents for the Beneficial Owner if needed by the Capital Market Financial Service Provider. Paragraph (4) A written statement as referred to in this paragraph contains among others a statement that the prospective Customer has undergone the CDD process for the Beneficial Owner and is willing to provide data, information, and/or copies of supporting documents for the Beneficial Owner if needed by the Capital Market Financial Service Provider. Paragraph (5) What is meant by not equivalent is the application of Customer Due Diligence Principles in other countries is lower than this Financial Services Authority Regulation. Paragraph (6) Clearly stated.

Article 26
Letter a
What is meant by state institutions or government agencies in this letter includes Indonesian government institutions and foreign government institutions.
Letter b
Clearly stated.
Letter c
Clearly stated.

Article 27
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
Those included as other financial service providers in the country are financial service providers under the supervision of the Financial Services Authority. Letter b Clearly stated. Letter c Clearly stated. Paragraph (3) Clearly stated. Paragraph (4) Letter a CDD procedures include identification and verification of prospective Customers. Letter b Clearly stated. Letter c Clearly stated. Letter d The classification of the risk level of a country is among others issued by The Financial Action Task Force (FATF) and/or The Asia/Pacific Group on Money Laundering (APG) which among others can be seen on the website www.fatf-gafi.org or www.apgml.org Paragraph (5) Clearly stated. Paragraph (6) Clearly stated. Paragraph (7) Letter a Clearly stated. Letter b In ensuring the application of CDD conducted by third parties, Capital Market Financial Service Providers can do among others the following:

periodically review the Customer Due Diligence Principles policies and procedures of the third party; and
conduct spot checks or sampling to ensure compliance with policies and procedures.
Letter c
What is meant by CDD result documents are forms containing data and/or information of prospective Customers or Customers and supporting documents.
Letter d
Clearly stated.

Article 28
Clearly stated.

Article 29
Clearly stated.

Article 30
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
What is meant by internal supervision system is procedures, mechanisms, methods, or means that can...

can be used to conduct systematic supervision.

Article 31
Testing and documentation of testing as referred to in this article are carried out for the improvement and development of the Customer Due Diligence implementation system owned by Capital Market Financial Service Providers.

Article 32
Clearly sufficient.

Article 33
Letter a
Examples of Politically Exposed Persons include:

Head of State or Head of Government;
Deputy Head of State or Head of Government;
Minister or official at the ministerial level;
Senior executives of state-owned companies;
Board of Directors of State-Owned Enterprises (BUMN);
Executives and chairpersons of political parties;
Senior officials in the military and/or police;
Senior officials in the Supreme Court and Attorney General's Office;
Officials appointed by Presidential Decree;
Legislative members at both the central and regional levels;
Family members (spouse, parents, siblings, children, sons/daughters-in-law, grandchildren) of the above categories;
Anyone not included above but due to their high position in society, significant influence, celebrity status, and/or combination of their position can place Capital Market Financial Service Providers in a risky position, must be included in the high-risk category; and
Other parties as contained in PPATK guidelines related to Politically Exposed Persons.

Examples of High Risk Customers include:

Politically Exposed Persons;
Government officials related to public services;
Persons residing and/or having funds originating from countries identified by reliable sources as having insufficient anti-money laundering standards or representing high-level criminal offenses and corruption;
Persons involved in types of activities or business sectors vulnerable to Money Laundering, such as employees of financial service providers;
Parties listed in the United Nations list or other lists issued by international organizations as terrorists, terrorist organizations, or organizations conducting Terrorism Financing; or
Other parties as contained in PPATK guidelines related to High Risk Customers.

Letter b
Examples of High Risk Business include:

Financial services, such as Foreign Exchange Dealers (money changer), Money Remittance Services;
Offshore companies including Financial Service Providers located in tax and/or secrecy havens and jurisdictions that do not adequately implement FATF recommendations;
Car dealers;
Travel agents;
Jewelers, gemstone dealers, and precious metal dealers;
Export/import trading companies;
Cash-based businesses such as minimarkets, parking management services, restaurants, Gas Stations (SPBU), mobile credit reload dealers;
Wholesalers and retailers of electronic goods (especially in free trade zones);
Lawyers, accountants, or financial consultants;
Antique and art dealers;
Real estate agents; or
Other businesses as contained in PPATK Guidelines related to High Risk Business.

Letter c
Examples of High Risk Countries include:

Jurisdictions identified by organizations conducting mutual assessment of a country (such as: Financial Action Task Force on Money Laundering (FATF), Asia Pacific Group on Money Laundering (APG), Caribbean Financial Action Task Force (CFATF), Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), The Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG), The Grupo de Accion Financiera de Sudamerica (GAFISUD), Intergovernmental Anti-Money Laundering Group in Africa (GIABA) or Middle East & North Africa Financial Action Task Force (MENAFATF)) as not adequately implementing FATF Recommendations;
Countries identified as non-cooperative or Tax Haven by the Organization for Economic Cooperation and Development (OECD);
Countries with low governance levels as determined by the World Bank;
Countries with high corruption risk levels as identified in the Transparency International Corruption Perception Index; or
Other countries or jurisdictions as contained in PPATK Guidelines related to High Risk Countries.

Letter d
Information on parties listed in the terrorist names list can be sourced from:

The National Police of the Republic of Indonesia;
United Nations Security Council Resolution 1267; or
Other commonly used sources.

Letter e
Information on suspected transactions related to criminal offenses in the Capital Market sector, Money Laundering criminal offenses, and/or Terrorism Financing criminal offenses can come from:

Reports or complaints from Customers or third parties who are harmed;
Databases and risk management of Capital Market Financial Service Providers;
Financial Services Authority;
Stock Exchange;
PPATK;
Mass media informing that prospective Customers or Customers commit criminal offenses;
Law enforcement officials; and/or
Other sources whose truthfulness can be accounted for.

Article 34
Approval from senior management is only valid for Custodian Banks. The term senior management refers to regulations in the banking sector.

Letter a
Clearly sufficient.

Letter b
In this case, specifically regarding Customers whose status changes from ordinary Customer to PEP, including Customers newly identified as PEPs.

Article 35
Paragraph (1)
The term Customer profile refers to a description of the Customer including, among others, identity, occupation or business field, income or business results, and source of funds. The term Customer characteristics refers to special characteristics inherent to the Customer including, among others, scope of activities, occupation, or business. The term Customer transaction pattern habits refers to the customary transactions conducted by the Customer including, among others, amount, frequency, currency, instruments used, portfolio type, products, and duration.

Paragraph (2)
Clearly sufficient.

Paragraph (3)
Clearly sufficient.

Paragraph (4)
Requests for further data by Capital Market Financial Service Providers in this paragraph must adhere to anti-tipping off regulations as referred to in laws governing the prevention and eradication of Money Laundering and/or Terrorism Financing criminal offenses. If requests for further data and/or information are feared to result in tipping off, Capital Market Financial Service Providers may report transactions indicated as suspicious in Suspicious Financial Transaction Reports without prior process of requesting further data and/or information.

Paragraph (5)
Clearly sufficient.

Paragraph (6)
Clearly sufficient.

Paragraph (7)
Clearly sufficient.

Paragraph (8)
Clearly sufficient.

Article 36
Paragraph (1)
Clearly sufficient.

Paragraph (2)
Clearly sufficient.

Paragraph (3)
Updating documented data also includes population documents.
Documentation of data update efforts can be in the form of physical documents proving the update effort or electronic documents in accordance with regulations on electronic information and transactions. Such documentation must be provided or shown if requested by the Financial Services Authority and/or other competent authorities when needed.

Article 37
Paragraph (1)
Clearly sufficient.

Paragraph (2)
Documents can be accounted for in original form, copies, electronic form, microfilm, or other documents that can be used as valid evidence based on legislation.

Paragraph (3)
Clearly sufficient.

Paragraph (4)
The implementation of storing records and documents regarding the identification of Suspicious Financial Transactions refers to PPATK regulations regarding the identification of Suspicious Financial Transactions.

Paragraph (5)
Clearly sufficient.

Article 38
Clearly sufficient.

Article 39
Paragraph (1)
Clearly sufficient.

Paragraph (2)
The information system owned must enable Capital Market Financial Service Providers to trace every individual transaction when necessary, for internal purposes and/or the Financial Services Authority, as well as in relation to judicial processes. Customer transaction monitoring can be conducted:

Manually, by inputting Customer data and transaction information into a data processing application (spreadsheet); or
Electronically, through anti-Money Laundering and Terrorism Financing prevention monitoring applications connected to the Capital Market Financial Service Provider's database system containing Customer data and information, Customer transactions, products and portfolios, and supported by integrated Customer data and information.
Transaction monitoring systems can be adjusted to the complexity of the Capital Market Financial Service Provider.

Paragraph (3)
The term indicator facility refers to when suspicious transactions can be immediately known by the person responsible for implementing Customer Due Diligence principles. One example of the aforementioned indicator facility is the red flag facility. Monitoring can be conducted manually or electronically through special applications adjusted to the complexity of the Capital Market Financial Service Provider.

Paragraph (4)
Clearly sufficient.

Paragraph (5)
Clearly sufficient.

Article 40
The use of Capital Market Financial Service Providers as a means of Money Laundering and Terrorism Financing is also possible involving employees of the Capital Market Financial Service Provider itself. Screening is conducted to prevent the use of Capital Market Financial Service Providers as a means and/or objective of Money Laundering or Terrorism Financing involving Internal Parties of the Capital Market Financial Service Provider.

Article 41
In determining training participants, Capital Market Financial Service Providers prioritize employees whose daily tasks meet the following criteria:
a. dealing directly with Customers (front liner); b. conducting supervision of the implementation of Customer Due Diligence principles; or
c. related to the preparation of reporting to PPATK and the Financial Services Authority.
The Board of Directors and Board of Commissioners are not required to follow the Customer Due Diligence implementation training program, but must still be aware of developments related to the implementation of Customer Due Diligence principles, including developments related to Money Laundering and Terrorism Financing.

Article 42
Clearly sufficient.

Article 43
Cooperation with law enforcement referred to in this article includes transmitting data, information, and/or supporting documents to law enforcement related to the identity of customers suspected of committing criminal offenses that are predicate crimes for Money Laundering and/or Terrorism Financing in accordance with legislation.

Article 44
Clearly sufficient.

Article 45
Clearly sufficient.

Article 46
Clearly sufficient.

Article 47
Clearly sufficient.

Article 48
Clearly sufficient.

Article 49
Clearly sufficient.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5631 ---

POJK on Customer Due Diligence Principles by Capital Market Financial Service Providers

Lineage: In force