FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 58 /POJK.04/2015

CONCERNING

DOCUMENT MAINTENANCE BY SECURITIES RATING COMPANIES

BY THE GRACE OF GOD THE ALMIGHTY,

THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that with the enactment of Law Number 21 of 2011 concerning the Financial Services Authority, since December 31, 2012, the functions, duties, and authorities for the regulation and supervision of financial service activities in the Capital Market sector, including Securities Rating Companies, have transferred from the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority; b. that in order to provide clarity and certainty regarding the regulation of document maintenance by Securities Rating Companies, regulations regarding Document Maintenance by Securities Rating Companies issued prior to the establishment of the Financial Services Authority need to be changed into a Financial Services Authority Regulation;
c. that based on considerations as referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Document Maintenance by Securities Rating Companies;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA

COPY

Considering: 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 DOCUMENT MAINTENANCE BY SECURITIES RATING COMPANIES.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, the following terms are defined as:

1. Securities Rating Company is an Investment Advisor in the form of a Limited Liability Company that conducts rating activities and provides ratings.
2. Rating is an opinion regarding the ability to meet payment obligations on time by a Party:
   a. as an entity (company rating); and/or b. related to Securities issued by the Party being rated (instrument rating).

CHAPTER II

DOCUMENT MAINTENANCE

Article 2

Every Securities Rating Company that has received a business license from the Financial Services Authority is required to administrate, store, and maintain documents comprising records, books, data, and information or explanations made or received related to its operational activities, at least in one form of printed document (hardcopy) or electronic document (softcopy).

Article 3

Documents as referred to in Article 2 consist of at least:
a. documents related to the procedures and processes for the licensing of Securities Rating Companies; b. documents related to each Rating result issued, containing information about:

1. the identity of each analyst involved in determining the Rating result;
2. the identity of members of the Rating Committee involved in the process of determining the Rating result before the Rating result is issued;
3. an explanation of whether the Rating result was issued based on the request of the rated party or not based on the request of the rated party; and
4. the date of each activity related to the determined Rating result;
   c. documents regarding the implementation of each stage of the rating procedure, including internal notes, non-public information, and working papers used as the basis for determining Ratings;
   d. documents regarding external and internal written communications, including electronic communications, received and sent by the Securities Rating Company and its employees related to the initiation, determination, monitoring, change, and withdrawal of Rating results; e. documents containing information about the types of services and products offered; f. marketing documents published or distributed to the public; g. financial documents comprising:
5. annual financial reports;
6. supporting notes in the preparation of financial reports;
7. records showing the amount of income received from Parties using the services of the Securities Rating Company to issue Ratings or monitor Ratings, including information such as:
   a) the identity and address of each such party; and b) the Rating result determined or reviewed for that party;
8. records showing the amount of income received from each party requesting rating and/or Rating reports, along with the identity and address of the orderer; and
   h. compliance officer reports.

Article 4

The administrating, storing, and maintaining of documents in the form of printed documents (hardcopy) or electronic documents (softcopy) as referred to in Article 2 and Article 3 must comply with applicable legislation.

Article 5

All documents as referred to in this Financial Services Authority Regulation must be available at all times for the development and supervision interests of the Financial Services Authority.

CHAPTER III

SANCTION PROVISIONS

Article 6

(1) Without prejudice to criminal provisions in the Capital Market sector, the Financial Services Authority has the authority to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties causing the violation, 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) letters b, c, d, e, f, or g may be imposed with or without prior imposition of an administrative sanction in the form of a written warning as referred to in paragraph (1) letter a. (3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 7

In addition to administrative sanctions as referred to in Article 6 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 8

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 6 paragraph (1) and specific actions as referred to in Article 7 to the public.

CHAPTER IV

CLOSING PROVISIONS

Article 9

Upon the commencement of this Financial Services Authority Regulation, the Decision of the Chairman of the Capital Market Supervisory Agency and Financial Institutions Number Kep-154/BL/2009 dated June 22, 2009 concerning Document Maintenance by Securities Rating Companies, along with Regulation X.F.5 which is its attachment, are repealed and declared invalid.

Article 10

This Financial Services Authority Regulation comes into force on the date of its enactment.

In order that everyone may know it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on December 23, 2015

CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY

signed

MULIAMAN D. HADAD

Promulgated in Jakarta on December 29, 2015

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 409

Copy in accordance with the original
Legal Director 1
Department of Law

signed

Sudarmaji

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 58 /POJK.04/2015

CONCERNING

DOCUMENT MAINTENANCE BY SECURITIES RATING COMPANIES

I. GENERAL

That since December 31, 2012, the functions, duties, and authorities for the regulation and supervision of financial service activities in the Capital Market, Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions sectors have 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 structure of existing regulations, particularly those related to the Capital Market sector, by converting Bapepam and LK regulations related to the Capital Market sector into Financial Services Authority Regulations.

This reorganization is carried out so that there are Financial Services Authority Regulations related to the Capital Market sector that are consistent with Financial Services Authority Regulations in other sectors.

Based on the background and aspects mentioned, it is necessary to convert Bapepam and LK Regulations, namely Regulation Number X.F.5, Attachment of the Decision of the Chairman of Bapepam and LK Number Kep-154/BL/2009 concerning Document Maintenance by Securities Rating Companies, dated June 22, 2009.

II. ARTICLE BY ARTICLE

Article 1

Clearly stated.

Article 2

Clearly stated.

Article 3

Documents related to the procedures and processes for the licensing of Securities Rating Companies as regulated in the POJK related to the licensing of Securities Rating Companies.

Article 4

Clearly stated.

Article 5

Clearly stated.

Article 6

Clearly stated.

Article 7

Clearly stated.

Article 8

Clearly stated.

Article 9

Clearly stated.

Article 10

Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5827