FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 40 /POJK.04/2016

CONCERNING

GUIDELINES FOR THE ARTICLES OF ASSOCIATION OF CORPORATE MUTUAL FUNDS

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 regulation and supervision of financial service activities in the Capital Market sector, including Corporate Mutual Funds, have shifted from the Capital Market and Financial Institution Supervisory Board to the Financial Services Authority; b. that in order to provide clarity and certainty regarding the regulation of the Articles of Association of Corporate Mutual Funds, regulations concerning the guidelines for the Articles of Association of Corporate Mutual Funds 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 Guidelines for the Articles of Association of Corporate Mutual Funds;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA

COPY

Recalling: 1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64 Addition 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 Addition to the State Gazette of the Republic of Indonesia Number 5253);

DECIDING:

To Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING GUIDELINES FOR THE ARTICLES OF ASSOCIATION OF CORPORATE MUTUAL FUNDS.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, the term Corporate Mutual Fund refers to an Issuer whose business activities involve raising funds by selling shares, and subsequently, the funds from the sale of such shares are invested in various types of Securities traded in the Capital Market and money market.

CHAPTER II

GUIDELINES FOR THE ARTICLES OF ASSOCIATION OF CORPORATE MUTUAL FUNDS

Article 2

The Articles of Association of a Corporate Mutual Fund shall at least contain the following matters:
a. the name and domicile of the company; b. the type of shares issued;
c. the duration of establishment;
d. the purpose and objective of the company solely as a Corporate Mutual Fund; e. paid-up capital of at least 1% (one percent) of the authorized capital; f. the duties and authorities of the Board of Directors of the Corporate Mutual Fund; g. quorum, voting rights, and decisions; h. the Board of Directors of the Corporate Mutual Fund is required to act in good faith for the benefit of the shareholders of the Corporate Mutual Fund;
i. dissolution and liquidation;
j. decisions may be taken based on the approval of the majority of the members of the Board of Directors of the Corporate Mutual Fund; k. in the event that the Investment Manager and/or members of the Board of Directors of the Corporate Mutual Fund commit violations of Law Number 8 of 1995 concerning the Capital Market, its implementing regulations, the Corporate Mutual Fund management contract, and/or the Articles of Association of the Corporate Mutual Fund, the Financial Services Authority has the authority to freeze the business activities of the Corporate Mutual Fund, secure the assets, and appoint another Investment Manager to manage the assets of the Corporate Mutual Fund, or revoke the business license of the Corporate Mutual Fund in question;
l. members of the Board of Directors of the Corporate Mutual Fund hold equal positions;
m. the issuance of new shares, repurchase (redemption), and transfer of shares for an open-end Corporate Mutual Fund may be conducted without the approval of the General Meeting of Shareholders; n. Corporate Mutual Funds are not required to create reserve funds; and o. in the event that a Corporate Mutual Fund establishes reserve funds, the amount of the reserve funds must receive approval from the Financial Services Authority.

CHAPTER III

SANCTION PROVISIONS

Article 3

(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 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. freezing 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 being preceded by the 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 4

In addition to administrative sanctions as referred to in Article 3 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 5

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 3 paragraph (1) and specific actions as referred to in Article 4 to the public.

CHAPTER IV

CLOSING PROVISIONS

Article 6

Upon the effective date of this Financial Services Authority Regulation, the Decision of the Chairman of the Capital Market Supervisory Board Number: Kep-18/PM/1996 dated January 17, 1996 concerning Guidelines for the Articles of Association of Corporate Mutual Funds, along with Regulation Number IV.A.2 which is its attachment, is repealed and declared invalid.

Article 7

This Financial Services Authority Regulation shall take effect on the date of its promulgation.

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 2, 2016

CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY,

signed

MULIAMAN D. HADAD

Promulgated in Jakarta on December 7, 2016

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 269

Copy in accordance with the original

Director of Law 1
Ministry of Law

signed

Yuliana

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 40 /POJK.04/2016

CONCERNING

GUIDELINES FOR THE ARTICLES OF ASSOCIATION OF CORPORATE MUTUAL FUNDS

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 have shifted from the Minister of Finance and the Capital Market and Financial Institution Supervisory Board 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 and Financial Institution Supervisory Board 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 replace the legislation in the Capital Market sector regulating Guidelines for the Articles of Association of Corporate Mutual Funds, namely the Decision of the Chairman of the Capital Market Supervisory Board Number: Kep-18/PM/1996 dated January 17, 1996 concerning Guidelines for the Articles of Association of Corporate Mutual Funds, along with Regulation Number IV.A.2 which is its attachment, into a Financial Services Authority Regulation concerning Guidelines for the Articles of Association of Corporate Mutual Funds.

II. ARTICLE BY ARTICLE

Article 1

Clearly stated.

Article 2

Clearly stated.

Article 3

Clearly stated.

Article 4

Clearly stated.

Article 5

Clearly stated.

Article 6

Clearly stated.

Article 7

Clearly stated.

ADDITION TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5965