FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 39/POJK.04/2016

CONCERNING

PROCEDURES FOR APPLYING FOR BUSINESS LICENSES FOR CORPORATION-FORM MUTUAL FUNDS

BY THE GRACE OF THE ALMIGHTY GOD,

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 services activities in the Capital Market sector, including Corporation-Form Mutual Funds, have shifted 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 procedures for applying for business licenses for Corporation-Form Mutual Funds, it is necessary to replace regulations regarding the Procedures for Applying for Business Licenses for Corporation-Form Mutual Funds issued prior to the establishment of the Financial Services Authority with a Financial Services Authority Regulation;

THE FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY

c. that based on the considerations as referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning the Procedures for Applying for Business Licenses for Corporation-Form Mutual Funds;

Recalling:

1. Law Number 8 of 1995 concerning Capital Markets (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);

DECIDES:

To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING PROCEDURES FOR APPLYING FOR BUSINESS LICENSES FOR CORPORATION-FORM MUTUAL FUNDS.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, Corporation-Form Mutual Fund means an Emitter whose business activities involve raising funds by selling shares, and subsequently, the funds from the share sales are invested in various types of Securities traded in the Capital Market and Money Market.

CHAPTER II

PROCEDURES FOR APPLYING FOR BUSINESS LICENSES FOR CORPORATION-FORM MUTUAL FUNDS

Article 2

Applications for business licenses as a Corporation-Form Mutual Fund are made as follows:

a. filling out the business license application form, the format and content of which correspond to the format of the Application for Business License for Corporation-Form Mutual Fund as stated in the Appendix which is an integral part of this Financial Services Authority Regulation; b. attaching the following documents:

1. the articles of association of the Corporation-Form Mutual Fund which have received approval and consent from the Minister of Law and Human Rights;
2. the Corporation-Form Mutual Fund management contract;
3. the contract between the Corporation-Form Mutual Fund and the Custodian Bank;
4. the appointment of Legal Consultants; and
5. the appointment of Accountants;
   c. attaching documents regarding the Board of Directors of the Corporation-Form Mutual Fund:
6. biographies;
7. proof of citizenship; and
8. photocopies of the highest educational diploma;
   d. attaching documents regarding the Investment Manager:
9. marketing and operational plans;
10. organizational structure;
11. experience as an Investment Manager;
12. photocopies of licenses for individual employees designated as Deputy Investment Managers; and
13. photocopies of business licenses for Securities Companies conducting activities as Investment Managers;
    e. attaching documents regarding the Custodian Bank:
14. operational plans concerning the Corporation-Form Mutual Fund; and
15. the name and telephone number of the Custodian Bank person in charge; and
    f. attaching the opening balance sheet.

Article 3

Applications as referred to in Article 2 are submitted to the Financial Services Authority in quadruplicate (four copies).

Article 4

In the event that the business license application as referred to in Article 2 does not meet the requirements, the Financial Services Authority issues a notification letter to the applicant stating that:
a. the application is incomplete; or b. the application is rejected.

Article 5

In the event that the business license application as referred to in Article 2 meets the requirements, the Financial Services Authority issues a business license to the applicant.

Article 6

A Corporation-Form Mutual Fund that has obtained a business license may have its license revoked.

Article 7

A Corporation-Form Mutual Fund that has obtained a business license from the Financial Services Authority must submit a Registration Statement to conduct a Public Offering within a period of 6 (six) months from the date of establishment.

CHAPTER III

SANCTION PROVISIONS

Article 8

(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 warnings; b. fines, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business licenses; f. cancellation of approvals; and g. cancellation of registrations.

(2) Administrative sanctions as referred to in paragraph (1) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (1) letter a.

(3) Administrative sanctions in the form of fines as referred to in paragraph (1) letter b may be imposed independently or concurrently with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 9

In addition to administrative sanctions as referred to in Article 8 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 10

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 8 paragraph (1) and specific actions as referred to in Article 9 to the public.

CHAPTER IV

CLOSING PROVISIONS

Article 11

Upon the enactment of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Agency Number: Kep-17/PM/1996 dated January 17, 1996 concerning the Procedures for Applying for Business Licenses for Corporation-Form Mutual Funds, along with Regulation Number IV.A.1 which is its appendix, is revoked and declared invalid.

Article 12

This Financial Services Authority Regulation takes effect upon enactment.

To ensure that everyone knows it, the enactment of this Financial Services Authority Regulation is ordered 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

Enacted 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 268

Copy consistent with the original
Legal Director 1
Legal Department

signed

Yuliana

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 39/POJK.04/2016

CONCERNING

PROCEDURES FOR APPLYING FOR BUSINESS LICENSES FOR CORPORATION-FORM MUTUAL FUNDS

I. GENERAL

That since December 31, 2012, the functions, duties, and authorities for regulating and supervising financial services activities in the Capital Market, Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions sectors have shifted from the Minister of Finance and the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority.

In light of the above, it is necessary to reorganize the existing regulatory structure, particularly those related to the Capital Market sector, by converting Capital Market Supervisory Agency regulations related to the Capital Market sector into Financial Services Authority Regulations. This reorganization is conducted to ensure 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 above, it is necessary to replace legislation in the Capital Market sector regulating the Procedures for Applying for Business Licenses for Corporation-Form Mutual Funds, namely the Decision of the Head of the Capital Market Supervisory Agency Number: KEP-17/PM/1996 dated January 17, 1996 concerning the Procedures for Applying for Business Licenses for Corporation-Form Mutual Funds, along with Regulation Number IV.A.1 which is its appendix, into a Financial Services Authority Regulation concerning the Procedures for Applying for Business Licenses for Corporation-Form Mutual Funds.

II. ARTICLE BY ARTICLE

Article 1

Clear enough.

Article 2

Clear enough.

Article 3

Clear enough.

Article 4

Clear enough.

Article 5

Clear enough.

Article 6

Clear enough.

Article 7

Clear enough.

Article 8

Clear enough.

Article 9

Clear enough.

Article 10

Clear enough.

Article 11

Clear enough.

Article 12

Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5694

APPENDIX

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 39/POJK.04/2016

CONCERNING

PROCEDURES FOR APPLYING FOR BUSINESS LICENSES FOR CORPORATION-FORM MUTUAL FUNDS

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA

APPLICATION FOR BUSINESS LICENSE FOR CORPORATION-FORM MUTUAL FUND

Hereby we apply for a business license to establish a Mutual Fund. As consideration material, we hereby submit the following data:

1. Applicant Name : ................................................................
2. Applicant Address : ................................................................
   ......................... (Street Name & Number) …………………… -  City & Postal Code)
3. Mutual Fund Name : ................................................................
4. Mutual Fund Address : ................................................................
   .......................... (Street Name & Number) ……………… -  City & Postal Code)
5. Mutual Fund Telephone Number : ..........................................................
6. Tax Identification Number : ...-
7. Corporation-Form Mutual Fund Board of Directors :
   Name Citizenship Address a. b. c. d. e.

Number : …………........................20...
Appendix :
Subject : Application for Business License
Corporation-Form Mutual Fund.

To:
Executive Supervisor of Capital Markets
Financial Services Authority in –
Jakarta

8. a. Number and date of deed of establishment and amendments to articles of association
   b. Number and date of approval and consent from the Minister of Justice
   : ................................................................
   : ................................................................

9. Open / Closed Mutual Fund
   : ................................................................

10. Capital Structure:
    a. Authorized Capital : ...............................................................
    b. Paid-up Capital
    : ...............................................................

11. Type of Shares Issued
    : ................................................................

12. In this regard, we appoint:
    a. Investment Manager

    1. Name
    2. Address
    3. Company Tax Identification Number
    4. Board of Directors and Board of Commissioners members:
       : ...............................................................
       : ...............................................................
       : ...............................................................
       : ...............................................................
       Name Citizenship Address a. b. c. d. e.

    b. Custodian Bank

    1. Name : ................................................................
    2. Address : ................................................................
    3. Company Tax Identification Number
    4. Board of Directors and Board of Commissioners members:
       : ................................................................
       Name Citizenship Address a. b. c. d. e.

    c. Accountant

    1. Name : ................................................................
    2. Address : ................................................................
    3. Tax Identification Number
    4. Registration Number at the Financial Services Authority
       : ................................................................
       : ................................................................

    d. Legal Consultant

    1. Name : ................................................................
    2. Address : ................................................................
    3. Tax Identification Number
    4. Registration Number at the Financial Services Authority
       : ................................................................
       : ................................................................

To complete this application, we attach the following documents:
a. Corporation-Form Mutual Fund articles of association which have received approval and consent from the Minister of Law and Human Rights; b. Corporation-Form Mutual Fund management contract;
c. Contract between the Corporation-Form Mutual Fund and the Custodian Bank;
d. Appointment of Legal Consultants; f. Appointment of Accountants; g. Documents regarding Corporation-Form Mutual Fund Board of Directors members:

1. biographies;
2. proof of citizenship;
3. photocopies of diplomas;
   h. Documents regarding Investment Managers:
4. marketing and operational plans;
5. organizational structure;
6. experience as Investment Managers;
7. photocopies of licenses for individual employees designated as Deputy Investment Managers;
8. photocopies of business licenses for Securities Companies conducting activities as Investment Managers;
   i. Documents regarding Custodian Banks:
9. operational plans concerning the Corporation-Form Mutual Fund;
10. photocopies of approvals from the Financial Services Authority;
11. name and telephone number of the Custodian Bank person in charge;
    j. Answers to questions contained in the Questionnaire and List of Affiliations of directors and all Parties exercising control over the company (List A) and explanations for "yes" answers (List B); and k. Opening balance sheet.

We hereby submit this application and thank you for your attention.

Applicant, stamp
.......................................
(full name)

QUESTIONNAIRE

I. INSTRUCTIONS FOR ANSWERING QUESTIONS:

1. All questions must be answered by each Board of Directors member and Parties exercising control over the company.
2. Place a checkmark √ in the box in front of the word "yes" if your answer is "Yes", or place a checkmark √ in the box in front of the word "no" if your answer to the following question is "No". For every "yes" answer, each Board of Directors member and Party exercising control over the company must provide detailed and clear answers in List B, including among others:
   a. companies and related parties; b. cases and dates of actions taken;
   c. courts or agencies taking action; and
   d. actions and sanctions imposed.

II. INTEGRITY OF EACH BOARD OF DIRECTORS MEMBER AND EACH PARTY EXERCISING CONTROL OVER THE COMPANY.

Definition:
Investment refers to activities involving Securities, banking, insurance, or real estate/business, including activities directly or indirectly related to Securities Companies, Investment Advisors, and other companies operating in the financial sector.

Answer the following questions:

1. In the last 10 (ten) years, have you been convicted, pleaded guilty, or not contested charges regarding:
   a. Criminal offenses or crimes involving Investment or businesses related to Investment, fraud, false statements or embezzlement, bribery, forgery, or extortion?  yes  no b. Or other crimes?  yes  no

2. Has a court:
   a. Ever declared you bankrupt?
    yes  no b. In the last 10 (ten) years, prohibited you from engaging in activities related to Investment?  yes  no
   c. Ever decided that you caused a business related to Investment, its business license, or license to operate to be rejected, suspended, revoked, or restricted?
    yes  no

3. Has the Financial Services Authority ever:
   a. Found you making false statements or committing negligence?
    yes  no b. Found you involved in violations of applicable laws and regulations?
    yes  no
   c. Found you causing the rejection, suspension, revocation, or restriction of your business license or license to operate related to Investment?
    yes  no d. Rejected, temporarily suspended, or revoked your business license, sanctioned you by restricting your activities?  yes  no

4. Have other competent agencies/institutions in Indonesia or other countries ever:
   a. Found you making false statements or not stating true facts or being dishonest, unfair, or unethical?  yes  no b. Found you involved in violations of Investment regulations, or applicable laws and regulations?  yes  no

5. Has a Stock Exchange ever:
   a. Found you making false statements or not stating the truth.
    yes  no b. Found you involved in violations of applicable laws and regulations?
    yes  no
   c. Found you causing the rejection, suspension, revocation, or restriction of a Mutual Fund business license or approval related to Investment?
    yes  no d. Taking disciplinary action against you by issuing or suspending membership, preventing or suspending relationships with other members, or restricting your activities?  yes  no

6. Has a foreign court, regulatory body, or Stock Exchange ordered action against you regarding Investment or fraud?
    yes  no

7. Are you currently facing court proceedings?
    yes  no

8. Has an insurance company ever refused to pay or revoked your coverage?
    yes  no

9. Do you have obligations based on court decisions or other agreements made with other parties that cannot be fulfilled?
    yes  no

10. Have you ever been a Board of Directors or Board of Commissioners member of a Securities Company, Individual Investment Advisor, or Party exercising control over a Securities Company that was declared bankrupt?
     yes  no

.............................., ..............
Person making the statement
..........................................
(full name)

LIST A

DIRECTOR AFFILIATIONS

This list contains information about Affiliations of all Board of Directors members with:

1. The Mutual Fund itself other than as a Board of Directors member;
2. The Securities Company acting as its Investment Manager;
3. The Custodian Bank;
4. Accountants or Legal Consultants providing or about to provide professional services to the Mutual Fund and/or Affiliates of such professions;
5. Other Securities Companies; and
6. Individuals having important and relevant business relationships or professional relationships with the Mutual Fund, the Mutual Fund's Investment Manager, or with other Mutual Funds.

Place a checkmark √ if there is an affiliation.

Full Name
Board of Directors/Party exercising control
Affiliation as explained above by number
1 2 3 4 5 6

LIST B

EXPLANATIONS FOR "YES" ANSWERS

Questions Number 1 through 10.
Filled with detailed explanations for "yes" answers to questions number 1 through 10.

No Question Number/List Explanation
..............., ......................... 20..
Person making the statement stamp
..............................................
(Full Name)

Established in Jakarta on December 2, 2016

CHAIRMAN OF THE COMMISSIONERS' COUNCIL
FINANCIAL SERVICES AUTHORITY,

signed

MULIAMAN D. HADAD

Copy consistent with the original
Legal Director 1
Legal Department

signed

Yuliana