FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 59 /POJK.04/2015

CONCERNING

PUBLICATION BY SECURITIES RATING AGENCIES

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 services activities in the Capital Market sector, including Securities Rating Agencies, 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 publication by Securities Rating Agencies, regulations concerning Publication by Securities Rating Agencies issued prior to the establishment of the Financial Services Authority need to be converted into a Financial Services Authority Regulation;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Publication by Securities Rating Agencies;

THE 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, 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:

To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING PUBLICATION BY SECURITIES RATING AGENCIES.

CHAPTER I

GENERAL PROVISIONS

Article 1

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

1. Securities Rating Agency 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. concerning Securities issued by the Rated Party (instrument rating).

CHAPTER II

PUBLICATION

Article 2

Securities Rating Agencies that have received a business license from the Financial Services Authority are required to publish:
a. rating results, statements, or other opinions related to rating results through the Securities Rating Agency's Website, unless otherwise determined by applicable legislation and/or rating agreements; and b. the methodology used in rating and its general operational activities, as well as any changes thereto, through the Securities Rating Agency's Website.

Article 3

The publication of Rating results as referred to in Article 2 letter a must at least include:
a. every Rating result; b. interpretation of every Rating result;
c. the date of issuance of the Rating result and the date of change of the Rating result;
d. key elements that form the basis for the issuance of the Rating result, both at the time of initial issuance and upon change of the Rating result; and e. financial summaries including important financial ratios that form the basis for the issuance of the Rating result.

Article 4

The publication of methodology as referred to in Article 2 letter b must at least cover:
a. policies regarding the distribution, reporting, and updating of Ratings; b. sufficient information regarding procedures and assumptions that are part of the methodology, so that the public can understand how Ratings are generated;
c. the history of average default rates of Issuers of Rated Securities in meeting their obligations to the owners of the Rated Securities against all Rating results in the same category issued by the Securities Rating Agency (historical default rates);
d. changes to historical default rates for each category of Rating results that have been issued from time to time (if any); and e. every policy and procedure related to Ratings issued not based on the request of a specific Party (if any); and f. every change made to procedures and assumptions that are part of the methodology in full before the intended changes are applied (if any).

Article 5

(1) The publication obligation as referred to in Article 2 letter a must be implemented at the latest 2 (two) business days after the completion of the rating, and/or review that results in a statement or other opinion related to the rating result. (2) The publication obligation as referred to in Article 2 letter b must be implemented at the latest 2 (two) business days after the issuance of the Securities Rating Agency's license and/or 7 (seven) business days after the submission of reports on changes to organizational structure, procedures and operational standards, and/or rating procedures and methodology.

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 that 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) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of a written warning as referred to in paragraph (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-156/BL/2009 dated June 22, 2009 concerning Publication by Securities Rating Agencies, along with Regulation Number X.F.6 which is its attachment, is revoked and declared invalid.

Article 10

This Financial Services Authority Regulation shall come into force on the date of its promulgation.

To ensure that everyone knows 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 410

Copy matches the original
Legal Director 1
Ministry of Law

signed

Sudarmaji

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 59 /POJK.04/2015

CONCERNING

PUBLICATION BY SECURITIES RATING AGENCIES

I. GENERAL

That since December 31, 2012, the functions, duties, and authorities for the regulation and supervision of financial services activities in the Capital Market, Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions 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 restructure 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 restructuring 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.6, Attachment of the Decision of the Chairman of Bapepam and LK Number Kep-156/BL/2009 concerning Publication by Securities Rating Agencies, dated June 22, 2009;

II. ARTICLE BY ARTICLE

Article 1

Clearly sufficient.

Article 2

Clearly sufficient.

Article 3

Clearly sufficient.

Article 4

Clearly sufficient.

Article 5

Clearly sufficient.

Article 6

Clearly sufficient.

Article 7

Clearly sufficient.

Article 8

Clearly sufficient.

Article 9

Clearly sufficient.

Article 10

Clearly sufficient.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5828