FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 45/POJK.04/2016

CONCERNING

SUPERVISION OF REPRESENTATIVES AND EMPLOYEES OF SECURITIES COMPANIES

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 functions, duties, and authority for regulating and supervising financial services activities in the Capital Market sector, including regulations regarding supervision of representatives and employees of Securities Companies, 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 regulations on supervision of representatives and employees of Securities Companies, regulations on supervision of representatives and employees of Securities Companies 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 Supervision of Representatives and Employees of Securities 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);

DECIDES:

To Establish:
FINANCIAL SERVICES AUTHABILITY REGULATION CONCERNING SUPERVISION OF REPRESENTATIVES AND EMPLOYEES OF SECURITIES COMPANIES.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, the term "Securities Company" refers to Parties conducting business activities as Issuance Underwriters, Securities Trading Brokers, and/or Investment Managers.

CHAPTER II

SUPERVISION OF REPRESENTATIVES AND EMPLOYEES OF SECURITIES COMPANIES

Article 2

(1) Securities Companies are responsible for the conduct of Representatives of Securities Companies and employees of Securities Companies.
(2) Every Securities Company is obligated to conduct continuous supervision over all Parties working as or becoming Representatives of such Securities Companies.

Article 3

The Board of Directors of Securities Companies is obligated to conduct supervision or appoint representatives to conduct supervision over Representatives of Securities Companies who are not members of the Board of Directors of Securities Companies and all employees of Securities Companies.

CHAPTER III

SECURITIES COMPANIES' SUPERVISION SYSTEM

Article 4

Every Securities Company is obligated to have a supervision system regarding the activities of Representatives of Securities Companies and every employee thereof to ensure compliance with all laws and regulations in the Capital Market sector.

Article 5

The supervision system as referred to in Article 4 must contain at least the following:
a. supervision procedures made in writing, including:

1. the authority and responsibility of each Representative of Securities Company and employee of Securities Company;
2. the opening or closing of customer accounts;
3. handling of customer complaints;
4. examination of customer accounts; and
5. examination of correspondence, orders, and transactions, and their settlement on behalf of customers; and
   b. supervision mechanisms implemented by 1 (one) or more supervisors to:
6. periodically supervise and review the activities of Representatives of Securities Companies and employees of Securities Companies; and
7. periodically examine every work unit of the Securities Company to ensure that the procedures referred to in letter a are implemented.

Article 6

The opening or closing of customer accounts as referred to in Article 5 letter a number 2 must obtain written approval from the supervisor.

Article 7

Examination of customer accounts as referred to in Article 5 letter a number 4 must be conducted frequently to prevent irregularities or misuse.

Article 8

Examination of customer correspondence, orders, and transactions by Representatives of Securities Companies as referred to in Article 5 letter a number 5 must be conducted continuously to prevent irregularities or misuse by Representatives of Securities Companies and employees of Securities Companies, such as transactions for self-interest.

CHAPTER IV

SANCTION PROVISIONS

Article 9

(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 violating the provisions of this Financial Services Authority Regulation, including parties causing the violation, consisting 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) Fine sanctions as referred to in paragraph (1) letter b may be imposed separately or together with sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 10

In addition to administrative sanctions as referred to in Article 9 paragraph (1), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 11

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 9 paragraph (1) and specific actions as referred to in Article 10 to the public.

CHAPTER V

CLOSING PROVISIONS

Article 12

Upon the enactment of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Agency Number Kep-27/PM/1996 dated January 17, 1996 concerning Supervision of Representatives and Employees of Securities Companies, along with Regulation Number V.D.1 which is its appendix, is revoked and declared invalid.

Article 13

This Financial Services Authority Regulation takes effect upon the date of enactment.

To ensure that everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on December 2, 2016
October

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 274

Copy matches the original
Legal Director 1
Legal Department

signed
Yuliana

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 45/POJK.04/2016

CONCERNING

SUPERVISION OF REPRESENTATIVES AND EMPLOYEES OF SECURITIES COMPANIES

I. GENERAL

That since December 31, 2012, the functions, duties, and authority for regulating and supervising financial services activities in the Capital Market, Insurance, Pension Funds, Financing Institutions, and Other Financial 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 Financial Services Authority regulations regarding the Capital Market sector are aligned with Financial Services Authority regulations in other sectors.

Based on the background and aspects mentioned above, it is necessary to replace laws and regulations in the Capital Market sector regulating Supervision of Representatives and Employees of Securities Companies, namely the Decision of the Head of the Capital Market Supervisory Agency Number: KEP-27/PM/1996 dated January 17, 1996 concerning Supervision of Representatives and Employees of Securities Companies along with Regulation Number V.D.1 which is its appendix, into a Financial Services Authority Regulation concerning Supervision of Representatives and Employees of Securities Companies.

II. ARTICLE BY ARTICLE

Article 1

Sufficiently clear.

Article 2

Representatives of Securities Companies consist of Representatives of Issuance Underwriters, Representatives of Securities Trading Brokers, and Representatives of Investment Managers.

Article 3

Sufficiently clear.

Article 4

Sufficiently clear.

Article 5

Sufficiently clear.

Article 6

Sufficiently clear.

Article 7

Sufficiently clear.

Article 8

Sufficiently clear.

Article 9

Sufficiently clear.

Article 10

Sufficiently clear.

Article 11

Sufficiently clear.

Article 12

Sufficiently clear.

Article 13

Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5970