POJK Regarding the Fit and Proper Assessment for Key Parties of Financial Services Institutions

FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 27 /POJK.03/2016
CONCERNING
FIT AND PROPER ASSESSMENT
FOR KEY PARTIES OF FINANCIAL SERVICES INSTITUTIONS BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering :
a. that in order to create healthy Financial Services Institutions, protect stakeholders, and increase compliance with laws and regulations, the implementation of governance in Financial Services Institutions is required; b. that to realize such governance, Financial Services Institutions must be owned and managed by parties who consistently meet the requirements of fit and proper;
c. that to support the realization of first-class licensing, faster, more accurate, easier, and transparent licensing services are needed;
d. that with the shift of regulatory and supervisory authority for Financial Services Institutions to the Financial Services Authority, harmonization of regulations regarding fit and proper assessment is required; e. that based on the considerations as referred to in letters a, b, c, and d, it is necessary to establish a Financial Services Authority Regulation concerning Fit and Proper Assessment for Key Parties of Financial Services Institutions; Considering :

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 11 of 1992 concerning Pension Funds (State Gazette of the Republic of Indonesia Year 1992 Number 37, Supplement to the State Gazette of the Republic of Indonesia Number 3477);
3. 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);
4. Law Number 21 of 2008 concerning Sharia Banking (State Gazette of the Republic of Indonesia Year 2008 Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
5. 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);
6. Law Number 40 of 2014 concerning Insurance (State Gazette of the Republic of Indonesia Year 2014 Number 337; Supplement to the State Gazette of the Republic of Indonesia Number 5618);
7. Law Number 1 of 2016 concerning Guarantees (State Gazette of the Republic of Indonesia Year 2016 Number 9; Supplement to the State Gazette of the Republic of Indonesia Number 5835);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING FIT AND PROPER ASSESSMENT FOR KEY PARTIES OF FINANCIAL SERVICES INSTITUTIONS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation:

1. Financial Services Institution, hereinafter abbreviated as FSI, is a Financial Services Institution as referred to in Law Number 21 of 2011 concerning the Financial Services Authority, including:
   a. Bank is a bank as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998 and Law Number 21 of 2008 concerning Sharia Banking, including branch offices and representative offices of banks located abroad; b. Securities Company is a party that conducts business activities as an Underwriter of Securities, Securities Broker, and/or Investment Manager as referred to in Law Number 8 of 1995 concerning Capital Markets;
   c. Investment Advisor is a company that provides advice to other parties regarding the sale or purchase of Securities for remuneration as referred to in Government Regulation Number 45 of 1995 concerning the Implementation of Activities in the Capital Markets Sector;
   d. Insurance Company is an insurance company, sharia insurance company, reinsurance company, sharia reinsurance company, insurance broker, reinsurance broker, and insurance loss assessor as referred to in Law Number 40 of 2014 concerning Insurance; e. Pension Fund is a legal entity that manages and operates a program promising pension benefits, as referred to in Law Number 11 of 1992 concerning Pension Funds, including those that operate all their business activities based on sharia principles; f. Financing Company is a business entity that conducts financing activities for the procurement of goods and/or services, including those that operate all their business activities based on sharia principles as referred to in regulations concerning financing companies and sharia financing companies; g. Guarantee Institution is a guarantee company, sharia guarantee company, re-guarantee company, and sharia re-guarantee company that conducts guarantee activities as referred to in Law Number 1 of 2016 concerning Guarantees; h. Venture Capital Company, hereinafter abbreviated as VCC, is a business entity that conducts Venture Capital Business activities, including those that operate all their business activities based on sharia principles as referred to in regulations concerning venture capital companies and sharia venture capital companies;
   i. Pawnshop Company is a private pawnshop company and government pawnshop company, including those that conduct their business activities based on sharia principles as referred to in regulations concerning pawnshop businesses.
2. Key Party is a party that owns, manages, supervises, and/or has significant influence on the FSI.
3. Controlling Shareholder, hereinafter abbreviated as CS, is a legal entity, individual, and/or business group that owns shares or shares equivalent to those of the FSI and has the ability to control the FSI.
4. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the general meeting of shareholders as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for FSIs in the form of a limited liability company or equivalent to GMS for FSIs in the form of a cooperative legal entity, joint venture, pension fund, state-owned enterprise, regional-owned enterprise, regional state-owned enterprise, or limited partnership.
5. Board of Directors is the board of directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for FSIs in the form of a limited liability company or equivalent to the Board of Directors for FSIs in the form of a cooperative legal entity, joint venture, pension fund, state-owned enterprise, regional-owned enterprise, regional state-owned enterprise, limited partnership, or branch office/representative office of a bank located abroad.
6. Board of Commissioners is the board of commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for FSIs in the form of a limited liability company or equivalent to the Board of Commissioners for FSIs in the form of a cooperative legal entity, joint venture, pension fund, state-owned enterprise, regional-owned enterprise, regional state-owned enterprise, limited partnership, or branch office of a bank located abroad.
7. Sharia Supervisory Board is a supervisor recommended by the National Sharia Board, Indonesian Ulema Council, placed in the FSI or sharia unit, tasked with supervising business activities to ensure compliance with sharia principles.
8. Insurance Company Controller is a party that directly or indirectly has the ability to determine the Board of Directors and Board of Commissioners, and/or influence the actions of the Board of Directors and Board of Commissioners in the Insurance Company.
9. Control is an action aimed at influencing management and/or company policy, including in FSIs, in any way, whether directly or indirectly.
10. Internal Auditor is an official in the Insurance Company responsible for evaluating and improving the effectiveness of risk management, controls, and corporate governance processes, working independently and in accordance with applicable practice standards.
11. Company Actuary is an official in insurance companies, sharia insurance companies, reinsurance companies, and sharia reinsurance companies appointed and responsible for managing the financial impact of risks faced by the company, working independently and in accordance with applicable practice standards.
12. Financial Services Authority, hereinafter abbreviated as OJK, is the Financial Services Authority as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.

Article 2
(1) Prospective Key Parties must obtain approval from OJK before carrying out actions, duties, and functions as Key Parties.
(2) Key Parties as referred to in paragraph (1) include:
a. for Banks:

1. CS;
2. members of the Board of Directors; and
3. members of the Board of Commissioners.
   b. for Securities Companies:
4. CS;
5. members of the Board of Directors; and
6. members of the Board of Commissioners.
   c. for Investment Advisors:
7. CS;
8. members of the Board of Directors; and
9. members of the Board of Commissioners.
   d. for Insurance Companies:
10. Insurance Company Controllers;
11. members of the Board of Directors;
12. members of the Board of Commissioners;
13. members of the Sharia Supervisory Board;
14. Internal Auditors; and
15. Company Actuaries.
    e. for Employer Pension Funds:
16. members of the Board of Directors;
17. members of the Board of Commissioners; and
18. members of the Sharia Supervisory Board.
    f. for Financial Institution Pension Funds:
19. executive officers of the management; and
20. members of the Sharia Supervisory Board.
    g. for Financing Companies, Guarantee Institutions, VCCs, and Pawnshop Companies:
21. CS;
22. members of the Board of Directors;
23. members of the Board of Commissioners; and
24. members of the Sharia Supervisory Board.
    (3) Prospective CS or prospective Insurance Company Controllers who are shareholders who have not yet obtained approval from OJK are prohibited from taking actions as CS or Insurance Company Controllers even if they already own shares in the FSI. (4) Prospective members of the Board of Directors, prospective members of the Board of Commissioners, and/or prospective members of the Sharia Supervisory Board who have not yet obtained OJK approval are prohibited from taking actions, duties, and functions as members of the Board of Directors, members of the Board of Commissioners, or members of the Sharia Supervisory Board of the FSI even if they have received approval and have been appointed by the GMS.

Article 3
In order to provide approval as referred to in Article 2, OJK conducts fit and proper assessments of prospective Key Parties.

CHAPTER II
FIT AND PROPER ASSESSMENT FACTORS
Article 4
Fit and proper assessments are conducted to evaluate that prospective Key Parties as referred to in Article 2 meet the requirements:
a. integrity and financial soundness for prospective CS or prospective Insurance Company Controllers who are shareholders; b. integrity and financial reputation for prospective Insurance Company Controllers who are not shareholders;
c. integrity, financial reputation, and competence for other than prospective CS or prospective Insurance Company Controllers.

Article 5
Integrity requirements as referred to in Article 4 letters a, b, and c include:
a. legal capacity to perform legal acts; b. having good ethics and morality, at least demonstrated by a attitude of complying with applicable regulations, including never being convicted of a criminal offense within a certain period before nomination;
c. having a commitment to comply with laws and regulations and support OJK policies;
d. having a commitment to the development of healthy FSIs; and e. not being among parties prohibited from becoming Key Parties.

Article 6
Financial reputation requirements as referred to in Article 4 letters b and c are at least proven by:
a. not having non-performing loans and/or financing; and b. never being declared bankrupt and/or never having been a shareholder, Insurance Company Controller who is not a shareholder, member of the Board of Directors, or member of the Board of Commissioners who was declared guilty causing a company to be declared bankrupt within the last 5 (five) years before nomination.

Article 7
Financial soundness requirements as referred to in Article 4 letter a are at least proven by:
a. having financial reputation as referred to in Article 6; b. having financial capacity that can support the business development of the FSI; and
c. having a commitment to take necessary measures if the FSI faces financial difficulties.

Article 8
Competence requirements as referred to in Article 4 letter c include at least knowledge and/or experience supporting the management of the FSI.

CHAPTER III
PROCEDURE FOR FIT AND PROPER ASSESSMENT
First Section
General

Article 9
Prospective Key Parties undergoing:
a. legal processes; b. fit and proper assessment processes at OJK; and/or
c. re-assessment processes due to indications of integrity, financial soundness, financial reputation, and/or competence issues in an FSI,
cannot be submitted for fit and proper assessment to become Key Parties.

Article 10
(1) Applications for approval to become Key Parties are submitted by:
a. prospective owners, founders, or members of the Board of Directors of the FSI in the case of FSI establishment license applications; or b. members of the Board of Directors of the FSI, in the case where the FSI has obtained business licenses; accompanied by administrative requirement documents. (2) The FSI must submit a list of administrative requirements to OJK, signed by:
a. prospective owners, founders, or authorized FSI officials in the case of FSI establishment license applications; or b. authorized FSI officials, in the case where the FSI has obtained business licenses. (3) Submission of applications and/or administrative requirement documents can be done through electronic means if regulations governing this have been implemented. (4) OJK may return applications as referred to in paragraph (1) if administrative requirement documents are incomplete. (5) The FSI may submit a specific number of prospective Key Parties for each target position.

Article 11
(1) In the event that all or majority shares of the FSI are owned by the central government or an institution tasked by Law to rescue the FSI, applications for approval to become members of the Board of Directors or members of the Board of Commissioners of the FSI may be submitted by the institution representing the central government or that institution. (2) In the event that prospective CS will purchase FSI shares as part of temporary capital participation by an institution tasked by Law to rescue the FSI, applications for approval to become CS may be submitted by that institution.

Article 12
In the event that members of the Board of Directors of the FSI as referred to in Article 10 paragraph (1) cannot perform their functions or have conflicts of interest, applications are submitted by:
a. other members of the Board of Directors who do not have conflicts of interest; b. members of the Board of Commissioners if all members of the Board of Directors cannot perform their functions or have conflicts of interest; or
c. other parties appointed by the GMS if all members of the Board of Directors or members of the Board of Commissioners cannot perform their functions or have conflicts of interest.

Second Section
Procedure for Fit and Proper Assessment for Prospective CS and Prospective Insurance Company Controllers

Article 13
(1) Fit and proper assessments for prospective CS and prospective Insurance Company Controllers are conducted through administrative assessments.
(2) In order to conduct administrative assessments as referred to in paragraph (1), prospective CS and prospective Insurance Company Controllers must conduct presentations or explanations at least regarding:
a. the plans of prospective CS and prospective Insurance Company Controllers for the development of the FSI to be owned and/or controlled; and b. the strategies of prospective CS and prospective Insurance Company Controllers in the event that the FSI to be owned and/or controlled faces financial difficulties.

Article 14
In the event that prospective CS or prospective Insurance Company Controllers are the central government or regional governments, presentations or explanations as referred to in Article 13 are conducted if deemed necessary.

Article 15
(1) In the event that prospective CS and prospective Insurance Company Controllers are legal entities, fit and proper assessments of such legal entities are conducted by assessing the legal entity itself, its Board of Directors, its Board of Commissioners, and parties that, based on OJK's assessment, are ultimate shareholders. (2) In the event that ultimate shareholders are foreign governments, and the laws of the respective country do not allow such ultimate shareholders to provide data and documents, OJK designates other ultimate shareholders directly controlled by the respective foreign government based on valid supporting documents as substitutes for the foreign government's ultimate shareholders. (3) Parties as referred to in paragraph (1) and paragraph (2) must submit administrative requirement documents. (4) In addition to parties as referred to in paragraph (1) and paragraph (2), OJK may designate other parties that, based on OJK's assessment, exercise Control, to submit administrative requirement documents. (5) The results of fit and proper assessments of parties as referred to in paragraph (1), paragraph (2), and paragraph (4) constitute a single integrated result of fit and proper assessment of the legal entity as referred to in paragraph (1).

Third Section
Procedure for Fit and Proper Assessment for Key Parties Other than Prospective CS and Prospective Insurance Company Controllers

Article 16
Fit and proper assessments of prospective Key Parties other than prospective CS and prospective Insurance Company Controllers are conducted by OJK through administrative assessments.

Article 17
(1) The FSI must first conduct its own assessment (self-assessment) of prospective Key Parties other than prospective CS and prospective Insurance Company Controllers before submission to OJK, regarding:
a. fulfillment of requirements as referred to in Article 4 letter c; and b. fulfillment of requirements in accordance with laws and regulations.
(2) The results of self-assessment as referred to in paragraph (1) are submitted to OJK at the time of application submission.

Article 18
(1) In order to conduct administrative assessments as referred to in Article 16, OJK may conduct clarifications with prospective Key Parties.
(2) Clarifications as referred to in paragraph (1) are conducted if:
a. there is negative information regarding the prospective Key Party; b. the prospective Key Party does not yet have relevant experience in an FSI in Indonesia concerning the targeted position, considering the position, size, complexity, and/or issues of the FSI where they will be nominated; and/or
c. the prospective Key Party was previously not approved in a prior nomination.

Fourth Section
Termination of Fit and Proper Assessment

Article 19
(1) OJK terminates fit and proper assessments of prospective Key Parties of FSIs if the prospective party is undergoing:
a. legal processes; b. fit and proper assessment processes; and/or
c. re-assessment processes due to indications of integrity, financial soundness, financial reputation, and/or competence issues in an FSI.
(2) Termination as referred to in paragraph (1) is notified in writing to the FSI.

Article 20
Prospective Key Parties whose fit and proper assessments have been terminated by OJK may be nominated again to OJK to become Key Parties if they have completed the processes as referred to in Article 19 paragraph (1).

CHAPTER IV
RESULTS OF FIT AND PROPER ASSESSMENT

Article 21
(1) OJK determines the results of fit and proper assessments as follows:
a. approved; or b. not approved.
(2) The timeframe for determining the results of fit and proper assessments as referred to in paragraph (1) is at most 30 (thirty) working days after all application documents are received completely. (3) In the event that fit and proper assessment processes for prospective Key Parties are conducted at the time of applications for licenses for the establishment, merger, and/or consolidation of FSIs, OJK provides determinations of fit and proper assessment results within timeframes in accordance with regulations governing the granting of licenses for the establishment, merger, and/or consolidation of FSIs. (4) OJK notifies the results of fit and proper assessments as referred to in paragraph (1) in writing to the FSI. (5) In addition to notifying the FSI as referred to in paragraph (4), OJK may notify the results of fit and proper assessments to other interested parties in the implementation of OJK's functions, duties, and authorities or as required by laws and regulations.

Article 22
(1) For prospective CS not approved by OJK but who already own shares in the FSI:
a. the party must transfer their share ownership in the respective FSI and not exercise Control; and b. restrictions are placed on the shareholder rights of the party in the respective FSI. (2) The FSI must report the transfer of share ownership as referred to in paragraph (1) letter a to OJK, referring to laws and regulations governing the reporting of articles of association changes related to ownership changes applicable in each financial services sector. (3) In the event that there are no laws and regulations governing the reporting of articles of association changes related to ownership changes as referred to in paragraph (2), the FSI must report the transfer of share ownership at the latest 7 (seven) working days after the GMS approves the transfer of share ownership.

Article 23
The FSI must include explanations regarding the status of shareholders as referred to in Article 22 in:
a. the FSI's shareholder list; and b. reports published by the FSI.

Article 24
(1) OJK may designate parties who are not permitted to receive share transfers as referred to in Article 22 paragraph (1).
(2) In the event that share ownership transfers are made to parties not permitted to receive share transfers as referred to in paragraph (1):
a. the transfer is not considered a transfer of ownership as referred to in Article 22 paragraph (1); b. the FSI is prohibited from recording the party receiving the transfer in the FSI's shareholder list; and
c. the party receiving the transfer does not obtain their rights as a shareholder.

Article 25
(1) OJK approval for prospective Key Parties other than prospective CS and prospective Insurance Company Controllers becomes invalid if, within a certain timeframe, no appointment is made for the prospective Key Party approved by OJK.

(2) FSIs are required to report the appointment referred to in paragraph (1) by referring to regulations governing the reporting of changes to Key Parties applicable in each financial service sector.

(3) In the event that no regulations govern the reporting of changes to Key Parties as referred to in paragraph (2), FSIs are required to report the appointment of Key Parties no later than 7 (seven) working days after the appointment.

Article 26

(1) For candidates for the Board of Directors, Board of Commissioners, and/or Board of Sharia Supervisory who are not approved by the OJK but have been appointed as members of the Board of Directors or Board of Commissioners, the FSI is required to convene an Annual General Meeting of Shareholders (AGMS) to cancel the appointment of the concerned individual.

(2) The FSI is required to report the AGMS cancellation as referred to in paragraph (1) to the OJK by referring to regulations governing the reporting of changes to Key Parties applicable in each financial service sector.

(3) In the event that no regulations govern the reporting of changes to Key Parties as referred to in paragraph (2), the FSI is required to report the change to Key Parties no later than 7 (seven) working days after the AGMS cancellation of the appointment of members of the Board of Directors or candidates for the Board of Commissioners.

Article 27

(1) Candidates for Key Parties other than candidates for Principal Service Providers (PSPs) and candidates for Controlling Parties of Insurance Companies who are not approved as referred to in Article 21 paragraph (1) letter b may be nominated again to the OJK no earlier than 6 (six) months from the date of the "Not Approved" determination by the OJK.

(2) In the event that the candidate for Key Party as referred to in paragraph (1) is not approved due to competency requirements, the concerned candidate may be submitted before 6 (six) months to:

a. a different field of position at a position that is at the same level or lower within the same FSI;

b. a position at a similar FSI that has a smaller size and lower complexity; or

c. a position at a different FSI.

(3) The re-submission of a candidate for Key Party who was not approved due to competency requirements as referred to in paragraph (1) must be accompanied by supporting documents proving that the candidate being re-submitted has improved their competency.

Article 28

(1) The OJK cancels the approval as referred to in Article 21 paragraph (1) letter a, if after the approval is given:

a. it is discovered that the information or documents submitted in the competence and propriety assessment process were incorrect, thereby failing to meet the requirements; and/or

b. there is information obtained from other authorities that causes the approved party to fail to meet the requirements.

(2) For PSPs whose approval is cancelled as referred to in paragraph (1), the provisions as referred to in Article 2 paragraph (3) and Article 22 shall apply to the concerned individual.

(3) For members of the Board of Directors, members of the Board of Commissioners, and/or members of the Board of Sharia Supervisory whose approval is cancelled as referred to in paragraph (1), the provisions as referred to in Article 2 paragraph (4) and Article 26 shall apply to the concerned individual.

CHAPTER V
ASSESSMENT OF COMPETENCE AND PROPRIETY FOR KEY PARTIES OF FINANCIAL SERVICE INSTITUTIONS IN RESCUE/RESOLUTION AND KEY PARTIES OF BANKS USED AS RESOLUTION INSTRUMENTS

Article 29

The OJK establishes different procedures for the assessment of competence and propriety for Key Parties in:

a. FSIs in rescue/resolution by institutions or agencies having the authority to conduct rescue/resolution of FSIs; and

b. Banks used as resolution instruments as regulated in Law Number 9 of 2016 concerning the Prevention and Handling of Systemic Financial Crises.

CHAPTER VI
OTHER PROVISIONS

Article 30

(1) Banks are required to report plans for changes in the business group structure related to the Bank, including the legal entity owners of the Bank up to the ultimate shareholders, to the OJK no later than 1 (one) month before the change occurs.

(2) In the event that the change in business group structure as referred to in paragraph (1) causes a change in the controlling party of the Bank according to the OJK's assessment, or if according to the OJK's assessment there is a controlling party of the Bank, the Bank is required to submit a candidate PSP for competence and propriety assessment by the OJK.

(3) The competence and propriety assessment of the controlling party of the Bank caused by changes in the business group structure as referred to in paragraph (2) constitutes a single competence and propriety assessment of the business group.

(4) The OJK has the authority to reject changes in the controlling party of the Bank, if based on the OJK's assessment, the change in the controlling party of the Bank can cause or is indicated to hinder the implementation of Bank supervision.

CHAPTER VII
SANCTIONS

Article 31

(1) FSIs and/or Key Parties who violate the provisions as referred to in Article 2 paragraph (1), Article 2 paragraph (3), Article 2 paragraph (4), Article 22, Article 23, Article 24 paragraph (2) letter b, Article 25 paragraph (2), Article 25 paragraph (3), Article 26 paragraph (1), Article 26 paragraph (3), or Article 30 paragraph (1), shall be subject to administrative sanctions in the form of:

a. written warning;

b. reduction in health level;

c. cancellation of the competence and propriety assessment results;

d. restriction on business activities;

e. order for management replacement;

f. inclusion of management in the list of parties prohibited from becoming Key Parties;

g. cancellation of approval, registration, and ratification; and/or

h. revocation of business license.

(2) In addition to the administrative sanctions as referred to in paragraph (1), the OJK may impose sanctions as regulated in the applicable legislation for FSIs in each financial service sector.

(3) The mechanism for imposing sanctions as referred to in paragraph (1) and paragraph (2) refers to the provisions applicable to FSIs in each financial service sector.

CHAPTER VIII
TRANSITIONAL PROVISIONS

Article 32

Results of competence and propriety assessments that have been established prior to the implementation of this Financial Services Authority Regulation are declared to remain valid.

Article 33

Regarding the competence and propriety assessment for candidate Key Parties being conducted at the time of the implementation of this Financial Services Authority Regulation:

a. the assessment procedures and assessment results continue to refer to the competence and propriety assessment provisions applicable in each financial service sector; and

b. the consequences of the competence and propriety assessment results refer to the provisions in this Financial Services Authority Regulation.

Article 34

(1) At the time of the implementation of this Financial Services Authority Regulation:

a. Key Parties at Pawnshop Companies (PMV) or Pawn Companies (Perusahaan Pergadaian) who have never participated in competence and propriety assessments may continue to serve as Key Parties;

b. members of the Board of Sharia Supervisory at Pension Funds and Internal Auditors at Insurance Companies who have never participated in competence and propriety assessments may continue to hold office and perform their duties and functions.

(2) Key Parties other than PSPs as referred to in paragraph (1) must participate in the competence and propriety assessment based on this Financial Services Authority Regulation before the concerned individual undergoes term extension or position transfer within the same company.

CHAPTER IX
CLOSING PROVISIONS

Article 35

Further provisions regarding the assessment of competence and propriety shall be regulated in a Circular Letter of the Financial Services Authority.

Article 36

With the implementation of this Financial Services Authority Regulation, Article 3 paragraph (2) letter a, Article 3 paragraph (2) letter b, and Article 18 paragraph (4) of Financial Services Authority Regulation Number 4/POJK.05/2013 concerning the Assessment of Competence and Propriety for Key Parties at Insurance Companies, Pension Funds, Financing Companies, and Guarantee Companies are repealed and declared invalid.

Article 37

Provisions of legislation governing the assessment of competence and propriety applicable in each financial service sector remain valid insofar as they do not conflict with this Financial Services Authority Regulation.

Article 38

This Financial Services Authority Regulation shall come into force:

a. on August 1, 2016, for FSIs other than Pawn Companies;

b. 2 (two) years from the date of promulgation for Pawn Companies.

To ensure that everyone is aware thereof, the promulgation of this Financial Services Authority Regulation is ordered by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on July 22, 2016

CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY,

signed

MULIAMAN D. HADAD

Promulgated in Jakarta on July 27, 2016

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 147

Copy in accordance with the original

Director of Legal Affairs 1
Ministry of Law

signed

Yuliana