Procedure for Exemption from Disclosure Principles for Financial Services Institutions in the Context of Preventing and Handling Financial System Crises

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 37/POJK.04/2020
CONCERNING
PROCEDURE FOR EXEMPTION FROM DISCLOSURE PRINCIPLES FOR EMITTERS OR PUBLIC COMPANIES THAT ARE FINANCIAL SERVICES INSTITUTIONS IN THE CONTEXT OF PREVENTING AND HANDLING FINANCIAL SYSTEM CRISIS

BY THE GRACE OF THE ALMIGHTY GOD
THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
that in order to implement the provisions of Article 23 paragraph (1) letter b of the Government Regulation in Lieu of Law of the Republic of Indonesia Number 1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the Coronavirus Disease 2019 (COVID-19) Pandemic and/or in the context of facing Threats that Endanger the National Economy and/or Financial System Stability, it is necessary to establish a Financial Services Authority Regulation concerning the Procedure for Exemption from Disclosure Principles for Emitters or Public Companies that are Financial Services Institutions in the context of Preventing and Handling Financial System Crisis;

Considering:

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);
3. Government Regulation in Lieu of Law Number 1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the Coronavirus Disease 2019 (COVID-19) Pandemic and/or in the Context of Facing Threats that Endanger the National Economy and/or Financial System Stability (State Gazette of the Republic of Indonesia Year 2020 Number 87, Supplement to the State Gazette of the Republic of Indonesia Number 6485);

DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING PROCEDURE FOR EXEMPTION FROM DISCLOSURE PRINCIPLES FOR EMITTERS OR PUBLIC COMPANIES THAT ARE FINANCIAL SERVICES INSTITUTIONS IN THE CONTEXT OF PREVENTING AND HANDLING FINANCIAL SYSTEM CRISIS.

CHAPTER I
GENERAL PROVISIONS

Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Financial Services Institution is an institution that carries out activities in the Banking, Capital Market, Insurance, Pension Fund, Financing Institution, and Other Financial Services Institution sectors.
2. Emitter is a Party that conducts a Public Offering.
3. Public Company is a Corporation whose shares are owned by at least 300 (three hundred) shareholders and have paid-in capital of at least Rp3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid-in capital determined by Government Regulation.
4. Disclosure Principle is a general guideline that requires Emitters, Public Companies, and other parties subject to Capital Market Laws to inform the public in a timely manner of all material information regarding their business or effects that can influence investors' decisions regarding the said Effects and/or the price of the said Effects.
5. Financial System Stability is a condition of the financial system that functions effectively and efficiently and is able to withstand fluctuations originating from within and outside the country.
6. Applicant is an Emitter or Public Company that is a Financial Services Institution that submits an application for exemption from the Disclosure Principle.
7. Written Order is a written order to carry out or not carry out specific activities to comply with financial services sector regulations and/or prevent and reduce losses to consumers, the public, and the financial services sector.

CHAPTER II
EXEMPTION FROM DISCLOSURE PRINCIPLES

Article 2
The Financial Services Authority may establish an exemption from the Disclosure Principle for Emitters or Public Companies that are Financial Services Institutions that have a license from the Financial Services Authority to collect and/or manage public funds.

Article 3
The establishment of exemption as referred to in Article 2 may be conducted based on:
a. review by the Financial Services Authority regarding specific Emitters or Public Companies that are Financial Services Institutions; or b. application submitted by the Applicant to the Financial Services Authority.

Article 4
(1) The review as referred to in Article 3 letter a is conducted on Emitters or Public Companies that are Financial Services Institutions that:
a. experience problems that can endanger Financial System Stability; b. receive a Written Order from the Financial Services Authority to resolve the problem as referred to in letter a; or
c. do not experience problems as referred to in letter a, but based on a Written Order from the Financial Services Authority, conduct transactions or corporate actions related to efforts to handle problems of other Financial Services Institutions.
(2) Further provisions regarding the implementation of the establishment of exemption from the Disclosure Principle based on review by the Financial Services Authority are regulated by a Board of Commissioners Regulation.

Article 5
Applicants who submit applications as referred to in Article 3 letter b must meet the following conditions:
a. experience problems that can endanger Financial System Stability; or b. do not experience problems as referred to in letter a, but based on a Written Order from the Financial Services Authority, conduct transactions or corporate actions related to efforts to handle problems of other Financial Services Institutions.

Article 6
Applications as referred to in Article 5 must contain at least:
a. reasons that compliance with the Disclosure Principle can endanger Financial System Stability, thus requiring exemption; b. types of Disclosure Principles requested for exemption; and
c. the duration or period for which exemption is requested.

Article 7
Reasons as referred to in Article 6 letter a must be accompanied by supporting documents and analysis results concluding that compliance with the Disclosure Principle can endanger Financial System Stability.

Article 8
(1) Regarding applications as referred to in Article 3 letter b, the Financial Services Authority conducts a review of the Applicant's conditions and their relevance to Financial System Stability. (2) Based on the review as referred to in paragraph (1), the Financial Services Authority may establish to:
a. approve the entire application; b. approve and reject part of the application;
c. reject the entire application; or
d. order the Applicant to carry out or not carry out certain actions that were not previously requested by the Applicant.
(3) The establishment as referred to in paragraph (2) letter a, letter b, or letter d may be accompanied by the obligation to submit periodic reports to the Financial Services Authority.

CHAPTER III
OTHER PROVISIONS

Article 9
The establishment of exemption from the Disclosure Principle that has been regulated in capital market sector legislation is implemented based on the procedure as regulated in this Financial Services Authority Regulation.

CHAPTER IV
CLOSING PROVISIONS

Article 10
This Financial Services Authority Regulation takes effect upon enactment.

This copy is consistent with the original
Deputy Director of Legal Consultancy and
Banking Regulation Harmonization 1
Legal Directorate 1
Legal Department signed
Wiwit Puspasari

In order 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 9 June 2020
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Enacted in Jakarta on 10 June 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 146

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 37/POJK.04/2020
CONCERNING
PROCEDURE FOR EXEMPTION FROM DISCLOSURE PRINCIPLES FOR EMITTERS OR PUBLIC COMPANIES THAT ARE FINANCIAL SERVICES INSTITUTIONS IN THE CONTEXT OF PREVENTING AND HANDLING FINANCIAL SYSTEM CRISIS

I. GENERAL
One of the mandates from the Government Regulation in Lieu of Law of the Republic of Indonesia Number 1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the Coronavirus Disease 2019 (COVID-19) Pandemic and/or in the context of facing Threats that Endanger the National Economy and/or Financial System Stability is that the Financial Services Authority can be more optimal in supporting the implementation of the Financial System Stability Committee's authority in the context of handling Financial System Stability problems. One form of handling financial system stability problems is the sensitivity of information management regarding problems faced by specific Financial Services Institutions to Financial Services Institution customers, capital market investors, or Financial System Stability. Considering this, it is necessary to regulate the procedure for exemption from disclosure principles for Emitters or Public Companies that are Financial Services Institutions in the context of preventing and handling financial system crisis.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.

Article 2
Sufficiently clear.

Article 3
Letter a
Sufficiently clear.

Letter b
Application to the Financial Services Authority is addressed to the Chairman of the Board of Commissioners of the Financial Services Authority with a copy to the Executive Head of Capital Market Supervision and the Executive Head who supervises the Financial Services Institution submitting the application.

Article 4
Paragraph (1)
Letter a
The term "problem" refers to problems related to the health level of Financial Services Institutions, which can be measured by liquidity, profitability, solvency, asset quality, minimum capital adequacy ratio, maximum credit granting limits, loan-to-deposit ratio, and reserves.

Letter b
Sufficiently clear.

Letter c
This condition occurs, for example, when there is a healthy Financial Services Institution that, based on Financial Services Authority regulations regarding written orders for bank problem handling, is ordered by the Financial Services Authority to merge with a Financial Services Institution experiencing problems.

Paragraph (2)
Sufficiently clear.

Article 5
Letter a
The term "problem" refers to problems related to the health level of Financial Services Institutions, which can be measured by liquidity, profitability, solvency, asset quality, minimum capital adequacy ratio, maximum credit granting limits, loan-to-deposit ratio, and reserves.

Letter b
This condition occurs, for example, when there is a healthy Financial Services Institution that, based on Financial Services Authority regulations regarding written orders for bank problem handling, is ordered by the Financial Services Authority to merge with a Financial Services Institution experiencing problems.

Article 6
Letter a
Sufficiently clear.

Letter b
The term "types of Disclosure Principles" includes requests for exemption from disclosing specific information in periodic reports or certain incidental reports.

Letter c
Sufficiently clear.

Article 7
The term "supporting documents" includes documents showing that the Financial Services Institution is experiencing health problems, such as documents related to liquidity, profitability, solvency, asset quality, minimum capital adequacy ratio, maximum credit granting limits, loan-to-deposit ratio, and reserves.

Article 8
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Example:
The Applicant only applies to be exempted from periodic compliance with the Disclosure Principle. However, based on the Financial Services Authority's review, the Applicant may be ordered for a certain period not to disclose incidental information.

Paragraph (3)
The submission of the report is addressed to the Chairman of the Board of Commissioners of the Financial Services Authority with a copy to the Executive Head of Capital Market Supervision and the Executive Head who supervises the Financial Services Institution submitting the application.

Article 9
Capital market sector legislation regulating exemption from disclosure principles includes Financial Services Authority Regulations regarding material transactions and changes in business activities.

Article 10
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6524