Procedure for Preparing and Submitting the Annual Budget and Profit Utilization Plan of Clearing and Guarantee Institutions

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 23 /POJK.04/2020
CONCERNING
THE PROCEDURE FOR PREPARING AND SUBMITTING THE BUDGET PLAN AND PROFIT UTILIZATION OF CLEARING AND GUARANTEE INSTITUTIONS BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that with the transfer of functions, duties, and authority for the regulation and supervision of financial services activities in the capital market sector, including the procedure for preparing and submitting the budget plan and profit utilization of clearing and guarantee institutions, from the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority; b. that to provide clarity and certainty regarding the procedure for preparing and submitting the budget plan and profit utilization of clearing and guarantee institutions, existing legislation in the capital market sector regarding the procedure for preparing and submitting the budget plan and profit utilization of clearing and guarantee institutions, issued prior to the establishment of the Financial Services Authority, needs to be changed into a Financial Services Authority Regulation;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA

c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Clearing and Guarantee Institutions;
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);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHABILITY REGULATION CONCERNING THE PROCEDURE FOR PREPARING AND SUBMITTING THE BUDGET PLAN AND PROFIT UTILIZATION OF CLEARING AND GUARANTEE INSTITUTIONS.

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

1. Securities are securities, namely debt acknowledgment instruments, commercial papers, shares, bonds, debt certificates, Investment Contract Units, futures contracts over Securities, and any derivatives of Securities.
2. Party refers to an individual, company, joint venture, association, or organized group.
3. Clearing and Guarantee Institution is a Party that provides clearing and guarantee services for the settlement of Exchange Transactions.
4. Stock Exchange is a Party that organizes and provides systems and/or facilities to match buy and sell offers of other Parties with the aim of trading Securities among them.
5. Exchange Transaction is a contract made by Stock Exchange members in accordance with the requirements determined by the Stock Exchange regarding the sale and purchase of Securities, borrowing and lending of Securities, or other contracts regarding Securities or the price of Securities.
6. Board of Directors is the organ of the Clearing and Guarantee Institution authorized and fully responsible for the management of the Clearing and Guarantee Institution for the interests of the Clearing and Guarantee Institution, in accordance with the purpose and objectives of the Clearing and Guarantee Institution, and representing the Clearing and Guarantee Institution, both inside and outside of court, in accordance with the provisions of the articles of association.
7. Board of Commissioners is the organ of the Clearing and Guarantee Institution tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.

CHAPTER II
ANNUAL BUDGET PLAN AND PROFIT UTILIZATION OF CLEARING AND GUARANTEE INSTITUTIONS
Article 2
(1) The annual budget plan and profit utilization of the Clearing and Guarantee Institution are prepared with the following provisions:
a. The Clearing and Guarantee Institution is established with the objective of providing orderly, fair, and efficient clearing and guarantee services for the settlement of Exchange Transactions; and b. the amount of service usage fees established by the Clearing and Guarantee Institution must be adjusted to the funding needs for the operation and development of the Clearing and Guarantee Institution, after considering the interests of service users. (2) In the event that the funds needed for the operation and development of the Clearing and Guarantee Institution are sufficient, the amount of service usage fees as referred to in paragraph (1) letter b may be reduced.

Article 3
(1) The annual budget plan and profit utilization of the Clearing and Guarantee Institution are submitted to the Financial Services Authority in the form of the annual work plan and budget of the Clearing and Guarantee Institution to obtain approval. (2) The submission of the annual budget and profit utilization of the Clearing and Guarantee Institution as referred to in paragraph (1) is conducted in the form of printed documents or electronic documents.

Article 4
The annual budget plan and profit utilization of the Clearing and Guarantee Institution must be guided by the principle of capital market efficiency and is aimed at organizing the improvement of clearing and guarantee services and the settlement of Exchange Transactions in an orderly, fair, and efficient manner.

CHAPTER III
WORK PLAN AND ANNUAL BUDGET OF CLEARING AND GUARANTEE INSTITUTIONS
Article 5
The work plan and annual budget of the Clearing and Guarantee Institution must be prepared systematically, accurately, and on time, and must explicitly contain the following:
a. objectives to be achieved; b. overview of the realization of the current year's budget;
c. constraints faced; and
d. assumptions and benchmarks underlying the budget.

Article 6
The work plan and annual budget of the Clearing and Guarantee Institution must contain at least:
a. the work plan of the Clearing and Guarantee Institution detailing the activities of the Clearing and Guarantee Institution for:

1. clearing service activities;
2. guarantee risk management; or
3. activity development;
   b. the revenue budget of the Clearing and Guarantee Institution, at least sourced from:
4. clearing activities; and
5. guarantee activities;
   c. the expense budget of the Clearing and Guarantee Institution, prepared based on functions according to the organizational structure of the Clearing and Guarantee Institution, including:
6. clearing and settlement;
7. guarantee and risk management;
8. financial management;
9. internal audit;
10. information technology; and
11. human resources;
    d. investment budget; e. plan for expense outlays in the form of salaries, other benefits, and facilities from the Board of Directors and Board of Commissioners; f. information regarding contracts of material value, including contracts between the Clearing and Guarantee Institution and/or subsidiary companies of the Clearing and Guarantee Institution with:
12. Parties affiliated with the Board of Directors and Board of Commissioners; and
13. Parties affiliated with the Clearing and Guarantee Institution or subsidiary companies of the Clearing and Guarantee Institution.

Article 7
(1) The work plan and annual budget of the Clearing and Guarantee Institution must be prepared for at least 1 (one) fiscal year starting from January 1 to December 31 of the following year. (2) The annual budget of the Clearing and Guarantee Institution must be presented comparatively with the current year's budget and its realization.

Article 8
(1) A Stock Exchange that holds the majority of shares in the Clearing and Guarantee Institution must submit to the Financial Services Authority the annual budget plan and profit utilization of the Clearing and Guarantee Institution for the following year, which is part of the annual budget plan and profit utilization of the Stock Exchange, in accordance with the provisions in the Financial Services Authority Regulation concerning the procedure for preparing and submitting the budget plan and profit utilization of Stock Exchanges, no later than November 5. (2) Notification of changes, rejection, and approval by the Financial Services Authority, as well as the resubmission of the budget plan and profit utilization of the Clearing and Guarantee Institution, which is part of the budget plan and profit utilization of the Stock Exchange, in accordance with the provisions of the Financial Services Authority Regulation concerning the procedure for preparing and submitting the budget plan and profit utilization of Stock Exchanges.

Article 9
The Clearing and Guarantee Institution must submit budget realization reports to the Financial Services Authority through the Board of Commissioners, with the provision that such reports are submitted cumulatively on a quarterly basis and received by the Financial Services Authority no later than the 12th (twelfth) day after the end of the respective quarter.

Article 10
Notes on the financial statements of the Clearing and Guarantee Institution must contain at least:
a. expenses related to Parties affiliated with the Board of Directors and Board of Commissioners or the directors and commissioners of subsidiary companies of the Clearing and Guarantee Institution; b. expenses related to Parties affiliated with the Clearing and Guarantee Institution or subsidiary companies of the Clearing and Guarantee Institution; and
c. expense outlays in the form of salaries, other benefits, and facilities provided to the Board of Directors and Board of Commissioners or the directors and commissioners of subsidiary companies of the Clearing and Guarantee Institution.

CHAPTER III
OTHER PROVISIONS
Article 11
The provisions in this Financial Services Authority Regulation must be included as provisions in the articles of association of the Clearing and Guarantee Institution.

CHAPTER IV
ADMINISTRATIVE SANCTIONS
Article 12
(1) Any Party that violates the provisions as referred to in Article 4, Article 5, Article 7 paragraph (2), Article 8 paragraph (1), Article 9, Article 10, and Article 11 shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) shall also be imposed on parties causing the occurrence of violations as referred to in paragraph (1). (3) Sanctions as referred to in paragraph (1) and paragraph (2) are imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) consist 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/or g. cancellation of registration.
(5) Administrative sanctions as referred to in paragraph (4) 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 (4) letter a. (6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or concurrently with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, f, or g. (7) The procedure for imposing sanctions as referred to in paragraph (3) is conducted in accordance with the provisions of applicable legislation.

Article 13
In addition to administrative sanctions as referred to in Article 12 paragraph (4), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 14
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 12 paragraph (4) and specific actions as referred to in Article 13 to the public.

CHAPTER V
CLOSING PROVISIONS
Article 15
Upon the enactment of this Financial Services Authority Regulation, the Decision of the Chairman of the Capital Market Supervisory Agency Number Kep-10/PM/1996 concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Clearing and Guarantee Institutions, along with Regulation Number III.B.4 which is its attachment, is revoked and declared invalid.

Article 16
This Financial Services Authority Regulation takes effect on the date of enactment.

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

For the information of everyone, 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 April 22, 2020
CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO
Enacted in Jakarta on April 23, 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 113

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 23 /POJK.04/2020
CONCERNING
THE PROCEDURE FOR PREPARING AND SUBMITTING THE BUDGET PLAN AND PROFIT UTILIZATION OF CLEARING AND GUARANTEE INSTITUTIONS

I. GENERAL
Since December 31, 2012, the functions, duties, and authority for the regulation and supervision of financial services activities in the capital market, insurance, pension funds, financing institutions, and other financial service institutions have transferred 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 regarding 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 existing legislation in the capital market sector regulating the procedure for preparing and submitting the budget plan and profit utilization of Clearing and Guarantee Institutions, namely the Decision of the Chairman of the Capital Market Supervisory Agency Number Kep-10/PM/1996 concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Clearing and Guarantee Institutions, along with Regulation Number III.B.4 which is its attachment, into a Financial Services Authority Regulation concerning the Procedure for Preparing and Submitting the Budget Plan and Profit Utilization of Clearing and Guarantee Institutions.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.
Article 2
Sufficiently clear.
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
The term "specific actions" includes, among others, orders to improve the Budget Plan of the Clearing and Guarantee Institution.
Article 14
Sufficiently clear.
Article 15
Sufficiently clear.
Article 16
Sufficiently clear.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6499