Procedures for Evaluation and Drafting of Regulations of Alternative Dispute Resolution Institutions in the Financial Services Sector

To:

1. Management of Alternative Dispute Resolution Institutions in the Financial Services Sector;
2. Board of Directors/Management of Associations in the financial services sector; and
3. Board of Directors/Management of Financial Service Business Actors,
   At their respective locations.

COPY
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY OF THE REPUBLIC OF INDONESIA NUMBER 14 /SEOJK.07/2022 CONCERNING PROCEDURES FOR EVALUATION AND DRAFTING OF REGULATIONS OF ALTERNATIVE DISPUTE RESOLUTION INSTITUTIONS IN THE FINANCIAL SERVICES SECTOR

In connection with the implementation of Financial Services Authority Regulation Number 61/POJK.07/2020 concerning Alternative Dispute Resolution Institutions in the Financial Services Sector, it is necessary to further regulate provisions regarding the implementation of evaluation and drafting of regulations for Alternative Dispute Resolution Institutions in the Financial Services Sector in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS
In this Financial Services Authority Circular Letter, the following terms are defined:

1. Alternative Dispute Resolution Institution in the Financial Services Sector, hereinafter referred to as LAPS Financial Services Sector, is an institution that resolves disputes in the financial services sector outside of court.
2. Management is the organ that performs the administration functions of the LAPS Financial Services Sector for the benefit of the LAPS Financial Services Sector in accordance with the purpose and objectives of the LAPS Financial Services Sector and represents the LAPS Financial Services Sector both inside and outside of court in accordance with the provisions of the articles of association.
3. Supervisor is an organ within the LAPS Financial Services Sector that plays a role in performing general and/or specific supervision functions in accordance with the articles of association and providing advice to the Management in carrying out the administration of the LAPS Financial Services Sector.
4. Dispute is a disagreement between consumers and financial service business actors that has gone through the complaint resolution process by the financial service business actor and is caused by material, fair, and direct losses and/or potential losses to consumers because the financial service business actor failed to fulfill the agreement and/or financial transaction documents that have been agreed upon.
5. LAPS Financial Services Sector Regulations are written regulations containing material regarding the resolution of Disputes in the financial services sector as regulated in the Financial Services Authority Regulation regarding LAPS Financial Services Sector.

II. EVALUATION AND DRAFTING OF LAPS FINANCIAL SERVICES SECTOR REGULATIONS

1. LAPS Financial Services Sector conducts evaluation of LAPS Financial Services Sector Regulations periodically at least once (1) in one (1) year.
2. Evaluation is conducted on the material of LAPS Financial Services Sector Regulations which includes:
   a. types of dispute resolution services; b. dispute resolution procedures;
   c. dispute resolution cost scale based on dispute categories;
   d. dispute resolution timeframes; e. provisions related to conflicts of interest and affiliation for mediators and arbitrators; f. code of ethics, requirements, sanctions, procedures and methods for assessment, and evaluation for mediators and arbitrators; and g. sanctions for members who violate regulations established by the LAPS Financial Services Sector.
3. Evaluation of LAPS Financial Services Sector Regulations as referred to in item 1 is drafted by the Management and submitted to the Supervisor to obtain recommendations on the evaluation results.
4. In the event that, based on the evaluation results as referred to in item 2, the Supervisor recommends improving the LAPS Financial Services Sector Regulations, the Management drafts the LAPS Financial Services Sector Regulations.
5. The Management drafts the LAPS Financial Services Sector Regulations as referred to in item 4 through the following stages:
   a. drafting of LAPS Financial Services Sector Regulations; b. consultation with relevant stakeholders regarding the draft LAPS Financial Services Sector Regulations;
   c. compilation and adjustment of the draft LAPS Financial Services Sector Regulations;
   d. consultation with the Supervisor; and e. request for approval to the Financial Services Authority.
6. Consultation as referred to in item 5 letter b is conducted by submitting requests for responses or opinions on the draft LAPS Financial Services Sector Regulations to relevant stakeholders, including consumer associations or organizations or institutions engaged in consumer protection or associations or organizations of financial service business actors in accordance with their respective sectors.
7. The Management compiles and adjusts the draft LAPS Financial Services Sector Regulations as referred to in item 5 letter c based on the results of requests for responses or opinions from relevant stakeholders as referred to in item 6.
8. Submission of the draft LAPS Financial Services Sector Regulations and consultation with the Supervisor as referred to in item 5 letter d is conducted after the draft LAPS Financial Services Sector Regulations, for which responses or opinions from relevant stakeholders have been requested, has been completed and adjusted by the Management as referred to in item 7.
9. The Management submits a request for approval of the draft LAPS Financial Services Sector Regulations as referred to in item 5 letter e, which must contain at least:
   a. background of the draft LAPS Financial Services Sector Regulations; b. problems faced;
   c. alternative problem-solving methods and the chosen problem-solving method; and
   d. related legislation.
10. Submission of the request for approval of the draft LAPS Financial Services Sector Regulations as referred to in item 9 is accompanied by supporting documents which include:
    a. results of evaluation of LAPS Financial Services Sector Regulations that have received Supervisor recommendations; b. responses or opinions from relevant stakeholders regarding the draft LAPS Financial Services Sector Regulations;
    c. documentation of consultation results with the Supervisor regarding the draft LAPS Financial Services Sector Regulations; and
    d. draft LAPS Financial Services Sector Regulations.
11. The Management submits the request for approval of the draft LAPS Financial Services Sector Regulations to the Financial Services Authority using the format as contained in the Appendix which is an integral part of this Financial Services Authority Circular Letter.

III. PROCEDURES FOR SUBMISSION OF DRAFT LAPS FINANCIAL SERVICES SECTOR REGULATIONS

1. LAPS Financial Services Sector submits the request for approval of the draft LAPS Financial Services Sector Regulations through the electronic reporting system provided by the Financial Services Authority.
2. In the event that the electronic reporting system as referred to in item 1 is not yet available or cannot operate due to disruption, submission of the request for approval of the draft LAPS Financial Services Sector Regulations is conducted via a letter addressed to the Member of the Board of Commissioners of the Financial Services Authority for Education and Consumer Protection c.q. the work unit that implements consumer protection functions.
3. In the process of reviewing the approval of the draft LAPS Financial Services Sector Regulations, the Financial Services Authority may request the LAPS Financial Services Sector to:
   a. provide additional information and/or documents; and/or b. change the material of the draft LAPS Financial Services Sector Regulations.
4. The Financial Services Authority provides approval or rejection of the draft LAPS Financial Services Sector Regulations within a maximum of 30 (thirty) working days since the draft LAPS Financial Services Sector Regulations documents as referred to in item 1 and item 3 (if any) are received completely.
5. The draft LAPS Financial Services Sector Regulations as referred to in item 4 take effect after receiving approval from the Financial Services Authority.

IV. CLOSING PROVISIONS
The provisions in this Financial Services Authority Circular Letter take effect on the date of determination.

Determined in Jakarta on September 7, 2022

MEMBER OF THE BOARD OF COMMISSIONERS
FOR EDUCATION AND
CONSUMER PROTECTION
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

signed
FRIDERICA WIDYASARI DEWI

APPENDIX
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY OF THE REPUBLIC OF INDONESIA NUMBER 14 /SEOJK.07/2022 CONCERNING PROCEDURES FOR EVALUATION AND DRAFTING OF REGULATIONS OF ALTERNATIVE DISPUTE RESOLUTION INSTITUTIONS IN THE FINANCIAL SERVICES SECTOR

APPLICATION FORM FOR APPROVAL OF DRAFT LAPS FINANCIAL SERVICES SECTOR REGULATIONS

(place, date)
Number: XXXX
Attachment:
Subject: Request for Approval of Draft Regulations XXXX LAPS Financial Services Sector

To: Member of the Board of Commissioners of the Financial Services Authority for Education and Consumer Protection c.q. Work Unit implementing Consumer Protection Functions At their respective locations

(background of LAPS Financial Services Sector Regulations) (problems faced) (alternative problem-solving methods and chosen problem-solving method) (related legislation)

Hereby we submit a request for approval of Regulations XXXX LAPS Financial Services Sector.

As consideration materials, the following explanations and documents are submitted herewith:

1. results of evaluation of Regulations XXXX LAPS Financial Services Sector that have received Supervisor recommendations;
2. responses or opinions from relevant stakeholders regarding the draft Regulations XXXX LAPS Financial Services Sector; and
3. documentation of consultation results with the Supervisor regarding the draft Regulations XXXX LAPS Financial Services Sector; and
4. draft Regulations XXXX LAPS Financial Services Sector.

This copy is in accordance with the original
Director of Legal Affairs 1
Legal Department signed
Mufli Asmawidjaja

Thus this request is submitted, for your attention, we thank you.

Alternative Dispute Resolution Institution in the Financial Services Sector (Full Name) Chairman of LAPS Financial Services Sector

Determined in Jakarta on September 7, 2022

MEMBER OF THE BOARD OF COMMISSIONERS
FOR EDUCATION AND
CONSUMER PROTECTION
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

signed
FRIDERICA WIDYASARI DEWI