Reassessment of Key Parties of Investment Managers and Investment Advisors

To:

1. The Board of Directors of Investment Managers; and
2. The Board of Directors of Investment Advisors,
   At your location.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 31/SEOJK.04/2021

CONCERNING

REASSESSMENT OF KEY PARTIES OF INVESTMENT MANAGERS AND INVESTMENT ADVISORS

In carrying out the provisions of Article 23 of Financial Services Authority Regulation Number 34/POJK.03/2018 concerning Reassessment of Key Parties of Financial Service Institutions (State Gazette of the Republic of Indonesia Year 2018 Number 259, Supplement to the State Gazette of the Republic of Indonesia Number 6285) as amended by Financial Services Authority Regulation Number 14/POJK.03/2021 concerning Amendments to Financial Services Authority Regulation Number 34/POJK.03/2018 concerning Reassessment of Key Parties of Financial Service Institutions, (State Gazette of the Republic of Indonesia Year 2021 Number 165, Supplement to the State Gazette of the Republic of Indonesia Number 6701), hereinafter referred to as the Reassessment POJK, it is necessary to regulate the implementation provisions of the aforementioned Reassessment POJK related to Investment Managers and Investment Advisors in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

1. In this Financial Services Authority Circular Letter, the following terms are defined:

a. Investment Manager is a party whose business activities manage securities portfolios for clients or manage collective investment portfolios for a group of clients, except insurance companies, pension funds, and banks that conduct their own business activities based on legislation.

b. Investment Advisor is a company that provides advice to other parties regarding the sale or purchase of securities in exchange for service fees.

c. Board of Directors is the corporate organ authorized and fully responsible for the management of the corporation for the benefit of the corporation, in accordance with the purpose and objectives of the corporation and representing the corporation, both inside and outside of court, in accordance with the provisions of the articles of association.

d. Board of Commissioners is the corporate organ tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.

e. Key Party is a party that owns, manages, supervises, and/or has significant influence on an Investment Manager or Investment Advisor, including those who no longer own, manage, supervise, and/or have influence at the time the reassessment is conducted.

f. Affiliation is:
1) family relationship due to marriage and descent up to the second degree, both horizontally and vertically;
2) relationship between a party and employees, members of the Board of Directors, or members of the Board of Commissioners of that party;
3) relationship between 2 (two) companies where there is one or more members of the Board of Directors or members of the Board of Commissioners who are the same;
4) relationship between a company and a party, directly or indirectly, controlling or controlled by that company;
5) relationship between 2 (two) companies controlled, directly or indirectly, by the same party; or
6) relationship between a company and major shareholders.

g. Control is an action aimed at influencing the management and/or policies of an Investment Manager or Investment Advisor in any way, directly or indirectly.

h. Controlling Shareholder, hereinafter abbreviated as CSP, is a legal entity, individual, and/or business group that holds shares or shares equivalent to those of an Investment Manager or Investment Advisor and has the ability to exercise Control over an Investment Manager or Investment Advisor.

i. Supervisory Action is an action that can be established as a follow-up to the results of Financial Services Authority supervision as referred to in Financial Services Authority regulations regarding the follow-up of capital market supervision.

j. Specific Action Order is an order given by the Financial Services Authority as part of Supervisory Action.

k. Written Order is a written order as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.

2. A party is stated to exercise Control over an Investment Manager or Investment Advisor, among others, if:

a. it has voting rights of more than 20% (twenty percent) either through its own share ownership and its Affiliations or together with other parties;

b. it has the right to arrange and determine the financial and operational policies of an Investment Manager or Investment Advisor based on the articles of association or agreements;

c. it is able to appoint or dismiss members of the Board of Directors of an Investment Manager or Investment Advisor; and/or

d. it is able to control the majority of votes in the meeting of the Board of Directors.

3. A party is stated to be a CSP if it directly or indirectly owns:

a. shares of at least 20% (twenty percent) of the issued shares of one Investment Manager or Investment Advisor and/or has voting rights; or

b. shares of less than 20% (twenty percent) of the issued shares of one Investment Manager or Investment Advisor and has voting rights but it can be proven that it has exercised Control directly or indirectly over an Investment Manager or Investment Advisor.

4. Reassessment of Key Parties of an Investment Manager or Investment Advisor can be conducted by the Financial Services Authority at any time if, based on the results of:

a. supervision; b. examination;
c. imposition of sanctions; or
d. information from other sources,

there are indications that Key Parties are involved and/or responsible for integrity, financial feasibility, financial reputation, and/or competence issues occurring in an Investment Manager or Investment Advisor.

II. KEY PARTIES OF INVESTMENT MANAGERS OR INVESTMENT ADVISORS SUBJECT TO REASSESSMENT

Reassessment is conducted by the Financial Services Authority against Key Parties of Investment Managers or Investment Advisors in the event there are indications that Key Parties are involved and/or responsible for integrity, financial feasibility, financial reputation, and/or competence issues occurring in Investment Managers or Investment Advisors, as regulated in Financial Services Authority regulations regarding reassessment of Key Parties of financial service institutions.

III. SCOPE OF REASSESSMENT

1. Reassessment of Key Parties of Investment Managers or Investment Advisors is conducted in the event that, based on evidence, data, and/or information obtained from the results of direct supervision, indirect supervision, examination, or other sources as referred to in Section I number 4, there are indications of involvement of Key Parties and/or Key Parties are responsible for:

a. integrity and/or financial feasibility issues for CSPs; or

b. integrity, financial reputation, and/or competence issues for members of the Board of Directors and members of the Board of Commissioners.

2. The CSP's actions to influence and/or order members of the Board of Directors, members of the Board of Directors, and/or employees of an Investment Manager or Investment Advisor as referred to in Article 4 letter a of the Reassessment POJK, or the actions of members of the Board of Directors and/or members of the Board of Commissioners as referred to in Article 5 letter a of the Reassessment POJK, are:

a. concealing and/or obscuring violations of certain provisions or financial conditions and/or transactions that are actually occurring, including:

1) incorrect recording and/or transactions performed in financial reports, including balance sheets, profit and loss statements, and/or administrative accounts;
2) failing to record securities transactions and/or financial transactions related to business activities according to actual conditions;
3) eliminating or destroying accounting records, supporting documents for securities transactions, and/or financial transactions related to business activities;
4) conducting securities transactions, investment management, and/or financial engineering by utilizing an Investment Manager and/or Investment Advisor for personal, group, Affiliation, or other parties' interests;
5) accounting practices and/or financial report presentations that do not comply with regulations;
6) concealing business activities and/or activities obtained using the permits held;
7) hacking and/or breaking into the electronic systems and/or information technology of an Investment Manager and/or Investment Advisor; and
8) being uncooperative with the examination process conducted by the Financial Services Authority;

b. providing unfair benefits to shareholders, Key Parties, employees, and/or other parties that can harm or reduce the profits of an Investment Manager and/or Investment Advisor, including through:

1) securities transactions and/or financial transactions related to business activities conducted unfairly;
2) financial engineering through investment products;
3) unfair sale of assets owned by an Investment Manager and Investment Advisor;
4) unfair purchase of assets owned by an Investment Manager and Investment Advisor;
5) unfair procurement processes or activities for goods and/or services;
6) providing unfair facilities to managing Key Parties, officials, and/or employees;
7) providing unfair gifts in the form of goods and/or services, directly or indirectly, that contradict legislation; and
8) significant and unfair increases in assets or capital;

c. committing acts that violate the prudential principles of a healthy Investment Manager or Investment Advisor and/or good management principles, including:

1) for Investment Managers:
a) investment management is not conducted based on, among others, standard operating procedures, adequate risk management, internal policy guidelines of the Investment Manager, and legislation; b) investment management is not based on the Investment Manager's code of conduct principles in accordance with legislation; c) involvement in financial engineering activities, including providing funds to parties or for activities prohibited by legislation; d) conducting:
(1) issuance of investment products and/or carrying out activities that have not obtained permits/effective statements/registrations/approvals from the OJK or have not been reported to the OJK; and/or (2) issuance of investment products and/or carrying out activities that have not obtained permits or approvals from other competent authorities or have not been reported to other competent authorities; e) making capital deposits with funding sources that do not comply with legislation; f) violating Financial Services Authority provisions that can be subject to administrative sanctions; and/or g) an Investment Manager conducting securities transactions for the benefit of the Investment Products it manages where the Investment Manager's shareholders, Key Parties, employees, and/or other parties have interests in such Securities at unfair prices that harm the Investment Products and thus harm Investment Product investors; and/or

2) for Investment Advisors:
a) providing advice activities is not conducted based on, among others, standard operating procedures, adequate risk management, internal policy guidelines of the Investment Advisor, and legislation; b) investment advice activities are not based on the Investment Advisor's code of conduct principles in accordance with legislation; c) involvement in financial engineering activities, including providing investment advice for the purpose of providing funds to parties or for activities prohibited by legislation; d) carrying out activities that have not obtained permits or approvals from the Financial Services Authority and/or other competent authorities or have not been reported to the Financial Services Authority and/or other competent authorities; e) making capital deposits with funding sources that do not comply with legislation; f) violating Financial Services Authority provisions that can be subject to administrative sanctions; and/or g) an Investment Advisor providing buy or sell Securities recommendations to investors without rational reasons or not based on research results, causing investors who conduct securities transactions based on such recommendations to suffer losses; and/or

d. committing acts that violate Sharia principles in the capital market for Investment Managers, including:

1) investment management for Sharia investment products is not conducted in accordance with Sharia principles in the capital market;
2) carrying out Sharia investment product issuance activities without being accompanied by a Sharia compliance statement issued by the Sharia supervisory board; and/or
3) violating Financial Services Authority provisions that can be subject to administrative sanctions.

3. The term "proven to have committed a criminal offense that has been decided by a court and has permanent legal force" as referred to in Article 4 letter b or Article 5 letter b of the Reassessment POJK means:

a. proven to have committed a criminal offense in the financial service sector; b. proven to have committed a criminal offense, namely criminal offenses listed in the Criminal Code (KUHP) and/or similar foreign criminal codes with a prison sentence threat of 1 (one) year or more; and/or
c. proven to have committed other criminal offenses with a prison sentence threat of 1 (one) year or more, including:
1) corruption;
2) money laundering;
3) narcotics/psychotropics;
4) smuggling;
5) customs;
6) excise;
7) human trafficking;
8) illegal arms trafficking;
9) terrorism;
10) counterfeiting money;
11) in the field of taxation;
12) in the field of forestry;
13) in the field of environment;
14) in the field of marine and fisheries; and
15) proliferation of weapons of mass destruction including the spread of nuclear, biological, and chemical weapons.

4. The term "causing an Investment Manager or Investment Advisor to experience difficulties that endanger the continuity of the business of an Investment Manager or Investment Advisor and/or can endanger the Capital Market industry" as referred to in Article 4 letter c or Article 5 letter c of the Reassessment POJK includes:

a. utilizing an Investment Manager or Investment Advisor to obtain funding or finance personal, business group, Affiliated party, or other parties' interests without using prudent principles, good governance, and intended to violate legislation; and

b. violating provisions and/or commitments to the Financial Services Authority and/or the government.

5. The term "having non-performing loans and/or financing at financial service institutions and/or being a controller, member of the Board of Directors, or member of the Board of Commissioners, or equivalent, of a company that has non-performing loans and/or financing" as referred to in Article 4 letter e or Article 5 letter e of the Reassessment POJK includes:

a. failure to fulfill obligations to settle securities transactions at securities companies; b. non-performing loans and/or financing recorded in the debtor data information system; and
c. non-performing loans and/or financing not yet reported by financial service institutions in the debtor data information system or already reported by financial service institutions in the debtor data information system but not yet classified as non-performing, but based on research conducted by the Financial Services Authority, the loans and/or financing meet the criteria for being classified as non-performing according to regulations governing asset quality.

The definition of non-performing loans or financing for credit cards or Sharia cards does not include charges originating from annual fees, administrative fees, and/or other charges not originating from credit card or Sharia card usage transactions.

6. The term "proven to be declared bankrupt and/or being a shareholder, member of the Board of Directors, or member of the Board of Commissioners, or equivalent, who is declared guilty of causing a company to be declared bankrupt or subject to sanctions such as revocation of business permits" as referred to in Article 4 letter f or Article 5 letter f linked to Article 7 letter b of the Reassessment POJK includes:

a. members of the Board of Commissioners who serve as Directors of a company that causes the company to be declared bankrupt based on a permanent court decision or subject to sanctions such as revocation of business permits by competent authorities; and

b. members of the Board of Commissioners who are shareholders of a company that causes the company to be declared bankrupt based on a permanent court decision or subject to sanctions such as revocation of business permits by competent authorities.

7. The term "CSP not taking necessary measures when facing capital and/or liquidity difficulties" as referred to in Article 4 letter g of the Reassessment POJK includes:

a. CSP not taking measures in the form of increasing capital deposits in an Investment Manager or Investment Advisor; and

b. CSP not obtaining strategic investors for the purpose of increasing capital deposits within a certain period determined by the Financial Services Authority.

8. The term "members of the Board of Directors and/or members of the Board of Commissioners not conducting strategic management for the development of a healthy Investment Manager or Investment Advisor" as referred to in Article 5 letter g of the Reassessment POJK, including the inability of the respective parties to, among others:

a. interpret the vision and mission of an Investment Manager or Investment Advisor in the implementation of operational activities; b. anticipate economic, financial, and/or technological developments;
c. analyze the capital market industry situation and explore potential development of an Investment Manager or Investment Advisor to maintain business continuity;
d. implement provisions including prudential principles, reporting and accounting standards, and the institutional structure of an Investment Manager or Investment Advisor; and e. carry out duties and/or responsibilities resulting in violations of prudential principles and/or good management principles of an Investment Manager or Investment Advisor.

Assessment of such inability is based on the duties and responsibilities of each position of members of the Board of Directors and members of the Board of Commissioners according to the job descriptions existing in the respective company.

9. The term "refusing to provide commitments and/or not fulfilling commitments agreed upon with the Financial Services Authority and/or the government" as referred to in Article 4 letter h or Article 5 letter h of the Reassessment POJK includes:

a. commitments for the rehabilitation of an Investment Manager or Investment Advisor other than commitments as referred to in number 4 letter b; b. commitments not to repeat actions or violations as referred to in number 2 letter a, number 2 letter b, number 2 letter c, number 2 letter d, number 4, and/or number 8;
c. commitments not to commit and/or repeat actions as referred to in Article 4 and/or Article 5 of the Reassessment POJK for Key Parties who have previously received the "Fail" rating and have served bans as regulated in the Reassessment POJK; and/or
d. commitments regarding the healthy operational development of Investment Managers and Investment Advisors.

10. The term "integrity, financial reputation, and/or competence issues contradicting legislation" as referred to in Article 5 letter k of the Reassessment POJK includes:

a. committing violations of legislation and being punished for proven criminal offenses within a certain period; b. committing violations of legislation that result in the respective party being prohibited from becoming a CSP, member of the Board of Directors, member of the Board of Commissioners, and/or having significant influence on a Financial Service Institution;
c. proven lack of commitment to developing a healthy Financial Service Institution; and
d. being included as a party prohibited from becoming a Key Party in an Investment Manager or Investment Advisor, including prospective Key Parties subject to administrative sanctions such as revocation of permits, cancellation of approvals, and/or cancellation of registrations by the Financial Services Authority within the last 5 (five) years.

IV. REASSESSMENT PROCEDURE

1. Reassessment of Key Parties of Investment Managers or Investment Advisors is conducted with the following steps:

a. Clarification of evidence, data, and/or information to the Key Party being reassessed.

1) The Financial Services Authority sends a letter requesting clarification of evidence, data, and/or information to the Key Party being reassessed.

2) The Key Party being reassessed submits a response to the request for clarification of evidence, data, and/or information through:

a) clarification in the form of written responses, either in physical documents submitted directly or other documents acceptable to the Financial Services Authority, including electronic mail attaching response documents signed by the Key Party as an attachment to the electronic mail; and/or

b) clarification in the form of face-to-face meetings,

within a maximum period of 10 (ten) working days calculated from the date of the clarification request from the Financial Services Authority.

3) Written responses through physical documents as referred to in number 2) letter a) are conducted by:

a) written responses accompanied by supporting documents proven by:

i. receipt or electronic confirmation of receipt from the Financial Services Authority if submitted directly to the Financial Services Authority;

ii. post stamp if sent via post office; or

iii. receipt from courier service if sent via courier service; and/or

b) in the event clarification is needed regarding the written response as referred to in letter a), clarification can be conducted face-to-face by:

(1) within a maximum period of 10 (ten) working days calculated from the date of the clarification request from the Financial Services Authority;

(2) the location of the clarification can be conducted at the Financial Services Authority or at other locations determined by the Financial Services Authority, and/or via electronic media due to specific situation or condition considerations; and

(3) the results of face-to-face clarification are completed with a minutes of meeting that forms a unity with the clarification letter submitted by the Key Party being reassessed.

4) Clarification through face-to-face meetings as referred to in number 2) letter b) is conducted by:

a) face-to-face clarification is conducted within a maximum period of 10 (ten) working days calculated from the date of the clarification request from the Financial Services Authority;

b) the venue for in-person clarification may be conducted at the Financial Services Authority or at another location designated by the Financial Services Authority, and/or through electronic media due to specific situational or conditional considerations; and

c) the results of in-person clarification are accompanied by a minutes of clarification.

5) In the event that the party being reassessed is a Legal Entity PSP, the response to the request for clarification of evidence, data, and/or information is carried out by a member of the Board of Directors or another party within the legal entity authorized to represent the legal entity in accordance with the Articles of Association or the equivalent for foreign legal entities.

6) Regarding parties who no longer own, manage, supervise, and/or have significant influence on the Investment Manager and Investment Advisor at the time of reassessment, if the clarification request letter is not received by the party being reassessed at the address recorded with the Financial Services Authority or if the letter is returned to the Financial Services Authority, notification for the clarification request is conducted by correspondence through the contactable party as referred to in Article 17 of the POJK on Reassessment and/or by summons through newspapers or the Financial Services Authority website.

7) In the event that the Key Person being reassessed does not exercise the right to submit a response to the request for clarification regarding evidence, data, and/or information within the established timeframe, the Financial Services Authority proceeds to the next step of reassessment, namely the determination and transmission of the temporary reassessment results to the Key Person.

b. Determination and transmission of temporary reassessment results to the Key Person being reassessed.

1) The Financial Services Authority determines the temporary reassessment results by considering evidence, data, and/or information obtained from supervisory results and other information, and considering responses to clarification requests regarding evidence, data, and/or information if the Key Person being reassessed submits clarification.

2) The Financial Services Authority transmits the temporary reassessment results via letter to the Key Person being reassessed.

c. Response from the Key Person being reassessed regarding the temporary reassessment results.

1) The Key Person being reassessed submits a response to the temporary reassessment results via physical documents submitted directly or other documents acceptable to the Financial Services Authority, including electronic letters containing the response document signed by the Key Person as an attachment to the electronic letter.

2) Submission of documents via electronic letter does not eliminate the responsibility of the Key Person to submit physical response documents as referred to in item 1) to the Financial Services Authority.

3) Written responses via physical documents or other documents acceptable to the Financial Services Authority, including electronic letters, are submitted within a maximum period of 10 (ten) working days from the date of the temporary reassessment result letter from the Financial Services Authority, proven by:

a) a receipt from the Financial Services Authority if submitted directly to the Financial Services Authority;

b) a post office stamp if sent via the post office;

c) an expedited service receipt if sent via expedited service; or

d) electronic confirmation of receipt from the Financial Services Authority if submitted via other documents acceptable to the Financial Services Authority, including electronic letters.

4) If necessary, the submission of responses to the temporary reassessment results may be conducted by:

a) in-person meetings held within a maximum period of 10 (ten) working days from the date of the temporary reassessment result transmission letter from the Financial Services Authority;

b) the venue for submitting responses to the temporary reassessment results may be at the Financial Services Authority or at another location designated by the Financial Services Authority, and/or through electronic media due to specific situational or conditional considerations; and

c) in-person submission of responses is accompanied by a minutes of response to the temporary reassessment results.

5) In the event that the Key Person being reassessed does not exercise the right to submit a response to the temporary reassessment results within the established timeframe, the Financial Services Authority determines the temporary reassessment results as the final reassessment results.

d. In the event that the Financial Services Authority obtains new evidence, data, and/or information before the determination and notification of the final reassessment results, the Financial Services Authority determines the final reassessment results for the Key Person by considering the new evidence, data, and/or information obtained, while still referring to the process as referred to in letters a to c.

New evidence, data, and/or information that serves as the basis for the Financial Services Authority to request clarification from the Key Person being reassessed may include, among others, new evidence, data, and/or information related to indications of issues currently under reassessment or indications of new issues committed by the Key Person currently being reassessed.

In considering such new evidence, data, and/or information, the Financial Services Authority reviews evidence, data, and/or information that could change the temporary or final reassessment results. Thus, if based on the Financial Services Authority's assessment, the new evidence, data, and/or information will not change the temporary or final reassessment results, the Financial Services Authority proceeds to the next step of reassessment.

e. Determination and notification of final reassessment results to the Key Person of the Investment Manager and Investment Advisor being reassessed.

The Financial Services Authority determines the final results after considering the responses to the temporary reassessment results submitted by the Key Person being reassessed, including new evidence, data, and/or information if any, or based on the temporary reassessment results if the Key Person being reassessed does not provide a response to the temporary reassessment results within the established timeframe.

2. Key Persons of Investment Managers or Investment Advisors being reassessed regarding issues or violations committed are categorized as perpetrators.

The term "perpetrator" refers to:

a. a person who orders, instructs to do, or proposes the occurrence of an act;

b. a person who approves, jointly approves, or signs;

c. a person who performs or jointly performs an act based on orders, with or without pressure, and who should know or should suspect that the order contradicts statutory regulations;

d. a person who performs an act due to specific promises or rewards; and/or

e. a person who fails to perform acts or actions that are duties and/or responsibilities, resulting in violations and/or deviations.

3. The Financial Services Authority determines the final reassessment results directly without following all steps as referred to in item 1, in the event that the Key Person being reassessed:

a. is proven to have committed a criminal offense that has been decided by a court and has permanent legal force as referred to in the Financial Services Authority Regulation regarding the assessment of competence and propriety for key persons of financial service institutions; or

b. is proven to be declared bankrupt and/or becomes a shareholder, member of the Board of Directors, member of the Board of Commissioners, or the equivalent, who is declared guilty causing a company to be declared bankrupt or have its business license revoked.

4. The Financial Services Authority may determine the final reassessment results without following all reassessment steps as referred to in item 1, with specific considerations.

5. The Financial Services Authority may establish a submission period for responses from the Key Person of less than 10 (ten) working days as referred to in item 1 letter a item 2) and letter c item 3), with specific considerations.

6. Correspondence regarding reassessment.

a. In carrying out the reassessment process, the Financial Services Authority corresponds with the Key Person of the Investment Manager or Investment Advisor being reassessed based on domicile data and information held by the Financial Services Authority.

b. In the event that based on such domicile data and information, the Key Person of the Investment Manager or Investment Advisor being reassessed cannot be contacted, the Financial Services Authority may correspond through a contactable party. The term "contactable party" refers to family or other parties besides the Key Person of the Investment Manager or Investment Advisor who are willing or designated by the Key Person of the Investment Manager or Investment Advisor to serve as a contact for correspondence with the Financial Services Authority.

V. CONSEQUENCES OF FINAL REASSESSMENT RESULTS

1. Parties who, at the time of reassessment, own, manage, supervise, and/or have significant influence on the Investment Manager or Investment Advisor as Key Persons designated with the predicate "Passed" are declared to meet the requirements to remain as Key Persons of Investment Managers or Investment Advisors.

2. Key Persons designated with the predicate "Not Passed" are subject to bans as referred to in Article 10 paragraph (2) and Article 10 paragraph (3) of the POJK on Reassessment.

3. The imposition of ban periods on Key Persons designated with the predicate "Not Passed" is conducted as referred to in Article 11 and Article 15 of the POJK on Reassessment.

4. The ban consequences for Key Persons designated with the predicate "Not Passed" apply from the date of the Financial Services Authority's determination letter.

5. In the event that the party designated with the predicate "Not Passed" as referred to in item 2 is a shareholder, the following provisions apply:

a. For PSP Investment Managers or Investment Advisors, the relevant party must transfer all of their shareholdings within a maximum period of 1 (one) year from being designated with the predicate "Not Passed" as referred to in Article 12 paragraph (1) letter c of the POJK on Reassessment.

b. In the event that the relevant shareholdings are not transferred within the established timeframe, the provisions as referred to in Article 13 of the POJK on Reassessment apply.

c. The Investment Manager or Investment Advisor submits a party to take over the shares of the Key Person designated with the predicate "Not Passed" to the Financial Services Authority, to obtain approval as a shareholder or PSP in accordance with Financial Services Authority regulations regarding the assessment of competence and propriety for key persons of financial service institutions.

6. In the event that the party designated with the predicate "Not Passed" as referred to in item 2 is currently serving as a Key Person of the management of the Investment Manager or Investment Advisor, the relevant party is prohibited from carrying out duties, functions, and authorities as a Key Person of the management of the Investment Manager or Investment Advisor and is required to cease being a Key Person of the management of the Investment Manager or Investment Advisor, as referred to in Article 15 paragraph (1) letter b of the POJK on Reassessment.

7. The Investment Manager or Investment Advisor where the Key Person designated with the predicate "Not Passed" is located is required to follow up on the aforementioned consequences by holding a General Meeting of Shareholders to dismiss the member of the Board of Directors or member of the Board of Commissioners designated with the predicate "Not Passed", within a maximum period of 3 (three) months from the date of notification from the Financial Services Authority, as referred to in Article 15 paragraph (2) of the POJK on Reassessment.

8. Members of the Board of Directors or members of the Board of Commissioners designated with the predicate "Not Passed" are prohibited from carrying out their duties, functions, and authorities from the date of the Financial Services Authority's determination.

9. The Investment Manager or Investment Advisor has a maximum period of 3 (three) months to hold a General Meeting of Shareholders to dismiss members of the Board of Directors or members of the Board of Commissioners, with the following provisions:

a. the date of dismissal of members of the Board of Directors or members of the Board of Commissioners in the General Meeting of Shareholders is the same as the date of the Financial Services Authority's decision designating the member of the Board of Directors or member of the Board of Commissioners with the predicate "Not Passed"; or

b. in the event that the Investment Manager or Investment Advisor outside the 3 (three) month period does not hold a General Meeting of Shareholders to dismiss members of the Board of Directors or members of the Board of Commissioners, the Investment Manager or Investment Advisor may be subject to specific action orders.

VI. REQUEST FOR JUDICIAL REVIEW

Key Persons of Investment Managers or Investment Advisors designated as "Not Passed" may submit a request for judicial review regarding the "Not Passed" predicate before the consequence period expires.

1. Criteria for Judicial Review

A request for judicial review may be submitted if it meets the following criteria:

a. there is new evidence, data, and/or information related to absence or failure to submit clarification or response during the reassessment;

Evidence, data, and/or information related to absence or failure to submit clarification or response must include strong and relevant reasons or considerations supported by evidence of absence or failure to submit clarification or response, such as illness preventing the Key Person being reassessed from normal activities or other strong reasons causing the Key Person being reassessed to be unable to provide clarification or response within the timeframe established by the Financial Services Authority;

b. there is a permanent legal court decision stating that the party designated with the predicate "Not Passed" is not proven to have committed a criminal offense or is not proven to be declared bankrupt and/or become a shareholder, member of the Board of Directors, or member of the Board of Commissioners who is declared guilty causing a company to be declared bankrupt or subject to sanctions such as business license revocation;

c. as a consequence of the implementation of Laws, including Law Number 11 of 2016 on Tax Amnesty; and/or

d. having served ¾ (three-quarters) of the consequence period and the Key Person of the Investment Manager and Investment Advisor:

1) has no negative records during the "Not Passed" period, accompanied by, among others, a stamped declaration letter stating that the applicant:

a) did not cause bankruptcy and/or did not become a shareholder, member of the Board of Directors, or member of the Board of Commissioners or the equivalent who is declared guilty causing a company to be declared bankrupt or have its business license revoked; and

b) has never been sentenced for proven legal violations with a penalty threat of more than 1 (one) year, supported by, among others, a Police Record Certificate;

2) commits to contributing significantly to the strengthening or rescue of the capital market industry, realized within a timeframe established by the Financial Services Authority.

The commitment to contribute is stated, among others, in the form of commitments and realization regarding capital increases or mergers and/or acquisitions.

2. Implementation of Judicial Review Request Assessment.

a. The Financial Services Authority has the authority to follow up or not follow up on the judicial review request submitted by the Key Person of the Investment Manager or Investment Advisor designated with the predicate "Not Passed" by conducting:

1) research on document completeness;

2) analysis of documents; and

3) impact analysis on the condition of the Investment Manager or Investment Advisor or the industry.

b. The judicial review request must be accompanied by a checklist of document completeness for the judicial review request using the format contained in the Appendix which is an inseparable part of this Financial Services Authority Circular, signed by the Key Person designated with the predicate "Not Passed".

c. If necessary, the Financial Services Authority has the authority to request other supporting information and/or documents related to the judicial review request.

d. In the event that based on the analysis results it is known that there is a mismatch of judicial review request criteria and/or the submitted documents are incomplete, the Financial Services Authority notifies the applicant that the judicial review request cannot be followed up.

e. The applicant may submit a judicial review request again if the judicial review request criteria are met and the documents held are complete.

f. In the event that criteria and document requirements are met, the Financial Services Authority follows up on the judicial review by conducting:

A copy of this is consistent with the original Legal Director 1 Legal Department signed Mufli Asmawidjaja

1) clarification of evidence, data, and/or information to the Key Person of the Investment Manager or Investment Advisor submitting the judicial review request;

2) determination and transmission of the temporary judicial review results to the Key Person of the Investment Manager or Investment Advisor submitting the judicial review request;

3) submission of responses from the Key Person of the Investment Manager or Investment Advisor submitting the judicial review request regarding the temporary judicial review results; and

4) determination and notification of the final judicial review results to the Key Person of the Investment Manager or Investment Advisor submitting the judicial review request.

g. Key Persons of Investment Managers or Investment Advisors designated with the predicate "Passed" in the judicial review process may return to become PSPs, members of the Board of Directors, and/or members of the Board of Commissioners by meeting the criteria, requirements, and mechanisms for assessing competence and propriency referring to Financial Services Authority regulations regarding the assessment of competence and propriety for key persons of financial service institutions.

h.

VII. CLOSING PROVISIONS

The provisions in this Financial Services Authority Circular shall take effect on the date of establishment.

Established in Jakarta on December 15, 2021

EXECUTIVE HEAD OF CAPITAL MARKET SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HOESEN

APPENDIX
FINANCIAL SERVICES AUTHORITY CIRCULAR
REPUBLIC OF INDONESIA
NUMBER 31/SEOJK.04/2021
REGARDING
REASSESSMENT OF KEY PERSONS OF INVESTMENT MANAGERS AND INVESTMENT ADVISORS

DOCUMENT CHECKLIST FOR JUDICIAL REVIEW REQUEST No. Document (√) Description

1. Identity documents, at least:
   a. photocopy of Identity Card (KTP), Indonesian Community Card Abroad (KMILN), passport, or Limited Stay Permit Card (KITAS); b. curriculum vitae;
   c. recent color photograph size 4x6 cm; and
   d. photocopy of
   Taxpayer Identification Number (NPWP).
2. Photocopy of the decision declaring the applicant Not Passed (if any).
3. Evidence documents according to the criteria of the judicial review request submitted:
   a. New evidence, data, and/or information related to absence or failure to submit clarification or response during reassessment, such as official letters from the hospital where the applicant was treated. b. Copy of the permanent legal court decision stating that the applicant is not proven to have committed a criminal offense or is not proven to be declared bankrupt and/or become a shareholder, member of the Board of Directors, member of the Board of Commissioners, or the equivalent, who is declared guilty causing a company to be declared bankrupt or have its business license revoked.

c. Official and valid evidence of consequences from the implementation of Laws, including the implementation of Law Number 11 of 2016 on Tax Amnesty.
d. Evidence of having no negative records during the "Not Passed" period, accompanied by, among others, a stamped declaration letter stating that the applicant:
1) did not cause bankruptcy and/or did not become a shareholder, member of the Board of Directors, or member of the Board of Commissioners or the equivalent who is declared guilty causing a company to be declared bankrupt or have its business license revoked; and
2) has never been sentenced for proven legal violations with a penalty threat of more than 1 (one) year, supported by, among others, a Police Record Certificate; and
e. Documents showing commitment to contribute significantly to the strengthening or rescue of the capital market industry realized based on the timeframe established by the Financial Services Authority, including commitments and realization plans, such as capital increases or mergers and/or acquisitions.

A copy of this is consistent with the original Legal Director 1 Legal Department signed Mufli Asmawidjaja

The undersigned hereby declares that:

1. the information provided above along with attached supporting documents is true, complete, and accurate; and
2. if the above statements or information are proven to be untrue, I declare to cancel the judicial review submission.

(place), (date, month, year)
(Name and signature above stamp)

Established in Jakarta on December 15, 2021

EXECUTIVE HEAD OF CAPITAL MARKET SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HOESEN
Stamp