Regulation of the Financial Services Authority of the Republic of Indonesia Number 21/POJK.04/2020 Concerning the Procedure for Preparing and Submitting the Annual Budget and Use of Profits of Stock Exchanges

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REGULATION OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 21 /POJK.04/2020 CONCERNING THE PROCEDURE FOR PREPARING AND SUBMITTING THE ANNUAL BUDGET AND USE OF PROFITS OF STOCK EXCHANGES BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering :
a. that with the transfer of functions, duties, and authorities for the regulation and supervision of financial services activities in the capital market sector, including regarding the procedure for preparing and submitting the annual budget and use of profits of stock exchanges, 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 annual budget and use of profits of stock exchanges, existing capital market sector legislation regarding the procedure for preparing and submitting the annual budget and use of profits of stock exchanges 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 as 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 Annual Budget and Use of Profits of Stock Exchanges;
Recalling : 1. Law Number 8 of 1995 concerning the Capital Market (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);
DECIDES:
Establishing : FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE PROCEDURE FOR PREPARING AND SUBMITTING THE ANNUAL BUDGET AND USE OF PROFITS OF STOCK EXCHANGES.

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

1. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, Units of Collective Investment Contracts, futures contracts over Securities, and any derivative of Securities.

2. Party refers to an individual, company, joint venture, association, or organized group.

3. Stock Exchange refers to a Party that organizes and provides systems and/or facilities to bring together buy and sell offers of Securities of other Parties with the aim of trading Securities among them.

4. Stock Exchange Transaction refers to a contract made by members of the Stock Exchange in accordance with requirements determined by the Stock Exchange regarding the sale and purchase of Securities, lending and borrowing of Securities, or other contracts regarding Securities or the price of Securities.

5. Board of Directors refers to the Stock Exchange organ authorized and fully responsible for managing the Stock Exchange for the interests of the Stock Exchange, in accordance with the purpose and objectives of the Stock Exchange and representing the Stock Exchange, both inside and outside of court, in accordance with the provisions of the Articles of Association.

6. Board of Commissioners refers to the Stock Exchange organ 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 AND USE OF PROFITS OF STOCK EXCHANGES
Article 2
(1) The annual budget and use of profits of the Stock Exchange are prepared in accordance with the following provisions:
a. The Stock Exchange is established with the objective of organizing orderly, fair, and efficient Securities trading; b. The Stock Exchange must provide supporting facilities and supervise the activities of Stock Exchange members;
c. The Stock Exchange may establish listing fees for Securities, membership dues, and transaction fees related to services provided; and
d. the amount of fees and dues established by the Stock Exchange must be based on the needs for the organization and development of the Stock Exchange.
(2) In the event that funds needed for the organization and development of the Stock Exchange are already sufficient, the fees and dues as referred to in paragraph (1) letter d may be reduced.

Article 3
(1) The annual budget and use of profits of the Stock Exchange are submitted to the Financial Services Authority in the form of the Stock Exchange's annual work plan and budget to obtain approval. (2) The submission of the annual budget and use of profits of the Stock Exchange as referred to in paragraph (1) is done in the form of printed documents or electronic documents.

Article 4
The annual budget and use of profits of the Stock Exchange must adhere to the principle of capital market efficiency and are directed to:
a. improve the system and facilities for Securities trading; b. improve the system for mentoring and supervision of Stock Exchange members;
c. develop an efficient Securities listing system;
d. develop the clearing and settlement system for Stock Exchange Transactions; e. improve information service systems; f. conduct capital market development activities through promotional and research activities; and g. improve human resource capabilities.

CHAPTER III
ANNUAL WORK PLAN AND BUDGET OF STOCK EXCHANGES
Article 5
The annual work plan and budget of the Stock Exchange 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. obstacles faced; and
d. assumptions and benchmarks underlying the budget.

Article 6
The annual work plan and budget of the Stock Exchange must at least contain:
a. the Stock Exchange's work plan detailing Stock Exchange activities for:

1. improvement of the system or facilities for Securities trading;

2. improvement of the system for mentoring and supervision of Stock Exchange members;

3. development of an efficient Securities listing system;

4. development of the clearing and settlement system for Stock Exchange Transactions;

5. improvement of information service systems;

6. capital market development activities, including promotional and research activities;

7. improvement of capital market human resource capabilities; or

8. development of activities;
   b. the Stock Exchange's revenue budget at least sourced from:

9. Securities listing activities;

10. membership dues;

11. Securities trading transaction activities; and

12. other operational activities;
    c. the Stock Exchange's expense budget prepared based on functions according to the Stock Exchange's organizational structure, covering:

13. listing;

14. membership;

15. trading;

16. trading supervision;

17. examination;

18. financial management;

19. human resources;

20. information technology;

21. research and development; and

22. public relations;
    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 Stock Exchange and/or the Stock Exchange's subsidiaries with:

23. Parties affiliated with the Board of Directors and Board of Commissioners; and

24. Parties affiliated with the Stock Exchange or the Stock Exchange's subsidiaries;
    g. the annual work plan and budget of the clearing and guaranteeing institution whose majority shares are owned by the Stock Exchange, prepared in accordance with the provisions in the Financial Services Authority Regulation concerning the procedure for preparing and submitting the annual budget and use of profits of clearing and guaranteeing institutions; and h. the annual work plan and budget of the depository and settlement institution prepared in accordance with the provisions in the Financial Services Authority Regulation concerning the procedure for preparing and submitting the annual budget and use of profits of depository and settlement institutions, if the majority of its shares are owned by the Stock Exchange.

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

Article 8
(1) The Stock Exchange must convene a General Meeting of Shareholders to approve the annual work plan and budget for the following year submitted by the Board of Directors no later than October 31. (2) The submission of the annual work plan and budget for the following year by the Board of Directors in the General Meeting of Shareholders as referred to in paragraph (1) must first obtain approval from the Board of Commissioners. (3) The Stock Exchange must submit the Stock Exchange's work plan and the annual budget for the following year, which has been approved by the General Meeting of Shareholders, to the Financial Services Authority no later than November 5. (4) The Financial Services Authority notifies the Board of Directors of changes to the Stock Exchange's annual work plan and budget no later than November 15. (5) The Board of Directors must resubmit the Stock Exchange's annual work plan and budget, having first obtained approval from the Board of Directors, no later than November 25. (6) The Financial Services Authority provides approval or rejection of the Stock Exchange's annual work plan and budget no later than December 5.

Article 9
The Stock Exchange must submit budget realization reports to the Financial Services Authority through the Board of Commissioners, with the provision that the report is submitted cumulatively on a quarterly basis and received by the Financial Services Authority no later than on the 12th (twelfth) day after the end of the relevant quarter.

Article 10
Notes on the Stock Exchange's financial reports must at least contain:
a. expense outlays related to Parties affiliated with the Board of Directors and Board of Commissioners or the board of directors and board of commissioners of the Stock Exchange's subsidiaries; b. expense outlays related to Parties affiliated with the Stock Exchange or the Stock Exchange's subsidiaries; 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 board of directors and board of commissioners of the Stock Exchange's subsidiaries.

CHAPTER IV
ADMINISTRATIVE SANCTIONS
Article 11
(1) Any Party that violates the provisions as referred to in Article 4, Article 5, Article 7 paragraph (2), Article 8 paragraph (1), paragraph (2), paragraph (3) and paragraph (5), Article 9, and Article 10, shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) are also imposed on Parties that cause 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 an administrative sanction 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 together 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 carried out in accordance with the provisions of legislation.

Article 12
In addition to administrative sanctions as referred to in Article 11 paragraph (4), the Financial Services Authority may take specific actions against any Party that violates the provisions of this Financial Services Authority Regulation.

Article 13
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 11 paragraph (4) and specific actions as referred to in Article 12 to the public.

CHAPTER V
CLOSING PROVISIONS
Article 14
Upon the commencement of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Agency Number Kep-05/PM/1996 concerning the Procedure for Preparing and Submitting the Annual Budget and Use of Profits of Stock Exchanges, along with Regulation Number III.A.4 which is its attachment, is revoked and declared invalid.

Article 15
This Financial Services Authority Regulation comes into force on the date of its promulgation.

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

To ensure everyone is aware, order the promulgation 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 COUNCIL FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed WIMBOH SANTOSO

Promulgated 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 111

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 21 /POJK.04/2020
CONCERNING
THE PROCEDURE FOR PREPARING AND SUBMITTING THE ANNUAL BUDGET AND USE OF PROFITS OF STOCK EXCHANGES

I. GENERAL
That since December 31, 2012, the functions, duties, and authorities for the regulation and supervision of financial services activities in the capital market, insurance, pension funds, financing institutions, and other financial service institutions have been transferred from the Minister of Finance and the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority. In relation to 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 and Financial Institutions regulations related to the capital market sector into Financial Services Authority Regulations. This reorganization is carried out so that there are Financial Services Authority Regulations related to the capital market sector that are consistent with Financial Services Authority Regulations in other sectors. Based on the background thinking and aspects mentioned, it is necessary to replace the existing capital market sector legislation regulating the procedure for preparing and submitting the annual budget and use of profits of Stock Exchanges, namely the Decision of the Head of the Capital Market Supervisory Agency Number Kep-05/PM/1996 concerning the Procedure for Preparing and Submitting the Annual Budget and Use of Profits of Stock Exchanges, along with Regulation Number III.A.4 which is its attachment, into a Financial Services Authority Regulation concerning the Procedure for Preparing and Submitting the Annual Budget and Use of Profits of Stock Exchanges.

II. ARTICLE BY ARTICLE
Article 1
Clearly sufficient.
Article 2
Clearly sufficient.
Article 3
Clearly sufficient.
Article 4
Clearly sufficient.
Article 5
Clearly sufficient.
Article 6
Letter a
Clearly sufficient
Letter b
Number 1
Clearly sufficient.
Number 2
Clearly sufficient.
Number 3
Clearly sufficient.
Number 4
The example of "other operational activities" includes, for example, the provision of information services related to data and the provision of screen central trading platform (CTP) reporting services.

Letter c
Clearly sufficient.
Letter d
Clearly sufficient.
Letter e
Clearly sufficient.
Letter f
Clearly sufficient.
Letter g
Clearly sufficient.
Letter h
Clearly sufficient.
Article 7
Clearly sufficient.
Article 8
Clearly sufficient.
Article 9
Clearly sufficient.
Article 10
Clearly sufficient.
Article 11
Clearly sufficient.
Article 12
The term "specific actions" includes, for example, orders to improve the Stock Exchange's Budget.
Article 13
Clearly sufficient.
Article 14
Clearly sufficient.

Article 15
Clearly sufficient.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6497