Return of Illegal Profits and Investor Loss Compensation Funds in the Capital Market Sector

To:
Capital Market Actors,
At your place.

COPY
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 17 /SEOJK.04/2021 CONCERNING THE RETURN OF ILLEGAL PROFITS AND INVESTOR LOSS COMPENSATION FUNDS IN THE CAPITAL MARKET SECTOR

In view of the establishment of Financial Services Authority Regulation Number 65/POJK.04/2020 dated December 29, 2020 concerning the Return of Illegal Profits and Investor Loss Compensation Funds in the Capital Market Sector (State Gazette of the Republic of Indonesia Year 2020 Number 312, Supplement to the State Gazette of the Republic of Indonesia Number 6611), it is necessary to regulate the return of illegal profits and investor loss compensation funds in the capital market sector in a Circular Letter of the Financial Services Authority as follows:

I. GENERAL PROVISIONS

1. In this Circular Letter of the Financial Services Authority, the following terms are defined as:
   a. Party means an individual, company, joint venture, association, or organized group. b. Return of Illegal Profits means an order from the Financial Services Authority to return profits obtained or losses avoided illegally by the Party that committed and/or the Party that caused a violation of laws and regulations in the capital market sector.
   c. Fund Account Provider means a Party appointed by the Financial Services Authority to provide a fund account for the payment of the Return of Illegal Profits and the distribution of Investor Loss Compensation Funds.
   d. Investor Loss Compensation Fund means funds collected from the imposition of the Return of Illegal Profits, intended to be administered and distributed to investors who suffered losses and meet the requirements to file claims. e. Administrator means a Party appointed by the Financial Services Authority to administer and distribute the Investor Loss Compensation Funds.

II. OPENING OF FUND ACCOUNTS BY FUND ACCOUNT PROVIDERS

1. Activities as a Fund Account Provider are carried out by the Indonesia Stock Exchange (IDX) or other Parties appointed by the Financial Services Authority.
2. Other Parties that can be appointed as Fund Account Providers as referred to in paragraph 1 must at least meet the following requirements:
   a. hold a business license in the capital market sector from the Financial Services Authority; b. have experience in the administration and storage of client assets in the capital market sector; and
   c. have no conflict of interest with the Party subject to the Return of Illegal Profits by the Financial Services Authority.
3. To accommodate payments of the Return of Illegal Profits, the Fund Account Provider as referred to in paragraph 1 must open a fund account in the form of:
   a. a sub-securities account at the Indonesia Stock Exchange; or b. a savings account at a conventional or Sharia commercial bank included in the commercial bank category based on business activities (BOOK) 4 as referred to in Financial Services Authority regulations regarding business activities and office networks based on core capital of commercial banks or Sharia commercial banks affiliated with such conventional commercial banks.
4. The Fund Account Provider opens a fund account in the name of the Fund Account Provider for each case of violation of laws and regulations in the capital market sector subject to the Return of Illegal Profits as referred to in paragraph 3 no later than 2 (two) working days after receiving an order from the Financial Services Authority.
5. The Fund Account Provider must report the opening of the fund account to the Financial Services Authority, including:
   a. the name and code of the fund account opening location; b. the date of opening the fund account;
   c. the name of the fund account;
   d. the fund account number; e. the account balance; and f. the Party who gave approval for the expenditure of funds, via written letter or electronic letter.
6. The Financial Services Authority includes the name and code of the fund account opening location, the name of the fund account, the fund account number opened by the Fund Account Provider, and the correspondence address of the Fund Account Provider, including the email address and telephone number, in the determination letter of the Return of Illegal Profits.
7. In the event that the funds collected from the imposition of the Return of Illegal Profits are deemed feasible, the fund account opened by the Fund Account Provider automatically becomes the Investor Loss Compensation Fund account.
8. The funds collected from the imposition of the Return of Illegal Profits and/or Investor Loss Compensation Funds as referred to in paragraph 7 are not part of the property ownership of the Fund Account Provider and must be administered separately from the main activities of the Fund Account Provider.
9. Costs for opening, administering, transferring, and closing accounts are charged to the Return of Illegal Profits fund account or Investor Loss Compensation Fund account.
10. In the event that the Party subject to the Return of Illegal Profits does not pay their obligations within the determined time limit, the costs arising as referred to in paragraph 9 are charged to the Fund Account Provider.

III. PROCEDURES FOR PAYMENT OF RETURN OF ILLEGAL PROFITS IN CASH FORM

1. The Party subject to the Return of Illegal Profits is required to pay the Return of Illegal Profits to the Financial Services Authority through the fund account provided by the Fund Account Provider no later than 30 (thirty) days after receiving the determination letter of the Return of Illegal Profits.
2. The determination letter of the Return of Illegal Profits is considered received by the Party subject to the Return of Illegal Profits if, based on the delivery proof held by the Financial Services Authority, the determination letter of the Return of Illegal Profits has been received by the Party subject to the Return of Illegal Profits or another Party at the address of the Party subject to the Return of Illegal Profits.
3. The Party subject to the Return of Illegal Profits can make payment in cash form by:
   a. direct deposit; or b. transfer or transfer, to the fund account provided by the Fund Account Provider with the account number as stated in the determination letter of the Return of Illegal Profits.
4. After making the payment of the Return of Illegal Profits as referred to in paragraph 3, the Party subject to the Return of Illegal Profits must submit confirmation to the Fund Account Provider by attaching a copy of valid payment proof no later than 2 (two) working days after the payment of the Return of Illegal Profits.
5. The submission of confirmation as referred to in paragraph 4 can be done via written letter or electronic letter.
6. In the event that the Party subject to the Return of Illegal Profits has submitted confirmation of payment of the Return of Illegal Profits to the Fund Account Provider, the Fund Account Provider subsequently reports to the Financial Services Authority regarding the payment of the Return of Illegal Profits no later than 2 (two) working days after receiving the payment confirmation by the Fund Account Provider via written letter or electronic letter.
7. In the event that the amount of payment of the Return of Illegal Profits received in the Fund Account Provider's fund account differs from the amount of funds reported by the Party subject to the Return of Illegal Profits, the valid payment is the amount received in the Fund Account Provider's fund account.
8. In the event of overpayment of the Return of Illegal Profits, the Financial Services Authority orders the Fund Account Provider to transfer the excess payment to the fund account of the Party subject to the Return of Illegal Profits.
9. The Fund Account Provider must transfer the excess payment as referred to in paragraph 8 no later than 2 (two) working days after receiving an order from the Financial Services Authority.

IV. PROCEDURES FOR PAYMENT OF RETURN OF ILLEGAL PROFITS IN FIXED ASSET FORM

1. Mechanism for payment of the Return of Illegal Profits in the form of fixed assets.
   a. In the event that the Party subject to the Return of Illegal Profits cannot make payment through the fund account to pay the Return of Illegal Profits, the Party subject to the Return of Illegal Profits can make payment in the form of fixed assets by first submitting a written request to the Financial Services Authority no later than 10 (ten) working days after receiving the determination letter of the Return of Illegal Profits, using the format as stated in the Appendix which is an inseparable part of this Circular Letter of the Financial Services Authority. b. Payment in the form of fixed assets is carried out by handing over fixed assets in the form of:

1. land;
2. land and buildings; and/or
3. motor vehicles.
   c. The fixed assets as referred to in letter b are valued with the following provisions:
4. the value of fixed assets in the form of land and/or buildings is 70% (seventy percent) of the tax sale object value; and/or
5. the value of fixed assets in the form of motor vehicles is 70% (seventy percent) of the market price.
   d. The fixed assets as referred to in letter b must meet the following provisions:
6. have valid ownership documents;
7. the location of the fixed assets is within the territory of the Republic of Indonesia;
8. not involved in legal disputes;
9. not currently pledged or mortgaged;
10. no tax arrears exist; and
11. not under the control of another Party for any reason.
    e. The request as referred to in letter a is accompanied by the handover of:
12. valid ownership documents of the fixed assets, including land certificates and/or Motor Vehicle Ownership Books (BPKB);
13. Land and Building Tax Notification Letter and tax payment proof;
14. approval letter from spouse/another Party as required by laws and regulations to give approval for the handover of fixed assets in the form of land used as payment for the Return of Illegal Profits;
15. notarized substitution power of attorney to the Financial Services Authority for the release of fixed assets;
16. stamped statement letter that payment cannot be made through the fund account, including due to insufficient funds to pay the Return of Illegal Profits;
17. statement letter of approval for the release of fixed assets stating agreement to:
    a) the value of fixed assets in the form of land and/or buildings is 70% (seventy percent) of the tax sale object value; and/or b) the value of fixed assets in the form of motor vehicles is 70% (seventy percent) of the market price; and c) the release of fixed assets is carried out in accordance with the provisions set by the Financial Services Authority and laws and regulations, using the format as stated in the Appendix which is an inseparable part of this Circular Letter of the Financial Services Authority; and
18. statement letter regarding the status of fixed assets that:
    a) is not involved in legal disputes; b) is not currently pledged or mortgaged; c) has no tax arrears; and d) is not under the control of another Party for any reason, using the format as stated in the Appendix which is an inseparable part of this Circular Letter of the Financial Services Authority. f. The Financial Services Authority submits a response to the request as referred to in letter a within a time limit of no later than 10 (ten) working days after receiving the request letter. g. The Financial Services Authority has the authority to accept or reject the fixed assets handed over as payment for the Return of Illegal Profits. h. In the event that the payment of the Return of Illegal Profits in the form of fixed assets is rejected by the Financial Services Authority, the Party subject to the Return of Illegal Profits can hand over other fixed assets that meet the provisions as referred to in letter b no later than 10 (ten) working days after the rejection of payment in the form of fixed assets by the Financial Services Authority.
    i. The Financial Services Authority submits a response to the request for handover of other fixed assets as referred to in letter h within a time limit of no later than 10 (ten) working days after receiving the request letter.
    j. The handover of other fixed assets as referred to in letter h can be done by the Party subject to the Return of Illegal Profits at most 1 (one) time after the rejection of payment in the form of fixed assets by the Financial Services Authority. k. In the event that the Financial Services Authority has rejected the handover of fixed assets 2 (two) times and the payment of the Return of Illegal Profits is not yet settled, the Financial Services Authority can take actions in accordance with Financial Services Authority regulations regarding the Return of Illegal Profits and Investor Loss Compensation Funds in the Capital Market Sector.

2. The release of fixed assets is carried out by auctioning the fixed assets.
3. The Financial Services Authority can appoint another Party to handle the fixed asset auction process.
4. The Financial Services Authority or another Party appointed by the Financial Services Authority conducts the auction of fixed assets through the State Asset Service Office and Auction Office or Class II auction house/auction official.
5. The Financial Services Authority or another Party appointed by the Financial Services Authority to handle the auction submits an auction request by attaching documents according to auction requirements.
6. In the event that the Financial Services Authority is the auction petitioner, the proceeds from the auction of fixed assets after deducting related auction costs are deposited by the State Asset Service Office and Auction Office or Class II auction house/auction official into the fund account provided by the Fund Account Provider appointed by the Financial Services Authority.
7. In the event that the Financial Services Authority appoints another Party to handle the auction, the proceeds from the auction of fixed assets after deducting related auction costs are deposited by the State Asset Service Office and Auction Office or Class II auction house/auction official into the fund account provided by the Fund Account Provider upon instruction from the other Party appointed by the Financial Services Authority as the auction petitioner.
8. Costs arising related to the auction of fixed assets and maintenance costs of fixed assets are charged to the proceeds from the auction of fixed assets.
9. In the event that there are remaining proceeds from the auction of fixed assets after deducting auction costs and the financial obligations of the Party subject to the Return of Illegal Profits to the Financial Services Authority, the Financial Services Authority orders the Fund Account Provider to transfer the remaining funds to the fund account of the Party subject to the Return of Illegal Profits.
10. The Fund Account Provider must transfer the funds as referred to in paragraph 9 no later than 2 (two) working days after receiving an order from the Financial Services Authority.

V. BLOCKING OF SECURITIES ACCOUNTS AND/OR OTHER ACCOUNTS AT FINANCIAL SERVICE INSTITUTIONS

1. The Financial Services Authority has the authority to order the Indonesia Stock Exchange (IDX) and/or financial service institutions to block securities accounts, block other accounts, and/or transfer assets from the Party subject to the Return of Illegal Profits, including prohibiting changes to share ownership records of the Party subject to the Return of Illegal Profits in the shareholder list of the Issuer or Public Company in the event that shares are in the form of securities.
2. The Financial Services Authority can revoke the blocking of securities accounts, other accounts, and/or the revocation of the prohibition of changes to share ownership records in the name of the Party subject to the Return of Illegal Profits in the shareholder list of the Issuer or Public Company in the event that:
   a. it is for the purpose of paying the Return of Illegal Profits obligation; b. the Party subject to the Return of Illegal Profits has settled the obligation using other assets; and/or
   c. there are other conditions set by the Financial Services Authority.
3. In carrying out the revocation of blocking of securities accounts for the Party subject to the Return of Illegal Profits, the Financial Services Authority coordinates with the Indonesia Stock Exchange (IDX).
4. In the event that the Party subject to the Return of Illegal Profits settles the Return of Illegal Profits obligation using blocked assets as referred to in paragraph 2 letter a, the Party subject to the Return of Illegal Profits must provide a written statement to the Financial Services Authority to make the payment of the Return of Illegal Profits using the blocked assets.
5. In the event that the Party subject to the Return of Illegal Profits provides a written statement to the Financial Services Authority to make the payment of the Return of Illegal Profits using the blocked assets as referred to in paragraph 4, the Financial Services Authority provides a response to the Party subject to the Return of Illegal Profits regarding the opening of the block for the purpose of settling the payment of the Return of Illegal Profits.
6. In the event that the Party subject to the Return of Illegal Profits has settled the obligation, the Financial Services Authority issues a letter of settlement regarding the payment obligation of the Return of Illegal Profits and:
   a. orders the Indonesia Stock Exchange (IDX) and/or financial service institutions to revoke the blocking of securities accounts and/or other accounts; and/or b. revokes the prohibition of changes to share ownership records of the Party subject to the Return of Illegal Profits in the shareholder list of the Issuer or Public Company in the event that shares are in the form of securities.
7. In the event that the Party subject to the Return of Illegal Profits refuses to make payment, the Financial Services Authority orders the liquidation of assets in the securities account and/or other accounts to the Indonesia Stock Exchange (IDX), financial service institutions, and/or other relevant Parties, with a copy to the Party subject to the Return of Illegal Profits.
8. The liquidation of assets in the securities account as referred to in paragraph 7 is carried out by selling the securities in the securities account based on an order from the Financial Services Authority.
9. Securities Companies that sell securities for the purpose of liquidating assets in the securities account as referred to in paragraph 8 provide transaction confirmation to the Financial Services Authority.
10. The proceeds from the sale of securities as referred to in paragraph 8 must be transferred to the fund account provided by the Fund Account Provider in accordance with the order of the Financial Services Authority.
11. The liquidation of assets in other accounts as referred to in paragraph 7 is carried out by transferring funds in other accounts to the fund account provided by the Fund Account Provider in accordance with the order of the Financial Services Authority.
12. Financial service institutions that carry out the transfer as referred to in paragraph 11 provide transfer confirmation to the Financial Services Authority.

VI. LEGAL EFFORTS IN THE EVENT THAT THE PARTY SUBJECT TO THE RETURN OF ILLEGAL PROFITS DOES NOT MAKE PAYMENT

1. In the event that the Party subject to the Return of Illegal Profits does not pay the total amount of the Return of Illegal Profits, the Financial Services Authority can take the following actions:
   a. process further to the investigation stage for non-compliance with written orders in the form of Return of Illegal Profits in accordance with laws regarding the Financial Services Authority; b. file a civil lawsuit against the Party subject to the Return of Illegal Profits while simultaneously requesting seizure of assets owned by the Party subject to the Return of Illegal Profits; and/or
   c. file a petition for bankruptcy declaration in accordance with laws regarding bankruptcy and suspension of debt payment obligations.
2. Legal efforts as referred to in paragraph 1 letter a can be carried out by the Financial Services Authority considering conditions including but not limited to:
   a. the Party subject to the Return of Illegal Profits behaves uncooperatively; b. the Party subject to the Return of Illegal Profits has a record of violations of laws and regulations in the financial services sector;
   c. the Party subject to the Return of Illegal Profits intentionally does not make payment of the Return of Illegal Profits; and/or
   d. there are complaints from investors or the public.
3. Legal efforts as referred to in paragraph 1 letter b can be carried out by the Financial Services Authority considering conditions including but not limited to:
   a. the Party subject to the Return of Illegal Profits has assets that economically can meet the payment obligation of the Return of Illegal Profits; b. the Party subject to the Return of Illegal Profits does not hand over assets as referred to in letter a to fulfill the payment obligation of the Return of Illegal Profits;
   c. the Party subject to the Return of Illegal Profits behaves uncooperatively;
   d. the Party subject to the Return of Illegal Profits intentionally does not make payment of the Return of Illegal Profits; and/or e. there are complaints from investors or the public.
4. Legal efforts as referred to in paragraph 1 letter c can be carried out by the Financial Services Authority considering conditions including but not limited to:
   a. the financial condition of the Party subject to the Return of Illegal Profits is considered unable to make payment but still has businesses that generate income for the Party subject to the Return of Illegal Profits; b. the Party subject to the Return of Illegal Profits has assets that economically can meet the payment obligation of the Return of Illegal Profits;
   c. there are other Parties who are creditors of the Party subject to the Return of Illegal Profits; and/or
   d. there are complaints from investors or the public.

VII. COORDINATION BETWEEN FUND ACCOUNT PROVIDERS AND ADMINISTRATORS

1. In the event that the Financial Services Authority has formed the Investor Loss Compensation Fund and appointed an Administrator, the Fund Account Provider must coordinate with the Administrator.
2. Coordination between the Fund Account Provider and the Administrator includes at least the submission of information:

a. name and code of the fund account opening location, name of the fund account, and account number of the Investor Loss Compensation Fund opened by the Fund Account Provider; b. the amount of funds in the Investor Loss Compensation Fund account;
c. a list of names, sub-account numbers at the Depository and Clearing Institution, and/or investor bank account numbers for claims that have been fully verified by the Administrator;
d. the amount of Investor Loss Compensation Fund to be paid to investors; e. the amount of Investor Loss Compensation Fund claim payments to investors; f. costs arising from the administration and distribution of the Investor Loss Compensation Fund; and g. remaining funds after the distribution of the Investor Loss Compensation Fund is completed.

3. In the event that the investor claim payment plan has been approved by the Financial Services Authority (OJK), the Administrator provides instructions via email or other media, attaching the OJK approval, to the Fund Account Provider to carry out the payment of the Investor Loss Compensation Fund to investors.

4. The Fund Account Provider transfers the Investor Loss Compensation Fund as referred to in paragraph 3 no later than 3 (three) working days after receiving instructions from the Administrator.

5. The Fund Account Provider submits a copy of the proof of fund transfer from the Investor Loss Compensation Fund account to the sub-account at the Depository and Clearing Institution and/or the investor's bank account to the Administrator.

6. The Fund Account Provider executes the payment of remuneration for the administration and distribution of the Investor Loss Compensation Fund in accordance with the distribution plan based on instructions from the Administrator via email or other media no later than 3 (three) working days after receiving instructions from the Administrator.

7. The Fund Account Provider submits a copy of the proof of payment of remuneration for the administration and distribution of the Investor Loss Compensation Fund to the Administrator.

8. In the event there is a remaining Investor Loss Compensation Fund, the Administrator instructs the Fund Account Provider via email or other media to transfer the remaining funds to the account of the Party designated by the Financial Services Authority to manage funds for the development of the capital market industry.

9. The Fund Account Provider must transfer the remaining Investor Loss Compensation Fund as referred to in paragraph 8 no later than 3 (three) working days after receiving instructions from the Administrator.

10. The Fund Account Provider submits a copy of the proof of transfer of the remaining Investor Loss Compensation Fund from the Investor Loss Compensation Fund account as referred to in paragraph 9 to the Administrator.

VIII. SUBMISSION OF REPORTS BY THE FUND ACCOUNT PROVIDER TO THE FINANCIAL SERVICES AUTHORITY

1. The Fund Account Provider must submit reports to the Financial Services Authority regarding the management of:
   a. the Return of Illegal Profits account; and/or b. the Investor Loss Compensation Fund account, via written letter or email.

2. The report on the management of the Return of Illegal Profits account as referred to in paragraph 1 letter a consists of reports containing:
   a. name and code of the fund account opening location, date of account opening, name of the fund account, and account number; b. the Party that gave approval for the disbursement of funds;
   c. the amount of Return of Illegal Profits payments that have entered the fund account;
   d. the amount of fund deposits into the account of the Party designated to manage funds for the development of the capital market industry, in the event that funds raised from the imposition of Return of Illegal Profits are deemed not feasible to form an Investor Loss Compensation Fund; and e. the date of closure of the Return of Illegal Profits account.

3. Reports as referred to in paragraph 2 letters a and b must be submitted to the Financial Services Authority no later than 2 (two) working days after the fund account is opened by the Fund Account Provider.

4. Reports as referred to in paragraph 2 letters c and d must be submitted to the Financial Services Authority no later than 2 (two) working days after the Return of Illegal Profits payment is received in the fund account or after the deposit of funds into the account of the Party designated to manage funds for the development of the capital market industry.

5. Reports as referred to in paragraph 2 letter e must be submitted to the Financial Services Authority no later than 2 (two) working days after the closure of the Return of Illegal Profits account.

6. The report on the management of the Investor Loss Compensation Fund account as referred to in paragraph 1 letter b includes, among others, the date of closure of the Investor Loss Compensation Fund account.

7. Reports as referred to in paragraph 6 must be submitted to the Financial Services Authority no later than 2 (two) working days after the closure of the Investor Loss Compensation Fund account.

IX. INVESTOR LOSS COMPENSATION FUND WEBSITE

1. The Administrator creates the Investor Loss Compensation Fund website no later than 21 (twenty-one) working days after the Administrator is appointed by the Financial Services Authority.

2. The website as referred to in paragraph 1 is a collection of web pages containing information or data that can be accessed via an internet network system.

3. The website as referred to in paragraph 1 is created with the following criteria:
   a. the Investor Loss Compensation Fund website must use at least a second-level Indonesian domain name; b. 1 (one) website is designated for 1 (one) Investor Loss Compensation Fund;
   c. it is separate from other websites owned by the Administrator; and
   d. it has a web address that reflects the name of the case underlying the formation of the Investor Loss Compensation Fund.

4. The second-level Indonesian domain name is the first derivative of the Indonesian top-level domain name.

5. The Indonesian top-level domain name as referred to in paragraph 4 is a top-level domain name in the domain naming system hierarchy that indicates the Indonesia code (.id) according to the country code list in ISO 3166-1 issued by the Internet Numbers Authority (IANA).

6. The Investor Loss Compensation Fund website must present information in Indonesian and foreign languages, with the condition that the foreign language used is at least English.

7. Information presented in the foreign language as referred to in paragraph 6 must contain the same information as that presented in Indonesian.

8. In the event of differing interpretations of information presented in the foreign language compared to information presented in Indonesian as referred to in paragraph 6, the information presented in Indonesian shall be used as the reference.

9. The website must contain information at least:
   a. the case underlying the formation of the Investor Loss Compensation Fund; b. criteria for investors entitled to submit claims;
   c. claim submission period;
   d. claim submission procedures; and e. progress of the distribution of the Investor Loss Compensation Fund in the form of the total amount of Investor Loss Compensation Fund distributed, as well as the number of investors who submitted claims and have received the Investor Loss Compensation Fund.

10. Information as referred to in paragraph 9:
    a. is presented correctly and without misleading elements; b. is presented clearly so as to be easily understood; and
    c. can be accessed at all times by all Parties.

X. REMUNERATION FOR THE ADMINISTRATOR AND OPERATIONAL ACTIVITY COSTS OF THE INVESTOR LOSS COMPENSATION FUND AS WELL AS THE TERM OF ADMINISTRATOR ASSIGNMENT

The Financial Services Authority establishes the amount of administration and distribution costs for the Investor Loss Compensation Fund based on the Administrator's proposal in the distribution plan with the following provisions:

1. The Administrator's remuneration, including experts appointed by the Administrator, is at most 2% (two percent) of the amount of the Investor Loss Compensation Fund or at least IDR 150,000,000 (one hundred fifty million rupiah);

2. The amount of remuneration as referred to in paragraph 1 considers at least:
   a. the fairness of the remuneration amount; b. the complexity of the distribution of the Investor Loss Compensation Fund; and
   c. the amount of funds collected in the Investor Loss Compensation Fund;

3. The Administrator's operational activity costs borne by the Investor Loss Compensation Fund are at most 1% (one percent) of the amount of the Investor Loss Compensation Fund;

4. The term of assignment for the Administrator is at most 1 (one) year for each case since appointment as Administrator; and

5. In the event necessary, the term as referred to in paragraph 4 may be extended through a decision of the Financial Services Authority.

XI. REMUNERATION FOR THE FUND ACCOUNT PROVIDER AND FUND ACCOUNT MANAGEMENT COSTS

The Financial Services Authority establishes the amount of remuneration for the Fund Account Provider and fund account management costs with the provision that the Fund Account Provider is entitled to remuneration for the opening and administration of the fund account of at most 0.5% (zero point five percent) of the amount of the Investor Loss Compensation Fund or at least IDR 1,000,000 (one million rupiah).

XII. ADMINISTRATION OF FUNDS FOR THE INTERESTS OF CAPITAL MARKET INDUSTRY DEVELOPMENT

1. Funds for the interests of capital market industry development are funds originating from payments of Return of Illegal Profits that are declared not feasible to form an Investor Loss Compensation Fund and/or remaining Investor Loss Compensation Funds.

2. Funds as referred to in paragraph 1 are intended, among others, to increase public and capital market participant knowledge and understanding, enhance investor protection, or encourage the growth of the number of investors or new Issuers, in the form of socialization activities, training, or seminars in the capital market sector.

3. In the event the Financial Services Authority establishes that funds raised from the imposition of Return of Illegal Profits are not feasible to form an Investor Loss Compensation Fund and/or there is a remaining Investor Loss Compensation Fund, the Financial Services Authority appoints a Party to manage the capital market industry development funds.

4. Activities as a manager of capital market industry development funds as referred to in paragraph 3 are carried out by the Indonesia Stock Exchange or another Party appointed by the Financial Services Authority.

5. Other Parties that can be appointed as the manager of capital market industry development funds as referred to in paragraph 4 are institutions that meet the following requirements:
   a. have a business license from the Financial Services Authority; b. are institutions that directly or indirectly have permanent educational infrastructure in the capital market sector; and
   c. have programs, expertise, and resources to conduct socialization, training, or seminar activities in the capital market sector.

6. The manager of capital market industry development funds as referred to in paragraph 4 opens a capital market industry development fund account that is separate from the operational account of the manager of capital market industry development funds.

7. The Financial Services Authority orders the Fund Account Provider to transfer funds from the Return of Illegal Profits that are not feasible from the Return of Illegal Profits account to the account of the manager of capital market industry development funds.

8. The Fund Account Provider must transfer funds as referred to in paragraph 7 no later than 2 (two) working days after receiving the order from the Financial Services Authority.

9. The Fund Account Provider submits a copy of the proof of fund transfer as referred to in paragraph 7 to the Financial Services Authority no later than 2 (two) working days after the fund transfer.

10. The manager of capital market industry development funds as referred to in paragraph 3 must submit reports to the Financial Services Authority as follows:
    a. report on fund receipts, which includes every receipt of funds received from the Return of Illegal Profits account or the Investor Loss Compensation Fund account; b. report on activity plans; and
    c. report on activity realization and fund usage,
    via written letter or email.

11. The fund receipt report as referred to in paragraph 10 letter a must be submitted to the Financial Services Authority no later than 3 (three) working days after the funds are received, attaching supporting documents.

12. The activity plan report as referred to in paragraph 10 letter b must be submitted to the Financial Services Authority no later than 14 (fourteen) days before the implementation of the activity, attaching supporting documents.

13. The activity realization and fund usage report as referred to in paragraph 10 letter c must be submitted to the Financial Services Authority no later than 7 (seven) working days after the implementation of the activity, attaching supporting documents.

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

XIII. CLOSURE OF RETURN OF ILLEGAL PROFITS ACCOUNT AND INVESTOR LOSS COMPENSATION FUND ACCOUNT

1. The Financial Services Authority orders the Fund Account Provider to close the fund account in the event:
   a. the Financial Services Authority declares the Return of Illegal Profits not feasible to form an Investor Loss Compensation Fund; and/or b. the distribution of the Investor Loss Compensation Fund has been completed and the Administrator's final report has been received and there are no further responses from the Financial Services Authority.

2. The Financial Services Authority orders the Fund Account Provider to close the Return of Illegal Profits account that is not feasible after receiving a copy of the proof of fund transfer as referred to in Paragraph XII paragraph 9.

3. The Financial Services Authority orders the Fund Account Provider to close the fund account holding the Investor Loss Compensation Fund after receiving the final report from the Administrator and the Financial Services Authority does not provide further response to the final report.

4. The Fund Account Provider must close the fund account as referred to in paragraphs 2 and 3 no later than 3 (three) working days after receiving the order from the Financial Services Authority.

XIV. CLOSING

This Circular Letter of the Financial Services Authority becomes effective on July 1, 2021.

Established in Jakarta on June 30, 2021
EXECUTIVE HEAD
CAPITAL MARKET SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HOESEN

APPENDIX
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 17 /SEOJK.04/2021 CONCERNING RETURN OF ILLEGAL PROFITS AND INVESTOR LOSS COMPENSATION FUNDS IN THE CAPITAL MARKET SECTOR

APPLICATION FOR PAYMENT OF RETURN OF ILLEGAL PROFITS IN THE FORM OF FIXED ASSETS Number : ………………………… ………., ………………...20 Attachments : ………………………… Subject : Application for Payment Return of Illegal Profits in the Form of Fixed Assets

To
The Executive Head
Capital Market Supervisor
Financial Services Authority in Jakarta.

Hereby I apply for the payment of Return of Illegal Profits (PKTS) to be made in the form of fixed assets. As consideration material, I hereby submit the following data:

1. Name : …………………………………………………..
2. Address : …………………………………………………..
3. Telephone Number : …………………………………………………..
4. Company Name (if any) : …………………………………………………..
5. Company Address (if any) : …………………………………………………..
6. PKTS Determination Letter Number : …………………………………………………..

To complete this application, I hereby attach the following documents:

1. Land Certificate and/or Vehicle Ownership Book Proof;
2. Tax Notification Letter for Land and Building Tax along with tax payment proof;
3. Spouse/Party approval letter or Party required by legislation to give approval for the transfer of fixed assets in the form of land used as payment for Return of Illegal Profits;
4. Notarized substitution power of attorney to the Financial Services Authority for the release of fixed assets;
5. Stamped statement letter that payment cannot be made through a fund account, among others, due to insufficient funds to pay for the Return of Illegal Profits;
6. Statement letter of approval for the release of fixed assets; and
7. Statement letter of fixed asset status.

Thus, I submit this application and thank you for your attention.

Applicant,
..............................................
(clear name and signature) stamp

STATEMENT LETTER OF APPROVAL FOR RELEASE OF FIXED ASSETS

I, the undersigned:
Name : …………………………………………………………..
Place & Date of Birth : …………………………………………………………..
Full Address : …………………………………………………………..
…………………………………………………………..
…………………………………………………………..
Company Name (if any) :
Company Address (if any) :
hereby state that I approve:
a. the value of fixed assets in the form of:

1. land and/or buildings at 70% (seventy percent) of the tax object selling value; and/or
2. motor vehicles at 70% (seventy percent) of the market price; and
   b. the release of fixed assets is carried out in accordance with the provisions established by the Financial Services Authority and legislation.

Thus, I make this statement truthfully so that it can be used as appropriate.
………., …………………..
(place and date)
Applicant,
..............................................
(clear name and signature)

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

STATEMENT LETTER OF FIXED ASSET STATUS

I, the undersigned:
Name : …………………………………………………
Place & Date of Birth : …………………………………………………
Full Address : …………………………………………………
…………………………………………………
…………………………………………………
Company Name (if any) :
Company Address (if any) :
hereby state that the fixed assets I submit for the payment of Return of Illegal Profits are in the status:
b) not in legal dispute; c) not pledged or mortgaged; d) no tax arrears; and e) not under the control of other Parties for any reason.

Thus, I make this statement truthfully so that it can be used as appropriate.
………., ………………….. 20….
(place and date)
Applicant,
............................................
(clear name and signature)

Established in Jakarta on June 30, 2021
EXECUTIVE HEAD
CAPITAL MARKET SUPERVISOR
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
HOESEN