Second Amendment to Financial Services Authority Regulation Number 23/POJK.04/2016 on Collective Investment Trust Mutual Funds

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 4 OF 2023
CONCERNING
THE SECOND AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 23/POJK.04/2016 CONCERNING COLLECTIVE INVESTMENT TRUST MUTUAL FUNDS BY THE GRACE OF GOD THE ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that strategic policies are needed to address liquidity issues in the management of mutual funds, conditions resulting in the restructuring of mutual funds, and various efforts to develop mutual funds in Indonesia; b. that to support the strategic policies as referred to in letter a, it is necessary to adjust certain provisions in the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds as amended by the Financial Services Authority Regulation Number 2/POJK.04/2020 concerning the Amendment to the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds;
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 Second Amendment to the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds;
Recalling:

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) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
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) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds (State Gazette of the Republic of Indonesia Year 2016 Number 109, Supplement to the State Gazette of the Republic of Indonesia Number 5886) as amended by the Financial Services Authority Regulation Number 2/POJK.04/2020 concerning the Amendment to the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds (State Gazette of the Republic of Indonesia Year 2020 Number 6, Supplement to the State Gazette of the Republic of Indonesia Number 6455);

RESOLVES:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE SECOND AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 23/POJK.04/2016 CONCERNING COLLECTIVE INVESTMENT TRUST MUTUAL FUNDS.

Article 1
Certain provisions in the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds (State Gazette of the Republic of Indonesia Year 2016 Number 109, Supplement to the State Gazette of the Republic of Indonesia Number 5886) as amended by the Financial Services Authority Regulation Number 2/POJK.04/2020 concerning the Amendment to the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Trust Mutual Funds (State Gazette of the Republic of Indonesia Year 2020 Number 6, Supplement to the State Gazette of the Republic of Indonesia Number 6455) are amended as follows:

Between Article 15 and Article 16, one article is inserted, namely Article 15A, which reads as follows:

Article 15A
The implementation of Fair Value calculation, announcement, and reporting of Net Asset Value for Mutual Funds based on foreign securities shall be subject to the following provisions:
a. the time limit for the obligation to calculate and submit the Fair Value of Securities in the Mutual Fund portfolio by the Investment Manager to the Custodian Bank, which is no later than 17:00 WIB on each trading day as regulated in legislation concerning Fair Value of Securities in Mutual Fund Portfolios, shall not apply to Mutual Funds based on foreign securities; b. the Fair Value of Securities in the portfolio of Mutual Funds based on foreign securities must be calculated and submitted by the Investment Manager to the Custodian Bank no later than 10:00 WIB on the following trading day;
c. the time limit for the obligation to submit the calculation of the Net Asset Value of Open-End Mutual Funds performed by the Custodian Bank, which is no later than 10:00 WIB on the following trading day to the Financial Services Authority and announcement to the public through a daily newspaper with national circulation as regulated in Financial Services Authority regulations concerning guidelines for daily announcement of Net Asset Value of Open-End Mutual Funds, shall not apply to Mutual Funds based on foreign securities;
d. the calculation of the Net Asset Value of Mutual Funds based on foreign securities must:

be submitted to the Financial Services Authority no later than 13:00 WIB on the following trading day; and
be announced to the public through the Investment Manager's or Custodian Bank's website on one (1) trading day in Indonesia the next day;
e. the time limit for the obligation to submit reports for Mutual Funds Based on Foreign Securities performed by the Custodian Bank of Open-End Mutual Funds on each trading day to the Financial Services Authority as regulated in Financial Services Authority regulations concerning reporting and accounting guidelines for Mutual Funds shall not apply to the submission of reports for Mutual Funds based on foreign securities; and f. the Custodian Bank of Open-End Mutual Funds must submit reports showing the financial position of each Mutual Fund based on foreign securities to the Financial Services Authority consisting of:
a. Mutual Fund Asset and Liability Report contained in Appendix I; b. Mutual Fund Operation Report contained in Appendix II;
c. Mutual Fund Net Asset Change Report contained in Appendix III; and
d. Mutual Fund Portfolio Report contained in Appendix IV, which are an integral part of the Financial Services Authority regulations concerning reporting and accounting guidelines for Mutual Funds every day no later than 13:00 WIB on the next working day.
The provisions of Article 22 are amended to read as follows:

Article 22
(1) The Custodian Bank must ensure that funds from the repurchase of Investment Units or liquidation of Mutual Funds are transferred to the account under the name of the holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust. (2) The account under the name of the holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust as referred to in paragraph (1) may be:
a. a bank account; b. an electronic money account;
c. an Investor Fund Unit Account at the Settlement and Custody Institution;
d. a customer funds account in the event that the Transaction of Investment Units of Mutual Funds in the form of a Collective Investment Trust is conducted through a Securities Company; e. a securities account in the event of asset delivery (in kind redemption); and f. other accounts.

Between Article 24 and Article 25, one article is inserted, namely Article 24A, which reads as follows:

Article 24A
(1) In the event that the liquidity of assets in the investment portfolio of Mutual Funds meets the following conditions:
a. experiencing significant liquidity pressure resulting in the failure to sell assets in the investment portfolio of Mutual Funds; b. becoming part of a settlement agreement with holders of Investment Units of Mutual Funds;
c. the Stock Exchange or market organizer where most of the Mutual Fund's Securities portfolio is traded is closed;
d. trading of Securities for most of the Mutual Fund's Securities portfolio at the Stock Exchange or market organizer is halted or its listing is cancelled; e. emergency conditions; f. the Securities Price Appraiser does not issue a Fair Market Price reference; g. restructuring of Debt Securities and/or Sukuk by the issuer of Debt Securities and/or Sukuk; h. the rating of Debt Securities and/or Sukuk for most or all of the investment portfolio falls to non-investment grade;
i. compliance with legislation; and/or
j. other conditions and matters established in the investment management contract, when implementing repurchase as referred to in Article 21, the Investment Manager may conduct repurchase with an asset delivery mechanism provided that approval is obtained from the holders of Investment Units. (2) The Investment Manager or holder of Investment Units conducting repurchase with an asset delivery mechanism shall not choose the type of portfolio that can be delivered to fulfill the repurchase of Investment Units. (3) Approval from the holders of Investment Units as referred to in paragraph (1) may be conducted through a general meeting of holders of Investment Units regulated in the Collective Investment Contract or be individual approval from each holder of Investment Units based on physical documents or in electronic form provided that its authenticity and validity can be proven. (4) In the implementation of repurchase with an asset delivery mechanism as referred to in paragraph (1), the Custodian Bank must ensure:
a. there is approval from the holders of Investment Units; and b. asset delivery is conveyed to the holders of Investment Units of Mutual Funds in the form of a Collective Investment Trust.

The provisions of paragraph (3) of Article 28 are amended and one paragraph is added, namely paragraph (4), so that Article 28 reads as follows:

Article 28
(1) The Custodian Bank must issue and submit written confirmation letters or proof of ownership of Investment Units of Mutual Funds in the form of a Collective Investment Trust regarding the implementation of the holder's order directly to the holder of Investment Units. (2) The written confirmation letter or proof of ownership of Investment Units of Mutual Funds in the form of a Collective Investment Trust as referred to in paragraph (1) must:
a. be sent to the holder of Investment Units no later than 7 (seven) trading days after the Investment Unit is issued, for the sale of Investment Units; or b. be sent to the holder of Investment Units no later than 7 (seven) trading days after the complete repurchase order of Investment Units is received, for the repurchase of Investment Units. (3) The submission of written confirmation letters or proof of ownership of Investment Units of Mutual Funds in the form of a Collective Investment Trust to the holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust as referred to in paragraph (1) is carried out in accordance with the procedures for submitting written confirmation letters or proof and periodic reports of Mutual Funds electronically through an integrated investment management system as regulated in the Financial Services Authority Regulation concerning integrated investment management systems. (4) The written confirmation letter or proof of ownership of Investment Units of Mutual Funds in the form of a Collective Investment Trust to the holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust as referred to in paragraph (1) contains at least:
a. the name of the holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust; b. the name of the Investment Manager, Securities Sales Agent, and Custodian Bank;
c. the single investor identification number;
d. the date of issuance of the letter or proof of confirmation; e. the transaction date; f. the Investor Fund Unit Account number; g. the type of transaction; h. transaction costs, if there are transaction costs;
i. the Net Asset Value of Mutual Funds used to calculate the number of Investment Units sold, repurchased, or redeemed;
j. the number of Investment Units held before sale, repurchase, or redemption; k. the number of Investment Units sold, repurchased, or redeemed; and
l. the number of Investment Units held after sale, repurchase, or redemption.

The provisions of Article 29 are amended to read as follows:

Article 29
(1) The Custodian Bank must submit Mutual Fund reports to each holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust with the following provisions:
a. no later than the 12th (twelfth) day of the following month if there was a mutation in the number of Investment Units held by the holder of Investment Units in the previous month; b. no later than the 12th (twelfth) day of January reflecting the account position on December 31; and
c. the report contains at least the following information:

name, address, account title, and account number of the holder of Investment Units;
the number of Investment Units held at the beginning of the period;
the date, Net Asset Value of Mutual Funds, and number of Investment Units purchased, sold back, or redeemed in each transaction during the period; and
the date of each dividend distribution or cash distribution and the number of Investment Units receiving dividends.
(2) The submission of reports to each holder of Investment Units of Mutual Funds in the form of a Collective Investment Trust as referred to in paragraph (1) is carried out in accordance with the provisions concerning the procedures for submitting written confirmation letters or proof and periodic reports of Mutual Funds electronically through an integrated investment management system as regulated in the Financial Services Authority Regulation concerning integrated investment management systems.
The provisions of Article 37 are amended to read as follows:

Article 37
(1) Payment for the purchase of Investment Units of Mutual Funds may use electronic payment systems and/or bank account debit mechanisms in accordance with the provisions of legislation.
(2) Payment for the repurchase or redemption of Investment Units of Mutual Funds may use electronic payment systems and/or bank account credit mechanisms to the account of the holder of Investment Units of Mutual Funds in accordance with the provisions of legislation. (3) Investment Managers and Securities Sales Agents conducting the sale of Securities of Mutual Funds through electronic systems may conduct Mutual Fund purchases through electronic payment systems consisting of:
a. virtual accounts provided by payment gateway service providers and fund transfer service companies, which have obtained permission from Bank Indonesia; and b. other innovations in Mutual Fund transaction payment mechanisms. (4) Investment Managers and Securities Sales Agents conducting sales activities through electronic systems as referred to in paragraph (3) must:
a. obtain approval from the Financial Services Authority regarding the plan to use virtual accounts provided by payment gateway service providers and/or fund transfer service companies that have obtained permission from Bank Indonesia and other innovations in Mutual Fund transaction payment mechanisms, submitted to the Financial Services Authority; b. ensure that virtual accounts are created under the name of each holder of Investment Units of Mutual Funds;
c. ensure that virtual accounts are always at a zero balance at the end of the trading day by immediately forwarding the funds from Mutual Fund purchase transactions to the Mutual Fund account administered by the Custodian Bank;
d. have adequate standard operating procedures and risk management related to the use of virtual accounts by Investment Managers and Securities Sales Agents conducting sales activities through electronic systems as a supporting facility for electronic Mutual Fund transaction payments; and e. have a written agreement with parties related to the operational use of virtual accounts by Investment Managers and Securities Sales Agents conducting sales activities through electronic systems as a supporting facility for electronic Mutual Fund transaction payments, with at least the following provisions:

identity of each party;
rights, obligations, and responsibilities of each party;
duration of the agreement;
mechanism for the use of virtual accounts by Investment Managers and Securities Sales Agents conducting sales activities through electronic systems;
provisions in the event of disputes; and
provisions for the termination of the agreement.
(5) To obtain approval as referred to in paragraph (4) letter a, Investment Managers and Securities Sales Agents must submit:
a. documents containing information that virtual accounts are created under the name of each holder of Investment Units of Mutual Funds; b. documents containing information that virtual accounts are always at a zero balance at the end of the trading day by immediately forwarding the funds from Mutual Fund purchase transactions to the Mutual Fund account administered by the Custodian Bank;
c. standard operating procedures and risk management of Investment Managers and Securities Sales Agents that are adequate related to the use of virtual accounts by Investment Managers and Securities Sales Agents conducting sales activities through electronic systems as a supporting facility for electronic Mutual Fund transaction payments; and
d. written agreements between Investment Managers and Securities Sales Agents with parties related to the operational use of virtual accounts by Investment Managers and Securities Sales Agents conducting sales activities through electronic systems as a supporting facility for electronic Mutual Fund transaction payments, with at least the following provisions:
identity of each party;
rights, obligations, and responsibilities of each party;
duration of the agreement;
mechanism for the use of virtual accounts by Investment Managers and Securities Sales Agents conducting sales activities through electronic systems;
provisions in the event of disputes; and
provisions for the termination of the agreement.
(6) In processing the application of Investment Managers and Securities Sales Agents as referred to in paragraph (5), the Financial Services Authority:
a. reviews the data and information in the application documents; b. requests the parties to present; and/or
c. requests changes and/or additional information related to the completeness of the submitted documents.
(7) The Financial Services Authority has the authority to approve or reject the application of Investment Managers and Securities Sales Agents as referred to in paragraph (5).
(8) Regarding the application of Investment Managers and Securities Sales Agents as referred to in paragraph (5), the Financial Services Authority provides a response within a time limit of no later than 45 (forty-five) trading days. (9) The response as referred to in paragraph (8) may consist of:
a. approval; b. rejection; or
c. confirmation of a follow-up request to fulfill requirements.
Between letter d and letter e of Article 45, one letter is inserted, namely letter d1, so that Article 45 reads as follows:

Article 45
Mutual Funds in the form of a Collective Investment Trust must be dissolved if any of the following conditions occur:
a. within a period of 90 (ninety) trading days, Mutual Funds whose Registration Statement has become effective have managed funds of less than Rp10,000,000,000.00 (ten billion rupiah); b. for Protected Mutual Funds, Guaranteed Mutual Funds, and Index Mutual Funds conducting a limited public offering, within a period of 120 (one hundred twenty) trading days after the Mutual Fund Registration Statement becomes effective, managed funds of less than Rp10,000,000,000.00 (ten billion rupiah);
c. ordered by the Financial Services Authority in accordance with the provisions of legislation in the Capital Market sector;
d. the total Net Asset Value of Mutual Funds is less than Rp10,000,000,000.00 (ten billion rupiah) for 120 (one hundred twenty) consecutive trading days; d1. the number of holders is less than 10 (ten) Parties for 120 (one hundred twenty) consecutive trading days; and/or e. the Investment Manager and Custodian Bank have agreed to dissolve the Mutual Fund.

The provisions of Article 46 are amended to read as follows:

Article 46
In the event that Mutual Funds in the form of a Collective Investment Trust are dissolved due to conditions as referred to in Article 45 letter a or letter b, the Investment Manager must:
a. submit a report of such conditions as referred to in Article 45 letter a or letter b to the Financial Services Authority and announce the plan to dissolve the Mutual Fund to the holders of Investment Units in at least 1 (one) daily newspaper in Indonesian circulating nationally, no later than 2 (two) trading days since the end of the period as referred to in Article 45 letter a or letter b; b. instruct the Custodian Bank no later than 2 (two) trading days since the end of the period as referred to in Article 45 letter a or letter b, to pay the liquidation results consisting of:

funds; and/or
assets if the holder of Investment Units approves payment in the form of assets,
which are the rights of the holder of Investment Units with the provision that the calculation is done proportionally from the Net Asset Value at the time of dissolution but must not be less than the initial Net Asset Value (par price) and the funds or assets are received by the holder of Investment Units no later than 7 (seven) trading days since the end of the period as referred to in Article 45 letter a or letter b; and
c. dissolve the Mutual Fund within a time limit of no later than 10 (ten) trading days since the end of the period as referred to in Article 45 letter a or letter b, and submit a report on the dissolution of the Mutual Fund to the Financial Services Authority no later than 10 (ten) trading days since the Mutual Fund was dissolved, accompanied by:
the deed of dissolution of the Mutual Fund from a Notary registered with the Financial Services Authority; and
the financial report of the dissolution of the Mutual Fund audited by an Accountant registered with the Financial Services Authority, if the Mutual Fund has had managed funds.
The provisions of Article 47 are amended to read as follows:

Article 47
(1) In the event that Mutual Funds in the form of a Collective Investment Trust are dissolved due to conditions as referred to in Article 45 letter c, the Investment Manager must:
a. announce the plan to dissolve the Mutual Fund in at least 1 (one) daily newspaper in Indonesian circulating nationally no later than 2 (two) trading days since ordered by the Financial Services Authority and on the same day notify the Custodian Bank in writing to stop the calculation of the Net Asset Value of Mutual Funds; b. instruct the Custodian Bank no later than 2 (two) trading days since ordered by the Financial Services Authority to pay:

funds from the liquidation of Mutual Funds that are the rights of the holder of Investment Units with an amount equal to the Net Asset Value at the time of dissolution or the cash value at the end of liquidation (depending on which value is higher) and the liquidation funds are received by the holder of Investment Units no later than 7 (seven) days

stock exchange since the dissolution or liquidation has been completed; or
2. assets from the mutual fund liquidation, if the Unit holders approve payment in the form of assets, which become the right of the Unit holders, provided that the calculation is done proportionally from the Net Asset Value at the time of dissolution and the liquidation assets are received by the Unit holders no later than 7 (seven) stock exchange days since the liquidation has been completed; and
c. submitting a mutual fund dissolution report to the Financial Services Authority no later than 60 (sixty) stock exchange days since the mutual fund dissolution order was issued by the Financial Services Authority with the following documents:

opinion from a Legal Consultant registered with the Financial Services Authority;
dissolution financial report audited by an Accountant registered with the Financial Services Authority; and
deed of mutual fund dissolution from a Notary registered with the Financial Services Authority.
(2) Payment of liquidation funds as referred to in paragraph (1) letter b number 2 is subject to the following provisions:
a. if the liquidation fund value is less than the Net Asset Value at the time of dissolution or the cash value at the end of liquidation, every member of the Board of Directors, member of the Board of Commissioners, Investment Manager shareholder, and/or other party proven to have caused the violation that resulted in the Financial Services Authority ordering the mutual fund to be dissolved must make up the shortfall jointly and severally; and/or b. payment of liquidation funds can be made in stages to Unit holders proportionally based on the percentage of Unit ownership against the sales proceeds.
The provisions of Article 48 are amended to read as follows:
Article 48
In the event that a Collective Investment Contract Mutual Fund is dissolved due to conditions as referred to in Article 45 letter d or letter d1, the Investment Manager must:
a. submit a report on the conditions as referred to in Article 45 letter d or letter d1 to the Financial Services Authority, accompanied by the latest financial conditions of the mutual fund, and announce to the Unit holders the plan to dissolve the mutual fund at least in 1 (one) daily newspaper in Indonesian language circulating nationally, within a time limit of no later than 2 (two) stock exchange days since the end of the time period as referred to in Article 45 letter d and letter d1, and on the same day notify the Custodian Bank in writing to stop the calculation of the mutual fund's Net Asset Value; b. instruct the Custodian Bank no later than 2 (two) stock exchange days since the end of the time period as referred to in Article 45 letter d and letter d1, to pay the funds or assets from liquidation that become the right of the Unit holders, provided that the calculation is done proportionally from the Net Asset Value at the time the liquidation is completed and the funds or assets from liquidation are received by the Unit holders no later than 7 (seven) stock exchange days since the liquidation is completed; and
c. submit a mutual fund dissolution report to the Financial Services Authority no later than 60 (sixty) stock exchange days since the end of the time period as referred to in Article 45 letter d and letter d1, with the following documents:
opinion from a Legal Consultant registered with the Financial Services Authority;
dissolution financial report audited by an Accountant registered with the Financial Services Authority; and
deed of mutual fund dissolution from a Notary registered with the Financial Services Authority.
The provisions of Article 49 are amended to read as follows:
Article 49
In the event that a Collective Investment Contract Mutual Fund is dissolved due to conditions as referred to in Article 45 letter e, the Investment Manager must:
a. submit the mutual fund dissolution plan to the Financial Services Authority within a time limit of no later than 2 (two) stock exchange days since the agreement to dissolve the mutual fund was reached by the Investment Manager and the Custodian Bank, attaching:
the mutual fund dissolution agreement between the Investment Manager and the Custodian Bank along with the reasons for dissolution; and
the latest financial conditions,
and on the same day the Investment Manager announces the mutual fund dissolution plan to the Unit holders at least in 1 (one) daily newspaper in Indonesian language circulating nationally, and notifies the Custodian Bank in writing to stop the calculation of the mutual fund's Net Asset Value; b. instruct the Custodian Bank no later than 2 (two) stock exchange days since the agreement to dissolve the mutual fund was reached, to pay the funds or assets from liquidation that become the right of the Unit holders, provided that the calculation is done proportionally from the Net Asset Value at the time the liquidation is completed and the funds or assets from liquidation are received by the Unit holders no later than 7 (seven) stock exchange days since the liquidation is completed; and
c. submit a mutual fund dissolution report to the Financial Services Authority no later than 60 (sixty) stock exchange days since the mutual fund dissolution was agreed upon, accompanied by the following documents:
opinion from a Legal Consultant registered with the Financial Services Authority;
dissolution financial report audited by an Accountant registered with the Financial Services Authority; and
deed of mutual fund dissolution from a Notary registered with the Financial Services Authority.
Between Article 50 and Article 51, 2 (two) articles are inserted, namely Article 50A and Article 50B, so that they read as follows:
Article 50A
(1) Proportional calculation of the Net Asset Value at the time of:
a. dissolution as referred to in Article 46 and Article 47; or b. completion of liquidation as referred to in Article 48 and Article 49, is based on the number of Units held by the Unit holder.
(2) Payment of funds or assets from liquidation to Unit holders of a Collective Investment Contract Mutual Fund is based on the results of liquidation conducted by the Investment Manager.
Article 50B
Payment of assets from liquidation to Unit holders of a Collective Investment Contract Mutual Fund as referred to in Article 46 letter b, Article 47 paragraph (1) letter b number 1, Article 48 letter b, Article 49 letter b, and Article 50A paragraph (2) can only be conducted under the following conditions:
a. The Stock Exchange or market organizer where most of the mutual fund's portfolio securities are traded is closed; b. trading of securities from most of the mutual fund's portfolio securities at the Stock Exchange or market organizer is halted or their listing is cancelled;
c. emergency conditions;
d. The Securities Price Appraisal Agency does not issue Fair Market Price references; e. restructuring of Debt-like Securities and/or sukuk by the issuer of Debt-like Securities and/or sukuk; f. downgrade of the rating of Debt-like Securities and/or sukuk from most or all of the investment portfolio to non-investment grade; g. fulfillment of statutory regulations; and/or h. other conditions and matters stipulated in the investment management contract.
After Part Two of Chapter III, 1 (one) part is added, namely Part Three, so that it reads as follows:
Part Three
Application of Multi-Class Features on Mutual Funds
Between Article 67 and Article 68, 2 (two) articles are inserted, namely Article 67A and Article 67B, so that they read as follows:
Article 67A
(1) The application of multi-class features applies to open-end mutual funds and can only be conducted on mutual funds with the same investment policy and asset pool.
(2) The distribution of multi-class features in one mutual fund can only be done based on administrative distinguishing features.
(3) The distribution of multi-class features in a mutual fund must be disclosed in the Collective Investment Contract and Prospectus and submitted to the Financial Services Authority.
(4) In the event that an Investment Manager applies multi-class features, the Investment Manager must:
a. uphold the principles of transparency and openness of the features, costs, risks, and other matters related to the application of multi-class features in one mutual fund; b. have adequate risk mitigation to avoid systematic risks between classes in the same mutual fund;
c. register each class established in the mutual fund into the integrated investment management system;
d. provide socialization and education to customers regarding the application of multi-class features on the mutual fund managed by them; and e. provide information openness regarding each class available to investors at the time of marketing. (5) The Custodian Bank administering a mutual fund applying multi-class features must:
a. have adequate systems to record and administer mutual funds applying multi-class features; b. calculate the Net Asset Value of each class established in the mutual fund, paying attention to applicable statutory regulations; and
c. prepare the mutual fund's financial report based on generally accepted accounting principles and disclose the financial conditions of each class established in the mutual fund.
Article 67B
In the event that the application of multi-class features is conducted on an open-end mutual fund whose Registration Statement has obtained an effective statement from the Financial Services Authority, the Investment Manager must amend the Collective Investment Contract and Prospectus of the mutual fund through the mechanism regulated in Article 67.
After Part Three of Chapter III, 1 (one) part is added, namely Part Four, so that it reads as follows:
Part Four
Relaxation and Restructuring Due to Downgrading of Debt-like Securities in the Portfolio of Protected Mutual Funds and Limited Participation Collective Investment Contract Mutual Funds
Between Article 67B and Article 68, 5 (five) articles are inserted, namely Article 67C, Article 67D, Article 67E, Article 67F, and Article 67G, so that they read as follows:
Article 67C
(1) In the event of a downgrade in the rating of Debt-like Securities and/or corporate sukuk in the portfolio of Limited Participation Collective Investment Contract Mutual Funds to a rating below BBB- or equivalent issued by a rating agency, or in a rating outside the investment-eligible category, the Investment Manager may request relaxation of the time limit for fulfilling guarantees on investments in Limited Participation Collective Investment Contract Mutual Funds in Debt-like Securities and/or corporate sukuk to the Financial Services Authority, provided that:
a. a follow-up plan and time limit for fulfilling guarantee obligations from the target company are submitted; and b. good faith and professionalism are maintained for the benefit of investors to formulate steps to fulfill guarantees on Debt-like Securities and/or corporate sukuk in the portfolio of Limited Participation Collective Investment Contract Mutual Funds. (2) In the event that after the guarantee fulfillment mechanism as referred to in paragraph (1), there is an option to restructure Debt-like Securities and/or corporate sukuk in the portfolio of Limited Participation Collective Investment Contract Mutual Funds, the Investment Manager must:
a. submit a restructuring plan for Debt-like Securities and/or corporate sukuk in the portfolio of Limited Participation Collective Investment Contract Mutual Funds to the Financial Services Authority no later than 10 (ten) working days since the option from the target company exists; b. obtain approval from Unit holders through a general meeting of Unit holders regarding the restructuring plan for Debt-like Securities and/or corporate sukuk in the portfolio of Limited Participation Collective Investment Contract Mutual Funds;
c. amend the Collective Investment Contract and disclosure documents of Limited Participation Collective Investment Contract Mutual Funds; and
d. submit documents related to the restructuring of Debt-like Securities and/or corporate sukuk in the portfolio of Limited Participation Collective Investment Contract Mutual Funds to the Financial Services Authority no later than 10 (ten) working days before the restructuring is conducted, with document completeness the same as documents submitted during the listing application for Limited Participation Collective Investment Contract Mutual Funds, adjusted in relation to the restructuring of securities.
Article 67D
Investment Managers managing Limited Participation Collective Investment Contract Mutual Funds undergoing restructuring as referred to in Article 67C paragraph (2) must:
a. maintain good faith and professionalism for the benefit of investors by conducting periodic monitoring of the performance of Debt-like Securities and/or corporate sukuk in the restructuring that becomes the investment portfolio of Limited Participation Collective Investment Contract Mutual Funds; b. take the best necessary steps to maintain the interests of Unit holders of Limited Participation Collective Investment Contract Mutual Funds in the restructuring, accompanied by rational analysis and considerations in accordance with statutory regulations;
c. conduct periodic communication with Unit holders regarding the conditions and development of Limited Participation Collective Investment Contract Mutual Funds in the restructuring; and
d. resolve complaints from Unit holders of Limited Participation Collective Investment Contract Mutual Funds in the restructuring.
Article 67E
(1) In the event that the portfolio of securities consists of Debt-like Securities, including cash flow-secured asset-backed securities as the basis for protection of Protected Mutual Funds, experiencing a downgrade below BBB- or equivalent issued by a rating agency, or in a rating outside the investment-eligible category, the Investment Manager may request relaxation of the time limit for replacing portfolio securities to the Financial Services Authority, provided that:
a. a follow-up plan for resolving and/or restructuring the portfolio of securities that serves as the basis for protection in Protected Mutual Funds is submitted; and b. good faith and professionalism are maintained for the benefit of investors to formulate steps for resolving and/or restructuring the portfolio of securities that serves as the basis for protection in Protected Mutual Funds. (2) In the event that there is a restructuring plan for Debt-like Securities and/or corporate sukuk in the portfolio of Protected Mutual Funds after the mechanism as referred to in paragraph (1), the Investment Manager must:
a. submit a restructuring plan for Debt-like Securities and/or corporate sukuk in the portfolio of Protected Mutual Funds to the Financial Services Authority; b. notify Unit holders regarding the restructuring plan for Debt-like Securities and/or corporate sukuk in the portfolio of Protected Mutual Funds; and
c. amend the Collective Investment Contract and Prospectus of the mutual fund in accordance with the provisions of Article 67.
Article 67F
Investment Managers managing Protected Mutual Funds undergoing restructuring as referred to in Article 67E must:
a. maintain good faith and professionalism for the benefit of investors by conducting periodic monitoring of the performance of Debt-like Securities and/or corporate sukuk in the restructuring that becomes the investment portfolio of Protected Mutual Funds; b. take the best necessary steps to maintain the interests of Unit holders of Protected Mutual Funds in the restructuring, accompanied by rational analysis and considerations in accordance with statutory regulations;
c. conduct periodic communication with Unit holders regarding the conditions and development of Protected Mutual Funds in the restructuring;
d. resolve complaints from Unit holders of Protected Mutual Funds in the restructuring; e. change the name of the mutual fund by adding the word "restructuring" to the name of the Protected Mutual Fund; and f. add a General Meeting of Unit holders mechanism to the Collective Investment Contract and Prospectus of Protected Mutual Funds undergoing restructuring as a means of decision-making for Unit holders.
Article 67G
(1) In processing the Investment Manager's request for relaxation and restructuring as referred to in Article 67C, Article 67D, Article 67E, and Article 67F, the Financial Services Authority:
a. reviews the data and information in the request documents; b. requests the parties to present; and/or
c. requests changes and/or additional information regarding the completeness of documents submitted.
(2) The Financial Services Authority may approve or reject the Investment Manager's request regarding relaxation and restructuring as referred to in Article 67C, Article 67D, and Article 67F.
(3) Upon the Investment Manager's request regarding relaxation and restructuring as referred to in Article 67C, Article 67D, Article 67E, and Article 67F, the Financial Services Authority provides a response within a time limit of no later than 45 (forty-five) stock exchange days. (4) The response as referred to in paragraph (3) may be:
a. approval; b. rejection; or
c. confirmation of follow-up requests to meet requirements.
The provisions of Article 76 are amended to read as follows:
Article 76
(1) Every party violating the provisions as referred to in Article 2, Article 3, Article 4, Article 5 paragraph (2), paragraph (3), paragraph (4), Article 6 paragraph (1), Article 7, Article 8, Article 9, Article 10, Article 11, Article 12, Article 13, Article 14 paragraph (1), paragraph (2), Article 15, Article 15A letter b, letter d, and letter f, Article 16, Article 17 paragraph (1), Article 19 paragraph (3), Article 20 paragraph (2), Article 21, Article 22 paragraph (1), Article 23 paragraph (4), Article 24A paragraph (4), Article 25 paragraph (2), paragraph (4), Article 26, Article 27, Article 28 paragraph (1), paragraph (2), Article 29 paragraph (1), Article 31 paragraph (2), Article 34 paragraph (3), paragraph (4), Article 35 paragraph (2), paragraph (3), paragraph (4), paragraph (5), paragraph (6), Article 37 paragraph (4), Article 38, Article 39, Article 41, Article 42, Article 43 paragraph (1), paragraph (3), paragraph (4), paragraph (5), Article 44 paragraph (1), paragraph (3), Article 45, Article 46, Article 47 paragraph (1) and paragraph (2) letter a, Article 48, Article 49, Article 52 paragraph (3), Article 56, Article 57, Article 58, Article 64, Article 65, Article 66, Article 67, Article 67A paragraph (3), paragraph (4), paragraph (5), Article 67B, Article 67D, Article 67E paragraph (2), Article 67F, Article 68, Article 71 paragraph (2), and paragraph (4), Article 73, are subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) are also imposed on parties causing the 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. fines, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business licenses; f. cancellation of approvals; and/or g. cancellation of registration.
(5) Administrative sanctions as referred to in paragraph (4) letter b, letter c, letter d, letter e, letter f, or letter g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of fines 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) letter c, letter d, letter e, letter f, or letter g. (7) The procedure for imposing sanctions as referred to in paragraph (3) is carried out in accordance with statutory regulations.
Article II
Accounts in the name of Unit holders of Collective Investment Contract Mutual Funds in the form of Investor Fund Unit Accounts may be used after the Settlement and Custody Institution provides Investor Fund Unit Account infrastructure.
Requests for relaxation and restructuring due to downgrading of Debt-like Securities in the portfolio of Protected Mutual Funds and Limited Participation Collective Investment Contract Mutual Funds that have been submitted to the Financial Services Authority before this Financial Services Authority Regulation takes effect, are processed based on the provisions of Financial Services Authority Circular Letter Number 19/SEOJK.04/2021 concerning Stimulus and Relaxation Policies Related to Investment Management in Maintaining Performance and Capital Market Stability Due to the Spread of Corona Virus Disease 2019.
Requests for mutual fund dissolution that have been submitted to the Financial Services Authority before this Financial Services Authority Regulation takes effect, are processed based on the provisions of Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contract Mutual Funds as amended by Financial Services Authority Regulation Number 2/POJK.04/2020 concerning Amendment to Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contract Mutual Funds and Financial Services Authority Circular Letter Number 19/SEOJK.04/2021 concerning Stimulus and Relaxation Policies Related to Investment Management in Maintaining Performance and Capital Market Stability Due to the Spread of Corona Virus Disease 2019.
Provisions regarding reporting of open-end mutual funds as referred to in Article 8 of Financial Services Authority Regulation Number 56/POJK.04/2020 concerning Reporting and Accounting Guidelines for Mutual Funds (State Gazette of the Republic of Indonesia Year 2020 Number 280, Supplement to the State Gazette of the Republic of Indonesia Number 6593) are declared invalid for Collective Investment Contract Mutual Funds.
This Financial Services Authority Regulation takes effect on the date of enactment.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja
To ensure that everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Established in Jakarta on March 30, 2023
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
MAHENDRA SIREGAR
Enacted in Jakarta on March 31, 2023
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2023 NUMBER 7/OJK

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 4 OF 2023
CONCERNING
THE SECOND AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 23/POJK.04/2016 CONCERNING COLLECTIVE INVESTMENT CONTRACTS IN THE FORM OF MUTUAL FUNDS

I. GENERAL

Mutual Funds remain one of the investment alternatives favored by the investing public. In addition to the hope that Mutual Funds can provide investment returns, they are also expected to be a safe investment alternative for investors.

However, with the rapid growth of Mutual Funds, there are strategic issues that have not yet been regulated, and there are provisions in the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contracts in the Form of Mutual Funds, as amended by the Financial Services Authority Regulation Number 2/POJK.04/2020 concerning the Amendment to the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contracts in the Form of Mutual Funds, that are no longer aligned with the needs and developments of the Capital Market.

In light of this, the Financial Services Authority establishes this Financial Services Authority Regulation, which constitutes an amendment to the Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contracts in the Form of Mutual Funds, covering the settlement of Mutual Funds through in-kind redemption, standards for applying "share class," the calculation of Net Asset Value for Mutual Funds based on Foreign Securities, and an electronic payment system in the form of virtual accounts.

II. ARTICLE-BY-ARTICLE EXPLANATION

Article I

Number 1

Article 15A

The term "Mutual Fund based on Foreign Securities" refers to Mutual Funds based on Foreign Securities in both conventional and Shariah forms.

Number 2

Article 22

Paragraph (1)

It is clear enough.

Paragraph (2)

Letter a

It is clear enough.

Letter b

It is clear enough.

Letter c

It is clear enough.

Letter d

It is clear enough.

Letter e

It is clear enough.

Letter f

The term "other accounts" refers to accounts adjusted to the development of the payment system.

Number 3

Article 24A

Paragraph (1)

Repurchase with an asset transfer mechanism is known as in-kind redemption.

Letter a

It is clear enough.

Letter b

It is clear enough.

Letter c

It is clear enough.

Letter d

It is clear enough.

Letter e

The term "emergency situation" refers to a force majeure condition beyond the control of the Parties, resulting from, among other things, war, natural disasters such as earthquakes or floods, strikes, sabotage or riots, a sudden (crash) decline in the price of Securities listed on the Stock Exchange that is large and material in nature, or failure of the trading or transaction settlement system.

Letter f

It is clear enough.

Letter g

It is clear enough.

Letter h

It is clear enough.

Letter i

It is clear enough.

Letter j

It is clear enough.

Paragraph (2)

It is clear enough.

Paragraph (3)

It is clear enough.

Paragraph (4)

It is clear enough.

Number 4

Article 28

Paragraph (1)

The submission of letters or written proof of ownership of Mutual Fund Units in the form of Collective Investment Contracts directly to Unit holders, including through account statements showing ownership of the relevant Mutual Fund Units at the Custodian Bank.

Paragraph (2)

It is clear enough.

Paragraph (3)

It is clear enough.

Paragraph (4)

It is clear enough.

Number 5

Article 29

It is clear enough.

Number 6

Article 37

Paragraph (1)

The electronic payment system referred to in this paragraph includes, among others, Mandiri Cash Machines (ATM), internet banking, and mobile banking.

The debiting referred to in this paragraph can be done periodically.

Periodic Mutual Fund investment is better known as Installment.

Paragraph (2)

Examples of electronic payments referred to in this paragraph include, among others, payment via electronic money.

Paragraph (3)

This provision is intended to facilitate the purchase of Mutual Funds by investors who conduct Mutual Fund transactions electronically.

Letter a

Payment gateway service providers are better known as payment gateways.

Letter b

It is clear enough.

Paragraph (4)

It is clear enough.

Paragraph (5)

It is clear enough.

Paragraph (6)

It is clear enough.

Paragraph (7)

It is clear enough.

Paragraph (8)

It is clear enough.

Paragraph (9)

It is clear enough.

Number 7

Article 45

It is clear enough.

Number 8

Article 46

Letter a

Announcements in daily newspapers in the Indonesian language circulated nationally can be made in print or electronic media formats.

Letter b

It is clear enough.

Letter c

It is clear enough.

Number 9

Article 47

Paragraph (1)

Letter a

Announcements in daily newspapers in the Indonesian language circulated nationally can be made in print or electronic media formats.

Letter b

It is clear enough.

Letter c

It is clear enough.

Paragraph (2)

It is clear enough.

Number 10

Article 48

It is clear enough.

Number 11

Article 49

It is clear enough.

Number 12

Article 50A

Paragraph (1)

"Net Asset Value" refers to the total Net Asset Value.

Paragraph (2)

In the liquidation process conducted by the Investment Manager, it is still possible for gains or losses from the sale of Securities in the portfolio of the Mutual Fund being liquidated to occur and become part of events after the reporting period in the Notes to the Financial Statements during the liquidation period.

Article 50B

It is clear enough.

Number 13

It is clear enough.

Number 14

Article 67A

Paragraph (1)

The multi-class feature is known as the share class.

Paragraph (2)

Administrative multi-class differentiation features include, among others:

a. fee amounts;

b. investment return distribution patterns; and

c. minimum purchase and/or sale amounts of Mutual Fund Units.

Paragraph (3)

It is clear enough.

Paragraph (4)

Letter a

It is clear enough.

Letter b

It is clear enough.

Letter c

Integrated investment management systems are known as S-INVEST.

Letter d

It is clear enough.

Letter e

It is clear enough.

Paragraph (5)

It is clear enough.

Article 67B

It is clear enough.

Number 15

It is clear enough.

Number 16

Article 67C

It is clear enough.

Article 67D

Letter a

It is clear enough.

Letter b

Examples of best efforts by the Investment Manager to protect the interests of holders of Limited Participation Units in Collective Investment Contracts in the form of Limited Participation include, among others, fulfilling the accountability of the Investment Manager's performance of duties and responsibilities over managed funds (stewardship principle) in accordance with Financial Services Authority Regulations concerning the Implementation of Investment Manager Governance, negotiating with Target Companies so that Unit holders obtain the best resolution (win-win solution), requesting additional collateral or changes to specific financial conditions in agreements (financial covenants), or taking legal action (if necessary). Rational considerations in this provision must take into account provisions related to rational reasons as referred to in Financial Services Authority Regulations concerning the Investment Manager Code of Conduct.

Letter c

Periodic communication in this provision can be done, among others, via written letters, electronic mail, and/or other media.

Letter d

It is clear enough.

Article 67E

It is clear enough.

Article 67F

Letter a

It is clear enough.

Letter b

Examples of best efforts by the Investment Manager to protect the interests of Protected Mutual Fund Unit holders include, among others, fulfilling the accountability of the Investment Manager's performance of duties and responsibilities over managed funds (stewardship principle) in accordance with Financial Services Authority Regulations concerning the Implementation of Investment Manager Governance, requesting additional collateral or changes to specific financial conditions in agreements (financial covenants) in general meetings of holders of Debt-Character Securities and/or corporate sukuk, or taking legal action (if necessary). Rational considerations in this provision must take into account provisions related to rational reasons as referred to in Financial Services Authority Regulations concerning the Investment Manager Code of Conduct.

Letter c

Periodic communication in this provision can be done, among others, via written letters, electronic mail, and/or other media.

Letter d

It is clear enough.

Letter e

It is clear enough.

Letter f

It is clear enough.

Article 67G

It is clear enough.

Number 17

Article 76

It is clear enough.

Article II

It is clear enough.

ADDITION TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 32/OJK

Second Amendment to Financial Services Authority Regulation Number 23/POJK.04/2016 on Collective Investment Trust Mutual Funds

Lineage: Amended

Timeline