Self-Assessment of Compliance with Consumer and Community Protection Provisions in the Financial Services Sector

To: Directors or Management of Financial Services Business Actors, Attn.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY OF THE REPUBLIC OF INDONESIA NUMBER 18/SEOJK.08/2024

CONCERNING

SELF-ASSESSMENT OF COMPLIANCE WITH CONSUMER AND COMMUNITY PROTECTION PROVISIONS IN THE FINANCIAL SERVICES SECTOR

In relation to the mandate of Article 87 paragraph (4) of Financial Services Authority Regulation Number 22 of 2023 concerning Consumer and Community Protection in the Financial Services Sector (State Gazette of the Republic of Indonesia Year 2023 Number 40/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 62/OJK) and the need of Financial Services Business Actors for implementation guidelines regarding self-assessment of compliance with consumer and community protection provisions in the financial services sector, it is necessary to further regulate provisions regarding self-assessment of compliance with consumer and community protection provisions in the financial services sector in this Financial Services Authority Circular as follows:

I. GENERAL PROVISIONS

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

1. Financial Institution (LJK) is an institution that carries out activities in the banking, capital market, insurance, pension fund, venture capital, microfinance institution, financing institution, and other financial services institutions sectors.

2. Financial Services Business Actor (PUJK) is: a. LJK and/or parties carrying out business activities for fundraising, lending, and/or managing funds in the financial services sector; and b. other financial services business actors, both those carrying out business activities on a conventional basis and those based on Sharia principles in accordance with applicable laws and regulations in the financial services sector.

3. Consumer is every person who owns and/or utilizes products and/or services provided by PUJK.

4. Consumer Protection is all efforts to ensure legal certainty to provide protection to Consumers.

5. Self-Assessment is the process of measuring compliance with consumer and community protection provisions in the financial services sector through the completion of worksheets by PUJK.

6. Worksheet is a standard form or format filled out by PUJK as a Self-Assessment of compliance with provisions regarding Consumer and Community Protection in the financial services sector.

II. FORM AND COMPOSITION OF THE SELF-ASSESSMENT RESULT REPORT

1. PUJK conducts a Self-Assessment of compliance with consumer and community protection provisions in the financial services sector and submits the Self-Assessment result report to the Financial Services Authority.

2. PUJK conducts identification, measurement, and analysis of the Self-Assessment adequately and in accordance with actual conditions.

3. The Self-Assessment result report as referred to in item 1 includes an assessment of Consumer and Community Protection principles, which is carried out by filling out: a. General Worksheet on compliance with Consumer and Community Protection provisions; b. Worksheet on the implementation of activities to increase financial literacy and inclusion for Consumers and the community; c. Worksheet on consumer data and information protection; d. Worksheet on product and service design; e. Worksheet on the provision and dissemination of product and service information; f. Worksheet on product and service marketing; g. Worksheet on the preparation of agreements related to products and services; h. Worksheet on the provision of services for the use of products and services; and i. Worksheet on handling complaints and dispute resolution for products and services.

4. The Self-Assessment result report as referred to in item 3 is prepared by referring to the standard format and technical guidelines as contained in the Appendix, which is an inseparable part of this Financial Services Authority Circular.

5. The Worksheet on the implementation of activities to increase financial literacy and inclusion for Consumers and the community as referred to in item 3 letter b for private insurance companies is prepared by referring to the standard format and technical guidelines as per Worksheet 2.1 contained in the Appendix, which is an inseparable part of this Financial Services Authority Circular.

6. In the event that there are PUJK products and/or services marketed after PUJK submits the Self-Assessment result report in the current year and meet the criteria: a. offered by PUJK for the first time; or b. product and/or service development that results in material changes to products and/or services previously offered, the submission of the Worksheet on product and service design related to the product and service is submitted as per Worksheet 3 contained in the Appendix, which is an inseparable part of this Financial Services Authority Circular, in the submission period of the Self-Assessment for the following year in accordance with the submission timeframe for the Self-Assessment result report.

Example: a. If PUJK has a product and/or service offered for the first time in November 2024, then the completion of compliance provisions in the Worksheet on product and service design must be submitted no later than September 30, 2025. b. Material changes to product and/or service design in insurance products include, among others:

1. risks covered, including exclusions or restrictions on covered risk causes; and
2. cash value calculation methods.

7. In the implementation of the Self-Assessment, PUJK submits data and/or information that includes reports and/or supporting documents as contained in the Appendix, which is an inseparable part of this Financial Services Authority Circular.

8. PUJK documents the reports and/or supporting documents as referred to in item 7.

9. PUJK is responsible for the truthfulness and completeness of the content of the Self-Assessment result report, which includes: a. consistency between the conditions reported through the Self-Assessment and the actual conditions during the reporting period; b. currency of matters reported through the Self-Assessment; and c. accuracy of data and/or information in the Self-Assessment result report submitted to the Financial Services Authority.

10. PUJK has a reporting mechanism to the Board of Directors for compliance with the submission of the Self-Assessment result report.

III. SUBMISSION OF THE SELF-ASSESSMENT RESULT REPORT

1. PUJK submits the Self-Assessment result report to the Financial Services Authority once every 1 (one) year no later than September 30 of the current year.

2. In the event that September 30 as referred to in item 1 falls on a Saturday, Sunday, or public holiday, the Self-Assessment result report is submitted on the next 1 (one) working day.

IV. RESPONSIBILITY FOR THE REPORT

PUJK designates one of the Board of Directors members responsible for the preparation and presentation of the Self-Assessment result report in accordance with PUJK's internal policies.

V. PROCEDURES FOR SUBMISSION OF THE SELF-ASSESSMENT RESULT REPORT

1. Submission of the Self-Assessment result report a. The submission of the Self-Assessment result report is sent to the Financial Services Authority c.q. the Executive Head of Supervision of Financial Services Business Actor Behavior, Education, and Consumer Protection. b. The submission of the Self-Assessment result report is conducted online (daring) through the electronic reporting system for PUJK behavior supervision, education, and consumer protection provided by the Financial Services Authority. c. In the event that the electronic reporting system as referred to in letter b experiences a disturbance, the Financial Services Authority informs the occurrence of the disturbance through:

1. the electronic reporting system;
2. email to PUJK that has access to the electronic reporting system as referred to in letter b; or
3. letter to PUJK. d. In the event that the Financial Services Authority has conveyed information about the occurrence of a disturbance through the mechanism as referred to in letter c, the Financial Services Authority may convey the information through the Financial Services Authority website. e. In the event that the electronic reporting system as referred to in letter b experiences a disturbance, PUJK submits the report online via the official email of PUJK to the Financial Services Authority, accompanied by a digital copy or scanned copy of the cover letter signed by one of the Board of Directors members responsible for the preparation and presentation of the Self-Assessment result report. f. The online submission of the report as referred to in letter e is sent to the official email address of the Financial Services Authority designated by the Financial Services Authority. g. In the event that the electronic reporting system provided by the Financial Services Authority as referred to in letter b and the official email address of the Financial Services Authority as referred to in letter f experience a disturbance, the submission of the report is conducted offline (luring) in the form of an electronic copy (softcopy) stored in hardware, such as compact discs, flash drives, and other storage media, accompanied by a cover letter signed by one of the Board of Directors members responsible for the preparation and presentation of the Self-Assessment result report. h. The offline submission of the report as referred to in letter g is conducted through the following mechanisms:
4. handed in directly to the Financial Services Authority office; or
5. sent via a courier service company. i. The offline submission of the report as referred to in letter g is sent to:
6. Executive Head of Supervision of Financial Services Business Actor Behavior, Education, and Consumer Protection Financial Services Authority u.p. Head of the Department of Supervision of Financial Services Business Actor Behavior Soemitro Djojohadikusumo Building, 7th Floor, Jl. Lapangan Banteng Timur No. 2-4, Central Jakarta; or u.p. Head of the Financial Services Authority Office Wisma Mulia 2, 25th Floor Jl. Jenderal Gatot Subroto Kav-42, Jakarta 12710, for PUJK whose headquarters or branch offices of PUJK located abroad are in the Special Capital Region of Jakarta Province and Banten Province; or
7. Executive Head of Supervision of Financial Services Business Actor Behavior, Education, and Consumer Protection Financial Services Authority u.p. Head of the Financial Services Authority Office according to the region where the PUJK's headquarters is located, for PUJK whose headquarters is located outside the Special Capital Region of Jakarta Province and Banten Province. j. PUJK that has submitted the Self-Assessment result report via:
8. email address; or
9. electronic copy (softcopy), due to electronic reporting system disturbances, has the obligation to resubmit the report via the electronic reporting system no later than 5 (five) working days after it is declared that the system disturbance has been resolved. k. The Financial Services Authority conveys notification that the system disturbance has been resolved through:
10. the electronic reporting system; and/or
11. email address to PUJK that has a user code. l. In the event that the Financial Services Authority has conveyed notification that the system disturbance has been resolved through the mechanism as referred to in letter k, the Financial Services Authority may convey the notification through the Financial Services Authority website. m. PUJK is deemed to have submitted the Self-Assessment result report to the Financial Services Authority with the following provisions:
12. for online submission via the electronic reporting system, proven by notification of the completion of report filling submitted via the electronic reporting system;
13. for online submission via the email address as referred to in letter e, proven by notification from the Financial Services Authority via email; or
14. for offline submission as referred to in letter g, proven by receipt from the Financial Services Authority. n. In the event of changes to the email address for online submission of the report as referred to in letter f and/or the Financial Services Authority office address for offline submission of the report as referred to in letter i, the Financial Services Authority will convey notification regarding the change of address via letter or announcement conveyed through:
15. the electronic reporting system;
16. the official email address of the Financial Services Authority to PUJK that has a user code; and/or
17. the Financial Services Authority website. o. In the event that PUJK exceeds the reporting deadline for the Self-Assessment and has not yet submitted the Self-Assessment result report, PUJK must still submit the Self-Assessment result report in the current year.

2. Electronic reporting system a. PUJK must have access to the electronic reporting system to submit the Self-Assessment result report as referred to in Section II item 1. b. PUJK submits a request to the Financial Services Authority stating the name, email address, and phone number of the Board of Directors member or PUJK employee to be granted access, to obtain access to the electronic reporting system as referred to in letter a. c. The PUJK request as referred to in letter b is submitted via the official email address of the Financial Services Authority designated by the Financial Services Authority. d. PUJK ensures periodically:

1. active users are Board of Directors members and/or employees who have authority and understand the completion of the Self-Assessment result report;
2. notifies the Financial Services Authority if there are changes in users and designates new users, subsequently the Financial Services Authority deactivates unused users;
3. maintains the confidentiality of the user codes and passwords provided; and
4. uses the provided user codes and passwords in accordance with regulations.

VI. CLOSING PROVISIONS

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

Established in Jakarta on December 10, 2024

EXECUTIVE HEAD OF SUPERVISION OF FINANCIAL SERVICES BUSINESS ACTOR BEHAVIOR, EDUCATION, AND CONSUMER PROTECTION FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA,

FRIDERICA WIDYASARI DEWI

s/s

APPENDIX CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY OF THE REPUBLIC OF INDONESIA NUMBER 18/SEOJK.08/2024 CONCERNING SELF-ASSESSMENT OF COMPLIANCE WITH CONSUMER AND COMMUNITY PROTECTION PROVISIONS IN THE FINANCIAL SERVICES SECTOR

No. SUBJECT

Legal Basis: PUJK must act in good faith in carrying out business activities and/or providing products and/or services to prospective Consumers and/or Consumers. (Article 4 paragraph (1) POJK Number 22 of 2023 concerning Consumer and Community Protection in the Financial Services Sector (PKM SJK))

1.KU.1 Has PUJK acted in good faith in carrying out its business activities? Guideline: SUPPORTING DOCUMENTS: Policies and/or procedures containing information on the obligation to implement good faith in carrying out PUJK business activities. EXPLANATION: What is meant by "acting in good faith," PUJK:

1. offers products and/or services by considering the suitability of Consumer needs and capabilities; and
2. carries out other activities in accordance with laws and regulations in the financial services sector, including recording activities for marketing products and/or services.

O Yes O No

Legal Basis: PUJK is required to treat or serve Consumers non-discriminatorily, unless otherwise determined by laws and regulations and/or agreements. (Article 4 paragraph (2) POJK Number 22 of 2023 concerning PKM SJK)

1.KU.2 Has PUJK applied non-discriminatory behavior towards Consumers in carrying out its business activities? Guideline: SUPPORTING DOCUMENTS: Policies and/or procedures containing information on the obligation to treat or serve Consumers non-discriminatorily. EXPLANATION: What is meant by "discriminatory" includes differential treatment among fellow citizens based on skin color, group, ethnicity, economy, and religion. What is meant by "discriminatory excluded in laws and regulations and/or agreements" is that not all products and/or services can be used by Consumers in general, but are intended for specific Consumer targets.

O Yes O No

Legal Basis: PUJK is required to ensure that third parties working for and/or representing PUJK interests treat or serve Consumers non-discriminatorily as referred to in paragraph (2). (Article 4 paragraph (3) POJK Number 22 of 2023 concerning PKM SJK)

1.KU.3 Has PUJK ensured that third parties working for and/or representing PUJK interests treat or serve Consumers non-discriminatorily? Guideline: SUPPORTING DOCUMENTS:

1. policies and/or procedures containing information on PUJK's obligation to ensure that third parties working for and/or representing PUJK interests treat or serve Consumers non-discriminatorily;
2. documents that can prove that third parties contain clauses stating they will treat or serve Consumers non-discriminatorily.

O Yes, All O Yes, Partially O No, Not At All

Legal Basis: Worksheet 1 General on Compliance with Consumer and Community Protection Provisions

PUJK is prohibited from carrying out actions that violate laws and regulations or norms applicable in society that can cause physical and/or psychological disturbance to prospective Consumers and/or Consumers in carrying out business activities. (Article 4 paragraph (4) POJK Number 22 of 2023 concerning PKM SJK)

1.KU.4 Has PUJK regulated regarding the prohibition of carrying out actions that violate laws and regulations or norms applicable in society that can cause physical and/or psychological disturbance to prospective Consumers and/or Consumers? Guideline: SUPPORTING DOCUMENTS:

1. Policies and/or procedures containing information on the prohibition of carrying out actions that violate laws and regulations or norms applicable in society that can cause physical and/or psychological disturbance to prospective Consumers and/or Consumers in carrying out business activities; or
2. Evidence showing actions that cause physical/psychological disturbance to Consumers. If there is any, it is assessed as Yes. EXPLANATION: What is meant by "norms applicable in society" includes norms of decency and morality. Examples of physical and/or psychological disturbance: prospective Consumers and/or Consumers experience pain, fall ill, suffer serious injuries, loss of self-confidence, fear, anxiety, loss of ability to act, and faint/powerlessness. Business activities include, among others, marketing and debt collection. Examples of actions that cause physical and/or psychological disturbance:
3. PUJK carries out the seizure of collateral in public spaces without prior Consumer consent;
4. PUJK disseminates information regarding the obligations of Consumers who are late in payments to contact numbers owned by the Consumer; and
5. PUJK uses threats and/or violence in marketing products and/or services.

O Yes O No

Legal Basis: PUJK is prohibited from approving requests for the use of products and/or services from parties carrying out business activities in the financial sector that do not have a license from the Financial Services Authority or the competent authority. (Article 5 paragraph (1) POJK Number 22 of 2023 concerning PKM SJK)

1.KU.5 Has PUJK regulated regarding the prohibition of approving requests for the use of products and/or services from parties carrying out business activities in the financial sector that do not have a license from the Financial Services Authority or the competent authority? Guideline: SUPPORTING DOCUMENTS: Policies and/or procedures regarding the prohibition of approving requests for the use of products and/or services from parties carrying out business activities in the financial sector that do not have a license from the Financial Services Authority or the competent authority. EXPLANATION: What is meant by "party" is an individual, company, joint venture, association, or organized group. Business activities in the financial sector include, among others: a. fundraising from the public and/or for distribution to the public; This provision is not intended to cover fundraising outside the financial sector, such as family arisan and fundraising for social purposes. b. issuance of securities offered to the public; Does not include capital increases without pre-emptive rights (private placement) and venture capital. c. provision of payment system products or services; and d. other activities that can be equated with fundraising, lending, fund management, intermediation in the financial sector, and provision of payment system products or services. Example of prohibited: PUJK approves requests for the use of products and/or services from parties carrying out illegal online lending business activities. What is meant by "competent authority" is Bank Indonesia.

O Yes O No

Legal Basis: PUJK in carrying out business activities is prohibited from cooperating with parties carrying out business activities in the financial sector that do not have a license. (Article 5 paragraph (2) POJK Number 22 of 2023 concerning PKM SJK)

1.KU.6 Does PUJK cooperate with parties carrying out business activities in the financial sector that do not have a license? Guideline: SUPPORTING DOCUMENTS: Policies and/or procedures containing information on the prohibition of cooperating with parties carrying out business activities in the financial sector that do not have a license. EXPLANATION: Example of prohibited: PUJK has cooperation with illegal online lending companies.

O Yes O No

Legal Basis: In the event that there are Consumers carrying out business activities in the financial sector that do not have a license, PUJK is required to report to the Financial Services Authority c.q. to: a. Executive Head of PUJK Behavior Supervision, Education and Consumer Protection c.q. the working unit in the Field of PUJK Behavior Supervision, Education and Consumer Protection; or b. Head of the Financial Services Authority Office in the region. (Article 5 paragraph (3) POJK Number 22 of 2023 concerning PKM SJK)

1.KU.7 Has PUJK regulated regarding the reporting of Consumers carrying out business activities in the financial sector that do not have a license to the Financial Services Authority in the event PUJK finds Consumers carrying out business activities in the financial sector that do not have a license? Guideline: SUPPORTING DOCUMENTS: Policies and/or procedures containing information on the obligation of PUJK to report Consumers carrying out business activities in the financial sector that do not have a license to the Financial Services Authority.

O Yes O No

Legal Basis: PUJK is required to have and apply written Consumer protection policies and procedures. Written Consumer protection policies and procedures exist in activities, consisting of: a. product and/or service design; (Article 8 paragraph (1) and paragraph (2) letter a PO

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