SEOJK Regarding Criteria for Written Statements by the Financial Services Authority and Procedures for Determining the Value of Lost Investor Assets in the Use of Investor Protection Funds

To:

1. Board of Directors of PT Investor Protection Program Organizer;
2. Board of Directors of Securities Companies;
3. Board of Directors of Custodian Banks;
4. Board of Directors of PT Indonesia Stock Exchange;
5. Board of Directors of PT Indonesia Clearing and Guarantee;
6. Board of Directors of PT Indonesia Central Securities Depository
   at their respective locations.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 18/SEOJK.04/2013

REGARDING
CRITERIA FOR WRITTEN STATEMENTS BY THE FINANCIAL SERVICES AUTHORITY AND PROCEDURES FOR DETERMINING THE VALUE OF LOST INVESTOR ASSETS, IN THE CONTEXT OF THE USE OF INVESTOR PROTECTION FUNDS

In view of the provisions of point 18 and point 20 of Regulation Number VI.A.4 regarding Investor Protection Funds, Appendix of the Decision of the Chairman of Bapepam and LK Number Kep-715/BL/2012 dated December 28, 2012, and considering the provisions of Article 70 of Law Number 21 of 2011 regarding the Financial Services Authority, it is necessary to regulate the implementation regarding the criteria for written statements by the Financial Services Authority and the procedures for determining the value of lost investor assets, in the context of the use of Investor Protection Funds, in the Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

1. In this Circular Letter of the Financial Services Authority, the following terms are defined:
   a. Financial Services Authority, hereinafter abbreviated as OJK, is the Financial Services Authority as referred to in Law Number 21 of 2011 regarding the Financial Services Authority. b. Written Statement is a letter issued by OJK to the Investor Protection Fund Manager stating that:
   1) there is a loss of Investor Assets;
   2) the Custodian does not have the ability to return the lost Investor Assets; and
   3) for Custodians that are Securities Trading Intermediaries administering Securities, it is stated that they are unable to continue their business activities and their business license is considered for revocation by OJK; or
   4) for Custodian Banks, it is stated that they are unable to continue their business activities as Custodian Banks and their approval as a General Bank acting as a Custodian is considered for revocation by OJK.
   c. Investor Assets are Securities and other assets related to Securities, and/or funds belonging to Investors deposited with the Custodian.
   d. Investor Protection Fund is a collection of funds established to protect Investors from the loss of Investor Assets. e. Investor is a customer of a Securities Trading Intermediary administering the customer's Securities account and a Custodian Bank. f. Investor Protection Fund Manager, hereinafter abbreviated as PDPP, is a Company that has obtained a business license from OJK to manage and administer the Investor Protection Fund.

2. The handling of Investor claims by the PDPP is conducted after the issuance of a written statement by OJK.

3. Provisions regarding the procedures for issuing the Written Statement are regulated by a Circular Letter of the OJK Board of Commissioners.

II. CRITERIA FOR WRITTEN STATEMENTS

1. The Criteria for Written Statements are the criteria for the elements of the Written Statement as referred to in point 17 letter a of Regulation Number VI.A.4, which must be met in issuing the Written Statement.

2. The criteria for the element of loss of Investor Assets are:
   a. Investor Securities held in the Sub-Securities Account at the Depository and Clearing Institution do not show the same type and/or show a quantity less than what the Investor should own; and/or b. funds recorded in the Customer Funds Account at the bank in the name of the Investor are less than what the Investor should own.

3. The fulfillment or non-fulfillment of the criteria as referred to in point 2 must be based on the results of an examination supported by available evidence, including but not limited to:
   a. Securities account reports and confirmations sent by the Custodian to the Investor; b. books and records owned by the Custodian, with the provisions:
   1) Custodian books and records must be in the form specified in OJK regulations; and
   2) Custodian books and records must be supported by an internal control system as specified in OJK regulations;
   c. books and records owned by the Investor;
   d. recordings of conversations between the Custodian's representative and the Investor; e. statements and official announcements by the Issuer; f. records and documents owned by other Custodians, the Depository and Clearing Institution, the Clearing and Guarantee Institution, and the Stock Exchange; g. Bank account records; and/or h. testimony from certain parties.

4. The criteria for the element that the Custodian does not have the ability to return the lost Investor Assets are:
   a. the financial condition of the Custodian cannot meet the obligation to return Investor Assets; or b. the financial condition of the Custodian cannot meet the obligation to return Investor Assets and the Custodian is unable to meet the commitment to return the lost Investor Assets.

5. The criteria for the element related to the Custodian being a Securities Trading Intermediary administering Securities, stated to be unable to continue business activities and having its license considered for revocation by OJK, are conditions where, based on OJK supervision results, the Custodian cannot perform its functions and its business license is worthy and appropriate to be revoked.

6. The criteria for the element related to the Custodian being a Custodian Bank, stated to be unable to continue business activities and having its General Bank approval as a Custodian considered for revocation by OJK, are conditions where, based on OJK supervision results, the Custodian Bank cannot perform its functions and its approval is worthy and appropriate to be revoked.

III. PROCEDURES FOR DETERMINING THE VALUE OF LOST INVESTOR ASSETS

1. The claim verification team formed by the PDPP must determine the value of the lost Investor Assets to be reported to the claims committee.

2. The claim verification team determines the value of lost Investor Assets based on the following matters:
   a. If the lost Investor Assets are Securities, the determination of the value of Investor Assets is as follows:
   1) If the Securities are Equity Securities and/or other Securities listed on the Stock Exchange other than Debt Securities and/or Sukuk, the determination of their value is based on the quantity of Securities lost multiplied by the average price of the closing price of the Securities on the trading day, and there are transactions over the Securities in the last 6 (six) months prior to the date of issuance of the Written Statement.
   2) If the Securities as referred to in point 1) have no transactions in the last 6 months prior to the date of issuance of the Written Statement, the determination of their value is based on the fair value calculation method for Securities determined by the PDPP.
   3) If the Securities are Debt Securities and/or Sukuk and the Securities Pricing Institution publishes their fair market price, the determination of their value is based on the quantity of Securities lost multiplied by the average price of the fair market price determined by the Securities Pricing Institution in the last 6 (six) months prior to the date of issuance of the Written Statement.
   4) If the Securities as referred to in point 3) have fair market prices not published by the Securities Pricing Institution, the determination of their value is based on the fair market price determined by the PDPP.
   5) If the lost Investor Assets are Securities other than Securities as referred to in point 1) and point 3), the determination of their value is based on the fair value calculation method for Securities determined by the PDPP.
   b. In the event that there are lost Investor Assets in the form of funds, the determination of their value is equal to the amount of funds lost.

3. Compensation payments using the Investor Protection Fund may be made for the loss of Investor Assets occurring since the Custodian became a member of the Investor Protection Fund.

IV. CLOSING

The provisions in this Circular Letter of the Financial Services Authority shall take effect as of the date of issuance.

To ensure that everyone knows, order the announcement of this Circular Letter of the Financial Services Authority by placing it in the State Gazette of the Republic of Indonesia.

A copy consistent with the original,
Head of Legal Assistance Division
Financial Services Authority
Signed,
Mufli Asmawidjaja

Established in Jakarta on December 31, 2013

EXECUTIVE HEAD OF MARKET SUPERVISOR
Signed,
NURHAIDA

STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 2 DATED JANUARY 7, 2014