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Financial Services Authority (OJK) & Banking Regulations
Update
The following is a list of the new Financial Services Authority (OJK) & banking regulations.
All regulations are available in Indonesian.
Financial Services Authority (OJK) & Banking Regulations Update
KM No.9/September/2020 15 September 2020
New Financial Services Authority (OJK) Regulations
1. Regulation : 44/POJK.05/2020
Date : 2 September 2020
Title (Indonesian) : Penerapan manajemen risiko bagi lembaga jasa keuangan nonbank
Title (English) : Implementation of risk management for non-bank financial services institutions
Summary
Considering that Financial Services Authority Regulation number 1/POJK.05/2015 does not accommodate the development
of the legal need to improve the quality of risk management implementation for non-bank financial services institutions
(LJKNB), this regulation needs to be replaced. This regulation regulates the following provisions.
The objects regulated in this regulation are:
o Insurance companies, which consist of insurance companies, sharia insurance companies, reinsurance
companies, sharia reinsurance companies, insurance brokers, reinsurance brokers, and insurance loss
assessor companies;
o Pension funds and sharia pension funds; and
o Financing companies and sharia financing companies
LJKNB is obliged to implement effective risk management, which includes:
o Active supervision of the board of directors, board of commissioners and sharia supervisory board;
o Adequacy of risk management policies and procedures and determination of risk limits;
o Adequacy of identification process, measurement, control and risk monitoring, as well as risk management
information system; and
o Comprehensive internal control system.
The implementation of risk management in LJKNB must be adjusted to the objectives, business policies, size and
complexity of LJKNB's business.
Provisons regarding active supervision of the board of directors, board of commissioners, and sharia supervisory
board.
Provisions regarding the adequacy of risk management policies and procedures and determination of risk limits.
Provisions regarding the adequacy of the identification process, measurement, control and risk monitoring, as well
as the risk management information system,
Provisions regarding the comprehensive internal control system.
It is the LJKNB’s obligation to establish:
o Risk management committee; and
o Risk management function.
The risk management function must be independent towards the business and operational functions (risk taking
unit) and internal control functions.
It is mandatory for LJKNB to have policies and procedures that are written to manage the inherent risk in the
development or expansion of LJKNB’s business activities.
Special provisions include:
o In the event that LJKNB implement integrated risk management, the risk management function can be
incorporated into the structure of the related LJKNB financial conglomeration.
o Implementation of risk management for financial institution pension funds can be combined with the
implementation of risk management.
https://www.ojk.go.id/id/regulasi/Documents/Pages/Penerapan-Manajemen-Risiko-bagi-Lembaga-Jasa-Keuangan-Nonbank/pojk%2044-2020.pdf
The compliance enforcement towards Financial Services Authority Regulation regarding Risk Management can be
in the form of:
o Sanction in the form of written warning;
o Decreased soundness result; and/or
o Reassessment of the LJKNB main party.
2. Regulation : 18/SEOJK.05/2020
Date : 27 August 2020
Title (Indonesian) : Rencana bisnis perusahaan pembiayaan infrastruktur
Title (English) : Infrastructure financing company business plan
Summary
With the issuance of Financial Services Authority Regulation number 24/POJK.05/2019, it is necessary to regulate the scope
of the business plan, the form and structure of the business plan realization report, the form and structure of the business
plan supervision report, and the procedures for submitting business plans, adjusting business plans, changing business plans,
business plan realization report, and infrastructure financing company business plan supervision report. This regulation
regulates the following provisions.
The scope of the Business Plan, including for Infrastructure Financing Company that carries out part of their business
activities based on Sharia Principles (having a Sharia Business Unit), which at least contains:
o Executive summary;
o Evaluation of the implementation of the previous period's business plan;
o Vision, mission and business strategy;
o Management policies and policies and plans
o Financial report projection and assumptions used; certain ratios and items; and
o Other information.
Form and structure of the Business Plan Realization Report which includes an explanation of the achievement of
the Business Plan, follow-up to the achievement of the Business Plan, financial ratios and certain items and other
information.
Form and structure of the Business Plan Supervision Report, which includes the realization of the Business Plan,
both quantitatively and qualitatively; factors that affect the performance of the Infrastructure Financing Company;
and efforts to improve the performance of Infrastructure Financing Companies.
Procedures for submitting Business Plans, adjusting Business Plans, changing Business Plans, Business Plan
Realization Report, and Business Plan Supervisory Report must be done online through the Financial Services
Authority's data communication network system.
3. Regulation : 17/SEOJK.04/2020
Date : 9 August 2020
Title (Indonesian) : Pedoman penilaian dan penyajian laporan penilaian bisnis di pasar modal
Title (English) : Guidelines for assessment and presentation of business valuation report in the capital
market
Summary
https://www.ojk.go.id/id/regulasi/Documents/Pages/Rencana-Bisnis-Perusahaan-Pembiayaan-Infrastruktur/seojk%2018-2020.pdfhttps://www.ojk.go.id/id/regulasi/Documents/Pages/Pedoman-Penilaian-dan-Penyajian-Laporan-Penilaian-Bisnis-di-Pasar-Modal/seojk%2017-2020.pdf
With the issuance of Financial Services Authority Regulation number 35/POJK.04/2020, it is necessary to regulate provisions
regarding assessment guidelines and presentation of business assessment report in the Capital Market. This regulation
regulates the following provisions.
To carry out the Assessment of a business on the premise of Business Continuity where there is projection for a
fixed period of time and a period of eternal time, the Business Assessor needs to calculate the Terminal Value.
Terminal Value estimation is carried out in applying the discounted cash flow method with 2 (two) financial
statement projection periods, namely the fixed time period and the eternal time period using the method contained
in this regulation.
In the event that the Business Assessor carries out a Professional Assessment Assignment in the form of a Fairness
Opinion, the Business Assessor must comply with several provisions such as the Fairness Opinion must be provided
for the entire transaction plan and elements of the transaction plan analysis and the minimum analysis that must
be carried out before giving a Fairness Opinion.
Fairness Opinion on Lending and Borrowing Funds and/or Guarantee Transactions including guaranteeing assets
and/or providing guarantee that the company must comply with several provisions such as, the fairness opinion
must be based on the results of an evaluation of the transaction object and is given on the entire plan of lending
and borrowing funds and/or guarantee as well as elements of the transaction plan analysis.
In the event that a Business Assessor carries out a Professional Assessment Assignment in the form of a Business
Feasibility Study, the Business Assessor is obliged to fulfill several conditions such as the opinion given by the
Business Assessor in conducting a Professional Assessment Assignment in the form of a Business Feasibility Study is
to declare the feasibility of a business or project. In addition, in the event that a Business Assessor does not have
expertise in the field of property, a Business Feasibility Study which requires a Property Assessment must refer to
the results of the Property Assessor's opinion.
Business Valuation Report which regulates the form and content that must be disclosed in the Business Valuation
Report.
New Banking Regulation
1. Regulation : 22/12/PBI/2020
Date : 27 August 2020
Title (Indonesian) : Penyelesaian Transaksi Bilateral menggunakan mata uang lokal (local currency settlement) melalui bank
Title (English) : Bilateral Transaction Settlement Using Local Currency (Local Currency Settlement) Through Banks
Summary
In order to anticipate cooperation between Bank Indonesia and other partner country authorities, it is necessary to improve
the provisions governing the settlement of bilateral transactions using the local currency (Local Currency Settlement/LCS).
This regulation regulates the following provisions.
Bank Indonesia together with partner country authorities compiled the criteria for an ACCD Bank (Appointed Cross
Currency Dealer) and then appointed a Bank as an ACCD Bank by considering the prepared criteria. In addition, BI
together with partner country authorities can terminate the appointment of a bank as an ACCD Bank.
ACCD Bank Activities and Financial Transactions for the purpose of implementing LCS (Local Currency Settlement).
Bank ACCD Indonesia performs:
https://www.bi.go.id/id/peraturan/moneter/Documents/PBI_221220.pdf
o Financial activities which include: opening of SNA (Special Purpose Non-Resident Account) Rupiah, SNA
Mitra and Sub-SNA Mitra; management of Special Purpose Non-Resident Account balance and Sub-Special
Purpose Non-Resident Account balance; transfer of funds; and Financing.
o Financial transactions, including tod, tom and spot transactions, as well as other transactions agreed by
Bank Indonesia with the authorities of partner countries.
Provisions regarding the underlying Transaction which include:
o General Principles of Underlying Transactions
o Types of Underlying Transactions
o Underlying Transaction Documents
Bank ACCD Indonesia is required to issue price quotations for partner countries' currencies against rupiah, which
reflects fair prices on the foreign exchange market and can be transacted (hittable)
Bank ACCD Indonesia can have an open position for partner country currency transactions at the end of each Day
for the purpose of implementing LCS and is prohibited from exceeding a certain amount at the end of each day.
Bank ACCD Indonesia is required to prepare and submit reports and/or report corrections for the purpose of
implementing LCS to Bank Indonesia in a correct, complete and timely manner.
Bank Indonesia supervises the activities and financial transactions of Bank ACCD Indonesia for the purposes of
implementing LCS, including:
o Indirect monitoring (off site); and/or
o Inspection (on site).
2. Regulation : 22/20/PADG/2020
Date : 28 August 2020
Title (Indonesian) : Penyelesaian Transaksi Bilateral Antara Indonesia dan Jepang menggunakan Rupiah dan Yen melalui
bank
Title (English) : Settlement of Bilateral Transactions between Indonesia and Japan using Rupiah and Yen through
banks
Summary
With the issuance of a Bank Indonesia Regulation concerning settlement of bilateral transactions using local currencies
through banks (local currency settlement/LCS), it is necessary to stipulate implementing regulations regarding the settlement
of bilateral transactions between Indonesia and Japan using Rupiah and Yen through banks. This regulation regulates the
following provisions.
The appointment criteria and the mechanism for the appointment of a Bank ACCD (Bank Appointed Cross Currency
Dealer) Indonesia.
Financial activities for the purpose of implementing LCS in the form of Opening a SNA (Special Purpose Non-Resident
Account) Rupiah, SNA Yen and Sub-SNA Yen; Management of SNA Yen, Sub-SNA Yen and Sub-SNA Rupiah balance;
Transfer of funds; and Financing.
Financial transactions in the form of rupiah transactions against yen.
Bank ACCD Indonesia is prohibited from conducting NDF (non-deliverable forward) transactions as stipulated by BI
regarding DNDF (domestic non-deliverable forward).
Underlying transactions, which include types of undelying transactions, underlying transaction documents ,
underlying transaction documents for rupiah transactions against yen and documents for underlying transactions
for financing.
Bank ACCD Indonesia is required to issue price quotations for yen against rupiah on information facilities at least 1
(once) per day with quoted prices that reflect fair prices and can be transacted in carrying out spot and forward
transactions.
Evaluation and Termination of Appointment of Bank ACCD Indonesia.
https://www.bi.go.id/id/peraturan/moneter/Documents/PADG_222020.pdf
Bank ACCD Indonesia is required to prepare and submit periodic reports and incidental reports related to the
implementation of the Rupiah and Yen LCS to Bank Indonesia.
Correspondence.
Procedure for Imposing Sanctions.
3. Regulation : 118/PMK.06/2020
Date : 31 August 2020
Title (Indonesian) : Investasi Pemerintah dalam rangka program Pemulihan Ekonomi Nasional
Title (English) : Government investment for the National Economic Recovery program
Summary
Government investment for the National Economic Recovery Program (PEN) is the placement of a number of funds and/or
financial assets sourced from the State Budget (APBN) in the long term for investment in the form of shares, debt securities,
and/or direct investment in order to obtain economic, social, and/or other benefits. The placement of these funds will be
given through State-Owned Enterprises (BUMN) or the Indonesian Export Financing Agency (LPEI) to business actors in the
real sector and the financial sector which includes micro, small, medium, large businesses and cooperatives whose business
activities affected by the Covid-19 pandemic. Placement of these funds is intended so that Government Investment in the
PEN Program is able to protect, maintain, and increase the economic capacity of BUMN or Institutions to be carried out with
good governance and provide optimal results.
https://jdih.kemenkeu.go.id/api/AppMediaCatalogs/Download/9fea6885-854f-4f6d-ad5d-4e4722b0dfea
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