OJK Regulates Anti-Fraud Policy for Insurance Companies
The Financial Services Authority has issued Circular No. 46/SEOJK.05/2017 on Fraud Control, Implementation of Anti-Fraud Strategy and Anti-Fraud Strategy Report for Insurance Companies, Sharia Insurance Companies, Re-Insurance Companies, Sharia Re-Insurance Companies, or Sharia Units, as mandated under Article 72 (5) of OJK Regulation No. 69/POJK.5/2016 on the Business Organization of Insurance Companies, Sharia Insurance Companies, Re-Insurance Companies and Sharia Re-Insurance Companies.
New State Securities and Investment Caps for Investments by Non-Bank Financial Services Institutions
In order to expand investment-instrument options for non-bank financial services institutions, as well as to increase investment realization, the Financial Services Authority has issued Regulation No. 56/POJK.05/2017 on the Second Amendment to Financial Services Authority Regulation No. 1/POJK.05/2016 on Investment in State Securities by Non-Bank Financial Services Institutions. In essence, this new regulation adds three new types of state securities which may be allocated as investments by non-bank financial services institutions with new investment caps available.
OJK Redefines Provisions on Bank Examinations
The Financial Services Authority has issued Regulation No. 41/POJK.03/2017 on Requirements and Procedures for Bank Examinations. This new regulation effectively makes no significant alterations to any of the provisions which were originally set out under Regulation 41/2017.
OJK Regulates Implementation of Commercial Bank Compliance
To minimize the risks inherent to commercial banking business in both a preventative and curative manner, the Financial Services Authority has issued Regulation No. 46/POJK.03/2017 on the Implementation of Commercial Bank Compliance. This new regulation makes a minor alteration to the provisions which were originally set out under Bank Indonesia Regulation No. 13/2/PBI/2011 on the same matte. Essentially, this regulation addresses several matters, including: 1) Compliance function; 2) Director of compliance; and 3) Sanctions.
OJK Codifies Periodic Reporting Obligation for Insurance-Related Companies
In a bid to codify provisions which relate to reporting obligations for Insurance-Related Companies, the OJK has issued Regulation No. 55/POJK.05/2017 on Periodic Reporting by Insurance Companies. In brief, Regulation 55/2017 re-regulates the list of periodic reports that should be submitted by each type of company operating within the insurance industry, as well as administrative sanctions for non-compliance.
OJK Regulates Foreign Workers Within the Banking Sector
In order to accommodate the needs of experts across the banking sector, the Financial Services Authority has issued Regulation No. 37/POJK.03/2017 on the Employment of Foreign Workers and the Transfer-of-Knowledge Program Within the Banking Sector. This regulation basically makes no alteration to any of the provisions which were originally set out under Bank Indonesia Regulation No. 9/8/PBI/2007, which addressed the same matters. The new regulation addresses several provisions, including: 1) Eligible positions for foreign workers; 2) Employment of foreign workers; and 3) The Transfer-of-Knowledge program.
Sustainable Financing for Financial-Service Institutions, Issuers and Public Companies
In an attempt to achieve Indonesia’s sustainable-development goals, the OJK has issued Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Financing by Financial Services Institutions, Issuers and Public Companies. In essence, Regulation 51/2017 mandates that financial-service institutions, issuers and public companies to implement sustainable financing through the formulation of two documents: 1) An action plan; and 2) Sustainability reports. Moreover, incentives will be offered by the OJK for the effective implementation of sustainable financing.
Scope and Procedures for the Granting of Government Guarantees within the Infrastructure Sector
The Ministry of Finance has issued Regulation No. 95/PMK.08/2017 on Scope and Procedures for the Granting of Government Guarantees in the Infrastructure Sector by the Infrastructure Guarantee Enterprise, which is an implementation of Article 2 (2) of Government Regulation No. 50 of 2016 on the Amendment to Government Regulation No. 35 of 2009 on State-Capital Participation in the Establishment of the Infrastructure Guarantee Enterprise. Essentially, this new regulation sets out numerous provisions which relate to government guarantees within the infrastructure sector, specifically: 1) Scope of guarantees; 2) Procedures for the securing of guarantees; 3) Guarantee governance; 4) Governmental support; and 5) Reporting obligations.
New Provisions on Single-Presence Banking Policy
In order to anticipate the dynamics of economic development, as well as to enhance the sustainability and competitiveness of the national banking sector (both in terms of sharia and conventional banks), the Financial Service Authority has issued Regulation No. 39/POJK.03/2017 on Single-Presence Policy for Indonesian Banks. In essence, this new regulation updates several provisions which were originally set out under Bank Indonesia Regulation No. 14/24/PBI/2012. Our discussion of this new regulation will revolve around the following matters: 1) The implementation of Single-Presence Policy; 2) Transfer of Authority from BI to the OJK; and 3) Administrative sanctions.
Technical Provisions on Short-Term Liquidity Loans for Conventional Commercial Banks
As a form of assistance for commercial banks undergoing short-term financial-liquidity stress, the BI Board of Governors has issued Regulation No. 19/6/PADG/2017 on Short-Term Liquidity Loans for Commercial Banks. In essence, Regulation 19/2017 redefines several provisions relating to short-term liquidity loans (PL JP), including the following issues: (1) Requirements for the securing of PLJP; (2) PLJP application procedures; (3) Repayment methods; (4) Reporting obligations; and (5) Prohibitions and limitations during PLJP periods.