LOGO

OTORITAS JASA KEUANGAN

Otoritas Jasa Keuangan (OJK)Indonesia Financial Services Authority

DEFINITION

OJK is an independent Institution and free from interference by other parties, having the functions, duties, and authority to regulate, supervise, examine, and investigate Financial Services sector in Indonesia.

OBJECTIVES

The objectives of OJK is to ensure that the overall activities within the financial services sector are:1. Implemented in an organized, fair, transparent and

accountable manner;2. Able to realize the financial system that grows in a

sustainable and stable manner; and3. Capable of protecting the interests of consumers

and the society.

FUNCTION

The main function of OJK is to promote and organize a system of regulations and supervisions that is integrated into the overall activities in the financial services sector.

DUTIES

OJK performs its regulatory and supervisory duties over:1. Financial services activities in the Banking sector;2. Financial services activities in the Capital Markets

sector; and3. Financial services activities in the sectors of

Insurance, Pension Funds, Financing Institutions, and Other Financial Services Institutions.

AUTHORITY

In order to perform its regulatory duties, OJK has the following authority to:1. Establish implementing regulations for this Law;2. Establish rules and regulations in the financial services

sector;3. Establish OJK rules and decisions;

4. Establish rules regarding supervision in the financial services sector;

5. Establish policies regarding the implementation of OJK duties;

6. Establish rules concerning procedures for issuing a written order to Financial Services Institutions and certain parties.

AUTHORITY (Cont’d)

In order to perform its supervisory duties, OJK has the following authority to:1.Establish operational policy for financial services activities oversight;2.Oversee the implementation of supervisory duties performed by the Chief Executive;3.Conduct supervision, inspection, investigation, Consumer protection, and other actions;4.Impose administrative sanctions on any party violating the laws and regulations in the financial services sector; 5.To issue and / or revoke business licenses; individual licenses; effective registration statement; registered-license statement; approval of business activities; and validation.

GOVERNANCE

• OJK is led by the Board of Commissioners.• Board of Commissioners is collective and collegial.• Board of Commissioners consists of 9 (nine) members and

appointed by Presidential Decree.• Members of the Board of Commissioners have equal voting

rights• Board of Commissioners’ supervision over the implementation

of Chief Executive’s tasks aims to evaluate and improve the performance of the Chief Executive. Supervision is not intended to give authority to the Board of Commissioners to intervene or to intervene against the performance of duties and authorities of each Chief Executive

• The Chief Executive shall mean a member of the Board of Commissioners in charge of leading the implementation of supervision of financial services activities and reporting performance of its duties to the Board of Commissioners

GOVERNANCE – Cont’dComposition of Board of Commissioners (BoC) consists of:a. One Chairman (Mr. Muliaman Dharmansyah Hadad);

b. One Vice-Chairman functioning as the Chairman of the Ethics Committee (Mr. Rahmat Waluyanto);

c. One Chief Executive functioning as Banking Supervisor (Mr. Nelson Tampubolon);

d. One Chief Executive functioning as Capital Market Supervisor (Mrs. Nurhaida);

e. One Chief Executive functioning as Insurance, Pension Funds, Financing Institutions, and Other Financial Services Institutions Supervisor (Mr. Firdaus Djaelani);

f. A member of BoC functioning as the Chairman of Board of Auditors(Mrs. Ilya Avianti);

g. A member of BoC as an in-charge of consumer education and protection (Mrs. Kusumaningtuti SS);

h. An Ex-officio member from Bank Indonesia, who is a member of the Board of Governors of Bank Indonesia (Mr. Halim Alamsyah); and

i. An Ex-officio member from the Ministry of Finance, who is an echelon Ilevel official at the Ministry of Finance (Mrs. Anny Ratnawati).

Consumer Protection

OJK handles consumer’s complaints by:a.preparing adequate complaint handling instruments for customers who have been disadvantaged by Financial Services Institutions;b.creating complaint handling mechanisms for customers who have been disadvantaged by Financial Services Institutions; andc.facilitating the settlement of complaints from customers who have been disadvantaged by Financial Services Institutions in accordance with laws and regulations in the financial services sector.

Consumer Protection (Cont’d)

For the protection of consumers and the public, OJK is authorized to take legal actions, including:a.to issue orders or to take measures against a Financial ServicesInstitution to resolve complaints from consumers who have been disadvantaged by the concerned Financial Services Institution;b.to file a lawsuit:i.to recover assets belonging to the disadvantaged party from the party which causes such disadvantage, to include assets under the control of the party causing the disadvantage or under the control of another party which acquires those assets in bad faith; and/orii.to obtain compensation from the party causing disadvantage to the Customer and/or from the Financial Services Institution as a result of violation of laws and regulations in the financial services sector.Compensation used only as damages or the disadvantaged party.

LAW ENFORCEMENT

• One of the authority OJK in the supervisory duty is to conduct investigation, and other actions towards Financial Services Institutions, actors, and/or supporting activities to financial services as defined under the laws and regulations in the financial services sector.

• Civil Servants whose scope of duties and responsibilities include overseeing financial services within OJK, are given special authority as investigators as referred to in the Book of the Criminal Code

• Civil Servant Investigators as referred shall present the results of investigations before the Attorney for prosecution purposes.

• Attorney shall follow up and decide on appropriate follow-up results of the investigation in accordance with his authority, within not more than 90 (ninety) days of receipt of the results of the investigation.

BUDGET

• OJK is funded from the State Budget and/or fees (levy) from parties who conduct their businesses in the financial services sector.

• OJK budget is expensed to finance operations, administrative, procurement of assets and other supporting activities.

• Budget and the use of budget to finance the activities shall be determined based on a reasonable standard in the financial services sector.

REPORTING AND ACCOUNTABILITY

• OJK must prepare financial statements which consist of semiannual and annual financial statements.

• OJK must prepare a report of activities which consist of monthly, quarterly, and yearly activity reports.

• The annual activity report submitted to the President and the House of Representatives

• In the event that the House of Representatives requires an explanation, OJK must submit a report.

• The annual financial report audited by the State Audit Agency or Public Accountant appointed by the Supreme Audit Board.

• OJK shall publish a public annual report through print and electronic media.

INSTITUTIONAL RELATIONS

• OJK coordinates with Bank Indonesia in making regulations in the field of banking supervision.

• In the case where Bank Indonesia to carry out its functions, duties and authorities to specifically examine a particular bank, Bank Indonesia may conduct a direct examination of the bank by submitting prior written notification to the OJK

• Deposit Insurance Corporation (LPS) can conduct an examination of a bank in accordance with its functions, duties and authority, and coordinate in advance with the OJK.

• OJK, Bank Indonesia, and the Deposit Insurance Corporation (LPS) shall establish and maintain a means of exchanging information in an integrated way.

• OJK may cooperate with regulatory authorities of Financial Services Institutions in other countries and international organizations and other international agencies.

• OJK could become a member of international financial services watchdog organizations

COORDINATION PROTOCOL

To maintain the stability of Indonesia financial system, a Coordination Forum of Financial System Stability (FKSSK) will be established with members consisting of:a. Minister of Finance as member, concurrently as

coordinator;b. Governor of Bank Indonesia as a member;

c. Chairman of the Board of Commissioners OJK as member; and

d. Chairman of the Board of Commissioners LPS as member;

TRANSITIONAL PROVISIONS

1. As of December 31, 2012, the functions, duties, as well as regulatory and supervisory authority of financial services activities in the sectors of Capital Markets, Insurance, Pension Funds, Financing Institutions, and Other Financial Services Institutions are transferred from the Minister of Finance and Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK) to OJK.

2. As of December 31, 2013, the functions, duties, as well as regulatory and supervisory authority of financial services activities in the banking sector are transferred from Bank Indonesia to OJK.

TRANSITIONAL PROVISIONS(Cont’d)

From the appointment of members of the Board of Commissioners until the transfer of functions, duties and authorities as referred, the Board of Commissioners:a.establish organizational structure, duties and functions, the design and structure of infrastructure and information technology, human resource systems, and standard operating procedures;b.establish OJK work plan and budget for fiscal year 2013;c.appoint OJK officers and employees;d.appoint officers and employees of Board of Commissioners’supporting organs; ande.organize other necessary matters in order to transfer the functions, duties, as well as regulatory and supervisory authorities of financial services activities in the sector of financial services from Bank Indonesia, the Minister of Finance, and Capital Market and Financial Institution Supervisory Agency to OJK.

THANK YOU

End of Presentation