Regulation of the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”)  No. 22 of 2023 (“Regulation 22/2023”) has been in force since 22 December 2023 and addresses a wide range of aspects that specifically relate to consumer and public protection within the financial services sector. The various provisions set out under this framework include the mandate for business actors operating within the financial services sector (Pelaku Usaha Jasa Keuangan – “PUJK”) to draft and submit self-assessment reports on their compliance with the various consumer and public protection obligations that feature under Regulation 22/2023 (“Self-Assessments”).[1] It should be noted that various provisions that feature under Regulation 22/2023 were previously summarized in the following edition of Indonesian Legal Brief (“ILB”): “OJK Harmonizes Regulations on Consumer Protection: Concerns over Debt Collection Activities Addressed”.

Following the above-mentioned Self-Assessment mandate, the OJK is currently preparing a Draft Circular (“Draft Circular”) that will ultimately detail procedures for the drafting and submission of the aforementioned Self-Assessments.[2] At its core, the Draft Circular states that Self-Assessments should be drafted by taking into account various quantitative and qualitative parameters, while the results of Self-Assessments will ultimately be ranked into five categories that break down as follows:[3]

Against the above backdrop, this edition of ILB offers an elaboration of the various provisions that are set out under the Draft Circular, specifically as they relate to the following matters:

1. Forms and Structures of Self-Assessments; and
2. Procedures for the Submission of Self-Assessments.

Forms and Structures of Self-Assessments

Pursuant to the Draft Circular, Self-Assessments should be drafted by PUJK through a series of activities that involve the identification, measurement and analysis of said PUJK’s implementation of and compliance with the applicable consumer and public protection obligations.[4] Self-Assessments should be drafted in line with the format that is comprehensively outlined under the Appendix to the Draft Circular.[5] This format states that Self-Assessments encompass the drafting and filling out information that relates to the following aspects in the form of working papers:[6]

However, the Draft Circular states that working papers on the design of products and services, as outlined in point (4) above, should only be submitted in the event that products and/or services that are offered by PUJK fulfill the following criteria:[7]

1. The products and/or services are being offered for the first time; or
2. The products and/or services have undergone processes of development that have resulted in material changes being made to existing products and/or services.

The above-described Self-Assessments should be submitted along with relevant supporting reports and/or documents, which should be properly administered by the respective PUJK.[8] Moreover, as PUJK are responsible for the accuracy of all information outlined in their submitted Self-Assessments, the Draft Circular obliges PUJK to establish mechanisms for the submission of reports to the relevant PUJK Boards of Directors (“BoD”) regarding the submission of their Self-Assessments.[9]

Procedures for the Submission of Self-Assessments

In terms of submission procedures, the Draft Circular states that Self-Assessments must be submitted on an annual basis by no later than the 30 September of the ongoing year via the reporting system provided by the OJK (“Reporting System”). However, if this deadline falls on a non-business day, then Self-Assessments should be submitted by the end of the next business day.[10]

In order to submit Self-Assessments via the Reporting System, a PUJK is required to submit an email to the OJK in order to secure access rights to the Reporting System. In this regard, any PUJK that have been granted access rights will be registered (“Registered PUJK”).[11] The Draft Circular obliges all Registered PUJK to ensure the following matters on a periodic basis:[12]

1. That the relevant User IDs and passwords are utilized in line with applicable Reporting System terms and conditions;
2. That all active users of the Reporting System are employees who understand and are authorized to draft and submit Self-Assessments;
3. That reports that are submitted to the OJK under certain conditions address relevant User IDs and passwords (e.g. addition of User IDs, deactivation of accounts and appointment of new users); and
4. The confidentiality of granted User IDs and passwords.

In the event that the Reporting System experiences any technical difficulties that result in an inability to submit Self-Assessments via said system, then the OJK will subsequently inform PUJK of the situation.[13] PUJK will then be directed to submit their Self-Assessments directly to an OJK officer or to send them via postal services.[14]

However, once the Reporting System comes back online, PUJK will be required to re-submit their Self-Assessments within five business days of the Reporting System problem being resolved.[15] Moreover, it should be noted that if any PUJK fail to submit their Self-Assessments within the determined submission period, then they will still be obliged to submit their Self-Assessments for the ongoing year.[16]

It should also be noted that the Draft Circular allows PUJK to revise or correct their submitted Self-Assessments by first submitting applications for said adjustments to the OJK. In this regard, Self-Assessment adjustment applications must be submitted within 15 business days of the OJK formally notifying a PUJK that they will be allowed to make such adjustments.[17]

While the Draft Circular does not explicitly set out any applicable sanctions for non-compliance with the Self-Assessment requirements, the framework of Regulation 22/2023 states that any late submissions or failure to submit Self-Assessments will result in the imposition of administrative sanctions that range from written reprimands to the imposition of fines amounting to Rp. 15 billion.[18]

Key Takeaways

The Draft Circular outlines a structured approach for the conducting of annual Self-Assessments by PUJK. In this regard, the Draft Circular emphasizes comprehensive evaluations that are based on both quantitative and qualitative parameters and that categorize the results into five distinct levels that reflect the level of compliance of each PUJK with the consumer and public protection obligations.

Moreover, by mandating the establishment of a policy of Self-Assessment reporting to PUJK’s boards of directors, the Draft Circular hopes to ensure internal oversight and accountability. In addition, through the availability of administrative sanctions for non-compliance, both Regulation 22/2023 and the Draft Circular demonstrate the OJK’s commitment to maintaining high consumer and public protection standards within the financial services sector.

Source: hukumonline.com