1LOGO

INDONESIAFINANCIALSERVICESAUTHORITYOtoritasJasaKeuangan(OJK)

h iGonthorR.AzizSeniorAdvisor,

IndonesiaCapitalMarketandFinancialInstitutionsSupervisoryAgency

MinistryofFinanceofRepublicofIndonesia

Background

BapepamLKunderMOF

BankIndonesiareportingtoParliament

OJK is an independent Institution with authorityto regulate, supervise, examine, and investigateFinancial Services sector in Indonesia

OJK is funded from the State Budget and/or

BEFORE

Entity Scope and Powers

Massive

CapitalMarket

NBFI

BankingRegulationandSupervision

Monetary,PaymentSystems

andForeignExchange

OJK is funded from the State Budget and/orfees (levy) from parties who conduct theirbusinesses in the financial services sector.

With the objective to promote and organize asystem of regulations and supervisions that isintegrated into the overall activities in thefinancial services sector

The Function of OJK are;

To ensure that the overall activitieswithin the financial services sector areiimplemented in an organized fair

OJKasanIndependentEntity

ReportingtoParliament

BankIndonesiareportingtoParliament

AFTER

Gaps in Cross

Sectoral

iimplemented in an organized, fair,transparent and accountable manner

Promotes a financial system thatgrows in a sustainable and stablemanner; and

Protect the interest of Consumer inthe Financial Market

CapitalMarket

NBFI*

BankingRegulationandSupervision

MacroPrudentialRegulation

Monetary,PaymentSystems

andForeignExchange

* NBFI includes Pension, Insurance, Finance Companies, Venture Capital, Guarantee Companies

2AuthorityandMandateRegulatoryMandate

ImplementOJKLawandharmonize3subsector laws

SupervisoryMandate InstitutionalandMarketOversightPolicyand Supervisory Activitiessectorlaws

Establishrulesandregulation Supervision Institutional EnforcementandSanctions

andSupervisoryActivities GovernanceandOversightofCEOsfromBanking,CapitalMarketandNBFIs(referOJKCommissionersFunction)

Conductsupervision,inspection,investigation,Consumerprotection,andotheractions

Imposeadministrativesanctionsonanypartyviolatingthelawsandregulationsinthe financial services sectorthefinancialservicessector

Toissueand/orrevokebusinesslicenses;individuallicenses;effectiveregistrationstatement;registeredlicensestatement;approvalofbusinessactivities;andvalidation.

InstitutionalGovernance OJK is led by the Board of Commissioners.

Board of Commissioners is collective and collegial.

BoardofCommissionersComposition

Chairman ViceChairman

ChairmanofE hi

ChiefExecutiveBanking

ChiefExecutive

CapitalMarketChief

ExecutiveNBFIs

Commissioner

ActingasChairman of

Commissioner

ConsumerP i &

ExOfficioMOF

E 1 L l

ExOfficioBI

MemberofB d f

Board of Commissioners consists of 9 (nine) members and appointed byPresidential Decree.

EthicsCommittee

ChairmanofBoardofAuditors

Protection&Education

Esc1Level BoardofGovernors

OperationalHeads

3InstitutionalCoordinationDomestic Law Enforcements Agencies

Eg: Police, Judiciary and Anti Money Laundering Agency

OJK, Bank Indonesia, and the DepositInsurance Corporation (LPS) shallestablish and maintain a means ofexchanging information in an integratedway

OJK Bank Indonesia (BI)Deposit Insurance Corporation (LPS)

Bank Indonesia and LPS may conduct a direct examination (in accordance to its powers mandated by law) of bank by submitting prior written notification to OJK

Coordination in formulating Banking Regulation

EnhancingCommunicationandMonitoringEffortsFKSSK

OperationalLevel

ManagementLevel

ForumLevelwithMinisterofFinanceasChairman of

Establishing the needed coordination across many agenciescould potentially create delays during a time when quickaction is needed. Moreover, different regulators can havedifferent supervisory philosophies. These potentialimpediments to a timely response suggest that regulatorsneed to be discussing the possibilities associated with Chairmanof

Forum

MOF,Chairmanf OJK BI

CEOofLPS

HeadofBankingSupervisor

BankingSupervision

HeadofCapMktSupervisor

MarketRegulation

MutualFund

need to be discussing the possibilities associated withfinancial crisis on an ongoing basis and long before an actualevent. These discussions should encompass the possibleactions that might be needed and the information thatshould be on hand to shape those actions in the publicinterest. This is one of the major goals of our CoordinatingForum for Financial System Stability

OJK shall undertake the necessary coordination and buildingthe consolidated informational infrastructure to support itsfunction. OJK will also work hand in hand with the CentralBank, MOF and the Deposit Insurance Corporation via theCoordinating Forum on Financial System Stability (FKSSK) to ofOJK,BI

Governor,ChairmanofLPS Issuers

HeadofNBFIsSupervisor

Pension

Insurance

FinanceCoBankIndonesia

Coordinating Forum on Financial System Stability (FKSSK) toundertake the consolidated Systemic Risk Monitoring andCrisis Prevention and Management Protocol on a marketwide basis.

The Forum shall be Chaired by the Minister of Finance,together with the Chairman of OJK, the Central BankGovernor and the Chairman of the Board of Commissionersof the Deposit Insurance Corporation

4TheTransitionPeriod31st Dec 2012 31st Dec 20131st June 2012

B d f C i i

OJK Entity Phase 2

Board of Commissioners are Appointed

OJK Entity Phase 1

Bapepam -LK Full Authority over

OJK Entity Phase 1

Full Authority over Capital Market and NBFIBapepam LK

Bank Indonesia

Capital Market and NBFI

Full Authority Banking Regulation and

Supervision

Capital Market and NBFI

THANK YOU

End of Presentation

THANK YOU