Know Your Customers - Financial Services Providers in the Capital Market

The simple rationale for the issuing of this decision, No. KEP-476/BL/2009, is that knowing your customers is the best way of ensuring the creation of a sound and healthy capital market that is free from the criminal practices of money laundering and the financing of terrorism. The government, through Bank Indonesia and other government agencies, has issued a raft of regulations recently addressing the crimes of money laundering and financing of terrorism and terrorists (see ILB No. 1249 7/12/2009).

The decision amends the ‘know your customer’ principles contained in the attachment to the Head of the Capital Market and Financial Institutions Supervisory Agency No. Kep-313/BL/2007 on the same subject matter. Specifically, the decision amends Rule No. V.D.10.

For any financial services providers in the capital market sector who have obtained their licenses or respective agreements prior to the effectiveness of this decision are required to be in compliance with the provisions of this decision as they relate to putting into place know your customer guidelines no later than 30 June 2010 (No. 3(a) of V.D.10).

Furthermore, providers are required to update and verify customer data in accordance with the provisions of this decision no later than 31 December 2010 (No. 11(c), (d), (g), and (h) of V.D.10).

This decision was issued on 23 December 2009 and comes into force on 1 January 2010.