Senin, Agustus 7, 2023

Framework for BPRS Products Adjusted: New Product Classification and Approval Mechanism Introduced

As mandated under Regulation of the Financial Services Authority (Otoritas Jasa Keuangan - "OJK") No. 25/POJK.03/2021, the OJK has decided to adjust various provisions that address products offered by Sharia Rural Banks (Bank Perkreditan Rakyat Syariah – "BPRS") through the issuance of Circular No. No. 10/SEOJK.03/2023 ("Circular 10/2023"), which has been in force since 27 June 2023. Upon its enforcement, Circular 10/2023 simultaneously repealed and replaced the previous framework that addressed BPRS products ("Products") and BPRS activities ("Activities"), i.e. Circular of the OJK No. 37/SEOJK.03/2015 ("Circular 37/2015").
In this regard, any Products and/or Activities that were organized in accordance with Circular 37/2015 prior to the enforcement of Circular 10/2023 must be brought into line with the Product terms and conditions ("T&C") that are listed under Appendix I to Circular 10/2023. If Products are unable to fulfill the determined T&C, then the relevant BPRS should terminate said Products when their validity periods expires or approval applications for the continuation of said Products should be submitted to the OJK.
Newly featured under Circular 10/2023, the above-mentioned Products have now been classified into the following categories based on the relevant levels of risk: 1) Basic Products: core services as stipulated under BPRS business licenses (e.g. the collection, disbursement and/or placement of funds); and 2) Advanced Products (e.g. those that support information-technology based BPRS, that relate to non-banking financial service products or other services that may affect the relevant BPRS risk profiles) and that require permits and/or approvals to be granted by the OJK.
While retaining the criteria for new Products that originally featured under Circular 37/2015, Circular 10/2023 has now clarified that the criteria that apply to said Products should be determined by the relevant BPRS and should be incorporated into written procedures for the organization of Products. Meaning that self-assessments of said new Product development plans should be established.
As the introduction of any new basic Product to the marketplace requires relevant BPRS to submit implementation reports to the OJK, Circular 10/2023 states that OJK approvals for the organization of any advanced Products must first be secured through one of the following mechanisms: 1) Approval for a limited trial project ("Piloting Review"); 2) Approval without Piloting Review; or 3) Approval through a notification stating that the planned introduction of the new advanced Product has been approved (instant approval). The new above-described advanced Product approval mechanism did not previously feature under Circular 37/2015.

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*Syarat dan ketentuan berlaku

As mandated under Regulation of the Financial Services Authority (Otoritas Jasa Keuangan - "OJK") No. 25/POJK.03/2021, the OJK has decided to adjust various provisions that address products offered by Sharia Rural Banks (Bank Perkreditan Rakyat Syariah – "BPRS") through the issuance of Circular No. No. 10/SEOJK.03/2023 ("Circular 10/2023"), which has been in force since 27 June 2023. Upon its enforcement, Circular 10/2023 simultaneously repealed and replaced the previous framework that addressed BPRS products ("Products") and BPRS activities ("Activities"), i.e. Circular of the OJK No. 37/SEOJK.03/2015 ("Circular 37/2015").
In this regard, any Products and/or Activities that were organized in accordance with Circular 37/2015 prior to the enforcement of Circular 10/2023 must be brought into line with the Product terms and conditions ("T&C") that are listed under Appendix I to Circular 10/2023. If Products are unable to fulfill the determined T&C, then the relevant BPRS should terminate said Products when their validity periods expires or approval applications for the continuation of said Products should be submitted to the OJK.
Newly featured under Circular 10/2023, the above-mentioned Products have now been classified into the following categories based on the relevant levels of risk: 1) Basic Products: core services as stipulated under BPRS business licenses (e.g. the collection, disbursement and/or placement of funds); and 2) Advanced Products (e.g. those that support information-technology based BPRS, that relate to non-banking financial service products or other services that may affect the relevant BPRS risk profiles) and that require permits and/or approvals to be granted by the OJK.
While retaining the criteria for new Products that originally featured under Circular 37/2015, Circular 10/2023 has now clarified that the criteria that apply to said Products should be determined by the relevant BPRS and should be incorporated into written procedures for the organization of Products. Meaning that self-assessments of said new Product development plans should be established.
As the introduction of any new basic Product to the marketplace requires relevant BPRS to submit implementation reports to the OJK, Circular 10/2023 states that OJK approvals for the organization of any advanced Products must first be secured through one of the following mechanisms: 1) Approval for a limited trial project ("Piloting Review"); 2) Approval without Piloting Review; or 3) Approval through a notification stating that the planned introduction of the new advanced Product has been approved (instant approval). The new above-described advanced Product approval mechanism did not previously feature under Circular 37/2015.

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