The OJK Regulation stipulates a number of actions that must be taken by conventional banks in order to reduce the potential of financial risk when acting as agents for foreign financial consumer products.

The OJK Regulation sets out the types of activity which can be outsourced by banks to third parties, as well as prudential measures which must be undertaken by Banks in order to ensure that such delegation will not result in any harm being caused to the Banks? activities.

The OJK Regulation aims to mitigate any risks resulting from the development and sale of the complex financial products known as Structured Products. This has been achieved through the formulation of various licensing procedures, risk-mitigation measures, reporting obligations, customer classifications, and marketing guidelines for Structured Products.

The Financial Services Authority (Otoritas Jasa Keuangan ? ?OJK?) has issued Regulation No. 6/POJK.03/2016 on Business Activities and Branch Offices Based on Core Bank Capital (?OJK Regulation?) in a bid to protect the national banking sector as it comes up against regional and global competition.

The 2015 Circular aims to strengthen the security of Card-Based Payment Instruments (Alat Pembayaran dengan Menggunakan Kartu ? ?APMK?) by mandating that the owners of Automated Teller Machines (ATM) and/or the issuers of debit cards incorporate chips, magnetic strips and six-digit personal identification numbers (PIN) into their ATM and debit cards.

Bank Indonesia (?BI?) has just issued Regulation No. 17/17/PBI/2015 on Bank Indonesia Securities in Foreign Currencies (?2015 Regulation?). In a bid to maintain foreign currency reserves and stabilize the rupiah exchange rate, the 2015 Regulation sets out procedures for the issuance and sale of BI securities to banks and other parties.

The Financial Services Authority (?OJK?) has issued Regulation No. 13/POJK.03/2015 on the Implementation of Risk Management for Rural Banks (?2015 Regulation?). The 2015 Regulation sets out a new risk-management procedure for rural banks with the ultimate aim in mind of empowering and developing the reputation of rural banks.

Due to the wide scope of the Circular, this edition of Indonesian Legal Brief will only discuss the following issues: Requirements and procedures to secure OJK?s approval; Basic savings account criteria; Bank and agent cooperation; and Customer due diligence and protection.

The Regulation sets out a guideline that allows the operation of branchless banking and/or other financial services, and is relevant to banks and non-bank financial institutions, including insurance or reinsurance companies, the capital market, pension fund companies, and financing companies.

With the ultimate aim of boosting the investment sector and strengthening the rupiah exchange rate, the Circular updates the requirements for foreign citizens who are looking to open bank accounts in Indonesia.