I.

Background The financial sector in many countries, including in Indonesia had experienced a crisis of recent years, where the difficult economic situation exposed in the news almost every day. If we look at the context of the economy of our country a few years ago, Indonesia experienced a severe economic crisis in 1997-1998 Economic turmoil that has ever happened in the years 1997-1998 should be a lesson for all countries including Indonesia in order to improve performance in the financial sector, but it appears that Indonesia is still entangled in the global economic crisis that occurred in 2008. When viewed in relative terms, the position of Indonesia in general is not the worst among other countries. Indonesia's economy may grow by 6.1% in 2008. While the fundamentals of the external sector, fiscal and banking industry is also strong enough to weather the global crisis (Table 1.1). The comparison of the Indonesian economy in 1997 and 2008 are listed in the table below: Table 1.1. Indonesian Macroeconomic Conditions: The Asian crisis (1997) and Global Crisis (2008) Indicator 1. 2. 3. a. b. (billions 1997 GDP Inflation The (% 4.7% 11 05% current GDP) -2.3% exchange dollars) 21, 4 of imports ULN) 5.5 (% GDP) 62.2% 2.2% 62.2% 111.1% 9.19% 77, 2008 6.1% 11.06% external account 0.1% reserves 51.6 and 4.0 29.0% fiscal Balance 0.1% Debt 32% banking 2% 16.2%

c. 4. a. fiscal (% GDP) b. Public (% GDP) 5. a. LDR (%) b. CAR (%) c. NPL (%) 8.15% 3.8%

Of foreign of U.S. (months payment External Debt (ED)

Based on Table 1.1 above, it can be seen that the Indonesian economy in 2008 is generally a pretty good record growth amid global turmoil. Bitter experience of the Asian economic crisis in 1997-1998 and the global crisis in 2008 and has led the authorities and actors in the Indonesian financial sector to improve itself, namely the idea of forming an independent authority in the functioning of the regulation and supervision of financial services sector in Indonesia, which is called the Financial Services Authority (FSA ). Establishment of the regulation and supervision in the financial services sector which is necessary in order to achieve integrated coordination mechanisms are more effective in dealing with problems in the financial system so it can better ensure the stability of the financial system.

In addition to experience crises and problems that exist in the financial services sector, the idea of the establishment of FSA in Indonesia also follow the trend of the unification of the supervisory authority of financial institutions is booming in many countries in the world. In this regard, Michael Taylor and Alex Fleming said that at least 36 countries by 2000 which implement an integrated monitoring system. Scandinavian countries was the one who pioneered the birth of an integrated monitoring system. The initial idea is the establishment of an integrated monitoring motivated by financial institutions conglomeration and bancassurance trend in banking institutions. Subsequent developments, trends begin implementation of an integrated monitoring system adopted by other countries that also experienced the phenomenon of changes in the structure of the financial system. In early 2000, Indonesia also experienced the phenomenon that gave birth to the idea of the establishment of FSA as an integrated financial institution supervisory authorities. When we see the formation of an academic paper about FSA Chapter I Introduction, there are 3 things that underlie the formation of the FSA: 1. juridical basis FSA was formed because of the mandate of Article 34 of Law No. 3 of 2004 on Bank Indonesia, which requires the establishment of the financial services sector oversight agency that includes banking, insurance, pension funds, capital markets, financial institutions and other agencies that manage public funds. 2. philosophical foundation FSA was formed with the aim that the overall activity of financial services in the financial services sector can be held on a regular basis, fair, transparent, and accountable financial system which can achieve sustainable growth and integrated. FSA itself based on the establishment of the principles of good governance as well as have the required structure that adheres to the principle of checks and balances that take the form of a clear separation between the functions of regulation by the Board of Commissioners and oversight functions by the respective banking supervisor, supervisor of capital markets, and IKNB supervisor. 3. sociological foundation Regulatory and supervisory functions are carried out by the FSA should be directed to create efficiency, fair competition, consumer protection and maintaining a healthy market mechanism. In addition, the FSA is also required to always take the shape and structure of the organization is sufficiently adaptive to the times. Now, the Law No. 21 Year 2011 on the Financial Services Authority has been born and is valid, it's just still in a transitional period so that can not be implemented fully. This Authority became attracted attention because someday be a huge asset to manage and supervise the financial institutions which exist in large numbers and have different characteristics as well, which has been the financial institutions are under the authority of BI and Bapepam-LK . FSA to become an institution that has a very important function in the national economy in the future because it involves traffic control public funds as well as determine the competitiveness of banks and other financial institutions. This makes the authors are interested in studying and researching more about the substance of the legislation and its implications and the prospects for implementation in the future is as expected as it is listed in 3 main runway at the FSA formation of an academic paper as mentioned in up through the preparation of a thesis by lifting the title "Critical Review Regulation and Supervision of Financial Services Sector by the Financial Services Authority Based on Law Number 21 Year 2011 About Financial Services Authority".

II. problem Formulation Based on the background as described above, then the subject matter that is formulated as follows: 1. What are the legal issues contained in Law No. 21 of 2011 on the Financial Services Authority related to the regulation and supervision of financial services sector in Indonesia? 2. How the establishment of the authority of the implications of financial services (FSA) of the regulation and supervision of the financial services sector in Indonesia? 3. How does the prospect of execution of the financial services authority (FSA) in the future? III.Basis Theory Theoretically, the financial services sector or the more we know the form of the financial institutions are part of the financial system in a modern economy that serves the users of financial services. The financial system is basically a network of financial markets, institutions, business sector / financial services, households, and government agencies as well as participants who have authority to regulate the operation of the financial system. Meanwhile, financial institutions themselves (financial institution) is a business entity whose wealth is mainly in the form of financial assets (financial assets) or bills (claims) as stocks and bonds compared to real assets such as buildings, equipment, and raw materials. Financial institutions as entities that carry out activities in the financial sector have a role as mentioned by Martono the transfer of assets (assets transmutation), liquidity (liquidity), the allocation of income (income allocation), and transactions (transaction). As in the context of Indonesia's financial system consists of the monetary system and the system of non-bank financial institutions (NBFI). The monetary system covers banking and monetary system as a sub-system, while the system of non-bank financial institutions include finance department as an authority and a variety of non-bank financial institutions. Thus, financial institutions in Indonesia to share its financial system into 2 kinds of bank financial institutions and non-bank financial institutions. Bank financial institution (bank finance institution) by Sunaryo is a business entity that conducts activities in the financial sector by collecting funds from the public in the form of savings and channel them in the form of loans and / or other forms in order to improve the standard of living, while the non-bank financial institutions (non-bank financial institution) is a business entity that conducts activities in the financial sector that directly or indirectly raise funds by way of issuing securities and distribute it to the public to finance corporate investment. The juridical, concrete forms of non-bank financial institutions based on the definition as set out in Article 1 paragraph 4 Presidential Decree No. 61 of 1988 as amended by Presidential Decree No. 9 of 2009 on Financing Institutions can be categorized into 4 sectors include capital markets are regulated in Law No. 8 of 1995 on Capital Markets, Insurance is regulated under Act No. 2 of 1992 on Insurance Business, pension funds regulated in Law Number 11 Year 1992 on the Pension Fund, and financial institutions are regulated in the Decree of the President No. 9 of 2009 on Financing Institutions. Activities of the banking sector has been regulated and supervised by Bank Indonesia under Law Number 23 of 1999 concerning Bank Indonesia, as last amended by Act No. 6 of 2009, while the activities of non-banking sector has been regulated and supervised by BapepamLK under the Ministry of Finance pursuant to Act No. 8 of 1995 on Capital Markets.

Function settings (regulatory) financial services sector is basically an arrangement of industrial activities / financial institutions both banking and non-bank financial institutions such as publishing and / or improvement of regulation of the Minister of Finance and Bapepam-LK capital markets and non-bank financial institutions, issuance of PBI and / or SEBI in the banking sector. Meanwhile, the monitoring function (supervisory) the financial services sector is an activity concerned authority in overseeing all activities in the financial services sector and those involved in it as oversight of stock trading transactions in the capital markets sector, monitoring of investment managers, the supervision of health of individual banks, institutional oversight of banks, and so on. Now, at the time the Act No. 21 of 2011 on the Financial Services Authority has been validated and has been born a single regulatory and supervisory institutions financial services sector in Indonesia, the consequences change control system into an integrated system of financial institutions that require Bapepam-LK and BI fused into a container that is FSA. FSA carried out because of the formation of cross-cutting issues in the financial services sector, which includes measures of moral hazard, yet optimal protection of consumers of financial services, and disruption of the stability of the financial system as set forth in the General Explanation of the Law No. 21 Year 2011. FSA goal is to achieve more effective coordination mechanism in dealing with the problems that arise in the financial system so it can better ensure the stability of the financial system. IV. Research Methods Research on Critical Review Regulation and Supervision of Financial Services Sector by the Financial Services Authority Under Act No. 21 of 2011 on the Financial Services Authority is a legal research is normative-empirical. The research was done in 2 ways, namely library research to obtain secondary data to explore legal materials that are readily available and research field in order to obtain primary data through interviews with relevant resource persons based interview guide. The informants in this study include: a. Kurnia Yuniakhir as the Head of Sub Division of Institutional Funding and Other Financial Services, Directorate for Information IKNB Institutional and Financial Services Authority; b. Asep Deni Bank as Manager of Supervisory Office BI in Yogyakarta; c. Ngalim Sawega as Chairman of Bapepam-LK; d. Siti Sundari Arie as academics (professors of banking laws). Data obtained from the results of both the research literature and field research studies systematically compiled and analyzed using descriptive-qualitative method. V. results A. Legal Issues in the Law No. 21 Year 2011 on the Financial Services Authority B. Implications of the establishment of FSA Regulation and Supervision of the Financial Services Sector in Indonesian 1. Implications for the scope of FSA regulation and supervision based on Law Number 21 Year 2011 concerning FSA 2. The implications of the transfer of authority, human resources, documents, and assets of Bapepam-LK and BI

3. Implications for changes in laws and regulations related to the financial services sector C. Future prospects for the implementation of FSA in Coming

VI. Conclusion 1. Some legal issues contained in Law No. 21 of 2011 on the Financial Services Authority related to the regulation and supervision of financial services sector in Indonesia, among others, regarding the legal status and independence of the FSA, accountability systems, decisionmaking, persona standi in judicio, consumer protection, and levy issues. 2. Implications of the establishment of the FSA regulation and supervision of the financial services sector in Indonesia can be seen from three aspects, namely: a. Implications for the scope of FSA regulation and supervision based on Law Number 21 Year 2011 concerning FSA, which is based on Article 5 to Article 9, it can be seen that the authority of the FSA include microprudential regulation and supervision and conduct of the banking business as well as macroprudential regulation and supervision, microprudential, and business conduct of the non-bank financial institutions. Now with the passing of the Law No. 1 of 2013 on Microfinance Institutions, FSA authority expanded to include microfinance institutions as well. b. The implications of the transfer of authority, human resources, documents, and assets of the BI and Bapepam-LK is divided into 2 stages: 1) Phase I is an intermediate stage of Bapepam-LK to the FSA where authority, assets, human resources and documents from Bapepam-LK has been transferred to the FSA using the big bang. 2) Phase II is an intermediate stage of BI to the FSA, which is currently ongoing implementation process with the formation of the transition team of FSA phase II. c. Implications for changes in laws and regulations related to the financial services sector, where the passing of the Law No. 21 Year 2011 on the FSA would have implications for the amendment of sectoral laws include: Law No. 23 of 1999 concerning Bank Indonesia, as amended last by Act No. 6 of 2009 concerning Stipulation of Government Regulation No. 2 of 2008, Act No. 7 of 1992 concerning Banking as amended by Act No. 10 of 1998 on the Amendment of Act No. 7 of 1992, Act- Law Number 21 Year 2008 on Islamic Banking, Law No. 8 of 1995 on Capital Market Law No. 2 of 1992 on Insurance Business, Law Number 11 Year 1992 regarding Pension Fund, Presidential Decree No. 9 of 2009 on Institutions financing. 3. Future prospects for the implementation of the FSA whether to run in accordance with the initial formation of the idea of course depends on a variety of factors as previously described including FSA efforts to face challenges. In addition to these factors, it should also be realized that the concept of FSA is applied in Indonesia currently has its own advantages and disadvantages, as well as any model of supervision where it still has the possibility of deviation gap.