Financial Services Authority Regulation Number 29/POJK.05/2020 on Amendments to Financial Services Authority Regulation Number 30/POJK.05/2014 on Good Corporate Governance for Financing Companies

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 29 /POJK.05/2020
CONCERNING
AMENDMENTS TO FINANCIAL SERVICES AUTHORITY
REGULATION NUMBER 30/POJK.05/2014 CONCERNING GOOD corporate governance for Financing Companies BY THE GRACE OF GOD THE ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in carrying out regulatory and supervisory duties in the financing institution sector as referred to in Article 8 and Article 9 of Law Number 21 of 2011 concerning the Financial Services Authority, the Financial Services Authority has the authority to establish legislation regarding financing companies; b. that to improve the quality of management of good corporate governance of financing companies, it is necessary to refine the provisions regarding good corporate governance for financing companies;
c. that based on the considerations as referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation on Amendments to Financial Services Authority Regulation Number 30/POJK.05/2014 concerning Good Corporate Governance for Financing Companies;

Recalling: 1. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
2. Financial Services Authority Regulation Number 30/POJK.05/2014 concerning Good Corporate Governance for Financing Companies (State Gazette of the Republic of Indonesia Year 2014 Number 365, Supplement to the State Gazette of the Republic of Indonesia Number 5639);

DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING AMENDMENTS TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 30/POJK.05/2014 CONCERNING GOOD CORPORATE GOVERNANCE FOR FINANCING COMPANIES.

Article I
Several provisions in the Financial Services Authority Regulation Number 30/POJK.05/2014 concerning Good Corporate Governance for Financing Companies (State Gazette of the Republic of Indonesia Year 2014 Number 365, Supplement to the State Gazette of the Republic of Indonesia Number 5639) are amended as follows:

1. The provisions of item 2, item 6, item 7, item 10, item 14, item 15, item 16, and item 17 of Article 1 are amended, so that Article 1 reads as follows:

Article 1
In this Financial Services Authority Regulation, the following terms are defined:

1. Company means a financing company and a sharia financing company.

2. Financing Company means a business entity that conducts financing activities for goods and/or services.

3. Sharia Financing Company means a Financing Company whose entire business activities conduct sharia financing.

4. Sharia Financing is the disbursement of financing conducted based on sharia principles.

5. Sharia Principles are Islamic legal provisions based on fatwas and/or sharia conformity statements from the National Sharia Council of the Indonesian Ulema Council.

6. Sharia Business Unit, hereinafter abbreviated as UUS, is a working unit of the head office of a Financing Company that conducts Sharia Financing and/or functions as the parent office of offices that conduct Sharia Financing.

7. Good Corporate Governance for Companies, hereinafter referred to as Good Corporate Governance, is the structure and process used and applied by the Company's organs to improve the achievement of business results and optimize the Company's value for all stakeholders in an accountable manner and based on legislation and ethical values.

8. Company Organs are the General Meeting of Shareholders, Board of Directors, and Board of Commissioners for Companies in the form of a limited liability company, or the General Meeting of Members, Management, and Supervisory Board for Companies in the form of a cooperative legal entity.

9. Stakeholders are parties who have an interest in the Company, directly or indirectly, including but not limited to debtors, members/shareholders, employees, creditors, providers of goods and services, and/or the government.

10. Debtor:
    a. for Financing Companies means debtors, whether business entities or individuals, who receive financing for goods and/or services from the Financing Company; or b. for Sharia Financing Companies or Financing Companies that have a UUS means consumers, whether business entities or individuals, who enter into a Sharia Financing agreement with the Sharia Financing Company or Financing Company that has a UUS.

11. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the general meeting of shareholders as referred to in the law concerning limited liability companies for Companies in the form of a limited liability company, or equivalent to the GMS for Companies in the form of a cooperative legal entity.

12. Board of Directors:
    a. for Companies in the form of a limited liability company means the Board of Directors as referred to in the law concerning limited liability companies; or b. for Companies in the form of a cooperative legal entity means the Management as referred to in the law concerning cooperatives.

13. Board of Commissioners:
    a. for Companies in the form of a limited liability company means the Board of Commissioners as referred to in the law concerning limited liability companies; or b. for Companies in the form of a cooperative legal entity means the Supervisory Board as referred to in the law concerning cooperatives.

14. Sharia Supervisory Board, hereinafter abbreviated as DPS, is a board that has the task and function of supervision and provides advice to the Board of Directors regarding the implementation of the Company's activities to ensure compliance with Sharia Principles.

15. Independent Commissioner is a member of the Board of Commissioners who is not affiliated with shareholders, members of the Board of Directors, other members of the Board of Commissioners and/or members of the DPS, namely does not have financial, managerial, share ownership and/or family relationships with shareholders, members of the Board of Directors, other members of the Board of Commissioners and/or members of DPS, or other relationships that can influence their ability to act independently.

16. Affiliation is:
    a. family relationships due to marriage or descent up to the second degree, both horizontally and vertically, with employees, members of the Board of Directors, members of the Board of Commissioners, members of the DPS, and/or shareholders of the Company; b. relationships with Companies due to the existence of one or more members of the Board of Directors or Board of Commissioners in common;
    c. control relationships with the Company, either directly or indirectly;
    d. share ownership relationships in the Company amounting to 20% (twenty percent) or more; and/or e. relationships between 2 (two) companies that are controlled, directly or indirectly, by the same party.

17. Conflict of Interest is a situation where there is a conflict between the economic interests of the Company and the personal economic interests of shareholders, members of the Board of Directors, members of the Board of Commissioners and/or members of the DPS, and employees of the Company.

18. Financial Services Authority, hereinafter abbreviated as OJK, is an independent agency as referred to in the law concerning the Financial Services Authority.

19. The provisions of paragraph (1), paragraph (2), paragraph (3), and paragraph (4) of Article 2 are amended, so that Article 2 reads as follows:

Article 2
(1) Companies are required to apply the principles of Good Corporate Governance in all their business activities at all levels or tiers of the organization.
(2) The principles of Good Corporate Governance as referred to in paragraph (1) include:
a. openness; b. accountability;
c. responsibility;
d. independence; and e. equality and fairness.
(3) The implementation of Good Corporate Governance aims to:
a. optimize the Company's value for Stakeholders, particularly Debtors, creditors, and/or other Stakeholders; b. improve Company management in a professional, effective, and efficient manner;
c. improve the compliance of Company Organs and the DPS and those below them so that in making decisions and taking actions, they are grounded in high ethics, compliance with legislation, and awareness of the Company's social responsibility towards Stakeholders and environmental sustainability;
d. realize a healthier, reliable, trustworthy, competitive Company that meets consumer protection principles; and e. increase the Company's contribution to the national economy. (4) The implementation of the principles of Good Corporate Governance as referred to in paragraph (2) is at least manifested in:
a. the execution of duties and responsibilities of the Board of Directors, Board of Commissioners, and DPS; b. the completeness and execution of duties of committees and work units that perform internal control functions;
c. handling Conflicts of Interest;
d. the implementation of compliance, internal audit, and external audit functions; e. the implementation of risk management and internal control systems; f. the implementation of remuneration policies; g. transparency of financial and non-financial conditions; and h. business plans.

(5) In conducting business activities, Companies are required to conduct their business activities in a healthy manner and comply with all industry regulations for financial services under the supervision of the OJK. (6) Companies are required to have adequate standard operating procedures for all Company business activities, established by the Board of Directors.

3. Between Article 2 and Article 3, 1 (one) article is inserted, namely Article 2A, so that it reads as follows:

Article 2A
(1) The OJK conducts assessments on the implementation of Good Corporate Governance.
(2) The OJK has the authority to request Companies to perform or not perform certain actions to improve the implementation of Good Corporate Governance.
(3) Companies are required to fulfill the OJK's request to perform or not perform certain actions as referred to in paragraph (2).

4. Article 18 is added with 1 (one) paragraph, so that it reads as follows:

Article 18
(1) Companies that have assets of more than IDR 200,000,000,000.00 (two hundred billion rupiah) are required to have at least 2 (two) members of the Board of Commissioners. (2) Companies are required to have at least 1 (one) member of the Board of Commissioners who resides within the territory of the Republic of Indonesia. (3) For foreign national members of the Board of Commissioners who reside within the territory of the Republic of Indonesia, they are required to possess:
a. a residence permit; and b. a work permit, from the competent authority.
(4) Members of the Board of Commissioners of a Company are prohibited from holding concurrent positions as members of the Board of Commissioners in more than 3 (three) other Companies. (5) Concurrent positions as referred to in paragraph (4) do not include:
a. non-independent Board of Commissioners members performing functional tasks from the shareholders of the Company in the form of a legal entity within their business group; and/or b. Board of Commissioners members holding positions in non-profit organizations or institutions, provided that they do not neglect the execution of duties and responsibilities as members of the Board of Commissioners of the Company. (6) Members of the Board of Commissioners must meet the requirement of never having been members of the Board of Directors of the same Company within the last 6 (six) months.

5. The provisions of letter a and letter b of Article 24 are amended, so that Article 24 reads as follows:

Article 24
Independent Commissioners of the Company as referred to in Article 23 must meet the following requirements:
a. do not have Affiliation relationships with shareholders, members of the Board of Directors, other members of the Board of Commissioners, and/or members of the DPS, in the same Company; b. have never been members of the Board of Directors, members of the Board of Commissioners, members of the DPS, or held positions one level below the Board of Directors in the same Company or another Company that has an Affiliation relationship with the Company within the last 6 (six) months;
c. understand legislation in the financing field and other relevant legislation;
d. have good knowledge of the financial conditions of the Company where the Independent Commissioner serves; e. possess Indonesian citizenship; and f. reside in Indonesia.

6. The provisions of paragraph (1) and paragraph (4) of Article 28 are amended, Article 28 paragraph (2) and paragraph (3) are deleted, so that Article 28 reads as follows:

Article 28
(1) In assisting in the execution of duties and responsibilities, the Board of Commissioners in Companies that have total assets of more than IDR 200,000,000,000.00 (two hundred billion rupiah) are required to form:
a. an audit committee; b. a risk monitoring committee; and
c. a remuneration and nomination committee.
(2) Deleted.
(3) Deleted.
(4) In addition to the committees as referred to in paragraph (1), the Board of Commissioners of a Company may form other committees to support the execution of the Board of Commissioners' duties.

7. Between Article 28 and Article 29, 3 (three) articles are inserted, namely Article 28A, Article 28B, and Article 28C, so that they read as follows:

Article 28A
(1) The audit committee as referred to in Article 28 paragraph (1) letter a is required to consist of at least:
a. 1 (one) Independent Commissioner who serves as chairman; and b. 1 (one) independent party who has expertise in:

1. audit;
2. finance; or
3. accounting for Financing Companies or sharia accounting for Sharia Financing Companies or Financing Companies that have a UUS,
   who serves as a member.
   (2) The audit committee as referred to in Article 28 paragraph (1) letter a is required to perform:
   a. monitoring and evaluation of audit planning and execution; and b. monitoring of follow-up on audit results in order to assess the adequacy of internal controls, including the adequacy of the financial reporting process. (3) The execution as referred to in paragraph (2) is performed at least on:
   a. the execution of duties by the internal audit work unit; b. the compliance of audit execution by public accounting firms with audit standards;
   c. the compliance of financial reports with financial accounting standards; and
   d. the execution of follow-up by the Board of Directors on findings from the internal audit work unit, public accountants, and OJK supervision results, in order to provide recommendations to the Board of Commissioners. (4) The audit committee is required to provide recommendations regarding the appointment of public accountants and accounting firms to the Board of Commissioners to be submitted to the GMS.

Article 28B
(1) The risk monitoring committee as referred to in Article 28 paragraph (1) letter b is required to consist of at least:
a. 1 (one) Independent Commissioner who serves as chairman; and b. 1 (one) independent party who has expertise in finance and/or risk management who serves as a member.
(2) The risk monitoring committee as referred to in Article 28 paragraph (1) letter b is required to perform at least:
a. evaluation of the compliance between risk management policies and the execution of Company policies; and b. monitoring and evaluation of the execution of duties by the risk management committee and risk management work unit.

Article 28C
(1) The remuneration and nomination committee as referred to in Article 28 paragraph (1) letter c is required to consist of at least:
a. 1 (one) Independent Commissioner who serves as chairman; b. 1 (one) Commissioner; and
c. 1 (one) official with a job level one level below the Board of Directors who handles human resource management.
(2) The remuneration and nomination committee as referred to in Article 28 paragraph (1) letter c is required to:
a. perform evaluations and provide recommendations regarding remuneration policies; and b. formulate and provide recommendations regarding nomination policies.

8. The provisions of paragraph (1) of Article 33 are amended so that Article 33 reads as follows:

Article 33
(1) The DPS has at least the task and authority to provide advice and suggestions to the Board of Directors, to supervise the sharia aspects of the operational activities of Sharia Financing Companies or UUS to ensure compliance with Sharia Principles. (2) The tasks and authorities as referred to in paragraph (1) must be included in the Company's Articles of Association.

9. The provisions of Article 43 are amended so that it reads as follows:

Article 43
Members of the Board of Directors and members of the Board of Commissioners are required to disclose regarding:
a. their share ownership reaching 5% (five percent) or more in the Company where the members of the Board of Directors and Board of Commissioners serve and/or in other companies located within and outside the country; and b. financial relationships and family relationships with other members of the Board of Directors, other members of the Board of Commissioners, members of the DPS, and/or shareholders of the Company or business group where the members of the Board of Directors and Board of Commissioners serve, to the Company where the members of the Board of Directors and/or members of the Board of Commissioners serve, and included in the report on the implementation of Good Corporate Governance.

10. The provisions of Article 57 are deleted.

11. The provisions of paragraph (2) letter a and letter c of Article 58 are amended, Article 58 paragraph (2) letter b and paragraph (6) are deleted, so that Article 58 reads as follows:

Article 58
(1) Companies are required to prepare a report on the implementation of Good Corporate Governance at the end of each fiscal year.
(2) The report on the implementation of Good Corporate Governance as referred to in paragraph (1) must at least contain:
a. transparency of the implementation of Good Corporate Governance disclosing all aspects of the execution of the principles of Good Corporate Governance as referred to in Article 2 paragraph (2); and b. Deleted;
c. action plans including corrective actions required and completion timeframes and obstacles/difficulties in completion, if there are still deficiencies in the implementation of Good Corporate Governance.
(3) Further provisions regarding the form and structure of the report on the implementation of Good Corporate Governance are regulated in an OJK Circular.
(4) The report on the implementation of Good Corporate Governance as referred to in paragraph (1) must be submitted no later than April 30 of the following year.
(5) In the event that April 30 as referred to in paragraph (4) is a holiday, the deadline for submitting the report is the first working day after the aforementioned April 30. (6) Deleted.

12. Between CHAPTER XVI and CHAPTER XVII, 1 (one) chapter is inserted, namely CHAPTER XVI A, and between Article 58 and Article 59, 2 (two) articles are inserted, namely Article 58A and Article 58B, so that they read as follows:

CHAPTER XVI A
COMPLIANCE ENFORCEMENT

Article 58A
(1) Companies that do not fulfill the provisions as referred to in Article 8 paragraph (1), paragraph (2), paragraph (3), paragraph (4), and paragraph (5), Article 9 paragraph (1), Article 18 paragraph (1), paragraph (2), and paragraph (4), Article 23, Article 28A paragraph (1) letter a, Article 28B paragraph (1) letter a, and Article 28C paragraph (1) letter a and letter b of this OJK Regulation are required to submit a fulfillment plan no later than 1 (one) month from the date of the determination of the violation by the OJK. (2) The fulfillment plan as referred to in paragraph (1) must at least contain the plan that the Company will carry out for the fulfillment of the provisions, accompanied by a specific timeframe required to fulfill the provisions as referred to in paragraph (1). (3) The timeframe for the fulfillment plan as referred to in paragraph (2) is limited to a maximum of 6 (six) months.

Article 58B
(1) The fulfillment plan as referred to in Article 58A paragraph (1) must be signed by all members of the Board of Directors and members of the Board of Commissioners.
(2) The fulfillment plan as referred to in Article 58A paragraph (1) must obtain a statement of no objection from the OJK.
(3) The OJK submits requests for improvement, rejection, or statements of no objection regarding the fulfillment plan submitted by the Company as referred to in Article 58A paragraph (1) within a maximum timeframe of 14 (fourteen) working days from the date the fulfillment plan is received by the OJK. (4) The OJK submits requests for improvement of the fulfillment plan in the event that the fulfillment plan is assessed as capable of resolving the issues regarding provisions that have not yet been fulfilled by the Company, but the fulfillment plan still requires improvement. (5) Companies are required to submit the improved fulfillment plan in accordance with the OJK's request as referred to in paragraph (4) no later than 14 (fourteen) working days from the date of the letter requesting improvement of the fulfillment plan from the OJK. (6) In the event that the Company has submitted the improved fulfillment plan in accordance with the OJK's request, the OJK provides a statement of no objection or rejection within a timeframe in accordance with the provisions as referred to in paragraph (3). (7) In the event that the fulfillment plan as referred to in paragraph (1) is assessed as unable to resolve the issues regarding provisions that have not yet been fulfilled by the Company, the OJK submits a rejection of the fulfillment plan. (8) In the event that the fulfillment plan as referred to in paragraph (1) is assessed as capable of resolving the issues regarding provisions that have not yet been fulfilled by the Company, the OJK provides a statement of no objection regarding the fulfillment plan. (9) If within the timeframe as referred to in paragraph (3), the OJK does not submit a request for improvement, rejection, or statement of no objection, the Company may execute the fulfillment plan. (10) Companies are required to execute the fulfillment plan that has obtained a statement of no objection from the OJK as referred to in paragraph (8) or the fulfillment plan as referred to in paragraph (9).

13. The provisions of paragraph (1), paragraph (2), and paragraph (3) of Article 59 are amended, and Article 59 paragraph (4) is deleted, so that Article 59 reads as follows:

Article 59
(1) Companies that:
a. violate the provisions as referred to in Article 58A paragraph (1) and/or Article 58B paragraph (5) and paragraph (10); b. have their fulfillment plan rejected by the OJK as referred to in Article 58B paragraph (7); and/or
c. have not fulfilled the provisions as referred to in Article 8 paragraph (1), paragraph (2), paragraph (3), paragraph (4) and paragraph (5), Article 9 paragraph (1), Article 18 paragraph (1), paragraph (2) and paragraph (4), Article 23, Article 28A paragraph (1) letter a, Article 28B paragraph (1) letter a, and Article 28C paragraph (1) letter a within the timeframe established in the fulfillment plan as referred to in Article 58A paragraph (3),
are subject to administrative sanctions in the form of written warnings.
(2) In the event that a Company violates the provisions as referred to in paragraph (1) but the violation has been resolved, it remains...

subject to administrative sanctions in the form of written warnings that end automatically.
(3) In the event that the Company has fulfilled the provisions as referred to in paragraph (1), the OJK revokes the administrative sanction in the form of a written warning. (4) Deleted.
14. The provisions of Article 60 are amended and supplemented with 2 (two) paragraphs, namely paragraph (2) and paragraph (3), so that Article 60 reads as follows:

Article 60
(1) Companies that violate the provisions as referred to in Article 2 paragraph (1), paragraph (5), and paragraph (6), Article 3 paragraph (1), Article 4 paragraph (1), Article 7 paragraph (1), Article 8 paragraph (6), Article 10 paragraph (1), Article 11, Article 12, Article 13 paragraph (1), Article 14 paragraph (1), Article 15, Article 16 paragraph (1), paragraph (2), paragraph (3), and paragraph (4), Article 18 paragraph (3), Article 19 paragraph (1), Article 20, Article 21, Article 26 paragraph (1), Article 27, Article 28 paragraph (1), Article 28A paragraph (1) letter b, paragraph (2), and paragraph (4), Article 28B paragraph (1) letter b and paragraph (2), Article 28C paragraph (1) letter c and paragraph (2), Article 29, Article 30 paragraph (1), paragraph (2), paragraph (3), and paragraph (4), Article 31, Article 32 paragraph (1), Article 33 paragraph (2), Article 34 paragraph (1), Article 35, Article 37, Article 38 paragraph (1), Article 40 paragraph (1), paragraph (2), and paragraph (3), Article 41, Article 42 paragraph (1), paragraph (2), and paragraph (4), Article 43, Article 44, Article 45 paragraph (1), Article 46, Article 47, Article 48, Article 50 paragraph (1), Article 51 paragraph (1), Article 53 paragraph (2), Article 54 paragraph (1), Article 55, Article 56, Article 58 paragraph (1) and paragraph (4) of this OJK Regulation, are subject to administrative sanctions in the form of written warnings.

(2) Companies that violate the provisions as referred to in paragraph (1) but whose violations have been resolved, are still subject to administrative sanctions in the form of written warnings that end automatically.

(3) In the event that the Company has fulfilled the provisions as referred to in paragraph (1), the OJK revokes the administrative sanction in the form of a written warning.

15. Between Article 60 and Article 61, 1 (one) article is inserted, namely Article 60A, which reads as follows:

Article 60A
In the event that the OJK has imposed administrative sanctions as referred to in Article 59 paragraph (1) and Article 60 paragraph (1) and the Company fails to fulfill the provisions causing the administrative sanction to be imposed, the OJK may:
a. downgrade the results of the Company's risk level assessment or health level assessment; and/or b. conduct a re-evaluation of the Company's principal parties.

Article II
At the time this OJK Regulation comes into force:
a. For Companies that have obtained business licenses before this OJK Regulation was enacted, the provisions in Article 28 paragraph (1) letter b and letter c, Article 28A paragraph (1), Article 28B paragraph (1), and Article 28C paragraph (1) shall be effective 1 (one) year from the enactment of this OJK Regulation. b. Every administrative sanction that has been imposed against Financing Companies based on OJK Regulation Number 30/POJK.05/2014 on Good Corporate Governance for Financing Companies is declared valid and effective.
c. Financing Companies that have not been able to overcome the causes of the administrative sanctions as referred to in letter b are subject to administrative sanctions in accordance with this OJK Regulation.

This copy is consistent with the original
Deputy Director of Legal Consultation and Harmonization of Banking Regulations 1 Legal Directorate 1 Legal Department signed Wiwit Puspasari d. This OJK Regulation comes into force on the date of enactment. To ensure that everyone knows it, ordering the enactment of this OJK Regulation by placing it in the State Gazette of the Republic of Indonesia. Established in Jakarta on 22 April 2020 CHAIRMAN OF THE COMMISSIONERS FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, signed WIMBOH SANTOSO Enacted in Jakarta on 29 April 2020 MINISTER OF LAW AND HUMAN RIGHTS REPUBLIC OF INDONESIA, signed YASONNA H. LAOLY STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 121

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 29 /POJK.05/2020
ON
AMENDMENT TO FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 30/POJK.05/2014 ON GOOD CORPORATE GOVERNANCE FOR FINANCING COMPANIES

I. GENERAL
Companies must uphold the principles of implementing Good Corporate Governance in carrying out all Company activities. To provide guidelines for the implementation of Good Corporate Governance, the OJK has established OJK Regulation Number 30/POJK.05/2014 on Good Corporate Governance for Financing Companies, which serves as the legal basis for the guidelines on implementing good corporate governance for Companies. As an effort to improve the Financial Services Authority Regulation Number 30/POJK.05/2014 on Good Corporate Governance for Financing Companies, there are content matters that are adjusted and/or added in this OJK Regulation, including the waiting period for Independent Commissioners, duties and membership of audit committees, duties and membership of risk monitoring committees, duties and membership of remuneration and nomination committees, transparency of share ownership, and the mechanism for imposing sanctions. Improvements to this Financial Services Authority Regulation are expected to enhance Good Corporate Governance so that it is able to create healthier, reliable, trustworthy, and competitive Companies in the future.

In this regard, the Financial Services Authority establishes the Amendment to the Financial Services Authority Regulation on OJK Regulation Number 30/POJK.05/2014 on Good Corporate Governance for Financing Companies.

II. ARTICLE BY ARTICLE
Article I
Number 1
Article 1
Sufficiently clear.
Number 2
Article 2
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Letter a
What is meant by "openness" is openness in the decision-making process and openness in the disclosure and provision of relevant information regarding the Company, which is easily accessible by Stakeholders in accordance with financing legislation, standards, principles, and practices of healthy financing business operations. Letter b What is meant by "accountability" is the clarity of functions and the implementation of Company Organ responsibilities so that Company performance can run transparently, fairly, effectively, and efficiently. Letter c What is meant by "responsibility" is the alignment of Company management with financing legislation, ethical values, standards, principles, and practices of healthy financing business operations. Letter d What is meant by "independence" is the state of the Company being managed independently and professionally, free from Conflicts of Interest and influence or pressure from any party that is not in accordance with financing legislation, ethical values, standards, principles, and practices of healthy financing business operations. Letter e What is meant by "equality and fairness" is equality, balance, and justice in fulfilling Stakeholder rights arising from agreements, legislation, and ethical values, standards, principles, and practices of healthy financing business operations. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear. Number 3
Article 2A
Paragraph (1)
Sufficiently clear.

Paragraph (2)
What is meant by "specific actions to improve the implementation of Good Corporate Governance" includes:

1. increasing the number of Directors and/or Commissioners in the event that the number of existing Directors and/or Commissioners is deemed ineffective and inefficient; and
2. adding information regarding transparency of share ownership of less than 5% (five percent) by Directors in the Company where the respective Director serves and/or in other companies located domestically and abroad, in the event that the respective Director is proven to exercise control.
   Paragraph (3)
   Sufficiently clear.
   Number 4
   Article 18
   Paragraph (1)
   The number of Commissioners includes Independent Commissioners.
   Paragraph (2)
   Sufficiently clear.
   Paragraph (3)
   Sufficiently clear.
   Paragraph (4)
   Sufficiently clear.
   Paragraph (5)
   Included in the definition of performing functional duties is if the relevant function in the Company and/or the legal entity shareholder group of the Company, including subsidiary Companies, is to perform its function as a representative of the Company's shareholders, such as members of the Board of Commissioners or members of the Board of Directors. Paragraph (6) Sufficiently clear. Number 5
   Article 24
   Sufficiently clear.
   Number 6
   Article 28
   Paragraph (1)
   Sufficiently clear.
   Paragraph (2)
   Deleted.
   Paragraph (3)
   Deleted.
   Paragraph (4)
   Other committees that may be formed by the Board of Commissioners include governance committees.
   Number 7
   Article 28A
   Paragraph (1)
   Letter a
   Sufficiently clear.
   Letter b
   What is meant by "independent party" is an individual outside the Company who is independent.
   Paragraph (2)
   Sufficiently clear.
   Paragraph (3)
   Sufficiently clear.
   Paragraph (4)
   Sufficiently clear.

Article 28B
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
What is meant by "independent party" is an individual outside the Company who is independent.
Paragraph (2)
Sufficiently clear.
Article 28C
Sufficiently clear.
Number 8
Article 33
Sufficiently clear.
Number 9
Article 43
Letter a
Sufficiently clear.
Letter b
What is meant by "family relationship" is the relationship between husband/wife or family relationships, both vertical and horizontal, including parents-in-law, children-in-law, and siblings-in-law. What is meant by "business group" is a business group due to ownership and/or control linkages. Number 10
Article 57
Deleted.

Number 11
Article 58
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
Sufficiently clear.
Paragraph (4)
Sufficiently clear.
Paragraph (5)
Sufficiently clear.
Paragraph (6)
Deleted.
Number 12
Article 58A
Sufficiently clear.
Article 58B
Sufficiently clear.
Number 13
Article 59
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
Sufficiently clear.
Paragraph (4)
Deleted.
Number 14
Article 60
Sufficiently clear.

Number 15
Article 60A
Letter a
What is meant by "downgrading the results of the Company's risk level assessment" is that the OJK can downgrade the Company's net risk level and/or the assessment results for each risk level assessment module. Regulations regarding the assessment of the risk level of Companies refer to OJK Regulations regarding the assessment of the risk level of non-bank financial service institutions and its implementing regulations. What is meant by "downgrading the results of the Company's health level assessment" is that the OJK can downgrade the Company's health level against the composite health level assessment results and/or the assessment results for each health level assessment factor. Regulations regarding the assessment of the health level of Companies refer to OJK Regulations regarding the assessment of the health level of non-bank financial service institutions and its implementing regulations. Letter b The implementation of re-evaluation of the Company's principal parties refers to OJK Regulations regarding re-evaluation for principal parties of financial service institutions.
Article II
Sufficiently clear.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6505 ---