Financial Services Authority Regulation Number 36/POJK.05/2015 on Good Corporate Governance for Venture Capital Companies

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 36 /POJK.05/2015
CONCERNING
GOOD CORPORATE GOVERNANCE
FOR VENTURE CAPITAL COMPANIES
BY THE GRACE OF GOD THE ALMIGHTY
THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that one of the efforts to strengthen the venture capital company industry is by improving the quality of implementation of good corporate governance for venture capital companies; b. that based on the considerations as referred to in letter a, it is necessary to establish a Financial Services Authority Regulation concerning Good Corporate Governance for Venture Capital Companies;

Recalling:
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);

DETERMINES:

To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING GOOD CORPORATE GOVERNANCE FOR VENTURE CAPITAL COMPANIES.

CHAPTER I
GENERAL PROVISIONS

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

1. Venture Capital Business is a financing business through capital participation and/or financing for a certain period of time in the context of developing the business of business partners or debtors.
2. Venture Capital Company, hereinafter abbreviated as PMV, is a business entity that conducts Venture Capital Business activities, venture fund management, fee-based service activities, and other business activities with the approval of the Financial Services Authority.
3. Sharia Venture Capital Business is a financing business through investment activities and/or service provision carried out for a certain period of time in the context of developing businesses executed based on Sharia principles.
4. Sharia Venture Capital Company, hereinafter abbreviated as PMVS, is a business entity that conducts Sharia Venture Capital Business activities, venture fund management, and other business activities with the approval of the Financial Services Authority, all of which are executed based on Sharia principles.
5. Sharia Principles are Islamic legal provisions based on fatwas and/or Sharia compliance statements from the National Sharia Council of the Indonesian Ulema Council.
6. Venture Fund Investor is an individual or institution, either domestic or foreign, that makes an investment into a venture fund.
7. Sharia Business Unit, hereinafter abbreviated as UUS, is a working unit of the PMV headquarters that functions as the parent office of offices conducting Sharia Venture Capital Business activities.
8. Business Partner is an individual or company, including micro, small, medium enterprises, and cooperatives, that receives capital participation and/or investment based on profit-sharing principles from PMV, PMVS, or UUS.
9. Debtor is an individual or company, including micro, small, medium enterprises, and cooperatives, that receives productive business financing from PMV.
10. Good Corporate Governance for PMV or PMVS, hereinafter referred to as Good Corporate Governance, is the structure and process used and applied by the PMV or PMVS organs to improve the achievement of business performance targets and optimize the value of PMV or PMVS for all stakeholders in an accountable manner, based on legislation and ethical values.
11. PMV or PMVS Organs are the General Meeting of Shareholders, Board of Directors, Board of Commissioners, and/or Sharia Supervisory Board as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PMV or PMVS that are legal entities in the form of a limited liability company or equivalent for PMV or PMVS that are legal entities in the form of a cooperative and limited partnership business entities.
12. Stakeholders are parties who have an interest in PMV or PMVS, directly or indirectly, including Business Partners, Debtors, shareholders/members, employees, Venture Fund Investors, creditors, fund providers, goods and service providers, and/or the government.
13. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the general meeting of shareholders as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PMV or PMVS that are legal entities in the form of a limited liability company or equivalent to GMS for PMV or PMVS that are legal entities in the form of a cooperative and limited partnership business entities.
14. Shareholder is the shareholder as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PMV or PMVS that are legal entities in the form of a limited liability company or equivalent to Shareholder for PMV or PMVS that are legal entities in the form of a cooperative and limited partnership business entities.
15. Board of Directors is the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PMV or PMVS that are legal entities in the form of a limited liability company or equivalent to Board of Directors for PMV or PMVS that are legal entities in the form of a cooperative or limited partnership business entities.
16. Board of Commissioners is the Board of Commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PMV or PMVS that are legal entities in the form of a limited liability company or equivalent to Board of Commissioners for PMV or PMVS that are legal entities in the form of a cooperative or limited partnership business entities.
17. Independent Commissioner is a member of the Board of Commissioners who is not affiliated with Shareholders, Board of Directors members, other Board of Commissioners members, and/or Sharia Supervisory Board members, meaning they do not have financial, managerial, share ownership, and/or family relationships with Shareholders, Board of Directors members, other Board of Commissioners members, and/or Sharia Supervisory Board members, or other relationships that can influence their ability to act independently.
18. Sharia Supervisory Board, hereinafter abbreviated as SSBoard, is a part of the PMV or PMVS organ that has the task and function of supervising the implementation of business activities to ensure compliance with Sharia Principles.
19. Conflict of Interest is a state where there is a conflict between the economic interests of PMV or PMVS and the personal economic interests of Shareholders, Board of Directors members, Board of Commissioners members, and/or SSBoard members, as well as PMV or PMVS employees.
20. Financial Services Authority, hereinafter abbreviated as OJK, is the Financial Services Authority as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.

CHAPTER II
IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE

Article 2
(1) PMV or PMVS is required to implement Good Corporate Governance principles in all its business activities at all levels or tiers of the organization.
(2) The Good Corporate Governance principles as referred to in paragraph (1) include:
a. transparency, namely openness in the decision-making process and openness in disclosure and provision of relevant information regarding PMV or PMVS, which is easily accessible by Stakeholders in accordance with legislation in the venture capital sector and standards, principles, and practices of healthy business conduct; b. accountability, namely clarity of function and implementation of responsibility by PMV or PMVS organs so that the performance of PMV or PMVS can run transparently, fairly, effectively, and efficiently;
c. responsibility, namely the conformity of PMV or PMVS management with legislation in the venture capital sector and ethical values and standards, principles, and practices of healthy business conduct;
d. independence, namely the state of PMV or PMVS being managed independently and professionally and free from Conflicts of Interest and influence or pressure from any party that is not in accordance with legislation in the venture capital sector and ethical values and standards, principles, and practices of healthy business conduct; and e. fairness, namely equality, balance, and justice in fulfilling the rights of Stakeholders arising from agreements, legislation, and ethical values and standards, principles, and practices of healthy business conduct.

(3) The implementation of Good Corporate Governance aims to:
a. optimize the value of PMV or PMVS for Stakeholders, specifically Business Partners, Debtors, creditors, fund providers, and/or Venture Fund Investors; b. improve the management of PMV or PMVS professionally, effectively, and efficiently;
c. increase the compliance of PMV or PMVS organs and the ranks below them so that in making decisions and carrying out actions, they are grounded in high ethics, compliance with legislation, and awareness of the social responsibility of PMV or PMVS towards Stakeholders and environmental sustainability;
d. realize a healthier, reliable, trustworthy, and competitive PMV or PMVS; and e. increase the contribution of PMV or PMVS to the national economy.

(4) The implementation of Good Corporate Governance principles as referred to in paragraph (2) must be formulated in a guideline that at least contains:
a. procedures for the implementation of duties and responsibilities of the Board of Commissioners and Board of Directors; b. completeness and procedures for the implementation of duties of committees and work units that perform internal control functions;
c. policies and procedures for the implementation of compliance, internal audit, and external audit functions;
d. risk management policies and procedures, including internal control systems; e. remuneration policies; f. policies on transparency of financial and non-financial conditions; and g. procedures for the preparation of long-term plans as well as annual work and budget plans.

CHAPTER III
GENERAL MEETING OF SHAREHOLDERS

Article 3
(1) The GMS of PMV or PMVS must be held in accordance with legislation and the articles of association of PMV or PMVS that are transparent and accountable.
(2) In making decisions, the GMS must safeguard the interests of all parties, specifically the interests of Business Partners, Debtors, creditors, fund providers, Venture Fund Investors, and/or minority Shareholders.

CHAPTER IV
SHAREHOLDERS

Article 4
(1) Shareholders of PMV or PMVS must meet the following requirements:
a. the capital contribution of Shareholders of PMV or PMVS does not come from loans; b. the capital contribution of Shareholders of PMV or PMVS does not come from money laundering and financial crime activities;
c. are not listed in the bad credit list;
d. are not listed in the Non-Pass List (DTL) in the financial services sector; e. have never been sentenced for committing criminal acts in the financial services business and/or economic sector in the last 5 (five) years; f. have never been sentenced for committing criminal acts based on court decisions that have acquired permanent legal force in the last 5 (five) years; g. have never been declared bankrupt or guilty causing a company/business to be declared bankrupt based on court decisions that have acquired permanent legal force in the last 5 (five) years; and h. have never been a Shareholder, Director, Board of Commissioner, or SSBoard member of a financial services company whose business license was revoked due to violations in the last 5 (five) years.

(2) For PMV or PMVS that have traded their shares on the stock exchange, the provisions as referred to in paragraph (1) only apply to Controlling Shareholders of the respective PMV or PMVS.

Article 5
Shareholders of PMV or PMVS through the GMS ensure that PMV or PMVS is operated based on healthy business practices.

Article 6
Shareholders must have a commitment to the operational development of PMV or PMVS.

Article 7
(1) Shareholders of PMV or PMVS are prohibited from interfering in the operational activities of PMV or PMVS that are the responsibility of the Board of Directors in accordance with the articles of association of PMV or PMVS and legislation, except in the context of exercising rights and obligations as the GMS. (2) Shareholders of PMV or PMVS who serve as members of the Board of Directors, Board of Commissioners, or SSBoard of the same PMV or PMVS must prioritize the interests of PMV or PMVS.

CHAPTER V
BOARD OF DIRECTORS

Article 8
(1) PMV or PMVS is required to have at least 2 (two) Board of Directors members.
(2) All Board of Directors members of PMV or PMVS where all Shareholders:
a. are Indonesian citizens; and/or b. are Indonesian legal entities, must be Indonesian citizens.
(3) PMV or PMVS that contains foreign ownership, either directly or indirectly, is required to have at least 1 (one) Board of Directors member who is an Indonesian citizen.
(4) Board of Directors members of PMV or PMVS as referred to in paragraph (1) must reside within the territory of the Republic of Indonesia.
(5) Foreign citizen Board of Directors members of PMV or PMVS must meet the provisions of legislation in the field of labor.

Article 9
(1) Board of Directors members of PMV or PMVS must meet the following provisions:
a. are not listed in the bad credit list; b. are not listed in the Non-Pass List (DTL) in the financial services sector;
c. have never been sentenced for committing criminal acts in the financial services business and/or economic sector in the last 5 (five) years;
d. have never been sentenced for committing criminal acts based on court decisions that have acquired permanent legal force in the last 5 (five) years; e. have never been declared bankrupt or guilty causing a company/business to be declared bankrupt based on court decisions that have acquired permanent legal force in the last 5 (five) years; f. have never been a Shareholder, Director, Board of Commissioner, or SSBoard member of a financial services company whose business license was revoked due to violations in the last 5 (five) years; and g. one of the Board of Directors members of PMV or PMVS must have at least 2 (two) years of operational experience in the venture capital, banking, or other financial services institutions.

(2) Board of Directors members of PMV or PMVS must meet the following criteria:
a. be able to act with good faith, honesty, and professionalism; b. be able to act in the interests of PMV or PMVS and/or other Stakeholders;
c. prioritize the interests of PMV or PMVS and/or other Stakeholders over personal interests;
d. be able to make decisions based on independent and objective assessments for the interests of PMV or PMVS and other Stakeholders; and e. be able to avoid abuse of authority to obtain undue personal gain or cause losses to PMV or PMVS.

Article 10
Board of Directors members of PMV or PMVS must:
a. comply with legislation, articles of association, and other internal regulations of PMV or PMVS in carrying out their duties; b. manage PMV or PMVS according to their authority and responsibilities;
c. be accountable for the implementation of their duties to the GMS;
d. ensure that PMV or PMVS considers the interests of all parties, specifically the interests of Business Partners, Debtors, creditors, fund providers, and/or Venture Fund Investors; e. ensure that information regarding PMV or PMVS is provided to the Board of Commissioners and SSBoard members in a timely and complete manner; and f. assist and provide facilities and/or resources for the smooth implementation of the duties and authorities of PMV or PMVS organs.

Article 11
Board of Directors members of PMV or PMVS are prohibited from:
a. conducting transactions that have a Conflict of Interest with the activities of the PMV or PMVS where the respective Board of Directors member serves; b. utilizing their position at the PMV or PMVS where they serve for personal, family, and/or other parties' interests that can harm or reduce the profits of the PMV or PMVS where they serve;
c. taking and/or receiving personal benefits from the PMV or PMVS where they serve, other than remuneration and facilities established based on GMS decisions; and
d. fulfilling Shareholder requests related to the operational activities of the PMV or PMVS where they serve, other than those established in the GMS.

Article 12
(1) Board of Directors members of PMV must hold Board of Directors meetings periodically at least 1 (one) time in 1 (one) month.
(2) Board of Directors members of PMV must attend Board of Directors meetings at least 50% (fifty percent) of the total Board of Directors meetings in a 1 (one) year period.
(3) The results of Board of Directors meetings as referred to in paragraph (1) must be formulated in Board of Directors meeting minutes and documented properly.
(4) Differences of opinion (dissenting opinions) occurring in Board of Directors meeting decisions must be clearly stated in the Board of Directors meeting minutes accompanied by the reasons for such differences of opinion. (5) Board of Directors members of PMV or PMVS, whether present or absent in the Board of Directors meeting, have the right to receive copies of the Board of Directors meeting minutes. (6) The number of Board of Directors meetings held and the attendance of each Board of Directors member of PMV or PMVS must be included in the Good Corporate Governance implementation report.

Article 13
The Board of Directors of PMV or PMVS must guarantee effective, precise, and quick decision-making and be able to act independently, without interests that can interfere with their ability to carry out tasks independently and objectively.

CHAPTER VI
BOARD OF COMMISSIONERS

Article 14
(1) PMV or PMVS with assets exceeding IDR 500,000,000,000.00 (five hundred billion rupiah) is required to have at least 2 (two) Board of Commissioners members.
(2) PMV or PMVS must have at least 1 (one) Board of Commissioners member residing within the territory of the Republic of Indonesia.
(3) Foreign citizen Board of Commissioners members of PMV or PMVS must meet the provisions of legislation in the field of labor.

Article 15
(1) Board of Commissioners members of PMV or PMVS must meet the following provisions:
a. are not listed in the bad credit list; b. are not listed in the Non-Pass List (DTL) in the financial services sector;
c. have never been sentenced for committing criminal acts in the financial services business and/or economic sector in the last 5 (five) years;
d. have never been sentenced for committing criminal acts based on court decisions that have acquired permanent legal force in the last 5 (five) years; e. have never been declared bankrupt or guilty causing a company/business to be declared bankrupt based on court decisions that have acquired permanent legal force in the last 5 (five) years; and f. have never been a Shareholder, Director, Board of Commissioner, or SSBoard member of a financial services company whose business license was revoked due to violations in the last 5 (five) years;

(2) Board of Commissioners members of PMV or PMVS must:
a. carry out supervisory tasks and provide advice to the Board of Directors; b. supervise the Board of Directors in maintaining the balance of interests of all parties;
c. prepare Board of Commissioners activity reports which are part of the Good Corporate Governance implementation report;
d. monitor the effectiveness of Good Corporate Governance implementation; e. provide approval in cases where the SSBoard requires assistance from committee members whose organizational structure is below the Board of Commissioners; f. ensure that the Board of Directors has followed up on audit findings and recommendations from the PMV or PMVS internal audit work unit, external auditors, OJK supervision results, and/or other authority supervision results; and g. report to PMV or PMVS regarding their share ownership and/or their family's ownership in the respective PMV or PMVS and/or other companies.

Article 16
Board of Commissioners members of PMV or PMVS are prohibited from:
a. conducting transactions that have a Conflict of Interest with the activities of the PMV or PMVS where the respective Board of Commissioners member serves; b. utilizing their position at the PMV or PMVS where they serve for personal, family, and/or other parties' interests that can harm or reduce the profits of the PMV or PMVS where they serve;
c. taking and/or receiving personal benefits from the PMV or PMVS where they serve, other than remuneration and facilities established based on GMS decisions; and
d. interfering in the operational activities of PMV or PMVS that are the responsibility of the Board of Directors.

Article 17
Board of Commissioners members of PMV or PMVS have the right to obtain complete and timely information from the Board of Directors regarding PMV.

Article 18
PMV or PMVS is required to have a function that assists Board of Commissioners members in monitoring and ensuring the effectiveness of the internal control system and the implementation of duties of internal and external auditors by monitoring and evaluating audit planning and implementation in order to assess the adequacy of internal controls, including the financial reporting process.

Article 19
(1) Board of Commissioners members of PMV or PMVS must hold Board of Commissioners meetings at least 1 (one) time in 3 (three) months.
(2) Board of Commissioners members of PMV must attend Board of Commissioners meetings at least 75% (seventy-five percent) of the total Board of Commissioners meetings in a 1 (one) year period. (3) The results of Board of Commissioners meetings as referred to in paragraph (1) must be formulated in Board of Commissioners meeting minutes and documented properly. (4) Differences of opinion occurring in Board of Commissioners meeting decisions must be clearly stated in the Board of Commissioners meeting minutes accompanied by the reasons for such differences of opinion. (5) Board of Commissioners members of the company, whether present or absent in the Board of Commissioners meeting, have the right to receive copies of the Board of Commissioners meeting minutes. (6) The number of Board of Commissioners meetings held and the attendance of each Board of Commissioners member must be included in the Good Corporate Governance implementation report.

Article 20
Board of Commissioners members of PMV or PMVS must guarantee effective, precise, and quick decision-making and be able to act independently in carrying out their tasks.

Article 21
PMV or PMVS with assets exceeding IDR 500,000,000,000.00 (five hundred billion rupiah) is required to have at least 1 (one) Independent Commissioner.

Article 22
Independent Commissioners of PMV or PMVS as referred to in Article 21 must meet the following requirements:
a. do not have an affiliation relationship with Board of Directors members, Board of Commissioners members, SSBoard members, or Shareholders of PMV or PMVS, in the same PMV or PMVS; b. have never been a Board of Directors member, Board of Commissioner member, SSBoard member, or held a position 1 (one) level below the Board of Directors in the same PMV or PMVS or another company that has an affiliation relationship with the respective PMV or PMVS in the last 2 (two) years;
c. understand the legislation in the venture capital sector and other relevant legislation provisions;

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d. have good knowledge of the financial condition of the PMV or PMVS where the aforementioned Independent Commissioner serves; e. hold Indonesian citizenship; and f. reside in Indonesia.

Article 23
Independent Commissioners have the main task of performing supervisory functions to voice the interests of Business Partners, Debtors, Creditors, Fund Providers, Venture Capital Investors, and other Stakeholders.

Article 24
(1) Independent Commissioners are required to report to the OJK no later than 10 (ten) calendar days since the discovery of:
a. violations of regulations in the field of venture capital; and/or b. conditions or estimated conditions that may endanger the continuity of the business of the PMV or PMVS.
(2) If the deadline for submitting the report as referred to in paragraph (1) falls on a holiday, the deadline for submitting the report is the first working day following it.

Article 25
PMV or PMVS are prohibited from dismissing Independent Commissioners due to actions taken by the Independent Commissioner in performing their duties as referred to in Article 23 and Article 24 paragraph (1).

CHAPTER VII
SHARIA SUPERVISORY BOARD

Article 26
(1) PMV that has a UUS or PMVS must have a DPS.
(2) The DPS as referred to in paragraph (1) consists of 1 (one) Sharia expert or more appointed by the General Meeting of Shareholders (RUPS) upon recommendation of the National Sharia Board of the Indonesian Ulema Council. (3) The DPS as referred to in paragraph (1) is appointed in the RUPS and recorded in a notarial deed.

Article 27
(1) The DPS has at least the duties and authority to provide advice and suggestions to the Board of Directors, and to supervise the Sharia aspects of the operational activities of PMV or PMVS that conduct business activities based on Sharia Principles. (2) The duties and authority as referred to in paragraph (1) must be included in the Articles of Association of PMV or PMVS that conduct business activities based on Sharia Principles.

Article 28
DPS members are prohibited from holding concurrent positions as members of the Board of Directors or Board of Commissioners at the same PMV or PMVS.

Article 29
(1) DPS members must meet the following requirements:
a. not listed in the non-performing loan list; b. not listed in the Unqualified List (DTL) in the financial services sector;
c. never sentenced for committing criminal offenses in the field of financial services business and/or the economy in the last 5 (five) years;
d. never sentenced for committing crimes based on a court decision that has acquired permanent legal force in the last 5 (five) years; e. never declared bankrupt or guilty causing a corporation/company to be declared bankrupt based on a court decision that has acquired permanent legal force in the last 5 (five) years; and f. never have been a Shareholder, Board of Directors, Board of Commissioners, or DPS of a financial services company whose business license was revoked due to violations in the last 5 (five) years. (2) DPS members must meet the following criteria:
a. able to act with good faith, honesty, and professionalism; b. able to act in the interest of the PMV or PMVS and/or other Stakeholders;
c. prioritize the interests of the PMV or PMVS and/or other Stakeholders over personal interests;
d. able to make decisions based on independent and objective assessments for the interest of the PMV or PMVS and/or other Stakeholders; and e. able to avoid abuse of authority to obtain undue personal profit or cause losses to the PMV or PMVS.

Article 30
The DPS is required to ensure effective, precise, and rapid decision-making and to act independently, having no interests that can interfere with their ability to perform tasks independently and objectively.

Article 31
DPS members have the right to obtain complete and timely information from the Board of Directors regarding the PMV.

Article 32
(1) DPS members are required to hold DPS meetings periodically at least 6 (six) times in 1 (one) year.
(2) The results of the DPS meetings as referred to in paragraph (1) must be recorded in the DPS meeting minutes and documented properly.
(3) Differences of opinion (dissenting opinions) occurring in DPS meeting decisions must be clearly stated in the DPS meeting minutes along with the reasons for the differences of opinion. (4) DPS members present and absent from the DPS meeting have the right to receive copies of the DPS meeting minutes. (5) The number of DPS meetings held and the attendance of each DPS member must be included in the report on the implementation of Good Corporate Governance.

Article 33
DPS members are prohibited from:
a. conducting transactions that have Conflicts of Interest with the activities of the PMV or PMVS where the aforementioned DPS member serves; b. utilizing their position at the PMV or PMVS where the aforementioned DPS member serves for personal, family, and/or other parties' interests that can harm or reduce the profit of the PMV or PMVS where the aforementioned DPS member serves; and
c. taking and/or receiving personal profit from the PMV or PMVS where the aforementioned DPS member serves, other than remuneration and other facilities established based on RUPS decisions.

Article 34
(1) In the event that DPS members assess that there are policies or actions by Board of Directors members that are not in accordance with Sharia Principles, the DPS is required to request explanations from Board of Directors members regarding the policies or actions not in accordance with Sharia Principles. (2) In the event that Board of Directors members reject the DPS assessment results as referred to in paragraph (1), the DPS is required to report completely and comprehensively to the OJK and copy the Board of Directors no later than 7 (seven) working days since the explanation from Board of Directors members was received by the DPS. (3) In the event that the Board of Directors accepts the DPS assessment results as referred to in paragraph (1), the DPS requests the Board of Directors to make improvements to the policies or actions of the Board of Directors members to be in accordance with Sharia Principles. (4) In the event that Board of Directors members do not make improvements to policies or actions as referred to in paragraph (3), the DPS is required to immediately report completely and comprehensively to the OJK and copy the Board of Directors no later than 7 (seven) working days since it was known that Board of Directors members did not make the intended improvement efforts.

CHAPTER VIII
EXTERNAL AUDITORS

Article 35
(1) External auditors of PMV or PMVS must be appointed by the RUPS from candidates for external auditors proposed by the Board of Commissioners.
(2) The nomination of external auditors as referred to in paragraph (1) must be accompanied by:
a. reasons for nomination and the amount of honorarium or service fees proposed for the external auditor; and b. a statement of willingness signed by the external auditor, to be free from the influence of the Board of Directors, Board of Commissioners, and interested parties at the PMV or PMVS and willingness to provide information related to the results of their audit to the OJK. (3) PMV or PMVS is required to provide all accounting records and supporting data necessary for external auditors so as to enable external auditors to give their opinion on the fairness and compliance of the financial reports of PMV or PMVS with applicable audit standards.

CHAPTER IX
ANNUAL BUSINESS PLAN

Article 36
(1) PMV or PMVS is required to prepare an annual business plan.
(2) The annual business plan as referred to in paragraph (1) must:
a. be established by the Board of Directors; b. obtain approval from the Board of Commissioners and/or DPS; and
c. be socialized to management and employees in relevant work units.
(3) The annual business plan as referred to in paragraph (1) must at least include:
a. policies and business activity plans; b. management policies and strategies;
c. implementation of risk management and compliance;
d. implementation of Good Corporate Governance; e. financial performance of the PMV or PMVS in the previous period; f. projected financial statements along with the assumptions used; g. projected ratios and financial health levels; h. business activity development and marketing plans;
i. office network development and/or change plans;
j. capital plans; k. financing plans;
l. organizational and human resource development plans; and
m. other information.
(4) PMV or PMVS is required to submit the annual business plan as referred to in paragraph (1) for the first time no later than January 30, 2017.
(5) PMV or PMVS is required to submit the annual business plan as referred to in paragraph (1) to the OJK no later than January 30 of the following year.
(6) If January 30 as referred to in paragraph (4) and paragraph (5) falls on a holiday, then PMV or PMVS is required to submit the annual business plan on the first working day following it.

CHAPTER X
RISK MANAGEMENT AND INTERNAL CONTROL

Article 37
(1) PMV or PMVS is required to implement risk management by identifying, assessing, and monitoring business risks effectively.
(2) Risk management as referred to in paragraph (1) must be adjusted to the objectives, business policies, size, and complexity of the business as well as the capabilities of the PMV or PMVS.

Article 38
(1) The Board of Directors of PMV or PMVS is required to establish effective and efficient internal controls to provide reasonable assurance that business activities are conducted in accordance with objectives and business strategies, Articles of Association, other internal regulations of PMV or PMVS, and applicable regulations. (2) Internal control as referred to in paragraph (1) must at least cover the following:
a. internal control environment in PMV or PMVS that is disciplined and structured; b. assessment and management of business risks, which is a process to identify, analyze, assess, and manage business risks;
c. control activities, which are actions taken in a control process regarding PMV or PMVS activities at every level and unit in the organizational structure of PMV or PMVS, including regarding authority, authorization, verification, reconciliation, performance assessment, division of tasks, and security of PMV or PMVS assets;
d. information systems and communication, which is a process of presenting reports regarding operational, financial, and compliance activities with regulations in the field of venture capital; e. monitoring procedures, which is a process of assessing the quality of the internal control system including the internal audit function at every level and unit in the organizational structure of PMV or PMVS, so that it can be implemented optimally; and f. reporting mechanisms to the Board of Directors, in the event of deviations in the quality of the internal control system including the internal audit function at every level and unit in the organizational structure of PMV or PMVS.

CHAPTER XI
INFORMATION DISCLOSURE

Article 39
(1) The communication policies and strategies of PMV or PMVS must allow necessary information to be provided to the OJK completely, timely, and efficiently.
(2) PMV or PMVS is required to have a reliable financial reporting system for supervision purposes and other Stakeholders.

Article 40
(1) PMV or PMVS is required to disclose to the OJK regarding important matters, at least including:
a. resignation or dismissal of external auditors; b. material transactions with related parties;
c. Conflicts of Interest that are ongoing and/or may occur; and
d. other material information regarding PMV or PMVS.
(2) Disclosure of important matters as referred to in paragraph (1) is included in the report on the implementation of Good Corporate Governance.

CHAPTER XII
REPORTING

Article 41
(1) PMV or PMVS is required to conduct self-assessment on the implementation of Good Corporate Governance periodically.
(2) Self-assessment on the Implementation of Good Corporate Governance as referred to in paragraph (1) is conducted based on guidelines for the implementation of Good Corporate Governance.

Article 42
(1) PMV or PMVS is 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 include:
a. transparency of the implementation of Good Corporate Governance which at least includes disclosure of all aspects of the implementation of Good Corporate Governance principles as referred to in Article 2 paragraph (2); b. self-assessment on the implementation of Good Corporate Governance as referred to in Article 41; and
c. action plans which include corrective actions required and completion timeframes and obstacles to 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) PMV or PMVS is required to submit the Good Corporate Governance report as referred to in paragraph (1) for the first time in the 2017 period, submitted no later than April 30, 2018. (5) 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. (6) If April 30 as referred to in paragraph (4) and paragraph (5) falls on a holiday, then the deadline for submitting the report is the first working day following it.

CHAPTER XIII
SANCTIONS

Article 43
(1) PMV or PMVS that do not fulfill the provisions as referred to in Article 2 paragraph (1) and paragraph (4), Article 3 paragraph (1), Article 7 paragraph (1), Article 8, Article 9, Article 10, Article 11, Article 12 paragraph (1), paragraph (2), paragraph (3), and paragraph (4), Article 14, Article 15, Article 16, Article 18, Article 19 paragraph (1), paragraph (2), paragraph (3), and paragraph (4), Article 20, Article 21, Article 24 paragraph (1), Article 25, Article 26 paragraph (1), Article 28, Article 30, Article 32 paragraph (1), paragraph (2), and paragraph (3), Article 33, Article 34 paragraph (1), paragraph (2), and paragraph (4), Article 35, Article 36 paragraph (1), paragraph (2), paragraph (4), paragraph (5), and paragraph (6), Article 37 paragraph (1), Article 38 paragraph (1), Article 39 paragraph (2), Article 40 paragraph (1), Article 41 paragraph (1), and Article 42 paragraph (1), paragraph (4), and paragraph (5) of this OJK Regulation are subject to graduated administrative sanctions in the form of:
a. warnings; b. suspension of business activities; or
c. revocation of business license.
(2) Warning sanctions as referred to in paragraph (1) letter a are given in writing by the OJK to PMV or PMVS at most 3 (three) times consecutively with a validity period of each at most 2 (two) months. (3) In the event that before the validity period of the warning sanction as referred to in paragraph (2) ends, PMV or PMVS has fulfilled the provisions as referred to in paragraph (1), the OJK revokes the warning sanction. (4) In the event that the validity period of the third warning sanction as referred to in paragraph (2) ends and PMV or PMVS still does not fulfill the provisions as referred to in paragraph (1), the OJK imposes a suspension of business activities sanction. (5) Suspension of business activities sanctions as referred to in paragraph (1) letter b are given in writing by the OJK to the relevant PMV or PMVS and the suspension of business activities applies for 6 (six) months since the suspension of business activities sanction letter is issued. (6) If the validity period of the warning sanction as referred to in paragraph (2) and the suspension of business activities sanction as referred to in paragraph (5) ends on a holiday, the warning sanction and suspension of business activities sanction apply until the first working day following it. (7) PMV or PMVS subject to suspension of business activities sanctions as referred to in paragraph (5) is prohibited from conducting business activities except to fulfill the provisions on investment value, participation, and/or receivables value to total assets (Investment and Financing to Assets Ratio) minimum as regulated in OJK Regulations regarding the conduct of venture capital business. (8) In the event that before the validity period of the suspension of business activities sanction as referred to in paragraph (5) ends, PMV or PMVS has fulfilled the provisions as referred to in paragraph (1), the OJK revokes the suspension of business activities sanction. (9) In the event that the suspension of business activities sanction as referred to in paragraph (5) is still in effect and PMV or PMVS continues to conduct Venture Capital Business or Sharia Venture Capital Business, the OJK can directly impose a license revocation sanction. (10) In the event that by the end of the validity period of the suspension of business activities sanction as referred to in paragraph (5), PMV or PMVS still does not fulfill the provisions as referred to in paragraph (1), the OJK revokes the business license of the relevant PMV or PMVS. (11) The OJK can announce the suspension of business activities sanction as referred to in paragraph (4) or license revocation sanction as referred to in paragraph (9) and paragraph (10) to the public.

Article 44
(1) PMV that has a UUS and does not fulfill the provisions as referred to in Article 26 paragraph (1), Article 28, Article 30, Article 32 paragraph (1), paragraph (2), and paragraph (3), Article 33, and Article 34 paragraph (1), paragraph (2), and paragraph (4) of this OJK Regulation are subject to graduated administrative sanctions in the form of:
a. warnings; b. suspension of UUS activities; or
c. revocation of UUS license.
(2) Warning sanctions as referred to in paragraph (1) letter a are given in writing by the OJK to PMV that has a UUS at most 3 (three) times consecutively with a validity period of each at most 2 (two) months. (3) In the event that before the validity period of the warning sanction as referred to in paragraph (2) ends, PMV that has a UUS has fulfilled the provisions as referred to in paragraph (1), the OJK revokes the warning sanction. (4) In the event that the validity period of the third warning as referred to in paragraph (2) ends and PMV that has a UUS still does not fulfill the provisions as referred to in paragraph (1), the OJK imposes a suspension of UUS activities sanction. (5) Suspension of UUS activities sanctions as referred to in paragraph (1) letter b are given in writing by the OJK to PMV that has a UUS and the suspension of UUS activities applies for 6 (six) months since the suspension of UUS activities sanction letter is issued. (6) If the validity period of the warning sanction as referred to in paragraph (2) and the suspension of UUS activities sanction as referred to in paragraph (5) ends on a holiday, the warning sanction and suspension of UUS activities sanction apply until the first working day following it. (7) PMV that has a UUS subject to suspension of UUS activities sanctions as referred to in paragraph (4) is prohibited from conducting UUS activities except to fulfill the provisions on investment value, participation, and/or receivables value to total assets (Investment and Financing to Assets Ratio) minimum as regulated in OJK Regulations regarding the conduct of venture capital business. (8) In the event that before the validity period of the suspension of UUS activities sanction as referred to in paragraph (5) ends, PMV that has a UUS has fulfilled the provisions as referred to in paragraph (1), the OJK revokes the suspension of UUS activities sanction. (9) In the event that the suspension of UUS activities sanction as referred to in paragraph (5) is still in effect and PMV that has a UUS continues to conduct Sharia Venture Capital Business, the OJK can directly impose a UUS license revocation sanction. (10) In the event that by the end of the validity period of the suspension of UUS activities sanction as referred to in paragraph (5), PMV that has a UUS still does not fulfill the provisions as referred to in paragraph (1), the OJK revokes the UUS license of the relevant entity. (11) The OJK can announce the suspension of UUS activities sanction as referred to in paragraph (4) or UUS license revocation sanction as referred to in paragraph (9) and paragraph (10) to the public.

CHAPTER XIV
TRANSITIONAL PROVISIONS

Article 45
For PMV that have obtained business licenses before this OJK Regulation is promulgated, the provisions in this OJK Regulation are declared to apply 1 (one) year after this OJK Regulation is promulgated, except for the provisions of Article 8 paragraph (1), Article 14 paragraph (1), Article 21, and Article 42 paragraph (1) which are declared to apply 2 (two) years.

CHAPTER XV
CLOSING PROVISIONS

Article 46
At the time this OJK Regulation comes into force, provisions regarding Good Corporate Governance are subject to this OJK Regulation.

Article 47
This OJK Regulation comes into force on the date of promulgation.
To ensure that everyone knows it, it is ordered to promulgate this OJK Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on December 21, 2015
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD

Promulgated in Jakarta on December 28, 2015
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 318 A copy in accordance with the original Director of Law 1 Ministry of Law signed Sudarmaji

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 36 /POJK.05/2015
ABOUT
GOOD CORPORATE GOVERNANCE FOR
VENTURE CAPITAL COMPANIES

I. GENERAL
The very rapid and dynamic development of the venture capital industry is generally accompanied by increasingly complex business activities resulting in increased risk exposure of PMV or PMVS. In order to improve the performance of PMV or PMVS, protect the interests of Stakeholders, and increase compliance with regulations, PMV or PMVS are required to conduct their business activities guided by the principles of good corporate governance. The implementation of good corporate governance in the venture capital industry must always be based on five basic principles, which include:
a. transparency, which is openness in the decision-making process and openness in disclosure and provision of relevant information regarding PMV or PMVS, which is easily accessible by Stakeholders in accordance with regulations in the field of venture capital as well as standards, principles, and practices of healthy venture capital business conduct; b. accountability, which is clarity of function and implementation of responsibility of the PMV or PMVS Organs

so that the performance of PMV or PMVS can run transparently, fairly, effectively, and efficiently;
c. responsibility, namely the conformity of the management of PMV or PMVS with legislation in the field of PMV or PMVS and ethical values, standards, principles, and practices of healthy venture capital business operations;
d. independence, namely the state of PMV or PMVS being managed independently and professionally and free from Conflicts of Interest and influence or pressure from any party that is not in accordance with legislation in the field of venture capital and ethical values, standards, principles, and practices of healthy venture capital business operations; and e. fairness and equity, namely equality, balance, and justice in fulfilling the rights of Stakeholders arising from agreements, legislation, and ethical values, standards, principles, and practices of healthy business operations. In order to implement the five basic principles mentioned above, PMV or PMVS must refer to various provisions and minimum requirements and guidelines related to the implementation of good governance. In efforts to improve and increase the quality of the implementation of good corporate governance, PMV or PMVS are required to periodically compile reports on their implementation, so that if there are still deficiencies, corrective actions can be taken immediately. In addition, with the implementation of Law Number 21 of 2011 concerning the Financial Services Authority, there are several improvements to regulations required regarding the implementation of the supervision system by the OJK against PMV or PMVS. In relation to the above matters, attention must also be paid to legislation that has relevance to these provisions, including applicable legislation regarding limited liability companies, cooperatives, capital markets, and other provisions.

II. ARTICLE BY ARTICLE
Article 1
It is clear enough.
Article 2
It is clear enough.
Article 3
It is clear enough.
Article 4
Paragraph (1)
It is clear enough.
Paragraph (2)
What is meant by "Controlling Shareholder" in this provision is an individual, legal entity, and/or business group that:
a. owns shares or capital of PMV or PMVS amounting to 25% (twenty-five percent) or more of the issued shares and has voting rights; or b. owns shares or capital of PMV or PMVS less than 25% (twenty-five percent) of the issued shares and has voting rights but the party concerned can prove to have controlled PMV or PMVS, either directly or indirectly.
Article 5
It is clear enough.
Article 6
Examples of commitments include, among others, if specifically needed to maintain the financial health level of PMV or PMVS, Shareholders are willing to increase the operational funds of PMV or PMVS, such as by adding paid-up capital, subordinated loans, and/or changing the composition/number of Shareholders.
Article 7
It is clear enough.
Article 8
It is clear enough.
Article 9
It is clear enough.
Article 10
It is clear enough.
Article 11
It is clear enough.
Article 12
Paragraph (1)
The form of the meeting can be adjusted to the needs of PMV or PMVS, for example by using teleconference technology. The Board of Directors meeting can be counted from the joint meeting of the Board of Directors, Board of Commissioners, and/or Risk Management Committee. Paragraph (2) It is clear enough. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough. Paragraph (5) It is clear enough. Paragraph (6) It is clear enough.
Article 13
It is clear enough.

Article 14
It is clear enough.
Article 15
It is clear enough.
Article 16
It is clear enough.
Article 17
It is clear enough.
Article 18
It is clear enough.
Article 19
Paragraph (1)
The form of the meeting can be adjusted to the needs of PMV or PMVS, for example by using teleconference technology. The Board of Commissioners meeting can be counted from the joint meeting of the Board of Directors, Board of Commissioners, and/or Risk Management Committee. Paragraph (2) It is clear enough. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough. Paragraph (5) It is clear enough. Paragraph (6) It is clear enough.
Article 20
It is clear enough.
Article 21
It is clear enough.

Article 22
It is clear enough.
Article 23
It is clear enough.
Article 24
It is clear enough.
Article 25
It is clear enough.
Article 26
It is clear enough.
Article 27
It is clear enough.
Article 28
It is clear enough.
Article 29
It is clear enough.
Article 30
It is clear enough.
Article 31
It is clear enough.
Article 32
Paragraph (1)
The form of the meeting can be adjusted to the needs of PMV or PMVS, for example by using teleconference technology.
Paragraph (2)
It is clear enough.

Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Paragraph (5)
It is clear enough.
Article 33
It is clear enough.
Article 34
It is clear enough.
Article 35
It is clear enough.
Article 36
It is clear enough.
Article 37
It is clear enough.
Article 38
It is clear enough.
Article 39
It is clear enough.
Article 40
It is clear enough.
Article 41
It is clear enough.
Article 42
It is clear enough.

Article 43
It is clear enough.
Article 44
It is clear enough.
Article 45
It is clear enough.
Article 46
It is clear enough.
Article 47
It is clear enough.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5788 ---