Implementation of Corporate Governance for Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions

FINANCIAL SERVICES AUTHORITY REGULATION OF THE REPUBLIC OF INDONESIA NUMBER 31 OF 2025 CONCERNING THE IMPLEMENTATION OF CORPORATE GOVERNANCE FOR STOCK EXCHANGES, CLEARING AND GUARANTEE INSTITUTIONS, AND CUSTODY AND SETTLEMENT INSTITUTIONS

BY THE GRACE OF GOD THE ALMIGHTY, THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering: a. that in order to support the development of the capital market, derivative financial markets, carbon markets, and financial markets that have an impact on the increasingly broad and complex business activities of stock exchanges, clearing and guarantee institutions, and custody and settlement institutions, it is necessary to strengthen the corporate governance aspects of stock exchanges, clearing and guarantee institutions, and custody and settlement institutions; b. that based on the considerations referred to in letter a and to implement the provisions of Article 269 and Article 270 paragraph (3) of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector, it is necessary to establish a Financial Services Authority Regulation concerning the Implementation of Corporate Governance for Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions;

Recalling:

1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
2. 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) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
3. Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);

DECIDES:

To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE IMPLEMENTATION OF CORPORATE GOVERNANCE FOR STOCK EXCHANGES, CLEARING AND GUARANTEE INSTITUTIONS, AND CUSTODY AND SETTLEMENT INSTITUTIONS.

CHAPTER I GENERAL PROVISIONS

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

1. Capital Market is a part of the financial system related to activities: a. public offerings and securities transactions; b. investment management; c. Issuers and Public Companies related to the securities they issue; and d. institutions and professions related to securities.
2. Securities are financial instruments or investment contracts, whether in conventional and digital forms or other forms in accordance with technological developments, which grant the owner the right to directly or indirectly obtain economic benefits from the issuer or from a specific party based on an agreement and any derivatives of Securities, which can be transferred and/or traded on the Capital Market.
3. Stock Exchange Member is: a. a securities broker who has obtained a business license from the Financial Services Authority; and b. another party who has obtained approval from the Financial Services Authority, who has the right to use the Stock Exchange system and/or facilities in accordance with Stock Exchange regulations.
4. Stock Exchange is a market organizer in the Capital Market for exchange transactions.
5. Clearing and Guarantee Institution is a party that organizes clearing and/or guarantee services for the settlement of securities transactions conducted through market organizers in the Capital Market, as well as other services that can be applied to support inter-market activities.
6. Custody and Settlement Institution is a party that: a. organizes central custodian activities for custodian banks, Securities Companies, and other parties; and b. provides other services that can be applied to support inter-market activities.
7. Issuer is a party that conducts a public offering.
8. Securities Company is a party that conducts activities as a securities underwriter and/or a securities broker or investment manager.
9. Public Company is a corporation with a number of shareholders and paid-up capital established by a Financial Services Authority Regulation.
10. Board of Directors is the organ of the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution that has the authority and is fully responsible for managing the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution for the benefit of the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution, in accordance with the purpose and objective of the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution, and represents the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution, both inside and outside of court, in accordance with the articles of association.
11. Board of Commissioners is the organ of the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution that is tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.
12. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the organ of the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution that has authority not given to the Board of Directors or Board of Commissioners within the limits determined in the Law concerning limited liability companies and/or the articles of association.
13. Good Corporate Governance on the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution, hereinafter referred to as Corporate Governance, is the structure, process, and mechanism for managing the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution to achieve the implementation of business activities that consider the interests of all related Stakeholders, create and optimize company value sustainably, and are based on applicable laws and regulations, standards, ethical values, principles, and common practices.
14. Stakeholder is all parties that have a direct or indirect interest in the business activities of the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution.
15. Party is an individual, legal entity, company, joint venture, association, or organized group.

CHAPTER II IMPLEMENTATION OF CORPORATE GOVERNANCE

Article 2 (1) Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions are required to implement Corporate Governance in the implementation of business activities at all levels or tiers of the organization. (2) Corporate Governance on Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions as referred to in paragraph (1) must apply at least the following principles: a. openness; b. accountability; c. responsibility; d. independence; and e. fairness. (3) The implementation of Corporate Governance on Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions as referred to in paragraph (1) must be manifested at least in the form of: a. the execution of duties, responsibilities, and authorities of the Board of Directors; b. the execution of duties, responsibilities, and authorities of the Board of Commissioners; c. the completeness and execution of committee duties; d. the handling of conflicts of interest; e. the implementation of internal audit functions; f. the implementation of external audit functions; g. the implementation of risk management including internal control systems; h. the implementation of alternative procedures; i. the organization of information technology; j. the implementation of supervision over subsidiaries; k. the provision of remuneration; l. investment policies; m. strategic plans; n. the implementation of anti-fraud strategies, including anti-bribery; o. the implementation of sustainable finance, including the implementation of social and environmental responsibility; p. the implementation of Corporate Governance with Stakeholders; q. document storage; and r. the handling of complaints.

Article 3 (1) Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions are required to have internal procedures regarding the implementation of Corporate Governance in the implementation of business activities. (2) Internal procedures as referred to in paragraph (1) include: a. decisions regarding operational mechanisms; b. manuals, policies, guidelines, and standard operating procedures; c. company charters; and d. other operational documents established by the Financial Services Authority. (3) Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions are required to evaluate and update the internal procedures as referred to in paragraph (1) to comply with laws and regulations.

Article 4 (1) Any Party that violates the provisions as referred to in Article 2 paragraph (1), Article 3 paragraph (1) and/or paragraph (3) shall be subject to administrative sanctions. (2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties that cause the violation as referred to in paragraph (1). (3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) consist of: a. written warnings; b. fines, namely the obligation to pay a certain amount of money; c. restriction of business activities; d. suspension of business activities; e. revocation of business licenses; f. cancellation of approvals; g. cancellation of registrations; h. revocation of the effectiveness of registration statements; and/or i. revocation of individual licenses. (4) Administrative sanctions as referred to in paragraph (3) letters b, c, d, e, f, g, h, or i may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (3) letter a. (5) Administrative sanctions in the form of fines as referred to in paragraph (3) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (3) letters c, d, e, f, g, h, or i.

CHAPTER III BOARD OF DIRECTORS

Section One Corporate Governance Provisions for the Board of Directors

Article 5 Members of the Board of Directors must be individuals who meet the following requirements: a. administrative, including:

1. physical and mental health; and
2. aged at most 65 (sixty-five) years at the time of registration; b. integrity, including:
3. Indonesian citizens and capable of performing legal acts;
4. having good character and morals;
5. never declared bankrupt or becoming a member of the Board of Commissioners and/or Board of Directors who are declared guilty or jointly guilty for causing a company to be declared bankrupt;
6. never sentenced for proven commission of: a) financial crimes, namely crimes in the fields of banking, Capital Market, and non-bank financial industries proven to have been committed within the last 20 (twenty) years before nomination; b) special crimes, namely crimes other than those regulated in the Criminal Code with a penalty of imprisonment of 1 (one) year or more, at least: corruption crimes; narcotics/psychotropics; smuggling; customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in the field of taxation; forestry; environment; marine and fisheries proven to have been committed within the last 20 (twenty) years before nomination; and c) crimes listed in the Criminal Code with a penalty of imprisonment of 1 (one) year or more proven to have been committed within the last 10 (ten) years before nomination;
7. never committed disgraceful acts proven by submitting at least a letter of clearance from the Indonesian National Police, where the period from the date of issuance to submission to the Financial Services Authority is not more than 6 (six) months or in accordance with the validity period given by the police if less than 6 (six) months;
8. never committed material violations of laws and regulations in the financial services sector; and
9. having a commitment to the development of Stock Exchanges, Clearing and Guarantee Institutions, Custody and Settlement Institutions, and the Indonesian Capital Market; and c. competence, including:
10. having an understanding of laws and regulations in the field of Capital Market and broad knowledge about the Capital Market including developments in the international Capital Market;
11. understanding the principles of Good Corporate Governance and risk management principles; and
12. having sufficient background and/or experience in accordance with Financial Services Authority Regulations concerning the Board of Directors and Board of Commissioners of Stock Exchanges, the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions, and the Board of Directors and Board of Commissioners of Custody and Settlement Institutions.

Article 6 Members of the Board of Directors are required to make statements to: a. maintain integrity; b. avoid all forms of conflicts of interest; and c. avoid actions that can harm Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions and/or cause Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions to violate prudential principles, during their tenure as members of the Board of Directors.

Article 7 Provisions regarding: a. Board of Directors membership; b. requirements for Board of Directors members and the composition of the Board of Directors; c. procedures for nomination and submission of Board of Directors members; d. assessment of the ability and propriety of candidates for Board of Directors members; e. GMS and procedures for the appointment of Board of Directors members; f. prohibitions for Board of Directors members; and g. terms of office for Board of Directors members, shall be implemented in accordance with Financial Services Authority Regulations concerning the Board of Directors and Board of Commissioners of Stock Exchanges, the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions, and the Board of Directors and Board of Commissioners of Custody and Settlement Institutions, unless otherwise regulated in this Financial Services Authority Regulation.

Section Two Duties, Responsibilities, and Authorities of the Board of Directors

Article 8 (1) The Board of Directors is tasked with carrying out and is responsible for managing Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions for the benefit of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions in accordance with the purpose and objective of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions established in laws and regulations, articles of association, and GMS decisions. (2) The Board of Directors has the authority to represent Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions in accordance with laws and regulations, articles of association, and GMS decisions. (3) The Board of Directors is required to execute duties, authorities, and responsibilities with good faith and with the principle of prudence.

Article 9 The Board of Directors is required to implement integrated Corporate Governance, risk management, and compliance adjusted to the development of financial markets.

Article 10 The Board of Directors is required to follow up on audit findings or examinations and recommendations from internal audit units, external auditors, results of Financial Services Authority supervision, and/or results of supervision by other authorities and institutions.

Article 11 The Board of Directors is required to disclose to employees internal policies that are strategic in the field of human resources.

Section Three Guidelines and Code of Conduct for the Board of Directors

Article 12 (1) The Board of Directors is required to have guidelines and a code of conduct that are binding for each member of the Board of Directors. (2) The guidelines and code of conduct as referred to in paragraph (1) must include at least: a. the organization of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions and the division of duties of the Board of Directors; b. duties, responsibilities, and authorities of the Board of Directors; c. the regulation of authority and procedures for decision-making by the Board of Directors; d. the regulation of the Board of Directors' work ethics; e. the regulation of Board of Directors meetings; f. prohibitions for the Board of Directors; g. evaluation of the Board of Directors' performance; and h. the pattern of working relationships between the Board of Directors and the Board of Commissioners.

Article 13 (1) The Board of Directors is required to make decisions in accordance with the guidelines and code of conduct as referred to in Article 12 paragraph (2) letter c. (2) Decisions taken by the Board of Directors as referred to in paragraph (1) are binding and become the responsibility of all members of the Board of Directors.

Section Four Board of Directors Meetings

Article 14 (1) The Board of Directors is required to hold Board of Directors meetings periodically at least 1 (one) time within a period of 1 (one) month. (2) The Board of Directors is required to hold joint meetings with members of the Board of Commissioners periodically at least 1 (one) time within a period of 4 (four) months. (3) Board of Directors meetings as referred to in paragraph (1) and meetings as referred to in paragraph (2) are held if attended by a majority of Board of Directors members. (4) Each member of the Board of Directors is required to attend at least 75% (seventy-five percent) of the total number of Board of Directors meetings during 1 (one) year.

Article 15 (1) Every policy and strategic decision must be decided through Board of Directors meetings, taking into account supervision according to the duties and responsibilities of the Board of Commissioners. (2) Decision-making by the Board of Directors through Board of Directors meetings as referred to in paragraph (1) must first be based on deliberation for consensus. (3) In the event that no deliberation for consensus occurs as referred to in paragraph (2), decision-making is based on the majority vote. (4) The Board of Directors is required to create minutes of Board of Directors meetings as referred to in paragraph (1) and document them properly. (5) The results of Board of Directors meetings, including differences of opinion that occurred in the Board of Directors meetings as referred to in paragraph (1), must be clearly stated in the minutes of the Board of Directors meetings along with the reasons for the differences of opinion and signed by the meeting chairperson.

Section Five Transparency Aspects of the Board of Directors

Article 16 In fulfilling the transparency aspects of the Board of Directors, members of the Board of Directors of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions are required to disclose: a. the absence of share ownership or not being a controller, either directly or indirectly, on Securities Companies and/or clearing members during their tenure as members of the Board of Directors at the latest 6 (six) months since the GMS appointment of Board of Directors members of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions, and within that period, the concerned party is willing not to have voting rights in the GMS; b. not being a controller, either directly or indirectly, on Issuers or Public Companies; and c. not transacting shares of Issuers or Public Companies owned by them until 6 (six) months after the end of their term of office, in the Corporate Governance implementation report.

Section Six Administrative Sanctions

Article 17 (1) Any Party that violates the provisions as referred to in Article 5, Article 6, Article 8 paragraph (3), Article 9, Article 10, Article 11, Article 12, Article 13 paragraph (1), Article 14 paragraph (1), paragraph (2), and paragraph (4), Article 15 paragraph (1), paragraph (2), paragraph (4), and paragraph (5), and/or Article 16 shall be subject to administrative sanctions. (2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties that cause the violation as referred to in paragraph (1). (3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) consist of: a. written warnings; b. fines, namely the obligation to pay a certain amount of money; c. restriction of business activities; d. suspension of business activities; e. revocation of business licenses; f. cancellation of approvals; g. cancellation of registrations; h. revocation of the effectiveness of registration statements; and/or i. revocation of individual licenses. (4) Administrative sanctions as referred to in paragraph (3) letters b, c, d, e, f, g, h, or i may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (3) letter a. (5) Administrative sanctions in the form of fines as referred to in paragraph (3) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (3) letters c, d, e, f, g, h, or i.

CHAPTER IV BOARD OF COMMISSIONERS

Section One Corporate Governance Provisions for the Board of Commissioners

Article 18 Members of the Board of Commissioners must be individuals who meet the following requirements: a. integrity, including:

1. Indonesian citizens and capable of performing legal acts;
2. having good character and morals;
3. never declared bankrupt or becoming a member of the Board of Commissioners and/or Board of Directors who are declared guilty or jointly guilty for causing a company to be declared bankrupt;
4. never sentenced for proven commission of: a) financial crimes, namely crimes in the fields of banking, Capital Market, and non-bank financial industries proven to have been committed within the last 20 (twenty) years before nomination; b) special crimes, namely crimes other than those regulated in the Criminal Code with a penalty of imprisonment of 1 (one) year or more, at least: corruption crimes; narcotics/psychotropics; smuggling; customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in the field of taxation; forestry; environment; marine and fisheries proven to have been committed within the last 20 (twenty) years before nomination; and c) crimes listed in the Criminal Code with a penalty of imprisonment of 1 (one) year or more proven to have been committed within the last 10 (ten) years before nomination;
5. never committed disgraceful acts proven by submitting at least a letter of clearance from the Indonesian National Police, where the period from the date of issuance to submission to the Financial Services Authority is not more than 6 (six) months or in accordance with the validity period given by the police if less than 6 (six) months;
6. never committed material violations of laws and regulations in the financial services sector; and
7. having a commitment to the development of Stock Exchanges, Clearing and Guarantee Institutions, and Custody and Settlement Institutions, and the Indonesian Capital Market; and b. competence, including:
8. having an understanding of laws and regulations in the field of Capital Market and broad knowledge about the Capital Market;
9. understanding the principles of Good Corporate Governance and risk management principles; and
10. having sufficient background and/or experience in accordance with Financial Services Authority Regulations concerning the Board of Directors and Board of Commissioners of Stock Exchanges, the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions, and the Board of Directors and Board of Commissioners of Custody and Settlement Institutions.

Article 19 Members of the Board of Commissioners are required to make statements to: a.

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