POJK on the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 59 /POJK.04/2016
CONCERNING
THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS OF CLEARING AND GUARANTEE INSTITUTIONS BY THE GRACE OF GOD THE ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to improve good corporate governance of Clearing and Guarantee Institutions and to enhance the competence and integrity of the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions, it is necessary to perfect regulations regarding the Board of Directors and Board of Commissioners of Clearing and Guarantee Institutions by establishing a Financial Services Authority Regulation concerning the Board of Directors and Board of Commissioners of Clearing and Guarantee 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);
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);

COPY

DECIDING:
Decree: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS OF CLEARING AND GUARANTEE INSTITUTIONS.

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

1. Board of Directors is an organ of the Clearing and Guarantee Institution that has the authority and is fully responsible for the management of the Clearing and Guarantee Institution for the interests of the Clearing and Guarantee Institution, in accordance with the purpose and objectives of the Clearing and Guarantee Institution and represents the Clearing and Guarantee Institution, both inside and outside of court, in accordance with the provisions of the Articles of Association.
2. Board of Commissioners is an organ of the Clearing and Guarantee Institution tasked with conducting general and/or specific supervision in accordance with the Articles of Association and providing advice to the Board of Directors.
3. Clearing and Guarantee Institution is a Party that provides clearing and guarantee services for the settlement of Stock Exchange Transactions.
4. Clearing Member is a Stock Exchange Member or other party that meets the requirements to obtain clearing and guarantee services for the settlement of Stock Exchange Transactions based on the regulations of the Clearing and Guarantee Institution.
5. Remuneration Committee is an ad hoc committee formed by and responsible to the Board of Commissioners to assist in carrying out the functions and duties of the Board of Commissioners to review and propose salaries and other benefits for members of the Board of Directors, as well as honoraria including the method of determination, for members of the Board of Commissioners.
6. Competency and Propriety Assessment Committee is an ad hoc committee formed by the Executive Head of Capital Market Supervision of the Financial Services Authority to conduct assessments of the competency and propriety of candidates for members of the Board of Directors and members of the Board of Commissioners of the Clearing and Guarantee Institution.
7. General Meeting of Shareholders, hereinafter abbreviated as GMS, is an organ of the Clearing and Guarantee Institution that has authority not given to the Board of Directors or Board of Commissioners within the limits determined in Law Number 40 of 2007 concerning Limited Liability Companies and/or the Articles of Association.

CHAPTER II
BOARD OF DIRECTORS OF CLEARING AND GUARANTEE INSTITUTION First Section Membership of the Board of Directors
Article 2
(1) A Clearing and Guarantee Institution must have at least 2 (two) members of the Board of Directors.
(2) One of the members of the Board of Directors of the Clearing and Guarantee Institution must be designated as the Chief Executive Officer of the Clearing and Guarantee Institution with main duties at least:

1. making final decisions if the Board of Directors meeting cannot make a decision; and
2. coordinating activities at the Clearing and Guarantee Institution, public relations activities, legal and regulatory activities, and internal audit activities.
   (3) Members of the Board of Directors of the Clearing and Guarantee Institution other than the Chief Executive Officer must be designated as members of the Board of Directors of the Clearing and Guarantee Institution who are at least responsible for 1 (one) or more of the following activities:
   a. clearing; b. guarantee and risk management;
   c. research and development;
   d. information technology; e. law; and f. finance and human resources as well as general administration.

Article 3
(1) The Board of Directors of the Clearing and Guarantee Institution must submit the schedule and agenda of the GMS regarding the appointment of members of the Board of Directors of the Clearing and Guarantee Institution to the Financial Services Authority at the latest 121 (one hundred twenty-one) days before the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution. (2) The Board of Commissioners of the Clearing and Guarantee Institution reviews the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution and submits it to the Financial Services Authority at the latest 116 (one hundred sixteen) days before the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution. (3) In reviewing the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution, the Board of Commissioners may form a committee with or without involving third parties, guided by this Financial Services Authority Regulation, legislation in the Capital Market sector regulating regarding Licensing of Clearing and Guarantee Institutions and the organizational structure of Clearing and Guarantee Institutions. (4) In determining the positions of members of the Board of Directors of the Clearing and Guarantee Institution, the Board of Commissioners must pay attention to the activities that are the responsibility of each position of members of the Board of Directors of the Clearing and Guarantee Institution as referred to in Article 2 paragraph (2) and paragraph (3). (5) If by the submission deadline as referred to in paragraph (2), the Board of Commissioners has not submitted the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution, the Financial Services Authority has the authority to directly determine the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution. (6) The Financial Services Authority has the authority to determine the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution at the latest 106 (one hundred six) days before the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution. (7) If by the deadline as referred to in paragraph (6), the Financial Services Authority has not determined the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution, the number of needs and positions of members of the Board of Directors of the Clearing and Guarantee Institution from the previous period shall apply.

Article 4
Taking into account the development of activities and operational needs of the Clearing and Guarantee Institution, the Financial Services Authority may add members of the Board of Directors of the Clearing and Guarantee Institution to the Board of Directors of the Clearing and Guarantee Institution currently in office.

Second Section
Requirements for Members of the Board of Directors and Composition of the Board of Directors
Article 5
Members of the Board of Directors of the Clearing and Guarantee Institution must meet the following requirements:
a. integrity includes:

1. individual Indonesian citizens who are legally competent to perform legal acts;
2. having good character and morality;
3. never declared bankrupt or become a member of the Board of Commissioners and/or Board of Directors who are declared guilty or jointly guilty causing a company to be declared bankrupt;
4. never sentenced for proven criminal acts within a certain period before nomination;
5. never committing disgraceful acts proven by submitting at least a Police Record Certificate where the time period from the date of issuance to submission to the Financial Services Authority is not more than 6 (six) months or according to the validity period given by the police if less than 6 (six) months;
6. never committing material violations of regulations in the financial services sector; and
7. having a commitment to the development of the Clearing and Guarantee Institution and the Indonesian Capital Market; and
   b. competency includes:
8. having an understanding of regulations in the Capital Market field and broad knowledge about the Capital Market including the development of the international Capital Market;
9. understanding the principles of good corporate governance and risk management principles; and
10. having sufficient background and/or experience.

Article 6
Based on the requirements as referred to in Article 5 letter b number 3, members of the Board of Directors of the Clearing and Guarantee Institution must meet the following provisions:
a. at least one member of the Board of Directors of the Clearing and Guarantee Institution must have experience in a managerial position in the field of risk management and/or investment management in a company operating in the financial sector, or a managerial position overseeing custodian services at least 1 (one) level below the Board of Directors at a Custodian Bank, for at least 5 (five) years; b. other members of the Board of Directors of the Clearing and Guarantee Institution must have experience in:

1. a Board of Directors position in a company operating in the financial sector for at least 5 (five) years;
2. a managerial position in the field of information technology for at least 3 (three) years and having sufficient knowledge regarding information systems of companies operating in the financial sector;
3. a managerial position at least 1 (one) level below the director or equivalent position at a Capital Market supervisory institution and/or organization authorized by Law Number 8 of 1995 concerning the Capital Market to regulate the implementation of its activities, for at least 3 (three) years; and/or
4. having experience as a professional in the field of law, accounting, or finance practicing actively in the Capital Market field, for at least 5 (five) years; and
   c. the duration or period of experience of members of the Board of Directors of the Clearing and Guarantee Institution as referred to in letter a and letter b is calculated until the date of the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution.

Article 7
Members of the Board of Directors of the Clearing and Guarantee Institution proposed as the Chief Executive Officer of the Clearing and Guarantee Institution must have strong leadership qualities.

Third Section
Procedure for Nomination and Submission of Candidates for Members of the Board of Directors
Article 8
(1) The nomination and submission of candidates for members of the Board of Directors of the Clearing and Guarantee Institution is conducted by shareholders or groups of shareholders of the Clearing and Guarantee Institution holding at least 20% (twenty percent) of the issued shares of the Clearing and Guarantee Institution with voting rights. (2) In the nomination of members of the Board of Directors of the Clearing and Guarantee Institution, shareholders or groups of shareholders meeting the requirements as referred to in paragraph (1) are jointly responsible for:
a. searching and selecting candidates for members of the Board of Directors of the Clearing and Guarantee Institution as referred to in Article 2; b. investigating that each candidate for members of the Board of Directors has the expertise, experience, and responsibility for each position and activity that is the duty of their position as referred to in Article 2, Article 5, and Article 6; and
c. recommending salaries and other benefits for each candidate for members of the Board of Directors of the Clearing and Guarantee Institution considering the proposal of the Remuneration Committee (if any).
(3) Candidates for members of the Board of Directors of the Clearing and Guarantee Institution must be submitted to the Financial Services Authority by shareholders or groups of shareholders as referred to in paragraph (1), in 1 (one) unified package of candidates for the Board of Directors of the Clearing and Guarantee Institution, meeting the position provisions as referred to in Article 2, Article 5, Article 6, and Article 7. (4) The package submission as referred to in paragraph (3) does not apply to the submission of candidates for members of the Board of Directors of the Clearing and Guarantee Institution to fill vacant positions of members of the Board of Directors of the Clearing and Guarantee Institution or to add candidates for members of the Board of Directors of the Clearing and Guarantee Institution.

Article 9
(1) In submitting candidates for members of the Board of Directors of the Clearing and Guarantee Institution to the Financial Services Authority, shareholders or groups of shareholders as referred to in Article 8 paragraph (1) must attach in duplicate 2 (two) sets of documents as follows:
a. curriculum vitae of the candidate for members of the Board of Directors of the Clearing and Guarantee Institution; b. photocopy of the ID card of the candidate for members of the Board of Directors of the Clearing and Guarantee Institution;
c. photocopy of diplomas and expertise certificates showing the expertise of the candidate for members of the Board of Directors of the Clearing and Guarantee Institution (if any);
d. a statement letter from each Party proposed as a candidate for members of the Board of Directors of the Clearing and Guarantee Institution containing at least:

1. a statement that the person concerned has met the provisions as referred to in Article 5 to Article 7;
2. a statement regarding the existence or non-existence of Affiliation relationships between the candidate for members of the Board of Directors of the Clearing and Guarantee Institution with other candidates for members of the Board of Directors of the Clearing and Guarantee Institution, members of the Board of Commissioners of the Clearing and Guarantee Institution, Securities Companies and/or Clearing Members in the submitted package;
3. willingness to unconditionally follow the competency and propriety assessment process conducted by the Financial Services Authority and willingness to be selected as a candidate for members of the Board of Directors of the Clearing and Guarantee Institution by the Financial Services Authority for positions as referred to in Article 2 paragraph (2) and paragraph (3), which are different from the positions proposed by shareholders or groups of shareholders of the Clearing and Guarantee Institution as referred to in Article 8 paragraph (1);
4. willingness to be appointed as a member of the Board of Directors of the Clearing and Guarantee Institution by the GMS responsible for the activities that are their duties and to work together as best as possible with other members of the Board of Commissioners and members of the Board of Directors of the Clearing and Guarantee Institution in order to carry out the activities of the Clearing and Guarantee Institution in an orderly, fair, and efficient manner;
5. a statement that they do not hold concurrent positions as directors, commissioners, or employees in other companies or institutions, if the person concerned is selected as a member of the Board of Directors of the Clearing and Guarantee Institution;
6. a statement that the candidate for members of the Board of Directors of the Clearing and Guarantee Institution, after becoming a member of the Board of Directors of the Clearing and Guarantee Institution, will not use the assets of the Clearing and Guarantee Institution or conduct transactions and provide benefits in any form to Affiliates of the candidate for members of the Board of Directors of the Clearing and Guarantee Institution, other members of the Board of Directors of the Clearing and Guarantee Institution, Affiliates of other members of the Board of Directors of the Clearing and Guarantee Institution, members of the Board of Commissioners of the Clearing and Guarantee Institution, and/or Affiliates of members of the Board of Commissioners of the Clearing and Guarantee Institution; and
7. a statement containing at least:
   a) willingness to not hold shares or act as a controller, directly or indirectly, of Securities Companies and/or Clearing Members during their term as members of the Board of Directors of the Clearing and Guarantee Institution at the latest 6 (six) months after the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution and within that period the person concerned is willing to not hold voting rights in the GMS; b) willingness to not control, directly or indirectly, Issuers or Public Companies; and/or c) willingness to not trade shares of Issuers or Public Companies owned by them until 6 (six) months after their term of office ends. e. Police Record Certificate; f. answers to questions as contained in the Appendix which is an integral part of this Financial Services Authority Regulation; g. latest 10x15 cm color photos with a red background totaling 3 (three) sheets; h. a letter of explanation regarding the process of searching, selecting, and investigating candidates for members of the Board of Directors of the Clearing and Guarantee Institution from shareholders or groups of shareholders of the Clearing and Guarantee Institution as referred to in Article 8 paragraph (1), including recommendations regarding salaries and other benefits if the candidate for members of the Board of Directors of the Clearing and Guarantee Institution is appointed as a member of the Board of Directors of the Clearing and Guarantee Institution, stating that the process has been conducted professionally and there are no other interests including interests due to Affiliation relationships, but only for the interests of the Clearing and Guarantee Institution specifically and the Capital Market in general; and
   i. the strategic plan of the candidate for members of the Board of Directors of the Clearing and Guarantee Institution which aligns with the vision and mission of the Clearing and Guarantee Institution.
   (2) The submission of the names of candidates for members of the Board of Directors of the Clearing and Guarantee Institution by shareholders or groups of shareholders of the Clearing and Guarantee Institution as referred to in Article 8 paragraph (1) and paragraph (3) along with supporting documents as referred to in paragraph (1) must meet the requirements and be received completely by the Financial Services Authority at the latest 56 (fifty-six) days before the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution.

Fourth Section
Assessment of Competency and Propriety of Candidates for Members of the Board of Directors
Article 10
(1) Every candidate for members of the Board of Directors of the Clearing and Guarantee Institution submitted must undergo a competency and propriety assessment conducted by the Competency and Propriety Assessment Committee.
(2) Members of the Competency and Propriety Assessment Committee as referred to in paragraph (1) consist of 5 (five) people, namely a Deputy Commissioner as chairman ex-officio member, and 4 (four) officials at least at the director level as members.
(3) Every implementation of the competency and propriety assessment must be attended by at least 3 (three) members of the Competency and Propriety Assessment Committee.
(4) The Competency and Propriety Assessment Committee conducts the competency and propriety assessment of candidates for members of the Board of Directors of the Clearing and Guarantee Institution at least through administrative research and interviews, and/or presentation requests which at least include the strategic plan for the future development of the Clearing and Guarantee Institution. (5) The Competency and Propriety Assessment Committee conducts the competency and propriety assessment of every candidate for members of the Board of Directors of the Clearing and Guarantee Institution individually according to the proposed position. (6) If necessary, the Competency and Propriety Assessment Committee may conduct the competency and propriety assessment of candidates for members of the Board of Directors of the Clearing and Guarantee Institution as referred to in paragraph (5) for other positions of members of the Board of Directors of the Clearing and Guarantee Institution. (7) In conducting the competency and propriety assessment of candidates for members of the Board of Directors of the Clearing and Guarantee Institution, the Competency and Propriety Assessment Committee may be assisted by resource persons with specific expertise from outside the Financial Services Authority.

Article 11
(1) The competency and propriety assessment is conducted to determine and assess that candidates for members of the Board of Directors of the Clearing and Guarantee Institution meet the requirements as referred to in Article 5 to Article 7, and are the best candidates to hold each position of members of the Board of Directors of the Clearing and Guarantee Institution. (2) The Competency and Propriety Assessment Committee in conducting the competency and propriety assessment of candidates for members of the Board of Directors of the Clearing and Guarantee Institution for each position must pay attention to the composition of candidates for members of the Board of Directors of the Clearing and Guarantee Institution as referred to in Article 6.

Article 12
The Financial Services Authority has the authority to stop the nomination process for candidates for members of the Board of Directors of the Clearing and Guarantee Institution if the candidate is undergoing legal proceedings.

Article 13
The Executive Head of Capital Market Supervision establishes candidates for members of the Board of Directors of the Clearing and Guarantee Institution for each position considering the results of the competency and propriety assessment conducted by the Competency and Propriety Assessment Committee.

Article 14
Based on the results of the competency and propriety assessment as referred to in Article 10 paragraph (4), paragraph (5), and paragraph (6), the Financial Services Authority may determine the position of candidates for members of the Board of Directors different from the position of the position proposed by shareholders or groups of shareholders as referred to in Article 8 paragraph (1).

Article 15
(1) In the event that there are no selected candidates for members of the Board of Directors of the Clearing and Guarantee Institution from the results of the competency and propriety assessment as referred to in Article 10 paragraph (4) for 1 (one) or more positions of members of the Board of Directors, the Financial Services Authority submits to each shareholder or group of shareholders as referred to in Article 8 paragraph (1) to submit other candidates for members of the Board of Directors of the Clearing and Guarantee Institution for the position of the position whose candidate has not been selected by the Financial Services Authority in the competency and propriety assessment process, at the latest 35 (thirty-five) days after the application meets the requirements and is received completely by the Financial Services Authority. (2) Shareholders or groups of shareholders of the Clearing and Guarantee Institution as referred to in Article 8 paragraph (1) may submit other candidates for members of the Board of Directors of the Clearing and Guarantee Institution for the position of the position whose candidate has not been selected by the Financial Services Authority as referred to in paragraph (1), to the Financial Services Authority at the latest 14 (fourteen) days before the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution, meeting the provisions in Article 5, Article 6, Article 7, Article 8, and Article 9 paragraph (1). (3) The Financial Services Authority conducts the competency and propriety assessment of other candidates for members of the Board of Directors of the Clearing and Guarantee Institution as referred to in paragraph (1).

Article 16
(1) If all documents as referred to in Article 9 paragraph (1) are complete and candidates for members of the Board of Directors have met the requirements, the Financial Services Authority submits the list of selected candidates for members of the Board of Directors of the Clearing and Guarantee Institution for each position of members of the Board of Directors along with photocopies of the documents of candidates for members of the Board of Directors of the Clearing and Guarantee Institution to the Board of Directors of the Clearing and Guarantee Institution at the latest 7 (seven) days before the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution. (2) The Board of Directors of the Clearing and Guarantee Institution must submit to all shareholders, the list of selected candidates for members of the Board of Directors of the Clearing and Guarantee Institution

along with a photocopy of the complete documents as referred to in paragraph (1) no later than 1 (one) working day after receiving the list of candidates for members of the Board of Directors of the Clearing and Guarantee Institution from the Financial Services Authority.
(3) The list of candidates for members of the Board of Directors of the Clearing and Guarantee Institution along with a photocopy of the complete documents as referred to in paragraph (2) must be available and accessible to shareholders and the public.

Fifth Section
General Meeting of Shareholders and Procedures for the Appointment of Board of Directors Members

Article 17
(1) An announcement regarding the convening of a General Meeting of Shareholders (GMS) for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution must be made no later than 14 (fourteen) days before the convening of the GMS, containing at least the plan for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution. (2) The convening of the GMS of the Clearing and Guarantee Institution to appoint members of the Board of Directors of the Clearing and Guarantee Institution must be done no later than 14 (fourteen) days before the said GMS, not counting the date of convening and the date of the GMS, containing at least the plan for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution.

Article 18
(1) The appointment of members of the Board of Directors of the Clearing and Guarantee Institution is carried out by the GMS based on candidate members of the Board of Directors selected by the Financial Services Authority according to their respective positions as referred to in Article 16 paragraph (1).

(2) The procedure for appointing candidate members of the Board of Directors of the Clearing and Guarantee Institution as referred to in paragraph (1) also applies to the appointment of candidate members of the Board of Directors of the Clearing and Guarantee Institution to fill vacant positions of members of the Board of Directors of the Clearing and Guarantee Institution or to add candidate members of the Board of Directors of the Clearing and Guarantee Institution. (3) The GMS to appoint members of the Board of Directors of the Clearing and Guarantee Institution must be chaired by the Lead Commissioner or one of the members of the Board of Commissioners in the event that the Lead Commissioner is unable to attend.

Article 19
(1) At the time of the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution, the candidate members of the Board of Directors of the Clearing and Guarantee Institution determined by the Financial Services Authority must explain the strategic plan to the shareholders. (2) The explanation may also be delivered in other forums prior to the GMS that allow shareholders to interact with the candidate members of the Board of Directors of the Clearing and Guarantee Institution.

Article 20
The GMS approves and determines the salary and other benefits for members of the Board of Directors of the Clearing and Guarantee Institution proposed by the shareholders or group of shareholders of the Clearing and Guarantee Institution as referred to in Article 8 paragraph (1).

Sixth Section
Prohibitions for Board of Directors Members

Article 21
(1) Members of the Board of Directors of the Clearing and Guarantee Institution are prohibited from having an Affiliation relationship with other members of the Board of Directors of the Clearing and Guarantee Institution and/or members of the Board of Commissioners of the Clearing and Guarantee Institution. (2) Members of the Board of Directors of the Clearing and Guarantee Institution are prohibited from holding shares or acting as controllers, directly or indirectly, of a Securities Company. (3) In the event that a member of the Board of Directors of the Clearing and Guarantee Institution holds shares or acts as a controller, directly or indirectly, of a Securities Company, such shares must be transferred no later than 6 (six) months since the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution, and during that period, the individual is prohibited from exercising voting rights in the GMS of the said Securities Company. (4) Members of the Board of Directors of the Clearing and Guarantee Institution are prohibited from controlling, directly or indirectly, an Emitter or Public Company and/or are prohibited from trading shares of an Emitter or Public Company. (5) In the event that a member of the Board of Directors of the Clearing and Guarantee Institution appointed by the GMS already holds shares of an Emitter or Public Company, such shares cannot be traded until 6 (six) months after the term of office has ended. (6) Members of the Board of Directors of the Clearing and Guarantee Institution are prohibited from holding concurrent positions as board members, board of commissioners members, or employees of other companies or institutions in any capacity.

Seventh Section
Term of Office of Board of Directors Members

Article 22
(1) The term of office of members of the Board of Directors of the Clearing and Guarantee Institution is 3 (three) years calculated from the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution until the closing of the GMS of the third year, and may only be reappointed for 1 (one) term of office, with the following provisions:
a. if a member of the Board of Directors of the Clearing and Guarantee Institution is appointed to fill a vacant position of a member of the Board of Directors of the Clearing and Guarantee Institution or to add candidate members of the Board of Directors of the Clearing and Guarantee Institution, the term of office of such member of the Board of Directors of the Clearing and Guarantee Institution applies for the remainder of the term of office of the currently serving member of the Board of Directors of the Clearing and Guarantee Institution; b. the calculation of 1 (one) term of office for a member of the Board of Directors of the Clearing and Guarantee Institution is if the individual serves for at least 2/3 (two-thirds) of the term of office of the Board of Directors of the Clearing and Guarantee Institution; and
c. the total term of office of members of the Board of Directors at the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution is at most 3 (three) terms of office.
(2) The end of the term of office of the Board of Directors of the Clearing and Guarantee Institution must be regulated differently from the end of the term of office of the Board of Commissioners of the Clearing and Guarantee Institution.

Article 23
(1) In the event that a member of the Board of Directors of the Clearing and Guarantee Institution no longer meets the requirements as referred to in Article 5 through Article 7, the following provisions apply:
a. such member of the Board of Directors of the Clearing and Guarantee Institution must be replaced within a period of no later than 3 (three) months since the individual is declared by the Financial Services Authority to no longer meet the requirements; b. the shareholders or group of shareholders of the Clearing and Guarantee Institution meeting the requirements as referred to in Article 8 paragraph (1) must immediately submit a candidate for a replacement member of the Board of Directors of the Clearing and Guarantee Institution to the Financial Services Authority according to the procedure as referred to in Article 8 and Article 9; and
c. the candidate for a replacement member of the Board of Directors of the Clearing and Guarantee Institution must meet Article 5 through Article 7.
(2) In the event that there are vacant positions of members of the Board of Directors of the Clearing and Guarantee Institution, the following provisions apply:
a. such position of a member of the Board of Directors of the Clearing and Guarantee Institution must be filled within a period of no later than 3 (three) months since the position of a member of the Board of Directors of the Clearing and Guarantee Institution becomes vacant; and b. the shareholders or group of shareholders of the Clearing and Guarantee Institution as referred to in Article 8 paragraph (1) must immediately submit candidate members of the Board of Directors of the Clearing and Guarantee Institution to fill the vacant position to the Financial Services Authority meeting the provisions as referred to in Article 5, Article 6, Article 7, and Article 9. (3) In the event that:
a. the position of the Chief Director of the Clearing and Guarantee Institution becomes vacant, one member of the Board of Directors of the Clearing and Guarantee Institution must be designated based on a decision of the Board of Directors of the Clearing and Guarantee Institution acting as the temporary official to carry out the duties and authority of the vacant Chief Director position until a replacement is appointed, after obtaining approval from the Board of Commissioners; b. the position of a member of the Board of Directors of the Clearing and Guarantee Institution other than the Chief Director becomes vacant, the duties and authority of such member of the Board of Directors must be transferred to another member of the Board of Directors of the Clearing and Guarantee Institution based on a decision of the meeting of the Board of Directors of the Clearing and Guarantee Institution until a replacement is appointed, after obtaining approval from the Board of Commissioners; and
c. the temporary designation of the Chief Director of the Clearing and Guarantee Institution or the transfer of duties and authority of a member of the Board of Directors of the Clearing and Guarantee Institution must be reported by the Board of Directors of the Clearing and Guarantee Institution to the Financial Services Authority no later than 2 (two) days after the designation or transfer.
(4) The Financial Services Authority may determine that a vacant position of a member of the Board of Directors of the Clearing and Guarantee Institution as referred to in paragraph (2) does not need to be filled after considering the development of activities and operations of the Clearing and Guarantee Institution. (5) The time limit for replacement and/or filling of members of the Board of Directors of the Clearing and Guarantee Institution as referred to in paragraph (1) and paragraph (2) may be determined otherwise by the Financial Services Authority. (6) In the event that there are vacant positions of members of the Board of Directors of the Clearing and Guarantee Institution or in the event of the resignation of a member of the Board of Directors of the Clearing and Guarantee Institution, the Board of Directors of the Clearing and Guarantee Institution must report to the Financial Services Authority no later than 5 (five) working days since it is known or since the resignation letter is received by the Board of Directors of the Clearing and Guarantee Institution. (7) In filling vacant positions of members of the Board of Directors of the Clearing and Guarantee Institution and/or the need for additional members of the Board of Directors of the Clearing and Guarantee Institution, the following provisions apply:
a. the filling and/or addition of members of the Board of Directors of the Clearing and Guarantee Institution must meet the provisions as regulated in Article 5 through Article 9; b. candidate members of the Board of Directors of the Clearing and Guarantee Institution to be submitted must be willing to cooperate with the existing members of the Board of Directors of the Clearing and Guarantee Institution; and
c. the addition of new members of the Board of Directors of the Clearing and Guarantee Institution must consider the provisions as referred to in Article 4, and its implementation must meet the provisions of Article 5 through Article 9.

Article 24
The term of office of members of the Board of Directors of the Clearing and Guarantee Institution ends automatically if:
a. losing Indonesian citizenship; b. incompetent to perform legal acts;
c. declared bankrupt or becoming a member of the Board of Commissioners and/or members of the Board of Directors who are declared guilty or partly guilty causing a company to be declared bankrupt;
d. sentenced for proven criminal acts; e. permanently unable to perform duties; f. deceased; and/or g. term of office ends.

Article 25
(1) Members of the Board of Directors of the Clearing and Guarantee Institution may be dismissed from their position by the Financial Services Authority if:
a. lacking good ethics and morality; b. committing disgraceful acts in the financial services sector;
c. committing material violations of laws and regulations in the financial services sector;
d. lacking commitment to the development of the Clearing and Guarantee Institution; and/or e. failing or being incompetent to perform duties.
(2) In the event that the Financial Services Authority temporarily dismisses and/or there is a vacancy of all members of the Board of Directors of the Clearing and Guarantee Institution, the Chief Executive of the Capital Market Supervision of the Financial Services Authority may designate and appoint the Board of Commissioners of the Clearing and Guarantee Institution to carry out the functions of the Board of Directors of the Clearing and Guarantee Institution until new members of the Board of Directors are appointed by the GMS. (3) In the event that there are no members of the Board of Commissioners of the Clearing and Guarantee Institution who can carry out the functions of the Board of Directors of the Clearing and Guarantee Institution as referred to in paragraph (2), based on the proposal of the Chief Executive of the Capital Market Supervision, the Commissioners of the Financial Services Authority may designate and appoint another party as the temporary management of the Board of Directors of the Clearing and Guarantee Institution.

Article 26
(1) The distribution of duties as referred to in Article 2 paragraph (2) and paragraph (3) must be established in the organizational structure of the Clearing and Guarantee Institution and the job descriptions of the Clearing and Guarantee Institution.
(2) The determination and/or change of the temporary organizational structure of the Clearing and Guarantee Institution up to 1 (one) level below the members of the Board of Directors must obtain approval from the Financial Services Authority.

Article 27
In the event that the Board of Directors of the Clearing and Guarantee Institution considers that a member of the Board of Directors of the Clearing and Guarantee Institution responsible for and carrying out duties for several activities as determined at the time of appointment is unable to perform some of their duties, based on a decision of the Board of Directors meeting, some of their duties may be transferred to another member of the Board of Directors of the Clearing and Guarantee Institution who is considered capable of performing the duties after obtaining approval from the Board of Commissioners and the Financial Services Authority.

Article 28
Members of the Board of Directors of the Clearing and Guarantee Institution who no longer serve as members of the Board of Directors of the Clearing and Guarantee Institution for any reason are not entitled to receive salary and other benefits from the Clearing and Guarantee Institution except for rights to compensation or honorarium fees as long as approved by the GMS, with the provision that the amount of such compensation or honorarium fees is not greater than the amount of salary for the remaining term of office.

CHAPTER III
BOARD OF COMMISSIONERS OF THE CLEARING AND GUARANTEE INSTITUTION

First Section
Membership of the Board of Commissioners

Article 29
(1) The Clearing and Guarantee Institution must have at least 2 (two) members of the Board of Commissioners.
(2) One of the members of the Board of Commissioners of the Clearing and Guarantee Institution must be designated as the Lead Commissioner.

Article 30
(1) The Board of Directors of the Clearing and Guarantee Institution must submit the schedule and agenda of the GMS for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution to the Financial Services Authority no later than 60 (sixty) days before the GMS for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution. (2) The Financial Services Authority has the authority to determine the number of required members of the Board of Commissioners of the Clearing and Guarantee Institution no later than 50 (fifty) days before the GMS for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution. (3) If by the time limit as referred to in paragraph (2) the Financial Services Authority has not determined the number of required members of the Board of Commissioners of the Clearing and Guarantee Institution, the number of required members of the Board of Commissioners of the Clearing and Guarantee Institution from the previous period applies. (4) Considering the development of activities and operational needs of the Clearing and Guarantee Institution, the Financial Services Authority may add members of the Board of Commissioners of the Clearing and Guarantee Institution to the Board of Commissioners of the Clearing and Guarantee Institution currently serving.

Second Section
Requirements for Members of the Board of Commissioners and Composition of the Board of Commissioners

Article 31
Members of the Board of Commissioners of the Clearing and Guarantee Institution must meet the following requirements:
a. integrity includes:

1. an individual Indonesian citizen who is competent to perform legal acts;
2. having good ethics and morality;
3. never declared bankrupt or becoming a member of the Board of Commissioners and/or members of the Board of Directors who are declared guilty or partly guilty causing a company to be declared bankrupt;
4. never sentenced for proven criminal acts within a certain period before being nominated;
5. never committing disgraceful acts proven by submitting at least a Police Record Certificate where the period from the date of issuance to submission to the Financial Services Authority is no more than 6 (six) months or according to the validity period provided by the police if less than 6 (six) months;
6. never committing material violations of laws and regulations in the financial services sector; and
7. having a commitment to the development of the Clearing and Guarantee Institution and the Indonesian Capital Market; and
   b. competence includes:
8. having an understanding of laws and regulations in the field of Capital Market and having 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.

Article 32
(1) Based on the requirements as referred to in Article 31 letter b number 3, members of the Board of Commissioners of the Clearing and Guarantee Institution must meet the following provisions:
a. experienced in the position of a member of the Board of Directors at a company operating in the Capital Market or financial sector for at least 2 (two) years; b. experienced in the management position at a Capital Market institution for at least 5 (five) years or has previously been a leader at a financial services supervisory institution;
c. experienced in the position of a director at an organization given authority by Law Number 8 of 1995 concerning Capital Market to regulate the implementation of its activities for at least 2 (two) years; or
d. is a professional in the fields of law, accounting, or finance who practices actively in the Capital Market field for at least 5 (five) years.
(2) The composition of the Board of Commissioners is regulated as follows:
a. in the event that the number of members of the Board of Commissioners consists of 4 (four) persons or less, the composition of members of the Board of Commissioners must have different backgrounds and/or experience; and b. in the event that the number of members of the Board of Commissioners consists of 5 (five) persons or more, at least the composition of members of the Board of Commissioners as referred to in letter a must still be fulfilled. (3) Two or more members of the Board of Commissioners of the Clearing and Guarantee Institution are prohibited from coming from the same company or from 2 (two) or more companies controlled directly or indirectly by the same Party. (4) The duration or period of experience of candidate members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in paragraph (1) is calculated until the date of the GMS for the appointment of members of the Board of Directors of the Clearing and Guarantee Institution.

Third Section
Procedures for Nominating and Submitting Members of the Board of Commissioners

Article 33
(1) The nomination and submission of candidate members of the Board of Commissioners of the Clearing and Guarantee Institution is carried out by the shareholders or group of shareholders of the Clearing and Guarantee Institution holding at least 20% (twenty percent) of the issued shares of the Clearing and Guarantee Institution that have voting rights. (2) In the nomination of members of the Board of Commissioners of the Clearing and Guarantee Institution, the shareholders or group of shareholders as referred to in paragraph (1) are jointly responsible for:
a. searching and selecting candidate members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in Article 30; and b. examining the level of expertise, experience, and responsibility as members of the Board of Commissioners according to this Financial Services Authority Regulation;
c. recommending remuneration for each candidate member of the Board of Commissioners of the Clearing and Guarantee Institution considering the proposal of the Remuneration Committee (if any).
(3) Candidate members of the Board of Commissioners of the Clearing and Guarantee Institution must be submitted to the Financial Services Authority by the shareholders or group of shareholders of the Clearing and Guarantee Institution in 1 (one) package of candidate members of the Board of Commissioners. (4) The package submission as referred to in paragraph (3) does not apply to the submission of candidate members of the Board of Commissioners of the Clearing and Guarantee Institution to fill vacant positions of members of the Board of Commissioners of the Clearing and Guarantee Institution or to add candidate members of the Board of Commissioners of the Clearing and Guarantee Institution.

Article 34
(1) In the submission of candidate members of the Board of Commissioners of the Clearing and Guarantee Institution to the Financial Services Authority, the shareholders or group of shareholders of the Clearing and Guarantee Institution as referred to in Article 33 paragraph (1) must attach 2 (two) copies of the following documents:
a. curriculum vitae of the candidate member of the Board of Commissioners of the Clearing and Guarantee Institution; b. photocopy of the Identity Card of the candidate member of the Board of Commissioners of the Clearing and Guarantee Institution;
c. photocopy of the diploma and expertise certificates showing the level of expertise of the candidate member of the Board of Commissioners (if any);
d. a statement letter from each party submitted as a candidate member of the Board of Commissioners containing at least:

1. a statement that the candidate member of the Board of Commissioners has met the provisions as referred to in Article 31 and Article 32;
2. a statement regarding the existence or non-existence of an Affiliation relationship between the candidate member of the Board of Commissioners and Members of the Stock Exchange that are Clearing Members of the Clearing and Guarantee Institution;
3. willingness to unconditionally follow the ability and propriety assessment process conducted by the Financial Services Authority; and
4. willingness to be selected as a member of the Board of Commissioners of the Clearing and Guarantee Institution and to cooperate as best as possible with other members of the Board of Commissioners and members of the Board of Directors of the Clearing and Guarantee Institution in carrying out the activities of the Clearing and Guarantee Institution in an orderly, fair, and efficient manner.
   e. Police Record Certificate; f. answers to questions as contained in the Appendix which is an integral part of this Financial Services Authority Regulation; g. recent color passport photos size 10x15 cm with a red background, 3 (three) sheets; and h. a letter of statement regarding the process of searching, selecting, and examining candidate members of the Board of Commissioners from the shareholders or group of shareholders of the Clearing and Guarantee Institution including recommendations regarding remuneration if the candidate member of the Board of Commissioners is appointed as a member of the Board of Commissioners, stating that the process has been carried out professionally and there are no other interests including interests due to Affiliation relationships, other than solely for the interests of the Clearing and Guarantee Institution in particular and the Capital Market in general. (2) The submission of the names of candidate members of the Board of Commissioners by the shareholders or group of shareholders of the Clearing and Guarantee Institution as referred to in Article 33 paragraph (1) and paragraph (3) along with supporting documents as referred to in paragraph (1) must meet the requirements and be received completely by the Financial Services Authority no later than 35 (thirty-five) days before the GMS for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution.

Fourth Section
Assessment of Ability and Propriety of Candidate Members of the Board of Commissioners

Article 35
(1) Every candidate member of the Board of Commissioners of the Clearing and Guarantee Institution submitted must undergo an assessment

competence and fit assessment conducted by the Competence and Fit Assessment Committee.
(2) Members of the Competence and Fit Assessment Committee as referred to in paragraph (1) consist of 5 (five) persons, namely a Deputy Commissioner as Chairman concurrently a member, and 4 (four) officials at the lowest level of a Director as members.
(3) Every implementation of the competence and fit assessment must be attended by at least 3 (three) members of the Competence and Fit Assessment Committee.
(4) The Competence and Fit Assessment Committee conducts the competence and fit assessment of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution at least through administrative research and interviews, and/or presentation requests.
(5) In conducting the competence and fit assessment of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution, the Competence and Fit Assessment Committee may be assisted by resource persons with specific expertise from outside the Financial Services Authority.

Article 36
(1) Competence and fit assessments are conducted to evaluate whether candidates for members of the Board of Commissioners meet the integrity and competency requirements as referred to in Article 31 and Article 32.
(2) The Competence and Fit Assessment Committee, in conducting the competence and fit assessment of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution, must consider the composition of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in Article 32.

Article 37
The Financial Services Authority is authorized to stop the nomination process for candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution if the candidate is undergoing legal proceedings.

Article 38
The Executive Head of Capital Market Supervision appoints candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution, considering the results of the competence and fit assessment conducted by the Competence and Fit Assessment Committee.

Article 39
(1) In the event that no candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution are selected from the results of the competence and fit assessment as referred to in Article 35 paragraph (4), for 1 (one) or more positions of members of the Board of Commissioners, the Financial Services Authority communicates to each shareholder or group of shareholders as referred to in Article 33 paragraph (1) to submit other candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution for the position where candidates have not been selected by the Financial Services Authority in the competence and fit assessment process, at the latest 14 (fourteen) days after the application meets the requirements and is received completely by the Financial Services Authority. (2) Shareholders or groups of shareholders as referred to in Article 33 paragraph (1) may submit other candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution for the position where candidates have not been selected by the Financial Services Authority as referred to in paragraph (1) to the Financial Services Authority at the latest 14 (fourteen) days before the General Meeting of Shareholders for the appointment of members of the Board of Commissioners, by fulfilling the provisions in Article 31, Article 32, Article 33, and Article 34 paragraph (1).

(3) The Financial Services Authority conducts competence and fit assessments on other candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in paragraph (2).

Article 40
(1) If all documents as referred to in Article 34 paragraph (1) are complete and meet all requirements, the Financial Services Authority submits the list of selected candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution along with photocopies of the candidates' documents to the Board of Directors of the Clearing and Guarantee Institution at the latest 7 (seven) days before the General Meeting of Shareholders for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution. (2) The Board of Directors of the Clearing and Guarantee Institution must submit to all shareholders the list of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution along with complete photocopies of documents at the latest 1 (one) working day after receiving the list of candidates from the Financial Services Authority. (3) The list of candidates for members of the Board of Commissioners along with complete photocopies of documents as referred to in paragraph (2) must be available and accessible to shareholders and the public.

Fifth Section
General Meeting of Shareholders and Procedures for the Appointment of Members of the Board of Commissioners

Article 41
(1) Announcements regarding the convening of the General Meeting of Shareholders for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution must be made at the latest 14 (fourteen) days before the convening of the General Meeting of Shareholders, containing at least the plan for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution. (2) The convening of the General Meeting of Shareholders for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution must be made at the latest 14 (fourteen) days before the General Meeting of Shareholders in question, not counting the date of convening and the date of the General Meeting of Shareholders, containing at least the plan for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution.

Article 42
(1) The appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution is carried out by the General Meeting of Shareholders based on the candidates for members of the Board of Commissioners selected by the Financial Services Authority as referred to in Article 40 paragraph (1). (2) The procedure for the appointment of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in paragraph (1) also applies to the appointment of candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution to fill vacant positions of members of the Board of Commissioners of the Clearing and Guarantee Institution or to add candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution. (3) The General Meeting of Shareholders to appoint members of the Board of Commissioners of the Clearing and Guarantee Institution must be led by the President Director or one of the members of the Board of Directors in the event the President Director is unable to attend.

Sixth Section
Positions of Members of the Board of Commissioners

Article 43
The term of office of members of the Board of Commissioners of the Clearing and Guarantee Institution is 3 (three) years calculated from the General Meeting of Shareholders for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution until the closing of the General Meeting of Shareholders in the third year, and may only be reappointed for 1 (one) term of office with the following provisions:
a. if a member of the Board of Commissioners is appointed to replace a vacant position of a member of the Board of Commissioners of the Clearing and Guarantee Institution and/or there are new additional members of the Board of Commissioners of the Clearing and Guarantee Institution, the term of office of the member of the Board of Commissioners of the Clearing and Guarantee Institution applies for the remaining term of office of the member of the Board of Commissioners of the Clearing and Guarantee Institution currently serving; b. the calculation of 1 (one) term of office for a member of the Board of Commissioners of the Clearing and Guarantee Institution is if the person concerned serves for at least 2/3 (two-thirds) of the term of office of the Board of Commissioners of the Clearing and Guarantee Institution; and
c. the total term of office of members of the Board of Commissioners on the Stock Exchange, Clearing and Guarantee Institution, and Custody and Settlement Institution is at most 3 (three) terms of office.

Article 44
(1) In the event that a member of the Board of Commissioners of the Clearing and Guarantee Institution no longer meets the requirements as referred to in Article 31 and Article 32, the following provisions apply:
a. the member of the Board of Commissioners of the Clearing and Guarantee Institution must be replaced within a period of at the latest 3 (three) months since the person concerned is declared by the Financial Services Authority to no longer meet the requirements; b. shareholders or groups of shareholders of the Clearing and Guarantee Institution meeting the requirements as referred to in Article 33 paragraph (1) must immediately submit candidates for replacement members of the Board of Commissioners of the Clearing and Guarantee Institution to the Financial Services Authority in accordance with the procedures as referred to in Article 33 and Article 34; and
c. candidates for replacement members of the Board of Commissioners of the Clearing and Guarantee Institution must meet the provisions of Article 31 and Article 32.
(2) In the event that there are vacant positions of members of the Board of Commissioners of the Clearing and Guarantee Institution, the Board of Directors of the Clearing and Guarantee Institution must report to the Financial Services Authority at the latest 5 (five) working days since the Board of Directors of the Clearing and Guarantee Institution becomes aware of it. (3) In filling positions of members of the Board of Commissioners of the Clearing and Guarantee Institution to replace vacant positions of members of the Board of Commissioners of the Clearing and Guarantee Institution and/or the need for new additional members of the Board of Commissioners, the following provisions apply:
a. the replacement or addition of members of the Board of Commissioners of the Clearing and Guarantee Institution must meet the provisions as regulated in Article 31 to Article 34; b. candidates for members of the Board of Commissioners of the Clearing and Guarantee Institution to be submitted must be willing to cooperate with and not receive objections from existing members of the Board of Commissioners; and
c. The addition of new members of the Board of Commissioners of the Clearing and Guarantee Institution must consider the provisions of Article 31 and its implementation must meet the provisions of Article 32 to Article 35.
(4) The Financial Services Authority may determine that vacant positions of members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in paragraph (2) do not need to be filled after considering the development of activities and operations of the Clearing and Guarantee Institution.

(5) The time limit for replacing members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in paragraph (1) may be determined otherwise by the Financial Services Authority.

Article 45
The term of office of members of the Board of Commissioners of the Clearing and Guarantee Institution ends automatically if:
a. loss of Indonesian citizenship; b. incompetent to perform legal acts;
c. declared bankrupt or becomes a member of the Board of Commissioners or a member of the Board of Directors who is declared guilty or jointly guilty causing a company to be declared bankrupt;
d. sentenced for proven criminal acts; e. permanently unable to perform duties; f. death; and/or g. term of office expires.

Article 46
Members of the Board of Commissioners of the Clearing and Guarantee Institution may be dismissed from their positions by the Financial Services Authority if:
a. lacking good ethics and morality; b. committing disgraceful acts in the financial services sector;
c. committing material violations of laws and regulations in the financial services sector;
d. lacking commitment to the development of the Clearing and Guarantee Institution; and/or e. failing or being incompetent to perform duties.

Article 47
The Board of Commissioners of the Clearing and Guarantee Institution must hold meetings at least once a month, led by the Lead Commissioner or one of the members of the Board of Commissioners in the event the Lead Commissioner is unable to attend.

Article 48
The Board of Commissioners of the Clearing and Guarantee Institution, in performing its duties, may form an Audit Committee and a Remuneration Committee, with the following provisions:
a. the chairman of the Audit Committee and the chairman of the Remuneration Committee are one of the members of the Board of Commissioners of the Clearing and Guarantee Institution; b. the Audit Committee is tasked with providing independent professional opinions to the Board of Commissioners of the Clearing and Guarantee Institution on reports or matters submitted by the Board of Directors to the Board of Commissioners of the Clearing and Guarantee Institution and identifying matters requiring the attention of the Board of Commissioners of the Clearing and Guarantee Institution; and
c. members of the Audit Committee must have expertise and experience in the fields of law, accounting, or finance.

Article 49
Members of the Board of Commissioners of the Clearing and Guarantee Institution are given remuneration, the amount of which is proposed or recommended by shareholders or groups of shareholders as referred to in Article 33 paragraph (2) letter c, considering the proposal of the Remuneration Committee (if any), before the implementation of the General Meeting of Shareholders for the appointment of members of the Board of Commissioners of the Clearing and Guarantee Institution.

Article 50
Remuneration for members of the Board of Commissioners of the Clearing and Guarantee Institution as referred to in Article 49 must receive approval and be determined by the General Meeting of Shareholders.

Article 51
Members of the Board of Commissioners of the Clearing and Guarantee Institution who no longer serve as members of the Board of Commissioners of the Clearing and Guarantee Institution for any reason are not entitled to receive remuneration from the Clearing and Guarantee Institution, except for rights to compensation or service rewards as long as approved by the General Meeting of Shareholders, with the provision that the amount of compensation or service rewards is not greater than the amount of remuneration for the remaining term of office.

CHAPTER IV
SANCTION PROVISIONS

Article 52
(1) Without prejudice to criminal provisions in the Capital Market sector, the Financial Services Authority is authorized to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and g. cancellation of registration.
(2) Administrative sanctions as referred to in paragraph (1) letter b, letter c, letter d, letter e, letter f, or letter g may be imposed with or without prior imposition of administrative sanctions in the form of a written warning as referred to in paragraph (1) letter a.
(3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letter c, letter d, letter e, letter f, or letter g.

Article 53
In addition to administrative sanctions as referred to in Article 52 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

CHAPTER V
TRANSITIONAL PROVISIONS

Article 54
In the event that there are applications for filling positions of members of the Board of Directors and members of the Board of Commissioners of the Clearing and Guarantee Institution to completely replace, fill vacant positions of members of the Board of Directors and members of the Board of Commissioners who do not meet requirements, or add members of the Board of Directors and members of the Board of Commissioners of the Clearing and Guarantee Institution before this Financial Services Authority Regulation takes effect, the procedure for submitting applications for members of the Board of Directors and members of the Board of Commissioners of the Clearing and Guarantee Institution follows the provisions of laws and regulations in the Capital Market sector regulating the Board of Directors and Board of Commissioners of the Clearing and Guarantee Institution in effect at the time of submission.

CHAPTER VI
CLOSING PROVISIONS

Article 55
At the time this Financial Services Authority Regulation takes effect:

1. Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-13/BL/2009 dated January 30, 2009 regarding Directors of the Clearing and Guarantee Institution, along with Regulation Number III.B.3 which is its attachment; and
2. Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-107/BL/2008 dated April 10, 2008 regarding Commissioners of the Clearing and Guarantee Institution, along with Regulation Number III.B.8 which is its attachment,
   are revoked and declared invalid.

Article 56
This Financial Services Authority Regulation takes effect on the date of enactment.

To ensure everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on December 20, 2016
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY, signature
MULIAMAN D. HADAD

Enacted in Jakarta on December 28, 2016
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signature
YASONNA H.LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 313 Copy in accordance with the original Legal Director 1 Legal Department signature Yuliana

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 59 /POJK.04/2016
REGARDING
THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS OF A CLEARING AND GUARANTEE INSTITUTION

I. GENERAL
That with the enactment of Law Number 21 of 2011 concerning the Financial Services Authority which establishes the authority for regulation and supervision of activities in the financial services sector including the Capital Market shifting from the Capital Market and Financial Institution Supervisory Board to the Financial Services Authority, the Financial Services Authority has an interest in maintaining that the Capital Market continues to be organized in an orderly, fair, transparent, and efficient manner. To realize this, it is necessary to improve the provisions applicable to every Party conducting activities in the Capital Market sector, one of which is the Clearing and Guarantee Institution established to provide clearing and guarantee services for the settlement of Stock Exchange Transactions. In order to improve the good corporate governance of the Clearing and Guarantee Institution and its global competitiveness, it is necessary for the Board of Directors and Commissioners of the Clearing and Guarantee Institution to have high competence and integrity and meet the requirements as stipulated in the applicable laws and regulations. Regulations regarding Directors of the Clearing and Guarantee Institution are currently regulated in Capital Market and Financial Institution Supervisory Board Regulation Number III.B.3 regarding Directors of the Clearing and Guarantee Institution, Attachment of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-13/BL/2009 dated January 30, 2009 (Regulation Number III.B.3 regarding Directors of the Clearing and Guarantee Institution), while regulations regarding Commissioners of the Clearing and Guarantee Institution are regulated in Capital Market and Financial Institution Supervisory Board Regulation Number III.B.8 regarding Commissioners of the Clearing and Guarantee Institution, Attachment of the Decision of the Chairman of the Capital Market and Financial Institution Supervisory Board Number Kep-107/BL/2008 dated April 10, 2008 (Regulation Number III.B.8 regarding Commissioners of the Clearing and Guarantee Institution). Considering these matters, it is necessary to make changes and merge the Capital Market and Financial Institution Supervisory Board Regulation Number III.B.3 regarding Directors of the Clearing and Guarantee Institution and Capital Market and Financial Institution Supervisory Board Regulation Number III.B.8 regarding Commissioners of the Clearing and Guarantee Institution by establishing a Financial Services Authority Regulation regarding the Board of Directors and Board of Commissioners of the Clearing and Guarantee Institution.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.

Article 2
Paragraph (1)
Sufficiently clear.
Paragraph (2)
What is meant by "decision that is final" is a decision determined by the President Director of the Clearing and Guarantee Institution in the event of a difference of opinion between members of the Board of Directors of the Clearing and Guarantee Institution so that the Board of Directors meeting of the Clearing and Guarantee Institution cannot make a decision, then the decision will be determined by the President Director. The decision determined by the President Director is one of the two or more opinions presented in the Board of Directors meeting of the Clearing and Guarantee Institution. Paragraph (3) Sufficiently clear.

Article 3
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
At the time this Financial Services Authority Regulation takes effect, the laws and regulations in the Capital Market sector regulating the Licensing of Clearing and Guarantee Institutions in effect are Regulation Number III.B.1, attachment of the Decision of the Chairman of the Capital Market Supervisory Board Number Kep-07/PM/1996 dated January 17, 1996 regarding Licensing of Clearing and Guarantee Institutions. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear. Paragraph (7) Sufficiently clear.

Article 4
Sufficiently clear.

Article 5
Letter a
Number 1
Sufficiently clear.
Number 2
Sufficiently clear.
Number 3
Sufficiently clear.
Number 4
What is meant by "criminal act" is:

1. criminal acts in the financial sector, namely criminal acts in the Banking sector, criminal acts in the Capital Market sector, and criminal acts in the Non-Bank Financial Industry sector proven to have been committed within the last 20 (twenty) years before nomination;
2. special criminal acts, namely criminal acts other than those regulated in the Criminal Code with a prison sentence penalty of 1 (one) year or more, at least: corruption;
   narcotics/psychotropics; smuggling; customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in the tax sector; in the forestry sector; in the environmental sector; in the maritime and fisheries sector proven to have been committed within the last 20 (twenty) years before nomination; and
3. criminal acts, namely criminal acts contained in the Criminal Code with a prison sentence penalty of 1 (one) year or more proven to have been committed within the last 10 (ten) years before nomination.
   Assessment of the criteria in this number is conducted at least based on information obtained by the Financial Services Authority or information known to the public, that the person concerned has been sentenced for committing criminal acts in the financial sector or special criminal acts within the last 20 (twenty) years before nomination or has been sentenced for committing criminal acts within the last 10 (ten) years before nomination. What is meant by "before nomination" is calculated from the date the application for the submission of the name of the candidate for members of the Board of Directors of the Clearing and Guarantee Institution is received completely by the Financial Services Authority. Number 5 Sufficiently clear. Number 6 Sufficiently clear. Number 7 Sufficiently clear. Letter b Sufficiently clear.

Article 6
Letter a
In the event that candidates for members of the Board of Directors of the Clearing and Guarantee Institution consist of 4 (four) persons and after the composition of the Board of Directors of the Clearing and Guarantee Institution meets the experience requirements as referred to in Article 6 letter a, then other candidate members of the Board of Directors of the Clearing and Guarantee Institution must still meet the requirements as referred to in Article 6 letter a. Letter b In the event that candidates for members of the Board of Directors of the Clearing and Guarantee Institution consist of 5 (five) persons and after the composition of the Board of Directors of the Clearing and Guarantee Institution meets the experience requirements as referred to in Article 6 letter b, then other candidate members of the Board of Directors must still meet the requirements as referred to in Article 6 letter b. Letter c Sufficiently clear.

Article 7
Sufficiently clear.

Article 8
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Letter a
Sufficiently clear.
Letter b
Sufficiently clear.
Letter c
Recommendations for salary and other benefits for candidate members of the Board of Directors of the Clearing and Guarantee Institution are determined based on the feasibility generally applicable to each position of members of the Board of Directors of the Clearing and Guarantee Institution according to their duties and responsibilities based on the expertise and experience of each candidate member of the Board of Directors of the Clearing and Guarantee Institution. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear.

Article 9
Sufficiently clear.

Article 10
Sufficiently clear.

Article 11
Sufficiently clear.

Article 12
What is meant by legal process in this paragraph is the investigation or judicial process (including appeal and cassation) in criminal cases including:

1. criminal acts in the financial sector, namely criminal acts in the Banking sector, in the Capital Market sector, and in the Non-Bank Financial Industry sector;
2. special criminal acts, namely criminal acts other than those regulated in the Criminal Code with a prison sentence penalty of 1 (one) year or more, at least: corruption; narcotics/psychotropics; smuggling;
   customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in the tax sector; in

forestry sector; in the environmental sector; in the marine and fisheries sector; and
3. criminal offenses, namely criminal offenses listed in the Criminal Code with a penalty of imprisonment of 1 (one) year or more.

Article 13
Clearly stated.

Article 14
Clearly stated.

Article 15
Clearly stated.

Article 16
Clearly stated.

Article 17
Clearly stated.

Article 18
Clearly stated.

Article 19
Clearly stated.

Article 20
Clearly stated.

Article 21
Clearly stated.

Article 22
Clearly stated.

Article 23
Clearly stated.

Article 24
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Proof of bankruptcy is based on a decision of the commercial court.

Letter d
The term "criminal offense" refers to:

1. criminal offenses in the financial sector, namely criminal offenses in the Banking sector, criminal offenses in the Capital Market sector, and criminal offenses in the Non-Bank Financial Industry sector;
2. special criminal offenses, namely criminal offenses other than those regulated in the Criminal Code with a penalty of imprisonment of 1 (one) year or more, at least: corruption; narcotics/psychotropics; smuggling; customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in the tax sector; in the forestry sector; in the environmental sector; in the marine and fisheries sector; and
3. criminal offenses, namely criminal offenses listed in the Criminal Code with a penalty of imprisonment of 1 (one) year or more.

Letter e
The term "permanent incapacity" refers at least to permanent illness resulting in the inability to perform work activities, proven by a doctor's certificate.

Letter f
Clearly stated.

Letter g
Clearly stated.

Article 25
Clearly stated.

Article 26
Clearly stated.

Article 27
Clearly stated.

Article 28
Clearly stated.

Article 29
Clearly stated.

Article 30
Clearly stated.

Article 31
Letter a
Number 1
Clearly stated.

Number 2
Clearly stated.

Number 3
Clearly stated.

Number 4
The term "criminal offense" refers to:

1. criminal offenses in the financial sector, namely criminal offenses in the Banking sector, criminal offenses in the Capital Market sector, and criminal offenses in the Non-Bank Financial Industry sector that are proven to have been committed within the last 20 (twenty) years prior to nomination;
2. special criminal offenses, namely criminal offenses other than those regulated in the Criminal Code with a penalty of imprisonment of 1 (one) year or more, at least: corruption;

narcotics/psychotropics; smuggling; customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in the tax sector; in the forestry sector; in the environmental sector; in the marine and fisheries sector that are proven to have been committed within the last 20 (twenty) years prior to nomination; and
3. criminal offenses, namely criminal offenses listed in the Criminal Code with a penalty of imprisonment of 1 (one) year or more that are proven to have been committed within the last 10 (ten) years prior to nomination.

The assessment of the criteria in this letter is conducted based at least on information obtained from the Financial Services Authority or information known to the public, that the person concerned has been convicted for committing criminal offenses in the financial sector and special criminal offenses within the last 20 (twenty) years prior to nomination or has been convicted for committing criminal offenses within the last 10 (ten) years prior to nomination. The term "prior to nomination" means calculated from the date the application for the submission of the name of the candidate member of the Board of Directors of the Clearing and Guarantee Institution is received in complete by the Financial Services Authority.

Number 5
Clearly stated.

Number 6
Clearly stated.

Number 7
Clearly stated.

Letter b
Clearly stated.

Article 32
Clearly stated.

Article 33
Paragraph (1)
Clearly stated.

Paragraph (2)
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Recommendations for remuneration for candidate members of the Board of Commissioners of the Clearing and Guarantee Institution must be determined based on feasibility generally applicable to each member of the Board of Commissioners of the Clearing and Guarantee Institution according to their duties and responsibilities based on the expertise and experience of each candidate member of the Board of Commissioners of the Clearing and Guarantee Institution.

Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.

Article 34
Clearly stated.

Article 35
Clearly stated.

Article 36
Clearly stated.

Article 37
Clearly stated.

Article 38
Clearly stated.

Article 39
Clearly stated.

Article 40
Clearly stated.

Article 41
Clearly stated.

Article 42
Clearly stated.

Article 43
Clearly stated.

Article 44
Clearly stated.

Article 45
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Clearly stated.

Letter d
The term "criminal offense" refers to:

1. criminal offenses in the financial sector, namely criminal offenses in the Banking sector, criminal offenses in the Capital Market sector, and criminal offenses in the Non-Bank Financial Industry sector;
2. special criminal offenses, namely criminal offenses other than those regulated in the Criminal Code with a penalty of imprisonment of 1 (one) year or more, at least: corruption; narcotics/psychotropics; smuggling; customs; excise; human trafficking; illegal arms trafficking; terrorism; counterfeiting money; in

the tax sector; in the forestry sector; in the environmental sector; in the marine and fisheries sector; and
3. criminal offenses, namely criminal offenses listed in the Criminal Code with a penalty of imprisonment of 1 (one) year or more.

Letter e
The term "permanent incapacity" refers at least to permanent illness resulting in the inability to perform work activities, proven by a doctor's certificate.

Letter f
Clearly stated.

Letter g
Clearly stated.

Article 46
Clearly stated.

Article 47
Clearly stated.

Article 48
Clearly stated.

Article 49
Clearly stated.

Article 50
Clearly stated.

Article 51
Clearly stated.

Article 52
Clearly stated.

Article 53
Clearly stated.

Article 54
At the time this Financial Services Authority Regulation takes effect, the legislation in the Capital Market sector regulating the Board of Directors and Board of Commissioners that is in effect is:

1. Regulation Number III.B.3, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number Kep-13/BL/2009 dated January 30, 2009 concerning Directors of Clearing and Guarantee Institutions; and
2. Regulation Number III.B.8, appendix of the Decision of the Chairman of the Capital Market Supervisory Board and Financial Institutions Number Kep-107/BL/2008 dated April 10, 2008 concerning Commissioners of Clearing and Guarantee Institutions.

Article 55
Clearly stated.

Article 56
Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6001