SEOJK on the Implementation of Integrated Governance for Financial Conglomerates

To:

1. Board of Directors of Banks;
2. Board of Directors of Insurance and Reinsurance Companies; and
3. Board of Directors of Securities Companies; and
4. Board of Directors of Financing Companies;
   At their respective locations.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 15/SEOJK.03/2015

CONCERNING

THE IMPLEMENTATION OF INTEGRATED GOVERNANCE
FOR FINANCIAL CONGLOMERATES

In light of the implementation of the Financial Services Authority Regulation Number 18/POJK.03/2014 concerning the Implementation of Integrated Governance for Financial Conglomerates (State Gazette of the Republic of Indonesia Year 2014 Number 349, Additional State Gazette of the Republic of Indonesia Number 5627), it is necessary to regulate implementation provisions regarding the implementation of integrated governance for financial conglomerates in a Circular Letter of the Financial Services Authority as follows:

I. INTRODUCTION

In order to improve the performance of Financial Conglomerates and enhance compliance with applicable legislation and ethical values in the financial services industry, Financial Conglomerates are required to conduct business activities guided by the principles of Good Integrated Governance.

The implementation of Integrated Governance in Financial Conglomerates must always be based on the following basic principles:

A. Transparency (transparency), namely openness in presenting material and relevant information and openness in the decision-making process.
B. Accountability (accountability), namely clarity of functions and the execution of accountability by the organs in the Financial Conglomerate so that its management runs effectively.
C. Responsibility (responsibility), namely the alignment of the management of the Primary Entity and Financial Service Institutions (FSIs) with applicable legislation and sound management principles.
D. Independence (independency), namely the professional management of the Financial Conglomerate without influence or pressure from any party; or professional (professional), for Sharia Commercial Banks, namely having competence, being able to act objectively and free from influence or pressure from any party (independent) and having a high commitment to developing the Sharia bank. E. Fairness (fairness), namely justice and equality in fulfilling the rights of stakeholders arising from agreements and applicable legislation.

In order to implement the five basic principles mentioned above, the Primary Entity and FSIs in the Financial Conglomerate must refer to regulations and legislation governing the implementation of good corporate governance.

II. GENERAL PRINCIPLES OF ASSESSING THE IMPLEMENTATION OF INTEGRATED GOVERNANCE

A. The Integrated Governance Assessment is an assessment of the implementation or application of Integrated Governance principles, taking into account the significance and/or materiality of an issue to the implementation of Integrated Governance in the Financial Conglomerate.

The Integrated Governance Implementation Assessment is conducted comprehensively and structured.

B. The Integrated Governance Assessment as referred to in letter A is conducted by taking into account the significance and/or materiality of the Integrated Governance assessment factors and the impact of the strengths and/or weaknesses of the implementation of Integrated Governance in the Financial Conglomerate.

C. The assessment is conducted through in-depth analysis by considering assessment factors completely and wholly (comprehensively). The analysis process for the assessment is based on relevant facts and their influence on the implementation of Integrated Governance as well as the complexity of the Financial Conglomerate, considering the level of issues. The Integrated Governance Implementation Assessment is structured by presenting facts, analysis results, and conclusions.

D. The Integrated Governance Implementation Assessment is an assessment of 3 (three) aspects of Integrated Governance, namely structure, process, and results of Integrated Governance.

1. The assessment of the Integrated Governance structure aims to assess the adequacy of the Integrated Governance structure so that the implementation process of Integrated Governance provides results in accordance with stakeholder expectations.
2. The assessment of the Integrated Governance process aims to assess the effectiveness of the Integrated Governance implementation process supported by the adequacy of the Integrated Governance structure, thereby providing results in accordance with stakeholder expectations.
3. The assessment of the Integrated Governance results aims to assess the quality of results that meet stakeholder expectations.

Included in the results of Integrated Governance are qualitative aspects and quantitative aspects, including:
a. Financial Conglomerate performance such as efficiency and capital adequacy; b. Adequacy of transparency in the annual report on Integrated Governance implementation;
c. Objectivity in conducting assessments or audits;
d. Level of compliance with applicable regulations and the resolution of issues faced by FSIs such as fraud, violations of regulations related to FSI reports to the Financial Services Authority.

E. The Integrated Governance Assessment is conducted by analyzing the three assessment aspects as referred to in item II.D as an integrated whole, so that if one aspect is assessed as inadequate, that weakness affects the overall assessment results of the implementation of Integrated Governance.

III. ASSESSMENT OF THE IMPLEMENTATION OF INTEGRATED GOVERNANCE

A. The Integrated Governance Implementation Assessment covers at least 7 (seven) Integrated Governance Implementation assessment factors, namely:

1. Implementation of duties and responsibilities of the Board of Directors of the Primary Entity;
2. Implementation of duties and responsibilities of the Board of Commissioners of the Primary Entity;
3. Duties and responsibilities of the Integrated Governance Committee;
4. Duties and responsibilities of the Integrated Compliance Unit;
5. Duties and responsibilities of the Integrated Internal Audit Unit;
6. Implementation of Integrated Risk Management; and
7. Formulation and implementation of the Integrated Governance Guidelines,
   and considering other information related to the implementation of Integrated Governance, such as direct intervention by owners in the management of the Financial Conglomerate and shareholder commitment to increase the capital of the Financial Conglomerate in accordance with applicable regulations regarding the adequacy of integrated minimum capital fulfillment.

B. The assessment is conducted by evaluating the structure, process, and results of Integrated Governance for each assessment factor.

Thus, in the assessment factor of the implementation of duties and responsibilities of the Board of Directors of the Primary Entity, the structure, process, and results of Integrated Governance are assessed. The same applies to the implementation of duties and responsibilities of the Board of Commissioners of the Primary Entity, the duties and responsibilities of the Integrated Governance Committee, the duties and responsibilities of the Integrated Compliance Unit, the duties and responsibilities of the Integrated Internal Audit Unit, the implementation of Integrated Risk Management, and the formulation and implementation of the Integrated Governance Guidelines.

C. The determination of assessment results is a conclusion on the implementation of Integrated Governance conducted using the principles as referred to in number II.

D. The results of the Integrated Governance Implementation Assessment are categorized into 5 (five) assessment ratings, namely Rating 1, Rating 2, Rating 3, Rating 4, and Rating 5. A smaller Integrated Governance Rating order reflects better implementation of Integrated Governance. The determination of these Ratings is guided by the Integrated Governance Rating Matrix as referred to in Appendix II, which is an integral part of this Circular Letter of the Financial Services Authority.

IV. IMPLEMENTATION OF INTEGRATED GOVERNANCE FOR FINANCIAL CONGLOMERATES WHOSE PRIMARY ENTITY IS A BRANCH OFFICE OF A FOREIGN ENTITY

A. Financial Conglomerates whose Primary Entity is a branch office of a foreign entity are required to implement Integrated Governance by referring to regulations regarding the implementation of integrated governance for financial conglomerates.

B. Specifically, the implementation of the Board of Commissioners function and the formation of the Integrated Governance Committee are adjusted to the organizational structure applicable to the branch office and headquarters of the aforementioned foreign entity.

C. Adjustments as referred to in letter B must fulfill all functions required in the implementation of Integrated Governance as regulated in the regulations regarding the implementation of integrated governance for financial conglomerates.

The Financial Services Authority has the authority to request adjustments to the organizational structure of the branch office of the foreign entity to ensure the implementation of Integrated Governance in accordance with regulations regarding the implementation of integrated governance for financial conglomerates.

V. GOVERNANCE FRAMEWORK FOR FSIS IN FINANCIAL CONGLOMERATES

A. The Governance Framework for FSIs in Financial Conglomerates is a minimum guideline that must be complied with by all FSIs in the Financial Conglomerate to implement governance in FSIs. Thus, a uniform level of governance implementation will be obtained across all FSIs in the Financial Conglomerate.

B. In the implementation of Integrated Governance, in addition to referring to the Governance Framework as referred to in letter A, the Primary Entity and FSIs are subject to applicable regulations for FSIs. In the event that applicable regulations for FSIs are more lenient than the Governance Framework for FSIs in Financial Conglomerates, FSIs are subject to the Governance Framework for FSIs in Financial Conglomerates.

C. The formulation of the Governance Framework for FSIs in Financial Conglomerates by the Primary Entity refers to the regulations in this Circular Letter, considering regulations related to governance applicable to FSIs.

VI. REPORT ON THE ASSESSMENT OF THE IMPLEMENTATION OF INTEGRATED GOVERNANCE

A. The Primary Entity conducts a self-assessment of the implementation of Integrated Governance in the Financial Conglomerate and submits a report on the assessment of Integrated Governance implementation periodically, every semester for the position at the end of June and December. The report is submitted to the Financial Services Authority no later than the 15th (fifteenth) day of the second month after the end of the respective reporting month.

B. The self-assessment of Integrated Governance implementation is conducted by referring to the Self-Assessment Working Paper (self assessment) of Integrated Governance Implementation as referred to in Appendix I, which is an integral part of this Circular Letter of the Financial Services Authority.

C. In conducting the self-assessment as referred to in letter B, the Primary Entity must first understand the purpose of the Integrated Governance Implementation assessment to be able to conclude matters that constitute the strengths and weaknesses of Integrated Governance implementation.

D. In concluding matters that constitute strengths and weaknesses, attention must be paid to, among others:

1. The assessment focuses on the substance of Integrated Governance implementation and not just on meeting regulatory requirements. For example, in assessing the fulfillment of organ and structure completeness, it must be evaluated whether the organs function as they should.
2. The assessment of the three aspects of Integrated Governance must be an integrated, comprehensive, and structured series of assessments. For example, the absence of an Independent Commissioner representing an FSI in the Integrated Governance Committee can cause weaknesses in the process of supervising the implementation of Integrated Governance, resulting in inadequate Integrated Governance evaluation results.

E. Based on the Self-Assessment Working Paper (self assessment) of Integrated Governance Implementation, the Primary Entity makes a general conclusion of the self-assessment results of Integrated Governance implementation and determines the rating of Integrated Governance factors by referring to the Integrated Governance Rating Matrix as referred to in Appendix II, which is an integral part of this Circular Letter of the Financial Services Authority.

F. Subsequently, the Primary Entity prepares a report on the self-assessment of Integrated Governance implementation by referring to the Self-Assessment Report (self assessment) of Integrated Governance Implementation for Financial Conglomerates as referred to in Appendix III, which is an integral part of this Circular Letter of the Financial Services Authority, and containing at least:

1. Integrated Governance rating and rating definitions;
2. Analysis of Integrated Governance factors, including by identifying issues such as:
   a. Strengths of Integrated Governance implementation; b. Weaknesses of Integrated Governance implementation, root causes of weaknesses, and improvement steps that have been and will be taken to improve the implementation of Integrated Governance.

G. The Integrated Governance Implementation Assessment Report is signed by the President Director of the Primary Entity and the Director of the Primary Entity appointed to perform the supervision function over FSIs in the Financial Conglomerate or the Director who oversees the Compliance function of the Primary Entity.

H. For Primary Entities that are Banks that have submitted reports on the self-assessment of Integrated Governance implementation periodically, the Bank is considered to have fulfilled the obligation to submit periodic Consolidated Governance Assessment reports as referred to in regulations regarding the implementation of good corporate governance for commercial banks.

I. In the event of a difference in the assessment rating of Integrated Governance implementation between the results of the Financial Services Authority assessment and the results of the Primary Entity assessment, the Primary Entity is required to adjust the Integrated Governance Implementation Assessment rating to the results of the Financial Services Authority assessment.

VII. ANNUAL REPORT ON THE IMPLEMENTATION OF INTEGRATED GOVERNANCE

A. The Primary Entity is required to formulate and submit the Annual Report on Integrated Governance Implementation to the Financial Services Authority no later than 5 (five) months after the end of the fiscal year, and publish the said annual report on the website of the Primary Entity no later than 5 (five) months after the end of the fiscal year.

Thus, in the event that there are regulations for FSIs of the Primary Entity that set stricter rules regarding the time limit for the publication of annual reports, the Primary Entity is required to adjust the time limit for the publication of annual reports in accordance with the stricter regulations.

B. The Annual Report on Integrated Governance Implementation contains at least:

1. Self-Assessment Report of Integrated Governance Implementation for 1 (one) fiscal year;
2. The structure of the Financial Conglomerate and the structure of the broader conglomerate, if different;
3. Shareholding structure in the Financial Conglomerate describing the parties who are shareholders of FSIs in the Financial Conglomerate up to the ultimate shareholders;
4. Management structure in the Primary Entity and FSIs in the Financial Conglomerate; and
5. Intra-group transaction policies containing at least policies to identify, manage, and mitigate intra-group transactions.

C. For FSIs that are Banks designated as the Primary Entity, the Annual Report on Integrated Governance Implementation, in addition to containing information as referred to in letter B, also contains the scope of the Good Corporate Governance Implementation Report as regulated in applicable regulations regarding the implementation of good corporate governance for commercial banks.

D. The Annual Report on Integrated Governance Implementation can be formulated as part of the Annual Report of the Financial Conglomerate or as a separate report distinct from the Annual Report of the Financial Conglomerate, and submitted together with the Annual Report of the Financial Conglomerate. In the event that there are no regulations governing the Annual Report of the Financial Conglomerate, the Primary Entity only submits the Annual Report on Integrated Governance Implementation.

E. The Financial Services Authority has the authority to request the Primary Entity to revise the Annual Report on Integrated Governance Implementation if, based on the Financial Services Authority's evaluation, the report does not correspond to the actual condition of the Financial Conglomerate. The report revision is submitted completely to the Financial Services Authority and published on the website of the Primary Entity.

VIII. ADDRESS FOR SUBMISSION OF REPORTS

The submission of reports to the Financial Services Authority as referred to in this Circular Letter of the Financial Services Authority is addressed to:

A. The Supervision Department that supervises the Primary Entity's FSI,

1. Menara Radius Prawiro, Jalan M.H. Thamrin No. 2, Jakarta, for Primary Entities that are Banks;
2. Gedung Soemitro Djojohadikusumo, Jalan Lapangan Banteng Timur No. 2-4, Jakarta 10710, for Primary Entities that are Securities Companies;
3. Menara Merdeka, Jalan Budi Kemuliaan I No. 2, for Primary Entities that are Insurance and Reinsurance Companies, and Financing Companies,
   in the event that the Primary Entity is headquartered in the working area of the Financial Services Authority Headquarters Office.

B. Regional Office or local Financial Services Authority Office, in the event that the Primary Entity's FSI is headquartered outside the working area of the Financial Services Authority Headquarters Office.

IX. OTHERS

A. For FSIs located outside the jurisdiction of Indonesia and whose country's law adopts a one-tier system for management, the obligation of the FSI to have Independent Commissioners is replaced by board members who perform supervisory functions from independent parties relative to the shareholders.

B. The definition of intra-group transactions as referred to in item VII.B.5 refers to regulations governing the implementation of Integrated Risk Management for Financial Conglomerates.

X. CLOSING

The provisions in this Circular Letter of the Financial Services Authority shall take effect on the date of determination.

To ensure that everyone knows it, it is ordered to announce this Circular Letter of the Financial Services Authority by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta on May 25, 2015

HEAD OF EXECUTIVE SUPERVISOR OF BANKING
FINANCIAL SERVICES AUTHORITY,
Signed,
NELSON TAMPUBOLON

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 44 DATE JUNE 1, 2015

Copy in accordance with the original
Director of Legal Affairs I
Legal Department,
Signed,
Sudarmaji

APPENDIX I
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 15/SEOJK.03/2015 CONCERNING THE IMPLEMENTATION OF INTEGRATED GOVERNANCE FOR FINANCIAL CONGLOMERATES

SELF-ASSESSMENT WORKING PAPER (SELF ASSESSMENT) OF INTEGRATED GOVERNANCE IMPLEMENTATION

Purpose
1. To obtain an overview of the implementation of Integrated Governance in the Financial Conglomerate; and
2. To know the strengths and weaknesses in the implementation of Integrated Governance so that the Primary Entity can formulate an improvement action plan according to the issues.

1. Board of Directors of the Primary Entity
a. Integrated Governance Structure
1) The Board of Directors of the Primary Entity has met the requirements of integrity, competence, and financial reputation and has obtained approval from the Financial Services Authority.
2) The Board of Directors of the Primary Entity has knowledge regarding the Primary Entity, including understanding of the main business activities and main risks of FSIs in the Financial Conglomerate.
b. Integrated Governance Process
1) The Board of Directors of the Primary Entity submits the Integrated Governance Guidelines to the Board of Directors of FSIs in the Financial Conglomerate.
2) The Board of Directors of the Primary Entity directs, monitors, and evaluates the implementation of the Integrated Governance Guidelines.
3) The Board of Directors of the Primary Entity follows up on directions or advice from the Board of Commissioners of the Primary Entity in order to refine the Integrated Governance Guidelines.
4) The Board of Directors of the Primary Entity follows up on findings from the Integrated Internal Audit Unit and the Integrated Compliance Unit.
c. Integrated Governance Results
1) The Integrated Governance Guidelines have been refined according to directions from the Board of Commissioners.
2) The Board of Directors of the Primary Entity has ensured that audit findings and recommendations from:
a) Integrated Internal Audit Unit; b) external auditors; c) OJK supervision results; d) supervision results from other authorities including Bank Indonesia; and/or e) supervision results from supervisory authorities against the Head Office of FSIs in the event that the FSI is a branch office of an entity located abroad, have been followed up by FSIs in the Financial Conglomerate.

2. Board of Commissioners of the Primary Entity
   a. Integrated Governance Structure
   1) The Board of Commissioners of the Primary Entity has met the requirements of integrity, competence, and financial reputation and has obtained approval from the Financial Services Authority.
   2) The Board of Commissioners of the Primary Entity has knowledge regarding the Primary Entity, including understanding of the main business activities and main risks of FSIs in the Financial Conglomerate.
   b. Integrated Governance Process
   1) The Board of Commissioners of the Primary Entity holds Board of Commissioners meetings periodically at least 1 (one) time every semester.
   2) The Board of Commissioners of the Primary Entity supervises the implementation of duties and responsibilities of the Board of Directors of the Primary Entity.
   3) The Board of Commissioners of the Primary Entity supervises the implementation of Integrated Governance.
   4) The Board of Commissioners of the Primary Entity evaluates the Integrated Governance Guidelines.
   c. Integrated Governance Results
   1) The results of the Board of Commissioners meetings of the Primary Entity have been recorded in meeting minutes and documented well, including clear disclosure of dissenting opinions and their reasons that occurred in the Board of Commissioners meetings of the Primary Entity.
   2) Recommendations from the supervision results of the Board of Commissioners of the Primary Entity regarding:
   a) implementation of duties and responsibilities of the Board of Directors of the Primary Entity; b) implementation of Integrated Governance; c) results of the evaluation of the Integrated Governance Guidelines by the Board of Commissioners of the Primary Entity, have been submitted to the Board of Directors of the Primary Entity.
   3) The Board of Commissioners of the Primary Entity has formed the Integrated Governance Committee.

3. Integrated Governance Committee
   a. Integrated Governance Structure
   1) The Integrated Governance Committee consists of at least:
   a) one Independent Commissioner who serves as Chairman on one of the committees in the Primary Entity, serving as Chairman and member; b) an Independent Commissioner who represents and is appointed from an FSI in the Financial Conglomerate, as a member; c) one independent party, as a member; d) a Sharia Supervisory Board member from an FSI in the Financial Conglomerate, as a member (in the event that the Financial Conglomerate has an FSI conducting business based on Sharia principles).
   2) The number and composition of Independent Commissioners who are members of the Integrated Governance Committee have been in accordance with the needs of the Financial Conglomerate as well as the efficiency and effectiveness of the implementation...

Implementation of the duties of the Integrated Governance Committee with regard to the representation of each financial services sector. b. Integrated Governance Process
1) The Integrated Governance Committee evaluates the implementation of Integrated Governance at least through an assessment of the adequacy of internal controls and the implementation of the compliance function in an integrated manner.
2) The Integrated Governance Committee holds Integrated Governance Committee meetings at least once (one) every semester.
c. Integrated Governance Results
1) The Integrated Governance Committee has evaluated the implementation of Integrated Governance, at least through an assessment of the adequacy of internal controls and the implementation of the compliance function in an integrated manner.
2) The Integrated Governance Committee has provided recommendations to the Board of Commissioners of the Main Entity for the improvement of the Integrated Governance Guidelines.
3) The results of the Integrated Governance Committee meetings have been recorded in meeting minutes and documented well, including the clear disclosure of dissenting opinions and their reasons that occurred in the Integrated Governance Committee meetings.
4…

4. Integrated Compliance Unit
   a. Integrated Governance Structure
   1) The Integrated Compliance Unit is independent of operational units.
   2) The Board of Directors of the Main Entity meets the need for quality human resources as members of the Integrated Compliance Unit.
   b. Integrated Governance Process
   The Integrated Compliance Unit monitors and evaluates the compliance function in Financial Service Entities (LJK) within the Financial Conglomerate.
   c. Integrated Governance Results
   The Integrated Compliance Unit has submitted a report on the implementation of its duties and responsibilities to the Director who oversees the Compliance function of the Main Entity or the Director appointed to perform supervision functions against LJK in the Financial Conglomerate.
5. Integrated Internal Audit Unit
   a. Integrated Governance Structure
   1) The Integrated Internal Audit Unit is independent of operational units.
   2) The Board of Directors of the Main Entity has met the need for quality human resources as members of the Integrated Internal Audit Unit.
   b. Integrated Governance Process
   The Integrated Internal Audit Unit has monitored…

monitored the implementation of internal audits in LJK within the Financial Conglomerate.
c. Integrated Governance Results
1) The Integrated Internal Audit Unit has submitted a report on the implementation of its duties and responsibilities to:
a) The Director appointed to perform supervision functions against LJK in the Financial Conglomerate; b) The Board of Commissioners of the Main Entity; and c) The Director who oversees the Compliance function of the Main Entity.
2) The Integrated Internal Audit Unit acts objectively in performing the monitoring of audit implementation.
3) Audit result recommendations are appropriate to the issues and can be used as a reference for improvement.
6. Implementation of Integrated Risk Management
a. Integrated Governance Structure
1) The Main Entity has an adequate organizational structure to support the implementation of integrated risk management as regulated in the regulations of the Financial Services Authority regarding the implementation of integrated risk management for financial conglomerates.
2) The Main Entity has adequate policies, procedures, and risk limit determinations as regulated in the regulations of the Financial Services Authority regarding the implementation of integrated risk management for financial conglomerates.
b. Process… b. Integrated Governance Process
The Main Entity implements integrated risk management in accordance with the regulations of the Financial Services Authority regarding the implementation of integrated risk management for financial conglomerates.
c. Integrated Governance Results
1) The Main Entity implements integrated risk management effectively in accordance with the characteristics and complexity of the business of the Financial Conglomerate.
2) The Board of Directors and Board of Commissioners of the Main Entity are able to perform their duties and responsibilities related to integrated risk management in accordance with the regulations of the Financial Services Authority regarding the implementation of integrated risk management.
7. Integrated Governance Guidelines
a. Integrated Governance Structure
1) The Integrated Governance Guidelines must include at least:
a. The Integrated Governance Framework for the Main Entity; b. The Integrated Governance Framework for LJK.
2) The Integrated Governance Framework for the Main Entity must include at least:
a. requirements for the Board of Directors and Board of Commissioners of the Main Entity; b. duties and responsibilities of the Board of Directors and Board of Commissioners of the Main Entity;
c. duties and responsibilities of the Integrated Governance Committee;
d. duties… d. duties and responsibilities of the Integrated Compliance Unit; e. duties and responsibilities of the Integrated Internal Audit Unit; and f. implementation of integrated risk management.
3) The Integrated Governance Framework for LJK in the Financial Conglomerate must include at least:
a. requirements for candidates for the Board of Directors and candidates for the Board of Commissioners; b. requirements for candidates for the Board of Sharia Supervisory *);
c. structure of the Board of Directors and Board of Commissioners;
d. structure of the Board of Sharia Supervisory *); e. independence of actions of the Board of Commissioners; f. implementation of the administration function of LJK by the Board of Directors; g. implementation of the supervision function by the Board of Commissioners; h. implementation of the supervision function by the Board of Sharia Supervisory *);
i. implementation of the compliance function, internal audit function, and external audit implementation;
j. implementation of the risk management function; k. remuneration policy; and
l. management of conflicts of interest.
*) in the event that the Financial Conglomerate has LJK that conducts business activities based on Sharia principles. b. Integrated Governance Process The implementation of the Integrated Governance process by the Main Entity and LJK must at least have…

have referred to the Integrated Governance Guidelines.
c. Integrated Governance Results
The Integrated Governance Results have reflected that the Main Entity and LJK in the Financial Conglomerate have applied good governance principles in accordance with the Integrated Governance Guidelines.
Conclusion:
Based on the analysis of indicators on all assessment factors for the implementation of Integrated Governance, it is concluded that:
A. Integrated Governance Structure
1. Values reflecting the strengths of the Integrated Governance structure aspect of the Financial Conglomerate are.....
2. Values reflecting the weaknesses of the Integrated Governance structure aspect of the Financial Conglomerate are.....
B. Integrated Governance Process
1. Values reflecting the strengths of the Integrated Governance process aspect of the Financial Conglomerate are.....
2. Values reflecting the weaknesses of the Integrated Governance process aspect of the Financial Conglomerate are.....
C. Integrated Governance Results
1. Values reflecting the strengths of the Integrated Governance results aspect of the Financial Conglomerate are.....
2. Values reflecting the weaknesses of the Integrated Governance results aspect of the Financial Conglomerate are.....
Established in Jakarta on May 25, 2015
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
Signed,
Copy in accordance with the original NELSON TAMPUBOLON Director of Law I Legal Department, Signed, Signed, Sudarmaji

APPENDIX II
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 15/SEOJK.03/2015 CONCERNING THE IMPLEMENTATION OF INTEGRATED GOVERNANCE FOR FINANCIAL CONGLOMERATES

INTEGRATED GOVERNANCE RATING MATRIX
Rating Definition Rating
1 The Financial Conglomerate is assessed to have implemented Integrated Governance that is generally very good. This is reflected in the very adequate fulfillment of the implementation of Integrated Governance principles. If there are weaknesses in the implementation of Integrated Governance, generally these weaknesses are not significant and can be immediately improved by the Main Entity and/or LJK. 2 The Financial Conglomerate is assessed to have implemented Integrated Governance that is generally good. This is reflected in the adequate fulfillment of the implementation of Integrated Governance principles. If there are weaknesses in the implementation of Integrated Governance, generally these weaknesses are less significant and can be resolved with normal actions by the Main Entity and/or LJK. 3 The Financial Conglomerate is assessed to have implemented Integrated Governance that is generally fairly good. This is reflected in the fairly adequate fulfillment of the implementation of Integrated Governance principles. If there are weaknesses in the implementation of Integrated Governance principles, generally these weaknesses are fairly significant and require fairly close attention from the Main Entity and/or LJK. 4 The Financial Conglomerate is assessed to have implemented Integrated Governance that is generally less good. This is reflected in the less adequate fulfillment of the implementation of Integrated Governance principles. There are weaknesses in the implementation of Integrated Governance, generally these weaknesses are significant and require comprehensive improvement by the Main Entity and/or LJK. 5… Rating Definition Rating 5 The Financial Conglomerate is assessed to have implemented Integrated Governance that is generally not good. This is reflected in the inadequate fulfillment of the implementation of Integrated Governance principles. There are weaknesses in the implementation of Integrated Governance, generally these weaknesses are very significant and difficult to improve by the Main Entity and/or LJK. Established in Jakarta on May 25, 2015 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, Signed, Copy in accordance with the original NELSON TAMPUBOLON Director of Law I Legal Department, Signed, Signed, Sudarmaji

APPENDIX III
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 15/SEOJK.03/2015 CONCERNING THE IMPLEMENTATION OF INTEGRATED GOVERNANCE FOR FINANCIAL CONGLOMERATES

SELF-ASSESSMENT REPORT OF THE IMPLEMENTATION
OF INTEGRATED GOVERNANCE
FOR FINANCIAL CONGLOMERATES
Main Entity :…………………………………
Report Position :…………………………………
Self-Assessment Results
Implementation of Integrated Governance
Rating Definition Rating
…………………………….
(filled with Rating 1, 2,
3, 4 or 5)
……………………………..…….
(filled with Rating Definition according to the rating value) Analysis ………………………………………………………………………………… (Contains an explanation regarding the conclusion of the comprehensive and structured assessment of the implementation of Integrated Governance covering structure, process, and results of Integrated Governance. In this explanation, the identification of issues in the form of strengths and weaknesses of the implementation of Integrated Governance, their causes (root cause) as well as improvement efforts that have been and will be carried out is explained) Established in Jakarta on May 25, 2015 EXECUTIVE HEAD OF BANKING SUPERVISOR FINANCIAL SERVICES AUTHORITY, Signed, Copy in accordance with the original NELSON TAMPUBOLON Director of Law I Legal Department, Signed, Signed, Sudarmaji