Board of Commissioners’ Rules of Procedure

The Board of Commissioners is the organ of a Securities Company responsible for conducting general and/or specific oversight in accordance with the Articles of Association and providing advice to the Board of Directors. Independent Commissioners are members of the Board of Commissioners who come from outside the Securities Company and meet the requirements set by OJK regulations.

Duties and Responsibilities of the Board of Commissioners

1. Supervise management policies, the general running of the management, and provide advice (recommendations) to the Board of Directors.
2. If the Board of Commissioners participates in decision-making regarding matters stipulated in the Articles of Association or statutory regulations, such decisions are made in its function as a supervisor and advisor to the Board of Directors.
3. If all members of the Board of Directors are temporarily dismissed and the Company has no Directors, the Board of Commissioners must temporarily take part in managing the Company. In such a case, the Board of Commissioners has the right to grant temporary authority to one or more members among them, which becomes the responsibility of the Board of Commissioners.

Board of Directors’ Rules of Procedure

The Board of Directors is the organ of the Company authorized and fully responsible for managing the Company in the interests of the Company in accordance with its purpose and objectives, and representing the Company both inside and outside the court as provided in the Articles of Association. Each Director must fulfill requirements of integrity, financial reputation, competence, and expertise in the capital market sector.

Duties and Responsibilities of the Board of Directors

1. The Board of Directors is fully responsible for carrying out its duties in the interest of the Company and in achieving the objectives set in the Articles of Association.
2. The Board of Directors must follow up on audit findings and recommendations from the risk management function, compliance function, and internal audit, supervision by the Board of Commissioners, supervision by OJK, and supervision by SROs (IDX, KPEI, KSEI).
3. Each member of the Board of Directors must perform his/her duties in good faith, responsibly, and in compliance with applicable laws and regulations.
4. The Board of Directors has the right to represent the Company inside and outside the court in all matters and events, bind the Company with other parties and vice versa, and perform all actions, whether related to management or ownership.
5. Provide explanations regarding all matters requested by the Board of Commissioners.

The Company’s business ethics explain how the Company, as a business entity, behaves, acts, and maintains balance between the interests of the Company and those of stakeholders in accordance with GCG principles and healthy corporate values while maintaining the Company's profitability. Thus, it is the responsibility of all Company personnel across all lines to protect the Company’s reputation, demonstrate high integrity, and uphold ethical conduct in every activity.

Company Code of Ethics Guidelines

1. Act professionally by prioritizing morality, responsibility, honesty, openness, upholding the Company’s work culture values, and consistently complying with systems and procedures, including Company regulations and applicable laws.
2. Avoid making false statements/claims, especially in marketing, negotiations, project assessments, and report writing.
3. Avoid conflicts of interest, particularly related to direct or indirect share ownership, insider trading, using Company assets for personal interests, engaging in external work that may disrupt productivity, and sharing Company information that may benefit others.
4. Prohibited from engaging in actions that may harm the Company’s finances or reputation, except for expenditures or provisions that are legally acceptable and aligned with the interests of the Company.
5. Prohibited from committing fraud, embezzlement, falsification, misuse of assets, diversion of funds, and similar acts.
6. Prohibited from using the Company’s logo/corporate identity outside the interest of the Company.

PT Shinhan Sekuritas Indonesia (SSI), which conducts business activities as a Securities Broker-Dealer, is required to implement internal controls, one of which is by establishing compliance and internal audit functions as part of the implementation of Good Corporate Governance (GCG). These functions serve as a means to enhance the Company’s value, support business development, improve competitiveness, and maintain sustainable long-term business growth.

Scope of Compliance and Internal Audit Policies

1. Formulation of policies.
2. Testing, evaluation, and recommendation on policy compliance.
3. Preparation and implementation of audit programs.
4. Monitoring, identification, measurement, and follow-up on compliance matters to achieve consistent results in line with the Company’s vision, mission, and corporate values.

Responsibilities of the Compliance and Internal Audit Functions

1. Identifying policies, standard operating procedures, and prevailing laws and regulations related to the business activities of Securities Brokerage Companies.
2. Formulating policies and procedures related to the duties and functions of compliance and internal audit.
3. Ensuring the Company’s compliance with internal policies, standard operating procedures, and applicable capital market laws and regulations.
4. Handling and administering customer complaints and following up on written complaints from customers through the internal dispute resolution mechanism.
5. Supervising the implementation of the business continuity plan.
6. Providing socialization, guidance, and/or training to employees to enhance understanding and compliance with capital market regulations and other applicable laws and regulations.

PT Shinhan Sekuritas Indonesia (SSI), which conducts business activities as a Securities Broker-Dealer, is required to implement internal controls, one of which is by establishing a risk management function as part of the implementation of Good Corporate Governance (GCG). This policy serves as a means to enhance the Company’s value, support business growth, improve competitiveness, and maintain sustainable long-term business growth.

Risk Management Strategy and Framework

In accordance with Financial Services Authority Regulation (POJK) Number 57/POJK.04/2017, the Risk Management Policy covers a comprehensive risk management strategy and framework. Risk represents the potential for losses arising from certain events, while risk management refers to a series of methodologies and procedures used to identify, measure, monitor, and control risks arising from all SSI business activities.

1. Active oversight by the Board of Commissioners and the Board of Directors.
2. Availability of policies, procedures, and the establishment of risk limits.
3. Availability of risk identification, measurement, monitoring, and control processes supported by a risk management information system.
4. Comprehensive internal control.

Prudential Principle

The capital market is vulnerable to money laundering and terrorism financing crimes. Therefore, financial service providers are required to implement risk management that promotes prudential practices in every transaction by applying the Know Your Customer (KYC) principle in customer acceptance policies and procedures, identification of customer accounts and transactions, and management of transaction-related risks in accordance with Financial Services Authority Regulation Number 23/POJK.01/2019 concerning the Implementation of Anti-Money Laundering and Counter-Terrorism Financing Programs in the Financial Services Sector.

Adequate Capital Provision

Based on Financial Services Authority Regulation Number 52/POJK.04/2020 concerning the Maintenance and Reporting of Adjusted Net Working Capital and Regulation Number 20/POJK.04/2018 concerning the Licensing of Companies Conducting Business Activities as Underwriters and Securities Broker-Dealers, securities companies holding such licenses are required to provide capital commensurate with the risks borne by the Company and to maintain capital adequacy in accordance with applicable regulations.

Compliance with Laws and Regulations

Shareholders, the Board of Directors, and the Board of Commissioners are obligated to meet integrity requirements by committing to comply with applicable laws and regulations and to support the development of sound Company operations and the Indonesian Capital Market in accordance with the policies of the Financial Services Authority.

Early Detection System

As part of the implementation of good corporate governance, the Company has established mechanisms for handling customer complaints as well as internal whistleblowing mechanisms for reporting violations committed within the Company.

Risk Identification, Mitigation, Assessment, Measurement, and Control

1. Operational Risk.
2. Credit Risk.
3. Market Risk.
4. Liquidity Risk.
5. Compliance Risk.
6. Legal Risk.
7. Reputational Risk.
8. Strategic Risk.

Transparency and Risk Awareness Culture

Risk culture reflects the behavior of all personnel in their interactions and perceptions related to risk. Such perceptions are reflected in decision-making processes and work practices. The development of a risk-aware culture requires an integrated approach involving management, the compliance function, and internal audit.