Charter of the Board of Commissioners (PT ASII)

Purpose

This Charter of the Board of Commissioners aims to provide guideline and ethical standards for the Board of Commissioners in order to improve effectiveness of performance of duties and responsibility of the Board of Commissioners as well as to enhance its supervisory duties in implementation of good corporate governance in accordance with applicable rules and regulations.

Regulations Background

Regulations background of the Board of Commissioners Charter are as follows:
  1. Law No. 40 of 2007 concerning Limited Liability Company.
  2. Law No. 8 of 1995 concerning Capital Market.
  3. Articles of Association of PT Aberdeen Standard Investments Indonesia.
  4. Bapepam and LK Rule No. V.A.3 concerning Licensing Procedures for a Securities Company Conducting Business as an Investment Manager.
  5. OJK rule No. 10/POJK.04/2018 concerning Implementation of Corporate Governance in Investment Management firm
  6. OJK rule No. 24/POJK.04/2014 concerning Guidelines of Investment Management Firms Functions Implementation.
  7. OJK rule No. 43/POJK.04/2015 concerning Code of Conduct of Fund Managers.
  8. OJK rule No. 27/POJK.03/2016 concerning Fit and Proper Test (“FPT”) for Primary Parties of Financial Institutions.
  9. OJK rule No. 76/POJK.07/2016 concerning Raising Financial Literacy and Inclusion in the Financial Services Sector among Customers and/or Public.
  10. OJK rule No. 12/POJK.01/2017 concerning Implementation of Anti-Money Laundering and Prevention of Terrorism Financing Programs [“APU-PPT”] within the Financial Sector.
  11. OJK rule No. No. 13/POJK.03/2017 concerning Use of Services of Public Accountants and Auditing Firms in Financial Services Activities.
  12. OJK rule No. 18/POJK.07/2018 concerning Customer Complaint Services in Financial Services Sector.

General Provisions

In this Charter, the following terms shall have the meaning as follows:
  1. Company means PT Aberdeen Standard Investments Indonesia.
  2. Articles of Association mean the Company’s Articles of Association along with any amendments thereto.
  3. Board of Directors (“BOD”) means the Company organ that is fully authorized and responsible for managing the Company for the interest of and in accordance with purposes and objectives of the Company as well as representing the Company, both inside and outside of the court in accordance with the provisions of the Articles of Association.
  4. Board of Commissioners (“BOC”) means the Company organ that is in charge of performing a general and/or specific oversight in accordance with the Articles of Association and providing advice to the BOD.
  5. Shariah Supervisory Board means a board which is responsible for giving advice and feedback as well as supervising Shariah Principle implementation for mutual funds managed by the Company.
  6. Otoritas Jasa Keuangan (OJK”) means an agency which is independent and free from interference by other parties, having the functions, duties and authorities to regulate, supervise, examine and investigate as referred to in Law No. 21 Year 2011 concerning Financial Services Authority.
  7. General Meeting of Shareholders (“GMS”) means the Company organ which has the authority not given to the BOD or the BOC within limits specified in Law No. 40 Year 2007 concerning Limited Liability Companies and/or the Articles of Association.
  8. Good Corporate Governance, hereinafter referred to as Governance means Investment Management Firm Governance applying transparency, accountability, responsibility, independency and fairness principles.
  9. Independent Commissioner is a member of the BOC from outside the Company and who fulfills the requirements to be appointed as Independent Commissioner in accordance with provisions of prevailing laws and regulations.

Requirements of The BOC Members

  1. Each member of the BOC shall meet integrity, financial reputation, competency, and skill in capital market, individual license, domicile and dual position requirements and other requirements as stipulated under applicable rules and regulations.
    1. Integrity requirements consisting of:
      1. An individual who is capable of entering into legal deeds;
      2. Has never been declared bankrupt or been a member of a board of directors and commissioners that has been proven guilty of causing a company to be declared bankrupt;
      3. Has never been a member of a board of directors or commissioners which is declared responsible for a company to become bankrupt based on Shareholders General Meeting or other equivalent organ;
      4. Has never been a member of a board of directors or commissioners of a company that is declared bankrupt, unless he/she can prove that he/she has fulfilled requirements set by article 104 point 4 of Law Number 40 Year 2007 concerning Limited Liability Company;
      5. Has never committed indecent conduct and/or been punished for committing financial crime that has been proven;
      6. Having good moral and integrity;
      7. Having high level of commitment to comply with the prevailing rules and regulations and support OJK’s policy;
      8. Having high level of commitment to develop sound operations of the Company; and
      9. Not included as a party that is prohibited from becoming a member of the BOC.
    2. Financial reputation requirements are as follows:
      1. Has never been declared bankrupt and/or has never registered as the shareholder, a member of a board of directors or a member of a board of commissioners declared as guilty for causing a company to be declared as bankrupt; and
      2. Having good financial reputation by having no bad debts.
      Within a period of 5 (five) years prior to his/her appointment and while holding his/her office.
    3. competency and expertise in capital market requirements are as follows:
      1. Having sufficient expertise in capital market that is relevant to the position; and/or
      2. Having experience for at least 2 (two) years in company conducting business activities in capital market and/or financial sector.
  2. An Independent Commissioner shall meet the following requirements:
    1. Not an individual who worked or had the authority and responsibility to plan, lead, control, or supervise activities of the Company within the last 6 (six) month, unless in the context of reappointment as the Independent Commissioner of the Company for the following period;
    2. Does not directly or indirectly own shares at the Company;
    3. Does not have an affiliation with the Company, members of the BOC, members of the BOD, members of the Sharia Supervisory Board or the Controlling Shareholders of the Company; and
    4. Does not have a business relationship, which is directly or indirectly associated with the business activities of the Company.
  3. The requirements stipulated in item (1) and (2) above shall be satisfied by each member of the BOC at the time of his/her appointment and while holding his/her terms of office. If member of the BOC fails to meet requirements of integrity, financial reputation, competition, and skill in Capital Market, as well as prohibition from performing double function in other local investment management firms, the concerned member of the BOC is prohibited from carrying out any legal activities as a member of the BOC.
  4. Former member of the BOD or other parties having a relationship with the Company, which may affect his/her ability to act independently, cannot be appointed as an Independent Commissioner before undergoing a waiting period (cooling off) for 6 (six) month.
  5. Members of the BOC or among members of the BOC and the BOD shall not have financial relationship and kinship with member of the BOD, other BOC members; and/or controlling Shareholders of the Company.

Terms of Office

  1. The Company shall have at least 2 (two) members of the BOC. Number of the BOC members shall not exceed number of members of the BOD.
  2. In the event the BOC consist of 2 (two) members, one of them shall be an Independent Commissioner. In the event the BOC consists of more than 2 (two) members, the number of Independent Commissioner shall account for at least 30% (thirty percent) of the total number of members of the BOC.
  3. Each candidate of commissioner is required to pass Fit and Proper Test held by OJK prior to his/her appointment by GMS. A member of the BOC is appointed by GMS for a period of 3 (three) years as from the date of his/her appointment, without prejudice to the right of the GMS to dismiss them at any time.
  4. Based on input and advice from the BOD, Remuneration Committee shall conduct a selection of a candidate of Independent Commissioner. Then the Remuneration Committee shall provide recommendation regarding the candidate of Independent Commissioner.
  5. An Independent Commissioner may be appointed for a maximum of 2 (two) consecutive terms of 3 (three) years each. The Independent Commissioner who has served for 2 (two) terms of office may be reappointed in the subsequent period to the extent the Independent Commissioner states his/her independency to the GMS and such appointment is approved by OJK.
  6. The newly appointed member of the BOC shall follow an Induction Program with aims to provide insight to the new commissioner so he/she can immediately comprehend business activities, policies and procedures applied by the Company as to perform her/his duties effectively and efficiently.
  7. The term of office of the relevant member of the BOC ends if the relevant member of the BOC:
    1. Has a term of office which ends according to Articles of Association;
    2. Resigns as set out in the Articles of Association and the Company’s policy;
    3. Fails to meet legislation requirements anymore;
    4. Passes away;
    5. Is dismissed based on the GMS decision.
  8. A member of the BOC may resign from his/her position by submitting a written request to the Company in accordance with Company’s policy and by stating the purpose of his/her resignation.
  9. The Company shall submit a report concerning resignation of a member of the BOC to Otoritas Jasa Keuangan within period determined by Otoritas Jasa Keuangan.

Duties and Responsibilities

  1. The BOC has the duty of supervision and is responsible for the supervision on management policies, general management and provide advice to the BOD. The BOC shall carry out its duties independently.
  2. In performing supervision duties, the BOC guides, monitors and evaluates implementation of Company’s strategic policy.
  3. In performing its duties and responsibities upon supervision over management policy, implementation of Company’s business in general and providing advice to the BOD, the BOC is required to perform audit function through the Independent Commisioner.
  4. The audit function as intended in point [3] shall review:- (a) financial information issued by the Company to public and/or authority; (b) independence, audit scope and fee of the auditor as a basis of public accountant appointment; (c) audit plan and implementation by the public accountant; and (d) performance of risk management function, compliance and internal audit of the Company.
  5. The BOC shall ensure that shariah invesment management unit in performing its activities may use function and/or committee in the Company in which such function and/or committee is responsible to the BOC.
  6. BOC approval is required for the Business Plan prepared by the BOD and BOC is responsible for performing supervision over Business Plan implementation. The BOC shall constructively challenge and provide advice on strategy and review the performance and effectiveness of BOD in achieving the agreed Business Plan.
  7. In the event the BOC is involved in making a decision concerning a matter stipulated under Articles of Association or rules and regulations, such decision is executed in its function as a supervisor and an advisor to the BOD.
    The involvement or approval of the BOC in the decision making relating to the operational activities is a part of early supervision efforts undertaken by the BOC. The involvement or approval of the BOC does not exclude the responsibility of the BOD in the managing the Company.
  8. In performing its duties and responsibilities, the BOC may establish an Audit Committee. The BOC is responsible for ensuring that the Audit Committee carries out its duties effectively.
  9. The BOC is responsible for the supervision over the implementation of Corporate Governance of the Company.
  10. The BOC shall ensure that the BOD follows-up on any finding and recommendation from compliance, risk management and internal audit function, external auditor; supervision result carried out by the BOC, Sharia Supervisory Board and/or Otoritas Jasa Keuangan.
  11. the BOC shall: [1] approve supervision policy and procedure concerning management and mitigation of money laundering and terrorism financing risk, so that the Company is able to manage and mitigate the identified risk; [2] perform periodic evalution upon implementation of customer complaint policy; [3] supervise implementation of BOD’s responsibility of application of Anti- Money Laundering and Prevention of Terrorism Funding program proposed by the BOD; and [4] ensure that anti-money laundering and Terrorism-Financing Prevention Programs in the Financial Services monitoring activities are discussed in the BOC and the BOD meetings.
  12. The BOC shall ensure:- (a) the BOD formulates and implements activities plan in order to enhance financial literacy and financial inclusion; and (b) the BOD has and implements customer complaint procedures.
  13. The BOC shall report to Otoritas Jasa Keuangan if it knows of an indication of breach of any applicable regulations in the financial service sector that may jeopardize Company’s business activities which is performed by member of the BOC, member of the BOD and/or employees of the Company, not more that 2 (two) business days since indication of such breach is known.
  14. The BOC shall convene a BOC meeting by inviting the BOD members to discuss any finding on indication of breach of rules and regulations in financial service sector.
  15. Each member of BOC shall share in personal liability for the Company’s losses if the Commissioner concerned is at fault or negligent in carrying out his/her duties. Such responsibilities are jointly for each member of the BOC.
  16. Members of the BOC may not be held liable for the losses as intended in point (15) if he/she can prove that:- (a) the losses were not due to his/her fault or negligence; (b) he/she has carried out the supervision over activities in good faith and with prudence in the interests of and in accordance with the purposes and objectives of the Company; (c) he/she does not have a direct or indirect interest upon management action carried out by BOD members that caused the losses; and (d) he/she has provided advice to the BOD members to prevent the losses from arising or continuing.
  17. Member of the BOC shall improve his/her knowledge and understanding to assist his/her in performing his/her duties through sustainable education or training.

Authorities

  1. The BOC shall be entitled at any time during Company’s office hours to enter the buildings and premises or other places used or controlled by the Company and shall be entitled to examine all books, documents and other instruments of evidence, to examine and verify the cash position and other matters as well as shall be entitled to know of all actions undertaken by the BOD.
  2. The BOC is authorized, based on an authority granted by GMS, to appoint public accountant or accounting firm in the event GMS does not make a decision about appointment of public accountant and/or accounting firm.
  3. The BOC is authorized to carry out management actions of the Company in a certain condition for a certain period in accordance with the provisions of Articles of Association.
  4. The BOC is authorized to perform any other authority granted by the Company’s Articles of Association and prevailing laws and regulations.

Work Ethics

  1. Each member of the BOC is prohibited from abusing his/her authority for his/her interest, family and/or other party(ies).
  2. Each member of the BOC is prohibited from taking personal advantage directly or indirectly from Investment Management activities aside from his/her legitimate income.
  3. The Independent Commissioner who becomes Chairman of Audit Committee or Investment Committee is not allowed to be given additional incomes other than incomes received as member of the BOC.
  4. Each member of the BOC is prohibited from receiving gifts or benefits having conflict with interest of client or its obligations to the client.
  5. Each member of the BOC may give gift or benefit to clients and other parties provided that source of the gift or benefit is not generated from portfolio of securities or portfolio of fund managed by the Company and/or may cause loss to the clients.
  6. Each member of the BOC shall report through whistleblowing system in relation to alleged violation of code of conduct.
  7. The BOC’s work ethic also refers to the Company’s Code of Conduct.

Conflict of Interest

  1. Conflict of Interest is a difference of economic interest between:
    1. The Company with personal economic interest of controlling shareholder, members of the BOC, members of the BOD, customers and/or related parties with the Company; and/or
    2. Customer with personal economic interest of controlling shareholder, members of the BOC, members of the BOD, customers and/or related parties with the Company,
    that may harm the customers and/or the Company.
  2. Each member of the BOC shall have a commitment to avoid all types of conflict of interest. Each member of the BOC shall:-
    1. prioritize the interest of the Company and not take advantage of the Company in the event of a Conflict of Interest; and
    2. abstain from decision making in circumstances of Conflict of Interest.
  3. In the event a conflict of interest is unavoidable, the relevant member of the BOC shall disclose the potential of conflict of interest in the BOC meeting and the relevant member of the BOC shall abstain from voting.
  4. Each member of the BOC is prohibited from:-
    1. executing transaction having conflict of interest with business activities of the Company;
    2. utilizing his/her position in the Company in which he/she works for his/her personal interest, families, and/or other party’s interest which may harm or reduce the Company’s profit; and/or
    3. taking and/or receiving personal advantage from the Company in which such member of the BOC works, other than remuneration and facilities determined by GMS resolution.
  5. Each member of the BOC shall comply and undertake other relevant provisions in relation to the Conflict of Interest applicable to the Company.

Transparency

In order to fulfill the principles of Transparency in the implementation of Good Corporate Governance:
  1. Each member of the BOC is required to disclose to the Company:- (a) whether he/she has interest in and/or ownership of Securities either directly or indirectly including through nominees or affiliated parties since taking office or working for the Company; and (b) any changes in interests and/or ownership of Securities, either directly or indirectly, including through nominees or affiliated parties, including the interests or ownership of a Securities owned by the said party during his/her tenure or work in the Company.
  2. Each member of the BOC shall notify the Company in writing no later than 2 (two) business days before and after executing securities selling or buying that was performed by:
    1. The concerned commissioner for personal, nominees, and/or affiliated parties who are parties where the concerned director has Securities ownership either directly or indirectly
    2. Nominees or affiliated parties who are parties whom the concerned commissioner has an interest in Securities either directly or indirectly.
  3. Each member of the BOC executing Securities sale or purchase transactions for benefit of his/her personal, nominees, and/or affiliated parties who are parties in which member of the BOC has securities ownership either directly or indirectly are prohibited from:- (a) making transactions in advance of certain Securities on the basis of information that the Customer will conduct transactions in large volumes of such Securities which are expected to affect market prices in order to gain profits or reduce losses; (b) executing cross transactions with the Company's customers; and/or; (c) selling owned Securities less than 30 (thirty) days.
  4. Disclosure of the interests or ownership of members of the BOC over Securities as referred to in item [3] and notification in writing to the Company before and after conducting Securities sale or purchase transaction for his personal interests, nominees and / or affiliated parties who are parties in which the BOC has ownership of Securities either directly or indirectly is carried out under the coordination of the compliance function of the Investment Manager.
  5. Other matters related to the fulfillment of transparency principles under the prevailing laws and regulations.

Policy of The BOD Meeting

  1. A meeting of the BOC may be held at any time, but at least every 3 (three) months in the respective financial year. The BOC schedules meetings of the BOC for the following year before the end of the financial year.
  2. Each member of the BOC shall attend at least 75% (seventy five percent) of the total BOC meetings in a year.
  3. An Invitation for the meeting of the BOC shall be served by registered mail or mail delivered by hand no later than 14 (fourteen) days prior to the meeting without taking into account the date of the invitation and the date of the meeting.
  4. The meeting of the BOC shall be chaired by the President Commissioner, in the event that the President Commissioner is absent or is unable to attend, of which impediment no evidence to third parties shall be required, the meeting of the BOC will be chaired by the Vice President Commissioner and in the event the Vice President Commissioner is unable to attend, one of members of the BOC attending shall be appointed in the meeting.
  5. A member of the BOC may be represented in the BOC meeting only by another member of the BOC by virtue of a power of attorney.
  6. Resolutions of the Meeting of the BOC must be adopted based on deliberation to reach consensus, and in the event that it is not reached, resolutions shall be adopted by voting based on affirmative votes of at least more than ½ (one-half) of the total number of votes cast in the meeting.
  7. All resolutions of the BOC are binding on all members of the BOC and a valid evidence for all members of the BOC and third parties. Any dissenting opinion in the BOC meeting should be clearly stated in the minutes of meeting and signed by all members of the BOC who were present and submitted to all BOC members.
  8. In the event the BOC meeting is attended by BOD members, results of the BOC meeting are binding on all BOC and BOD members and a valid evidence for all BOC and BOD members and third parties. Any dissenting opinion in such meeting should be clearly stated in the minutes of meeting. The minutes of BOC meeting is signed by all members of the BOC and BOD who were present and submitted to all BOC and BOD members.
  9. In the event a member of the BOC does not sign the minutes of the BOC meeting or a member of the BOC and/or BOD does not sign the minutes of the joint meeting BOC and BOD, the relevant member shall specify the reasons in a separate letter attached in the minutes of meetings.
  10. The BOC may also adopt valid resolutions without holding a Meeting of the BOC, provided that all members of the BOC have been notified in writing regarding the submitted proposal and all members of the BOC have granted written approval of the proposal submitted and have signed such approval. Resolutions adopted in such manner, shall have equal force as resolution adopted validly in a meeting of the BOC.

Performance Assessment, Accountability and Reporting

  1. The BOC must report the performance of its duties and responsibilities to the Shareholders through the GMS.
  2. Performance assessment of the BOC members is basically executed by Shareholders.

Working Time

  1. Working time is time specified by the Company to the members of the BOC to attend the work place/office and conduct his/her duties.
  2. A member of the BOC is required to visit the Company at least once every semester.

Others

  1. The BOC Charter is binding on each member of the BOC and is enacted since the signing date until there is revision and/or revocation based on the prevailing rules and regulations.
  2. In the event of ambiguity of the provisions of this Charter with the provisions stipulated in OJK rules and Articles of Association, then OJK rules will prevail first and then Articles of Association.
  3. The BOC Charter shall be published on the Company’s website.