Considering:
- That Financing Companies (FC) are required to operate by implementing reliable and integrated governance, risk management, and compliance (GRC), supported by digitalization and technological innovation, as well as environmental and social awareness (environmental, social, and governance or ESG).
- That Financing Companies (FC) must be able to comply with laws and regulations, standards, ethical values, generally accepted principles and practices; maintain and build the foundation for value creation; optimize sustainable performance achievements; manage rights and responsibilities; and balance the interests of shareholders and all other stakeholders in an effort to contribute more broadly to driving the national economy.
- That based on the above two considerations, a code of ethics is needed to serve as the standard of business ethics for Financing Companies.
Referring to:
- Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia of 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
- OJK Regulation (POJK) No. 46/2024 concerning the Development and Strengthening of Financing Companies, Infrastructure Financing Companies, and Venture Capital Companies;
- OJK Regulation (POJK) No. 48/2024 concerning Good Governance for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions.
Deciding:
TO ESTABLISH THE CODE OF ETHICS FOR FINANCING COMPANIES
Article 1
Definitions
- A Financing Company (FC) is a legal entity engaged in financing goods and/or services to the public, including those conducting their business activities based on Sharia principles.
- Good Governance for FCs, hereinafter referred to as Good Governance, is the structure and process used and applied by FC organs to improve the achievement of business goals and optimize the value of the FC for all stakeholders in an accountable manner, based on laws and regulations as well as ethical values.
- Stakeholders are parties who have an interest in the FC, either directly or indirectly, in the business activities of the FC, such as debtors, members/shareholders, employees, creditors, funders, goods and service providers, and/or the government.
- A Debtor is a business entity or an individual who receives financing from the FC.
- The Board of Directors is the organ of the FC authorized and fully responsible for the management of the FC in the interest of the FC, in accordance with its purpose and objectives, and represents the FC both inside and outside of court in accordance with the articles of association for FCs in the form of limited liability companies or its equivalent for FCs in the form of cooperatives.
- The Board of Commissioners is the organ of the FC responsible for general and/or specific supervision in accordance with the articles of association and provides advice to the Board of Directors for FCs in the form of limited liability companies or its equivalent for FCs in the form of cooperatives.
- The Sharia Supervisory Board, hereinafter abbreviated as SSB, is the party responsible for supervising the implementation of FC activities to ensure compliance with Sharia principles.
- A Conflict of Interest is a situation in which there is a conflict between the economic interests of the FC and the personal, family, or shareholder group interests of members of the Board of Directors, Board of Commissioners, committee members, Executive Officers, and/or SSB, as well as employees of the FC.
- APPI is the Indonesian Financing Companies Association, an association of financing service businesses that has been approved by the Financial Services Authority.
- The Code of Ethics for Financing Companies is a set of principles, norms, and rules that govern FCs.
Article 2
Code of Ethics for Financing Companies
- FCs must conduct their business activities in a sound manner and comply with all applicable laws and regulations of the financial services industry under the supervision of the Financial Services Authority.
- FCs must demonstrate good conduct in designing, providing, and delivering information, offering, drafting agreements, providing services related to product and/or service usage, as well as handling complaints and dispute resolution, in an effort to realize consumer protection.
- FCs must ensure that members of the Board of Directors, Board of Commissioners, company committees, SSB, Executive Officers, and employees avoid any form of conflict of interest in carrying out their management and supervisory duties.
- FCs must have an information disclosure policy to the Financial Services Authority based on the principles of completeness, accuracy, timeliness, and integrity.
- FCs must establish guidelines on ethical conduct, containing business ethical values, to serve as guidance for all FC organs and employees.
- FCs must ensure fulfillment of competency certification requirements for human resources in accordance with prevailing regulations, as part of human resource development to improve service quality for the public.
- FCs must maintain the confidentiality of debtor data by fully implementing the applicable laws and regulations on personal data protection.
- FCs must maintain fair business competition and avoid unfair business practices.
- FCs must carry out their business by considering social responsibility, environmental concerns, and corporate governance (ESG).
- FCs must apply the principle of fairness in fulfilling stakeholder rights arising from agreements, laws and regulations, ethical values, as well as applicable standards, principles, and practices.
Article 3
Compliance Enforcement
In accordance with POJK Regulation No. 46 of 2024, Article 15D paragraph 4, every FC is required to comply with the Code of Ethics for Financing Companies established by the Association. To enforce compliance with the Code of Ethics for Financing Companies:
- The Board of Directors and Board of Commissioners of the FC are responsible for ensuring compliance with the Code of Ethics for Financing Companies.
- The APPI Ethics Committee, together with the APPI Supervisory Board, shall receive and follow up on reports of violations of the Code of Ethics for Financing Companies.
