KSEI in brief

KSEI as a Securities Depository and Settlement Institution

PT Kustodian Sentral Efek Indonesia (KSEI - Indonesian Central Securities Depository), is The
Securities Depository and Settlement Institution in the Indonesian capital market. KSEI was
established on December 23, 1997 in Jakarta and obtained its operational license on November
11, 1998. Within the structure of the Indonesian capital market, KSEI is one of the few Self
Regulatory Organizations (SROs), which includes PT Bursa Efek Indonesia (BEI) and PT
Kliring Penjaminan Efek Indonesia (KPEI). In regards to the capital market, under the provisions
of Law number 8 Year 1995, KSEI takes its role as LPP in the Indonesian capital market by
providing orderly, fair, and efficient central Securities depository and transaction settlement
services.

KSEI started its operational activities which handles Securities settlements in script form. On
January 9, 1998 KSEI took over a similar function from PT Kliring Deposit Efek Indonesia
(KDEI), which was once the Clearing Depository and Settlement Institution (LKPP). Afterwards,
on July 17, 2000, KSEI together with BEI and KPEI made a breakthrough by implementing
scripless trading and central depository activities in the Indonesian capital market. KSEI shares
are owned by its service users, namely: the SROs (IDX and KPEI), Custodian Banks, Securities
Companies, and Registrars.

KSEI Service Users

KSEI’s Account Holders consists of Securities Companies and Custodian Banks. One of the
services used by Account Holders is the investor’s portfolios administration which is able
to open a Sub Securities accounts in KSEI. By opening a Sub Securities Account, the account
holder can directly monitor the portfolios kept in KSEI.

Issuers whose Securities are registered in KSEI use our services to administer their issued
Securities, obtain data of their shareholders and manage the corporate action distribution process.

As the party who manage the Issuers’ Securities, Registrars use KSEI’s services to assists them
in managing the Issuers’ Securities that are kept in KSEI. One of the services used by Registrars
is shareholders' data of their managed Issuers.

KSEI Services

KSEI's function is to provide Securities depository and transaction settlement services, such as:
electronic Securities depository, Securities transaction settlement, Securities account
administration, distribution of corporate action, and other related services.
To assure a speedy, secure and satisfying settlement transaction of securities in the capital
market, all KSEI’s activities are operated through an electronic securities depository and
transaction settlement system known as the Central Depository and Book Entry Settlement
System or C-BEST. This system is an integrated electronic platform that supports Securities
transaction settlements in the Indonesian capital market. Since June 2002, KSEI had completed
the conversion of all the stocks listed on Stock Exchange, from script to scripless form.

Operational activities in KSEI relies on the C-BEST. Since September 13, 2001 to safeguard
KSEI’s operational activities, KSEI has a Disaster Recovery Center (DRC) which is located in a
different site from the main system. The system in the DRC functions as a backup system which
is able to continue data processing for no later than 2 hours after the main system breakdown.
The system in the DRC has the same capacity, specification, and format with the main system.
Thus enabling the DRC system to adequately replace the main system if there is an unforeseen
issue. To make sure the backup system can function well, every year KSEI always performs
procedural testing periodically using the DRC Live Test.

KSEI uses the Private Network Provider (PNP) to facilitate communication between KSEI and
Account Holders. The PNP is a successful combination of speed and security. At present, KSEI
provides 2 PNPs to allow Account holders to access C-BEST, where Account Holders can
choose one of those PNPs to become their main data network provider to link to KSEI. We hope
that those two PNPs can provide an improvement to data network quality, performance, and
security of KSEI Users.

In addition to KSEI services in performing Securities depository and transactions settlement,

KSEI keeps innovating to improve its services as well as security and efficiency in the
Indonesian capital market. This will allow KSEI to compete with other similar institutions from
other countries.

In July 2004, KSEI made a breakthrough by implementing a Post Trade Processing (PTP)
facility. This PTP facility will enable Fund Managers to communicate with Exchange Members
and Custodian Banks through a single platform: C-BEST. The PTP facility is a preliminary step
for Straight Through Processing (STP) as the standard for global transaction settlement processes
for the Indonesian capital market.

Since September 2004, KSEI has provided another facility known as the Online Research and
Centralized Historical Data (ORCHiD). This online system facility will provide historical data
and activities performed by Account Holders in C-BEST. Through ORCHiD, Account Holders
can obtain and process data at anytime for the purpose of analyzing, reporting, and auditing.

In order to support the capital market, KSEI also disseminates information by providing effective
and updated information concerning corporate actions through electronic mail (e-mail) as well as
access through a facility called Issuer Area. This facility helps Issuers to obtain relevant
information concerning their shareholders, including daily adjustments of Securities ownership,
list of shareholders, and Securities pledged as collateral.
As of May 2006, KSEI has become the Sub Registry for Bank Indonesia. As such, allowing
KSEI to provide depository and transaction settlement services for Government Bonds (SUN). In
August of the same year, KSEI also started to provide the administration of Government Retail
Bonds (ORI).

From March 2007, KSEI is able to improve its services by facilitating another type of depository
and transaction settlements; namely Central Bank Certificates (SBI). This can happen because
the C-BEST system has integrated with BI-SSSS (Bank Indonesia-Scripless Securities Settlement
System or BI-S4) owned by Bank Indonesia, which enables an ideal single communication
platform for KSEI's service users for SUN's and SBI's trading.

KSEI keeps making a series of new services and products for the development and benefit of the
capital market industry. At the end of 2007, KSEI contributed to the implementation of
the Exchange Traded Fund (ETF) in the Indonesian capital market. The ETF is now kept in C-
BEST and can be traded at IDX.

KSEI keeps improving the transaction settlement process in the capital market by providing a
automatic facility for Pre-matching activity for Over The Counter (OTC) transactions. With the
availability of this facility as of April 2008, KSEI Account Holders can perform a more efficient
OTC transaction settlement and reduce manual pre-matching activity as well as anticipate the
existing adjournment of transaction settlement processes.

In line with C-BESTs development to provide excellent services to all users and in order to cope
with the international standard related to data format and communication network, on September
6, 2008 KSEI has officially become an active member of The Society for Worldwide Interbank
Financial Telecommunication (SWIFT). Supporting the communication platforms for C-BEST,
the activation of SWIFT enhances communication between KSEI and Account Holders for its
clients, especially foreign investors. Thus, information from KSEI to Account Holders can be
delivered easier to global investors that have linked to SWIFT, and vice versa. Instruction
coming from investors to Account Holders can be easily processed and forwarded to C-BEST.

At the end of 2008, KSEI also launched a depository and transaction settlement service for
Assets Backed Securities (ABS). The transaction settlement process of this instrument is similar
to other Securities. Account Holders can perform the settlement transaction by book-entry.
Therefore, ABS issuance can be conducted electronically which improved efficiency for issuers
as well as market players.

Besides the SUN and SBI, the development of other new mechanisms issued by The
Government in February 2009 has provided KSEI an additional depository and transaction
settlement service for Government Retail Sharia (Sukuk Ritel). Not only does KSEI performs
settlements of ORI transactions as debt instruments for retail investors, but also a depository and
settlement of Sukuk Ritel transactions.

In July 2009, KSEI has developed a new depository service for Limited Fund Investment
Scheme (RDPT). The development is in compliance with the Otoritas Jasa Keuangan (OJK -
before Bapepam-LK) Number IV.C.G rule, which is dated at February 14 2008. RDPT is an
investment tool for collecting funds from professional investors. These fund will be used to
further invest in Securities portfolio by investment managers.

KSEI developed an electronic reporting system for Registrars (BAE) called E-BAE, in
consideration that almost all Registrars are connected to KSEI and it will be efficient to use
KSEI as the reporting centre. The development is performed based on OJK review regarding
shareholders information that are administered by different parties, Registrars managed
shareholders information in script form and KSEI managed in scripless form.

Meanwhile, to improve efficiency in the daily activities of KSEI Account Holders; development
has been made on the STP Interface system which enables C-BEST to have a host to host
connection through Account Holders' back office system. This tool is expected not only to
support the application of international standard formats like SWIFT, XML Message, and others,
but also to replace the semi-manual activities such as uploading and downloading files
performed by Account Holders.

Until mid 2012, C-BEST is able to perform depository services of various Securities: Shares,
Warrants, RDPT, ETF, Corporate Bonds, Government Bonds, Sukuk, SBI, SBSN, Medium
Term Notes, Promissory Notes and ABS. With the diversity of Securities recorded in C-BEST, it
is expected that users will obtain more benefits from KSEI.

AKSes Facility

At the end of 2009, KSEI with other SROs and OJK are prepared in developing the infrastructure
for the Indonesian capital market. This project is performed by the development team consisting
of OJK and all the SROs, whose goal is to achieve the implementation of integrated Securities
trading system (Straight Through Processing).

For KSEI itself, this development was started with the implementation of Investor Area facility
on June 18, 2009 which later turned into AKSes (Securities Ownership Reference) on December
23, 2009. Furthermore, on June 24 2010, KSEI launched a new name for AKSes Facility known
as AKSes Card, which has a more attractive design.

The implementation of AKSes Facility serves as one of KSEI’s commitments to provide

protection and transparency upon the investor's investment portfolio and to improve investor’s
trust to invest in the Indonesian capital market. With this facility, investors as Account Holders'
clients (Securities Companies and Custodian Banks), can get real-time information related to the
position and movement of Securities owned in Sub Securities Account kept in KSEI up to the
last 30 days through https://akses.ksei.co.id website for free and fund kept in bank.

On December 2011, The AKSes mobile application has been developed. The needs of high
mobility investors to perform regular monitoring, as well as the intensive usage of smart devices
in daily activities became the motivation for developing this application. AKSes Mobile
application officially launches in Jakarta on January 10, 2012, followed by AKSes Mobile
campaigns in Surabaya and Medan.

AKSes Mobile application available for smart devices (smart phone and computer tablet) are
produced by Apple (iPhone, iPad and iPod), Research in Motion (Blackberry) and Android based
devices. AKSes Mobile application for Blackberry can be downloaded through the Blackberry
App World, the Play Store for Android based smart phone/computer tablet, while smart
phone/computer tablets with the iOS operating system can be downloaded from App Store. The
keyword to search AKSes Mobile application through those services is “AKSes KSEI”.

KSEI Payment Bank

To provide a Securities transaction settlement services by book-entry, KSEI has appointed 5

(five) Payment Banks for the period of 2011-2015, namely PT Bank Central Asia Tbk, PT Bank
Mandiri (Persero) Tbk, PT Bank CIMB Niaga Tbk, PT Bank Negara Indonesia (Persero) Tbk,
and Bank Permata Tbk. The cooperation between KSEI and the Payment Banks is conducted
concerning that KSEI, as a non-banking institution, cannot perform a fund management book-
entry function, especially for payment and receiving money for users' services. Also, it is related
to the requirements for the placement of fund in a specific account in the bank, pursuant to OJK
Regulation Number III.C.6 regarding Operation Procedures and Internal Control of Depository
and Settlement Institution. The whole funds recorded in Securities Account owned by Account
Holder will be placed in Payment Banks in a specific account by KSEI.

Single Investor Identification (SID)

AKSes Facility is a preliminary step for the implementation of Single Investor ID (Single ID). It
does not only aim to improve investor’s trust in investing, but it is also a success key for the
development of an investor database, which is key for the realization of the capital market
infrastructure development plan, such as STP and data warehouse.

SID also enables investors to monitor their Securities ownership balance, movement and
instruction data related to transaction performed in IDX. Additionally, it also enables investors to
monitor calculation data regarding transaction settlement rights and obligations from KPEI up to
the settlement instruction data from KSEI.

SID development serve as a single identity for every investor in the Indonesian capital market. It
is also intended to provide benefits to capital market authorities to perform more effective
supervision toward the whole Securities transaction settlement conducted by investors and
brokers, so that the misuse and abuse of investors' portfolios can be reduced.

In order to improve investor’s trust, convenience, and transparency of the Indonesian capital
market industry, KSEI has developed AKSes with the facility of separation investor’s funds
account and the Account Holders' account. This development is in line with the OJK Regulation
Number V.D.3 regarding Internal Control of Securities Company Carrying on Business Activity
as Securities Broker Dealer, since January 31 2012. With the AKSes facility, investors can
monitor Securities balance and movement and also their fund balance and movement. It is
expected that transparent monitoring by investors through the AKSes facility can improve the
investor’s trust, so that they will more actively trading in the Indonesian capital market.

Optimization of KSEI Service Satisfaction

To achieve KSEI’s commitment in providing quality services based on international standard, on

April 2001, KSEI achieved the ISO9002 certificate. Strong commitment towards the exceptional
quality is being conducted through conversion of ISO9002: 1994 certification into the
ISO9001:2000 which was successfully achieved on July 2003. It also remained persistent on the
second renewal audit of ISO9001:2000 certification on April 2007.

Afterwards, on April 2010, KSEI has successfully conducted an upgrade of ISO Certification to
9001:2008. Up until now, an independent certification body continues to conduct periodic
renewal audit to follow up on the implementation of ISO9001:2008 requirements. Thus it serves
as KSEI's quality standard and to prove that the management of KSEI has performed proper
monitoring upon the existing work process, as well as to maintain and improve its services.

Additionally, in order to provide best possible services to maintain the quality of services and
measure the level of satisfaction of its service users, KSEI regularly performs a yearly customer
survey. The customer survey was assisted by an independent consultant using the following
methodology: questionnaires, visit to some service users and focus group discussions, then
followed up by making an action plan to determine the needs of the service users, as well as to
provide a solution. It is expected that the survey result becomes the basis for KSEI in making
improvement upon its services. This activity is in line with KSEI’s commitment to provide
excellent services to all service users and to meet one of the ISO9001:2000 requirements; the
Customer Focus.

KSEI also tries to provide an excellent services through the Call Center management, a central
information and communication for KSEI service users as well as for public, that intends to find
out about KSEI’s services. This Call Center accepts queries and inputs regarding KSEI during
office hours. As such, it is always expected that KSEI gives an excellent services and be able to
perform well for the Call Center management.

Additionally, every two months through the publication of Bulletin called Forum Kustodian
Sentral (FOKUSS), KSEI tries to give the latest information about the developments of KSEI’s
services.

Enterprise Risk Management (ERM)

As part of the effort to maintain the company’s assets, KSEI has developed the Enterprise Risk
Management (ERM), which is a reliable and continual risk management system. ERM's
approach enables companies to identify and manage risks comprehensively, so it can minimize
the corporate risks, e.g.: strategic risk, compliance risk, financial risk and operating risk and help
the company to achieve its objectives.

In line with the increasing number of Securities managed in KSEI and considering the
extremely-high-risk security level, KSEI has an independent party to examine the IT Security.
Referring to the recommendation of the independent party, KSEI started to perform revitalization
of IT Security to protect the network system from outer threat, as well as to keep providing
convenience to its service users.

In order to improve risk management process, at the beginning of 2010, KSEI conducted an
integration policy between Business Continuity Plan (BCP) and Risk Management. Through this
program, risk management becomes more comprehensive and integrated in protecting the
company’s assets and ensuring the company has longevity.

To anticipate disaster risks that might happen, KSEI also implemented a Business Continuity
Plan (BCP). Should the company be unable to undertake its operational activities from its current
location due a natural disaster or any other disaster happens, the objective of this strategy is to
maintain the continuity of operational activities. Since, 2010 KSEI has conducted BCP testing
regularly every year by all employees to ensure the BCP can perfectly operate according to
standard procedure.

KSEI Educational Program

As its commitment to improve Indonesian capital market development, KSEI together with other
SROs, have organized various program that are expected to improve the economy of Indonesian
society. To promote and improve the capital market as well as to increase the number of
investors, KSEI arranges a number of activities, such as: workshops, seminars, and interactive
talk shows about investing in capital market for KSEI service users, associations, journalists, and
college students.

In line with the current activities, KSEI and other SROs have committed to organize a free
Capital Market Course which is open for the public from all levels. Since the beginning of 2007,
these activities offers 3 class programs, which are: Basic class for beginners who only have basic
knowledge about capital market investment, Intermediate class for those who have joined Basic
class and are interested in learning more, and Advance class for investors who are interested in
learning about derivatives products and bonds. It is expected that this educational program can
help public to know better about the capital market investment, and to arouse public’s interest as
potential investors to invest in the Indonesian Capital Market.

In cooperation with University of Indonesia, KSEI together with other SROs officially launched
The Indonesia Capital Market Institute (TICMI) on December 22, 2010. The educational
program, that was started to run on February 2011, is expected to generate competent capital
market players for developing the Indonesian Capital Market.

Corporate Social Responsibility Program

Since its establishment in 1997, KSEI has conducted the Corporate Social Responsibility (CSR)
program by providing assistance to third parties in different kinds of activities such as: financial
support for construction of school's or mosques, education fund aid, mass circumcision, and
donation for orphans and the elderly, also financial support for teacher professionalism
improvement program for early childhood (PAUD).

Together with the SROs and other capital market participants, KSEI keeps conducting a series of
charity events such as reforestation and the outreach program, which is about the importance of
forest and environment preservation in the upstream area of Ciliwung river; the construction of
pure water and sanitary facilities in Cibunian village - Bogor. Additionally KSEI provides
education books for the capital market library in Muara Angke, Babelan - Bekasi and also
financial support for the construction of education facility in Bekasi.

Closing

Existing for more than a decade in the Indonesian capital market, with its accomplishment in
transforming transaction settlements into scripless and other breakthroughs that contribute to the
efficiency of transaction settlements, KSEI shall keep moving forward to provide excellent
services to its users as well as to carry on a number of continuous developments in the
Indonesian capital market.

Vision Mission & Core Value

Mission :
Take an active role in supporting the actualization of Indonesian capital market with global
competitiveness.

Vision :
To become a reliable central depository with a regional competitiveness.

1. Reliable – deliver a fair, secure, accurate, organized and prompt service.

2. Regional competitiveness – provide innovative and efficient services that suit to
regional market development and service user’s requirement.
Core Value :

1. Integrity
2. Excellence
3. Continual Development
4. Togetherness

Shareholders

KSEI consists of 26 Securities Companies, 9 Custodian Banks, 3 Registrars, and 2 Self

Regulatory Organizations.

Rp
Group Name of Shareholders Unit %
(million)

Custodian Bank The Royal Bank of Scotland N.V 60 300 1

PT Bank Permata Tbk. 60 300 1

PT Bank Mandiri (Persero) Tbk 600 3000 10

PT Bank Negara Indonesia (Persero) Tbk. 60 300 1

PT Bank Rakyat Indonesia (Persero) Tbk. 180 900 3

Citibank N.A. 300 1500 5

Deutsche Bank A.G. 300 1500 5

The Hongkong & Shanghai Banking Corporation 300 1500 5

Limited

Standard Chartered Bank 300 1500 5

Subtotal 2160 10800 36

Securities Company PT Amantara Securities 60 300 1

PT Bahana Securities 75 375 1.25

 Rp
Group Name of Shareholders Unit %
(million)

PT MNC Securities 60 300 1

PT BNI Securities 90 450 1.5

PT Ciptadana Securities 60 300 1

PT CIMB Securities Indonesia 120 600 2

PT Danareksa Sekuritas 75 375 1.25

PT DBS Vickers Securities Indonesia 60 300 1

PT Equity Securities Indonesia 60 300 1

PT HD Capital Tbk 60 300 1

PT HSBC Securities Indonesia 60 300 1

PT Indomitra Securities 60 300 1

PT JP Morgan Securities Indonesia 60 300 1

PT Kresna Graha sekurindo Tbk 60 300 1

PT Lippo Securities Tbk 60 300 1

PT Macquarie Securities Indonesia 60 300 1

PT Makindo Securities 60 300 1

PT Merrill Lynch Indonesia 60 300 1

PT Nikko Securities Indonesia 60 300 1

PT Nomura Indonesia 60 300 1

PT Panin Sekuritas Tbk 60 300 1

PT Recapital Securities 60 300 1

PT Sinarmas Sekuritas 60 300 1

 Rp
Group Name of Shareholders Unit %
(million)

PT Trimegah Securities Tbk 60 300 1

PT UBS Securities Indonesia 120 600 2

PT Wanteg Securindo 150 750 2.5

Subtotal 1890 9450 31.5

Registrar PT Dharmayasa Adisejahtera 60 300 1

PT Sinartama Gunita 60 300 1

PT Sirca Datapro Perdana 60 300 1

Subtotal 180 900 3

SRO PT Bursa Efek Indonesia 1140 5700 19

PT Kliring Penjaminan Efek Indonesia 630 3150 10.5

Subtotal 1770 8850 29.5

Total 6000 30000 100

Organization Structures
KSEI Committe

SUSUNAN KOMITE KERJA

2014 – 2016

BUSINESS COMMITTEE

NAME COMPANY

Ananta Wiyogo PT BNI Securities

Heru Handayanto PT CIMB Securities Indonesia

Indriani Darmawati PT Kliring Penjaminan Efek Indonesia

Rosmini Lidarjono PT Panin Sekuritas Tbk

Supranoto Prajogo HSBC Corp. Ltd.

REGULATION COMMITEE

NAME COMPANY

Ade Kusmayadi PT Danareksa Sekuritas

Risa E. Guntoro PT Macquarie Capital Securities Indonesia

Samsul Hidayat PT Bursa Efek Indonesia

Samuel Siahaan Standard Chartered Bank

Tjeng Susanty Wijaya PT DBS Vickers Securities Indonesia

 SUSUNAN KOMITE KERJA
2014 – 2016

INTERNAL CONTROL COMMITTEE

NAME COMPANY

Adhitya Wisesa Deutsche Bank AG

Daniel Wijono Citibank NA

Ginung Pratidina PT Bank Permata Tbk

Roosmayani S. Effendi PT Bank Negara Indonesia (Persero) Tbk

Sigit Winarno PT Bank Mandiri (Persero) Tbk

THE COMPOSITION OF BUDGET COMMITTEE

Fiscal Year 2015

BUDGET COMMITTEE

NAME COMPANY

Andreas Tjajamulyo PT Merril Lynch Indonesia

Hamdi Hassyarbaini PT Bursa Efek Indonesia

Hasan Fawzi PT Kliring Penjaminan Efek Indonesia

Henri PT Bank Rakyat Indonesia (Persero) Tbk

Wijanti Jatno PT Wanteg Securindo

 THE COMPOSITION OF AUDIT COMMITTEE
2012 - 2015

AUDIT COMMITTEE

NAME

Erry Firmansyah

Eddy Sugito

Elwin Karyadi

KSEI Journey

 1997
23 December

The establishment of KSEI as one of the Self Regulatory Organizations in the Indonesian
capital market structure.

 1998
9 January

KSEI started its operations in scrip transaction activities settlement, taking over the
similar fuction of Indonesian Securities Clearing Deposit (KDEI).

 1998
11 November
 Obtain an operating permit as a Central Securities Depository Agency by OJK (formerly
Bapepam-LK) through letter decree No. Kep. 54/PM/1998.

 2000
17 July

Beginning of scriptless trading era and KSEI has operated the depository and settlement
of securities transactions through book-entry mechanism using C-BEST system.

 2001
13 September

The operation of the center of the disaster management system (Disaster Recovery
System) located 30 km from the location to KSEI office.

 2002
9 September

KSEI with SROs accelerated the settlement cycle from T+4 to T+3 to increase efficiency.

 2003
23 July

Obtaining ISO 9001 version 2000 which is the conversion of ISO 9002 version 1994 have
been required in April 2001.

 2004
1 September

Implementation of the Online Research and Centralized Historical Data (Orchid), namely
an online facility system that provides history activities data of Account Holder at C-BEST.

 2006
19 May

KSEI has been officially appointed as the Sub-Registry of Bank Indonesia for depository
administration and settlement of Government Bond (SUN).
 2006
10 December

The first distribution of ORI001, marks KSEI function as an administrator of Government

Debts Securities.

 2008
6 September

Officially became an active member of The Society for Worldwide Interbank Financial
Telecommunication (SWIFT).

 2009
18 June

Implementation of Investor Area that served as information transparency on investors

portfolios.

 2009
23 December

AKSes Facility (as Securities Ownership Reference) launching with the change of Investor
Area into AKses Facility.

 2012
31 January

SID obligation and RDN separation as required in OJK Regulation (formerly Bapepam-LK)
No.V.D.3.

 2013
January

Commencing the development of the C-BEST Next-G.

 2013
18 June
 The signing of a cooperation agreement with Bank Syariah Mandiri on the administration
Sharia based RDN.

 2013
Oktober

ISMS policy certification achieved by KSEI as an overall organization.

 2013
27 December

Application of Static Data Investors module in C-BEST.

 2013
December

Scoping cooperation with RDN Administrator Banks to develop AKSes Facility Co-Branding
with the Bank's ATM.

 2014
28 Februari

Signing ceremony of AKSes Facility Co-Branding via PermataATM cooperation between

KSEI and PT Bank Permata Tbk.