PT. MINNA PADI INVESTAMA SEKURITAS TBK. 59
Risk management system applied by the Company is intended to improve the quality and performance of the Company and at the same time also supports the achievement of better
objective. The scope of risk management system adopted by the Company is the identification of business risks encountered by the Company, assessment on potential impact of such risks against
the Company’s performance, and handling as well as mitigation that needs to be performed by the Company related with such risks.
BUSINESS RISKS
As business world in general, the Company is not free from various business risks influenced by internal and external factors that may affect the Company’s profitability and sustainability. The
business risks below are material risks and arranged according to the weight of the risk. 1.
SUSPENSION OF BUSINESS LICENSE The Company’s Business Activities are bound by various government prevailing regulations
highly regulated industry, either issued by Financial Services Authority as the legal institution appointed by the state to monitor the Capital Market in Indonesia, Ministry of
Finance of the Republic of Indonesia, and regulations of Indonesia Stock Exchange. If the Company fails or neglects to fulfill the provisions of capital market currently applicable in
Indonesia, it may result in temporary suspension of trading activities or revocation of one of the Company’s business licenses that will result in suspension of Company’s business
activities. Therefore, in running its business, the Company has the Compliance Division that is in charge of auditing the compliance with prevailing regulations and taking corrective
actions on existing deficiencies.
2. MARKET RISK
This risk can arise because of movement of interest rate or price applicable in the market against the value of an asset owned by the Company, either as portfolio for trade or for
investment. Failure to anticipate this market risk may incur financial loss to the Company. The Company monitors the fluctuation of portfolio price on a daily basis so that it can immediately
anticipate any changes so as to prevent financial loss to the Company.
3. UNDERWRITING RISK
One of Company’s business activities is underwriting. Under the underwriting agreement, the Company must commit to buy all securities that agreed upon as underwriting portion.
Should the agreed portion is not able to be sold out to the public, the Company is obliged to buy the remaining portion of the securities according to underwriting portion. If this occurs
in a large value, it will incur financial liquidity problem to the Company, in addition to the decline in value of the purchased securities, thus this may have negative impact on the
Company’s income. Therefore, in underwriting, the Company always performs careful study before deciding to perform underwriting.
4. OPERATIONAL RISK
This is a risk encountered by the Company in connection with operational system, procedure or control over the Company’s operational activities such as trade settlement, transfer of
shares and cash flows. If the Company is less selective in performing daily activities procedure and operating system, smooth operational activities will be disturbed and this decreases the
quality of services to customers, thus potentially decreasing the Company’s income.
PT. MINNA PADI INVESTAMA SEKURITAS TBK. 60
The Company has Risk Management Unit monitoring the Company’s operational activities on a daily basis, inspecting unusual or suspicious transactions, monitoring trade limit,
monitoring customers’ security financing ratio and inspecting transaction reports in order to ensure that there is no violation of applicable provisions. Risk Management performs its
duties
reviewing the effectiveness of the Company’s risk management system, primarily to prevent anything that may hurt the Company.
5. TECHNOLOGY RISK
