OJK Indonesia Issues Regulations for Finance Companies and Securities Companies

Indonesia's OJK (Financial Services Authority) has issued two new regulations for finance companies and securities companies.

​Fazzaco to Launch Business Awards 2022

The first regulation regulates the purchase of shares by finance companies to ensure effective risk mitigation and create a healthy industry ecosystem.

Under the regulation, financing companies are prohibited from owning shares for the purpose of short-term investment, trading, cash flow management, or equity participation – other than in the context of developing the finance company's business activities.

Finance companies that already have shares must transfer their ownership no later than one year after the new regulation is enacted.

OJK explained that the regulation was issued to address the increasingly complex activities of finance companies.

The second regulation introduces requirements for securities companies to submit periodic reports and incidental reports to OJK when they conduct business activities as underwriters and broker-dealers.

The regulation covers reporting parties, reporting procedures, delays and exceptions to reporting, and the deadlines for submitting each report.

The regulation is designed to strengthen supervision in the financial services sector, which "requires complete, accurate, current and comparable information on financial conditions and business activities," OJK said.

The regulation also harmonises reporting requirements for securities companies, which are currently "scattered" in several different regulations and with different frequencies.