Indonesia, Ali Budiardjo, Nugroho, Reksodiputro updates

Banking

Contributed by Ali Budiardjo, Nugroho, Reksodiputro
OJK issues umbrella regulation for fintech development and establishes regulatory sandbox regime
  • Indonesia
  • 05 October 2018

Until recently, the Financial Services Authority (OJK) had never issued an overarching regulation governing the development of the fintech sector as a whole or replicating the sandbox regime and pre-audit mechanism established by Bank Indonesia for fintech in the payments arena. This gap has now been filled by OJK Regulation 13/POJK.02/2018 on Digital Financial Innovation in the Financial Services Sector.

New regulation has significantly changed e-money landscape
  • Indonesia
  • 27 July 2018

After nine years of regulating e-money transactions, the Indonesian Central Bank has responded to changes in technology by replacing the previous e-money regulation. The issuance of the new regulation has significantly changed the e-money landscape, as it applies to all licensed e-money players and prioritises consumer protection by requiring minimum capital and the placement of floating funds.

New OJK regulation on single presence policy
  • Indonesia
  • 23 February 2018

The new Financial Services Authority Regulation on the Single Presence Policy in Indonesian Banking was issued in July 2017. The policy aims to ensure that a single entity does not simultaneously hold a controlling interest in more than one bank. Therefore, a controlling shareholder of more than one bank is required to merge or consolidate its controlled banks, establish a bank holding company or establish a holding function.

New rules on employment of expatriates in banking sector
  • Indonesia
  • 09 February 2018

The Financial Services Authority (OJK) has introduced rules for the employment of expatriates and the transfer of knowledge in the banking sector, pursuant to which it has taken over the supervisory role previously performed by Bank Indonesia. Therefore, in order to employ an expatriate, a bank must now obtain OJK approval and submit reports on its expatriate staff. An expatriate's work permit will be processed by the Ministry of Manpower only after having been approved by the OJK.

New regulations to prevent financial crises and improve financial stability
  • Indonesia
  • 08 September 2017

New regulations require the banking and finance industries to comply with heightened supervision by financial authorities and will be welcomed by foreign investors and customers concerned with Indonesia's financial stability. Key developments include intensifying reporting obligations for systemically important banks, introducing tiered supervision and raising safeguard measures.


Capital Markets

Contributed by Ali Budiardjo, Nugroho, Reksodiputro
New framework to establish Securities Finance Agency introduced
  • Indonesia
  • 12 February 2019

The Financial Services Authority recently issued a new regulation which provides a framework to establish the Securities Finance Agency (SFA). The agency aims to boost transaction volumes and liquidity in the Indonesian stock market, particularly by encouraging margin trading and short selling. Upon its establishment, the SFA will provide securities financing to brokerage firms.

OJK tightens control over bankruptcy disclosure by issuers and public companies
  • Indonesia
  • 07 November 2017

A recent Financial Services Authority (OJK) regulation sets out new disclosure obligations that apply to issuers and public companies in Indonesia and creates a new penalty regime for non-compliance. The regulation is significant for investors with an interest in the Indonesian Stock Exchange and is consistent with other measures that the OJK has taken to improve transparency and align the reporting obligations of issuers and public companies with international standards.

OJK issues new regulation regarding public companies' shareholding reporting obligations
  • Indonesia
  • 30 May 2017

The Financial Services Authority (OJK) recently amended public companies' obligation to report on their shareholding by way of OJK Regulation 11/POJK.04/2017 regarding Reporting on Public Company Ownership or on Every Change in Share Ownership. The regulation aims to bring public companies' reporting obligations in line with international standards.

OJK issues regulation on exemption from reporting and announcement obligations
  • Indonesia
  • 22 March 2016

The Financial Services Authority (OJK) has issued a regulation setting out the criteria for exemption from the reporting and announcement obligations ordinarily imposed on issuers and public companies with securities and shares registered at the Indonesian Stock Exchange. The exemption must be confirmed by way of an OJK decision letter, but can be rescinded if the entity no longer meets the established exemption criteria.

New OJK regulation on rights issues
  • Indonesia
  • 01 March 2016

A new regulation on rights issues was passed by the Financial Services Authority in December 2015. The regulation introduces key changes relating to rights issue approval, effective statements, non-cash capital injections, announcements and company and shareholder requirements, and is intended to provide investors with more flexibility and ease when conducting rights issues.


Company & Commercial

Contributed by Ali Budiardjo, Nugroho, Reksodiputro
Will BKPM takeover of OSS help to eliminate glitches?
  • Indonesia
  • 28 January 2019

The online single submission (OSS) system constitutes a significant overhaul of Indonesia's business and investment licensing regime. Although much later than scheduled, responsibility for the OSS has now officially transferred to the Investment Coordinating Board. The government made it clear from the outset that the OSS would take time to perfect. Although the OSS works reasonably well for the most part, a number of problems remain.

New online single submission system: what is it?
  • Indonesia
  • 17 September 2018

Government Regulation 24/2018 recently entered into force and established the integrated online single submission (OSS) system, which constitutes a significant overhaul of Indonesia's business licensing regime. The system aims to enable businesses to obtain all necessary central and local government business and operating licences online using the OSS portal. Although these changes have been welcomed, the OSS system remains a work in progress.

New procedure for manpower reporting
  • Indonesia
  • 22 January 2018

The Ministry of Manpower recently issued Regulation 18/2017, which introduces an online-only procedure for mandatory manpower reporting. The regulation specifies when companies must submit an online report and requires them to do so via the ministry website. It also regulates the usage and management of data from manpower reports.

Amendment to nuisance permit regulation
  • Indonesia
  • 07 November 2016

The minister of home affairs recently enacted Regulation 22/2016, amending Regulation 27/2009 on the Guidelines for the Granting of Regional Nuisance Permits. The amendment is part of the president's policy to reduce the number of business permits and licences required to start a business. It introduces important changes to the criteria considered in nuisance permit applications and the types of business that are exempted from the requirement to obtain a permit.


Energy & Natural Resources

Contributed by Ali Budiardjo, Nugroho, Reksodiputro
Repatriation of natural resource export earnings: new regulation signals stricter approach
  • Indonesia
  • 11 February 2019

Government Regulation 1/2019 requires exporters in the natural resources sector to repatriate their forex-denominated export earnings to Indonesia. Thus, forex-denominated export proceeds in the mining, plantation, forestry and fisheries sectors must be deposited in the Indonesian financial system. Overall, the regulation is clearly intended to bolster Indonesia's balance of payments situation, which has worsened considerably over the past year.

MEMR moves quickly to limit application of coal price caps to new contracts
  • Indonesia
  • 02 April 2018

Following the recent issuance of the ​Ministry of Energy and Mineral Resources decree which imposed price caps on coal supplied for power generation in the public interest, the coal industry was expected to undertake significant lobbying in order to reduce or limit the decree's impact. This anticipated lobbying appears to have commenced already, as the decree was amended on March 12 2018 after having been on the statute books for just four days.

Government caps prices of coal for power generation
  • Indonesia
  • 26 March 2018

The government recently imposed caps on the prices payable for coal to be used for power generation in the public interest. The maximum price payable under the new Ministry of Energy and Mineral Resources decree is 30% less than the Indonesian benchmark price for equivalent coal sold for export in February 2018, which means that the country's coal producers will suffer a substantial cut to their profitability by selling coal for domestic power generation.

MEMR delivers on promise to revoke regulations
  • Indonesia
  • 19 March 2018

The Ministry of Energy and Mineral Resources recently announced the revocation of 32 regulations in furtherance of the government's efforts to reduce the regulatory burden on the energy and mineral resources sector. However, it was unclear which of these regulations had been revoked before the announcement and which would be revoked in the future. This situation has now been clarified with the issuance of four new revoking regulations, which form part of what some have called a 'big-bang' reform.

MEMR announces easing of regulatory burden for new and renewable energy sector
  • Indonesia
  • 05 March 2018

The Ministry of Energy and Mineral Resources recently announced the revocation of 32 regulations in the energy and mineral resources sector, three of which are of particular importance to independent power producers in the new and renewable power sub-sector. However, a subsequent examination revealed that most if not all of the regulations have yet to be revoked, and the lack of clarity in this regard has called the ministry's commitment to transparency into question.


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