Announcement! OJK Bans Multifinance Investing in Shares

Jakarta, CNBC Indonesia – The Financial Services Authority (OJK) issued two Financial Services Authority Regulations (POJK) related to financing companies and securities companies. One of these regulations prohibits finance or multi-finance companies from investing in stock securities and other derivative products with an underlying asset of shares.

The two rules are POJK Number 7/POJK.05/2022 concerning Amendments to OJK Regulation Number 35/POJK.05/2018 concerning Business Conduct of Financing Companies, and POJK Number 8/POJK.04/2022 concerning Reporting of Securities Companies Conducting Activities Business as Underwriter and Broker-Dealer.

Regarding financing company regulations, OJK’s consideration is that it prohibits stock investment because the activities of finance companies are increasingly complex and the handling of various problems in finance companies that require effective and efficient risk mitigation to ensure compliance with prudential aspects.

“The POJK regulates investment provisions for buying shares by finance companies as an effort to fulfill the prudential aspect to create a healthy industry ecosystem for financing companies,” wrote Deputy Commissioner for Public Relations and Logos, Anto Prabowo, Friday (18/6/2022).

This new provision adds a regulation related to investment in the purchase of shares by finance companies. In the regulation, finance companies are prohibited from owning shares and or securities with underlying in the form of shares or guaranteed by shares for the purpose of short-term investment, buying and selling, cash flow management; and or equity participation other than in the context of developing the business activities of the Financing Company.

“For finance companies that already have shares or securities with underlying stock in the form of shares before POJK Number 7/POJK.05/2022 applies, they are required to transfer their ownership no later than one year after the POJK was enacted,” he said.

As for securities companies, through POJK Number 8/POJK.04/2022, it aims to strengthen supervision in the financial services sector which requires complete, accurate, current, complete and comparable information on financial conditions and business activities.

In addition, it is also to harmonize the provisions related to the reporting of securities companies which are currently still scattered in several separate regulations and with different frequencies.

This regulation regulates the reporting obligations of securities companies that carry out business activities as Underwriters (PEE) and Broker-Dealers (PPE). PEEs and PPEs that meet the criteria in the audit process but no longer have management and offices, and/or are in the stage of settling customer assets or revocation of licenses are excluded from the obligation to submit reports.

“Reports that must be submitted by PEE and PPE as regulated in this POJK include periodic reports and incidental reports to OJK,” he added.

Furthermore, the regulation also regulates reporting parties, reporting procedures, delays and exceptions to reporting, as well as the deadline for submitting each report.

With the issuance of this POJK, the reporting provisions for PEE and PPE as regulated in Rule Number XE1 attached to the Decree of the Chairman of the Capital Market and Financial Institution Supervisory Agency Number KEP-460/BL/2008 concerning Obligations to Submit Periodic Reports by Securities Companies, are revoked and declared invalid.

[Gambas:Video CNBC]