All questions
Overview
Fintech actions in Indonesia are primarily regulated by the 2 most distinguished monetary regulatory our bodies in Indonesia, particularly the Indonesian central financial institution, or Financial institution Indonesia, and the Indonesian Monetary Companies Authority (OJK). If a fintech exercise is particularly regulated, firms participating in that exercise should abide by that regulation. Noting the exponential development of the fintech sector in Indonesia, the Indonesian authorities tries to observe and concurrently facilitate the event of fintech actions which have but to be particularly regulated. That is performed by means of sandbox mechanisms offered by Financial institution Indonesia and the OJK. The protection of every authority’s sandbox differs, with Financial institution Indonesia specializing in fee programs associated to fintech and the OJK specializing in monetary companies associated to fintech. The latter contains improvements within the fields of banking, capital markets, insurance coverage, pension funds and financing establishments. By requiring unclassified business gamers to abide by the sandbox mechanism, the federal government of Indonesia seeks to make sure that Indonesian customers are protected whereas concurrently supporting innovation within the fintech sector. Each Financial institution Indonesia and the OJK have issued rules on this sandbox mechanism, in addition to different rules pertaining to fintech. These rules could be accessed on the web sites of every establishment.
Typically, there aren’t any particular tax incentives for fintech firms. Nonetheless, firms conducting enterprise in a pioneer business might obtain sure tax services within the type of discount in company earnings tax. Capital Funding Coordinating Board Regulation No. 7 of 2020 concerning description of enterprise actions and pioneer business manufacturing and procedures for granting company earnings tax deduction services defines a pioneer business as being extremely related, offering added worth and excessive externalities, introducing new applied sciences and having strategic worth for the nationwide economic system. This contains, amongst different issues, information processing actions, internet hosting actions and associated actions.
Regulation
i Licensing and advertising
Fintech firms are usually regulated by Financial institution Indonesia and the OJK. The scope of the fintech licence offered by every authority is totally different. Financial institution Indonesia, by means of Financial institution Indonesia Regulation No. 22/23/PBI/2020 concerning fee programs, dated 30 December 2020 (BI Reg 22), Financial institution Indonesia Regulation No. 23/6/PBI/2021 concerning fee service suppliers, dated 1 July 2021 (BI Reg 23/6), and Financial institution Indonesia Regulation No. 23/7/PBI/2021 concerning fee system infrastructure suppliers, dated 1 July 2021 (BI Reg 23/7), regulates that fintech actions associated to fee programs might endure a improvement trial below Financial institution Indonesia supervision. Cost programs that utilise revolutionary know-how, which covers merchandise, actions, companies and enterprise fashions utilizing revolutionary know-how of their financial ecosystem and digital funds that may help the availability of fee programs, however are usually not but regulated by the present rules, might decide to endure this improvement trial. Fintech actions regulated by Financial institution Indonesia are restricted to the availability of supply of fund info, fee initiation, buying companies, supply of fund administration, remittance companies, clearing and remaining settlement.
Fintech actions associated to monetary companies are regulated by the OJK. OJK Regulation No. 13/POJK.02/2018 concerning digital monetary innovation within the monetary companies sector, dated 16 August 2018 (OJK Reg 13), requires firms finishing up the next digital monetary innovation actions to register or acquire a licence (except in any other case exempted):
- transaction settlement: focuses on, amongst different issues, funding settlement;
- capital elevating: contains fairness crowdfunding, digital trade, good contracts and different due diligence;
- funding administration: contains superior algorithms, cloud computing, functionality sharing, open-source info know-how, automated recommendation and administration, social buying and selling and retail algorithmic buying and selling;
- fundraising and fund disbursement: contains P2P lending, different adjudication and third-party utility programming interface;
- insurance coverage: contains sharing economic system, autonomous autos, digital distribution, securitisation and hedge funds;
- market help: contains synthetic intelligence or machine studying, machine readable information, large information, social sentiment, market info platforms, automated information assortment and evaluation;
- different digital finance supporting actions: contains social and eco-crowdfunding, sharia digital financing, e-waqf, e-zakat, automated digital advisory and credit score scoring; and
- different monetary companies actions: contains bill buying and selling, vouchers and merchandise utilizing blockchain-based purposes.
Financial institution Indonesia and the OJK have the authority to control, register and concern licences for the above-listed fintech actions. These two authorities have set out their respective guidelines on circumstances or necessities, which shall rely upon the particular registration or licence to be held by the related firm. As a matter of basic precept, the OJK stipulates intensive standards for regulated fintech actions (comparable to being revolutionary in nature and future-oriented, utilising info and communications know-how as the primary foundation for offering monetary companies to customers, supporting monetary inclusion and literacy) and requires any supplier whose companies meet the factors to register with the monetary regulatory our bodies.
Automated digital advisory
Thus far, there isn’t any particular legislation or regulation that particularly addresses automated digital advisory in Indonesia. It’s talked about in OJK Reg 13 for instance of digital monetary innovation within the funding administration sector. Provided that it falls below the purview of the OJK and is explicitly referred to in OJK Reg 13, firms offering automated digital advisory might want to adjust to the provisions of OJK Reg 13, which embrace the acquiring of a registration or licence, as relevant.
Asset administration firm
Any get together that needs to determine an asset administration firm in Indonesia should confer with the actions of an funding supervisor (IM) firm working on the Indonesia Inventory Alternate pursuant to Legislation No. 8 of 1995 concerning capital markets, dated 10 November 1995 (the Capital Market Legislation). Apart from the requirement for the corporate to be established within the type of an Indonesian restricted legal responsibility firm (PT), as set out in Legislation No. 40 of 2007 concerning restricted legal responsibility firms, dated 16 August 2007, as final amended by Legislation No. 11 of 2020 concerning job creation, dated 2 November 2020 (the Omnibus Legislation), the corporate should even be registered as a securities firm, particularly as an IM firm, for which a licence have to be obtained from the OJK, pursuant to Article 30, Paragraph (1) of the Capital Market Legislation. Different technology-based asset administration actions not particularly regulated by the OJK are topic to the regulatory sandboxing programme below OJK Reg 13.
Credit score info companies
Credit score info companies are regulated in OJK Regulation No. 42/POJK.03/2019 concerning credit score info administration businesses, dated 31 December 2019, and Financial institution Indonesia Round Letter No. 15/49/DPKL concerning credit score info administration businesses, dated 5 December 2013. Below these Rules, a credit score bureau is permitted to gather and course of credit score information and different information to generate a credit score report. A credit score report is a services or products generated by a credit score bureau in writing, verbally or by another technique, sourced from credit score information and different information owned by the credit score bureau. As is the case with different fintech firms below the OJK’s supervision, a credit score bureau is required to acquire a enterprise licence from the OJK to hold out its enterprise actions in Indonesia.
Gross sales and advertising of monetary services and products
Conventional gross sales and advertising of monetary companies, comparable to standard banking, funding and insurance coverage, are regulated by the OJK. There aren’t any particular rules for the sale and advertising of unconventional monetary companies, comparable to preliminary coin choices. Principally, fintech firms should be sure that when promoting and advertising monetary merchandise, there isn’t any deceptive info which will trigger losses for customers.
ii Cross-border points
Indonesia doesn’t recognise the idea of passporting, and Indonesian legislation doesn’t allow regulated actions to be offered from offshore. Moreover, below Indonesian legislation, a celebration offering any fintech companies or merchandise within the jurisdiction should set up a neighborhood presence and acquire the requisite licence from the Indonesian regulatory our bodies as stipulated by the prevailing legal guidelines and rules.
Sure limitations or restrictions on overseas possession of Indonesian firms could also be relevant, relying on the corporate’s enterprise line and whether or not that enterprise line is topic to overseas shareholding limitations pursuant to the ‘Funding Record’, which is contained in Presidential Regulation No. 10 of 2021 concerning capital funding traces of enterprise, dated 4 March 2021, as amended by Presidential Regulation No. 49 of 2021, dated 25 Could 2021, or relevant sectoral rules issued by the federal government. For instance, an organization participating within the provision of peer-to-peer (P2P) lending actions can have a most overseas possession of 85 per cent, which signifies that a minimum of 15 per cent of the possession have to be held by Indonesian shareholders.
If offshore services or products are actively marketed in Indonesia, there’s a threat that the related authority would require the supplier of these services or products to determine a neighborhood presence, because the entity might be thought of to be finishing up enterprise in Indonesia. Nonetheless, if the availability of the services or products is finished on a reverse-enquiry foundation, the place the method is made by potential shoppers on an unsolicited foundation, it is not going to set off a licensing requirement in relation to the fintech actions, offered that the corporate responds to the potential shoppers on a reach-in or fly-in foundation.
With respect to forex controls in Indonesia, the Indonesian rupiah can’t be remitted outdoors Indonesian territory. Moreover, solely an quantity of lower than 100 million rupiah could be freely taken bodily out of Indonesia at anybody time.
Digital id and onboarding
Digital id in Indonesia is usually recognised as an digital certificates that holds an individual’s digital signature, as referred to below Legislation No. 11 of 2008 concerning digital info and transactions, dated 21 April 2008, as final amended by Legislation No. 19 of 2016, dated 25 November 2016 (the ITE Legislation). Following the enactment of the ITE Legislation, Indonesian authorities have issued a number of rules to help, enhance and develop the security of utilizing digital identification to entry monetary companies, together with:
- validation of licensed e-signature and digital id for digital transactions, as ruled by Ministry of Communication and Informatics Regulation No. 11 of 2018 concerning implementation of digital certification, dated 6 September 2018; and
- use of digital know-your-customer tips, as ruled by Legislation No. 8 of 2010 concerning prevention and eradication of cash laundering, dated 22 October 2010, and OJK Regulation No. 12/POJK.01/2017 concerning implementation of anti-money laundering and prevention of terrorism funding within the monetary companies sector, dated 21 March 2017, as final amended by OJK Regulation No. 23/POJK.01/2019, dated 30 September 2019 (OJK Reg 12).
Indonesia, by means of the Nationwide Council for Monetary Inclusion and its related companions, has been working to place in place insurance policies to implement a robust digital id infrastructure for the inclusive supply of monetary companies. There are presently a number of state and personal enterprises which have registered with or obtained a licence from the Ministry of Communication and Informatics (MOCI) to concern digital certificates in Indonesia.
Absolutely digitised onboarding of shoppers is permitted for monetary companies suppliers, below OJK Reg 12. The protection of monetary companies suppliers below OJK Reg 12 is broad in order to incorporate monetary companies suppliers within the banking sector, capital market sector and non-bank monetary establishment sector. The circumstances to implement the totally digitised onboarding of shoppers, nonetheless, might fluctuate throughout every regulation governing particular monetary companies actions. For instance, banks intending to supply totally digitised onboarding might solely accomplish that as soon as they’ve procured approval from the OJK for the availability of digital banking companies. Third events whose digital services are utilized by monetary companies suppliers for the id verification of potential clients should additionally acquire OJK approval.
Digital markets, fee companies and funding
i Digital market
Digital marketplaces are usually not regulated by both Financial institution Indonesia or the OJK. Quite, they’re regulated by the Minister of Commerce below Authorities Regulation No. 80 of 2019 concerning buying and selling by means of digital programs, dated 25 November 2019, and its implementing regulation, Minister of Commerce Regulation No. 50 of 2020 concerning provisions of enterprise licensing, commercials, steering and supervision of enterprise practitioners in commerce by means of digital programs, dated 19 Could 2020. To function a digital market, an organization should acquire a Commerce by means of Digital System Enterprise Licence and different supporting licences as vital. There isn’t a particular rule for digital marketplaces that facilitate the sale of digital property.
The buying and selling of cryptoassets is particularly regulated by the Commodity Futures Buying and selling Regulatory Company (Bappebti), an company below the Ministry of Commerce, and is topic to a unique algorithm. These guidelines are specified by Bappebti Regulation No. 8 of 2021 concerning steering for the implementation of the cryptoasset bodily market in futures trade, dated 29 October 2021.
ii Collective funding schemes
Indonesian legislation doesn’t regulate collective funding schemes basically. As an alternative, rules are issued pertaining to particular finance merchandise, comparable to fairness crowdfunding platforms.
Firms are permitted to conduct securities crowdfunding in the event that they acquire the requisite licence from the OJK. Pursuant to OJK Regulation No. 57/POJK.04/2020 concerning safety crowdfunding, dated 11 December 2020, as amended by OJK Regulation No. 16/POJK.04/2021, dated 26 August 2021 (OJK Reg 57), safety crowdfunding is outlined as the availability of safety choices by issuers to promote securities on to buyers by means of an open digital system community. Below OJK Reg 57, securities are outlined as promissory notes, business papers, shares, bonds, proof of debt, collective funding contract participation models, futures contracts over securities, and any by-product of securities. Crowd-lending shouldn’t be particularly regulated in Indonesia.
iii Peer-to-peer lending
P2P lending is below the purview of the OJK, regulated particularly by OJK Regulation No. 77/POJK.01/2016 concerning info technology-based cash lending companies, dated 29 December 2016, as amended by OJK Regulation No. 4/POJK.05/2021 concerning threat administration implementation in using info know-how by non-bank monetary companies establishments, dated 9 March 2021 (OJK Reg 77). P2P lending is outlined therein as the availability of monetary companies to convey collectively lenders and debtors for the aim of concluding lending agreements in rupiah straight by means of an digital system utilizing the web. Firms offering P2P lending platforms are required to register and acquire a licence from the OJK upon the fulfilment of sure necessities.
Below OJK Reg 77, P2P lending platform suppliers are prohibited from:
- finishing up different enterprise actions;
- appearing as a lender or borrower;
- issuing safety in any kind for the fulfilment of one other get together’s obligation;
- issuing bonds;
- offering suggestions to customers;
- publishing fictional or deceptive info;
- providing companies to customers or the general public by means of non-public communication services with out the consent of the customers; and
- charging any payment to customers for any submission of complaints.
iv Buying and selling of loans in secondary market
There isn’t a particular restriction on the buying and selling of loans within the secondary market, neither is it regulated in Indonesia.
v Cost companies
An organization offering fee companies is required to acquire a licence from Financial institution Indonesia. BI Reg 22 divides fee system suppliers into fee service suppliers and fee system infrastructure suppliers. Cost system suppliers are outlined as banks or non-bank establishments that present companies to facilitate fee transactions to service customers. They might perform the next actions: (1) provision of knowledge on fund supply; (2) fee initiation or buying companies; (3) administration of fund supply; and (4) remittance companies. Cost system infrastructure suppliers are outlined in BI Reg 22 as events offering infrastructure that could be used to conduct the switch of funds for the curiosity of their members. Cost system infrastructure suppliers might present clearing or remaining settlement companies for the curiosity of members. Particulars on licensing necessities are additional elaborated in BI Reg 23/6 for fee service suppliers and BI Reg 23/7 for fee system infrastructure suppliers.
BI Reg 22, BI Reg 23/6 and BI Reg 23/7 now restrict overseas possession of fee system suppliers. This restriction was beforehand restricted to e-money issuers, principals, switching suppliers, clearing suppliers and remaining settlement suppliers. Non-bank fee service suppliers are required to have a minimal of 15 per cent of complete shares, with a minimal of 51 per cent of these shares having voting rights, owned by a home get together or events. Cost system infrastructure suppliers are required to have a minimal of 80 per cent of complete shares and shares with voting rights held by a home get together or events. These overseas possession restrictions are waived for current fee service suppliers and fee system infrastructure suppliers (i.e., Financial institution Indonesia licence holders previous to the enactment of the brand new Financial institution Indonesia rules). Nonetheless, current fee service suppliers and fee system infrastructure suppliers are required to regulate their overseas shareholding composition if there are any future adjustments to their shareholding composition.
BI Reg 23/6 and BI Reg 23/7 additionally increase the minimal capital requirement for brand spanking new entities making use of for fee service supplier or fee system infrastructure supplier licences. The minimal capital requirement for fee service suppliers differs based on the licence class. Licence class 1, which encompasses account info companies, fee initiation, buying companies, account issuance companies and remittance companies, has a minimal preliminary paid-up capital of 15 billion rupiah. The minimal preliminary paid-up capital for licence class 2, encompassing account info companies and fee initiation and buying companies, is 5 billion rupiah, and licence class 3, overlaying remittance companies and different actions as decided by Financial institution Indonesia, has a minimal preliminary paid-up capital of 500 million rupiah for licence holders that don’t present a system that can be utilized by different fee service suppliers, and 1 billion rupiah for licence holders that present a system that can be utilized by different fee service suppliers. Regardless of the foregoing, all overseas funding firms are nonetheless required to have a minimal preliminary paid-up capital of 10 billion rupiah.
For fee system infrastructure suppliers, the minimal preliminary paid-up capital is 100 billion rupiah.
As well as, BI Reg 22, together with BI Reg 23/6 and BI Reg 23/7, launched the idea of ongoing capital. Ongoing capital have to be fulfilled by fee system suppliers for so long as they perform fee system actions. The calculation of the continuing capital differs from one supplier to a different and isn’t particularly acknowledged within the Financial institution Indonesia rules. Cost system suppliers are anticipated to conduct self-assessments for the calculation of ongoing capital, however Financial institution Indonesia will make the ultimate dedication of the continuing capital requirement for the particular fee system supplier.
vi Mandated accessibilities to shopper or product information
MOCI Regulation No. 5 of 2020 concerning non-public digital system suppliers, dated 24 November 2020, as amended by MOCI Regulation No. 10 of 2021, dated 21 Could 2021 (MOCI Reg 5), requires non-public digital system suppliers (ESPs) to grant entry to their digital programs or digital information to (1) authorised establishments for supervisory functions and (2) legislation enforcement officers for the aim of legislation enforcement, particularly prison investigations, prosecutions and trials carried out in Indonesia. A non-public ESP is outlined in MOCI Reg 5 as a person, enterprise entity or member of the general public that operates an digital system. Digital system is additional outlined therein as a collection of digital gadgets and procedures that serve to organize, gather, course of, analyse, retailer, show, publish, transmit or disseminate digital info. Subsequently, there’s an obligation for personal ESPs to supply their digital shopper or product information to authorities as related third events.
Cryptocurrencies, preliminary coin choices (ICO) and safety tokens
i Blockchain know-how
Whereas there isn’t any particular rule or regulation in Indonesia for blockchain know-how, it’s referred to in two totally different rules issued by Financial institution Indonesia and the OJK. Each rules have been issued for the aim of facilitating and supporting revolutionary business gamers within the subject of monetary companies and fee programs. Particularly, blockchain know-how is referred to in BI Reg 23/6, which supplies that using blockchain know-how or distributed ledger know-how for the availability of fund transfers, digital cash, digital pockets or cellular funds shall be thought of as the availability of monetary know-how within the fee system sector. Blockchain know-how can also be talked about in OJK Reg 13 within the context of the scope of digital monetary innovation associated to different monetary companies actions. OJK Reg 13 supplies examples of different monetary companies actions, comparable to bill buying and selling, vouchers and tokens.
ii Tokens as securities
Securities are outlined within the Capital Market Legislation, as promissory notes, business papers, shares, bonds, proof of debt, collective funding contract participation models, futures contracts over securities and any by-product of securities. Primarily based on this definition, taking a conservative method, tokens wouldn’t qualify as securities below Indonesian legislation.
iii Cryptocurrencies
Cryptocurrencies are usually not recognised as a fee instrument in Indonesia. Nonetheless, they could be traded if they’ve been so authorized by the top of Bappebti. To be authorized for buying and selling in Indonesia, a cryptocurrency should fulfil a number of necessities, which embrace: (1) being primarily based on distributed ledger know-how; (2) being a utility crypto or a crypto-backed asset; and (3) having had its related dangers evaluated, together with the chance of cash laundering and terrorism funding, in addition to the proliferation of weapons of mass destruction. Moreover, cryptoasset merchants will need to have in place commonplace working procedures that, on the minimal, cowl the next:
- advertising and receipt of cryptoasset clients;
- transaction implementation;
- inside controls and supervision;
- dispute settlement for cryptoasset clients; and
- implementation of anti-money laundering, terrorism financing and proliferation of weapons of mass destruction insurance policies.
Any transaction mechanism applied by cryptoasset merchants should endure related analysis for dangers of cash laundering, terrorism funding and proliferation of weapons of mass destruction.
As well as, any earnings arising from the sale of cryptocurrencies might be imposed with earnings tax, however every other tax therapy as to cryptocurrencies has but to be particularly regulated. It’s presently unclear whether or not tokens could also be provided to Indonesian residents from overseas.
Different new enterprise fashions
i Sensible contracts
Sensible contracts are referred to in OJK Reg 13 however are usually not particularly regulated. Below OJK Reg 13, good contracts are categorised as digital monetary innovation within the fairness amassing sector, together with fairness crowdfunding, digital trade and different due diligence. Subsequently, the provisions of good contracts could be usually ruled by OJK Reg 13. As a result of there isn’t any particular authorized framework for self-executing contracts, there’s presently no correction mechanism applied by the legislation.
ii Automated funding
OJK Reg 13 additionally usually covers the availability of automated funding recommendation and funding administration as a part of digital monetary innovation within the funding administration sector. Nonetheless, the extent to which this automation could also be applied is unclear. Included inside the identical sector is using superior algorithms, cloud computing, capabilities sharing, open-source info know-how, social buying and selling and retail algorithmic buying and selling.
iii Synthetic intelligence
There isn’t a particular rule relevant to using synthetic intelligence in monetary merchandise. Nonetheless, synthetic intelligence is talked about in OJK Reg 13 as a part of digital monetary innovation out there help sector, together with machine readable information, social sentiment, large information, market info platforms and automatic information assortment and evaluation. Thus, using synthetic intelligence in monetary merchandise is allowed, topic to the restrictions offered in OJK Reg 13 in addition to any regulation for the particular monetary product provided.
iv Aggregators
Third-party web sites that examine merchandise or present info on monetary merchandise are thought of aggregators and are required to adjust to OJK Reg 13 with regard to the conduct of their companies. Aggregators are additionally required to abide by the Knowledge Safety Rules (as outlined beneath) in addition to every other information safety requirement imposed below OJK Reg 13. They’re additionally topic to competitors guidelines set out in Legislation No. 5 of 1999 concerning prohibition of monopolistic practices and unfair competitors, dated 5 March 1999, as final amended by Legislation No. 11 of 2020 concerning job creation, dated 2 November 2020, in addition to its implementing rules.
v Different fintech enterprise fashions
From our observations, there aren’t any new fintech enterprise fashions on the rise. The covid-19 pandemic has inspired finish customers to undertake digital technique of fee and, consequently, the monetary sector has acquired a push to digitalise its merchandise.
Mental property and information safety
i Mental property
Below Indonesian mental property rules, fintech enterprise fashions and associated software program are categorised as laptop applications, that are protected by copyright. The granting of copyright for laptop applications doesn’t depend on prior registration by the creator and, as such, copyright shall be robotically hooked up to laptop applications as soon as they’re created. Patent safety can also be accessible, offered that the invention fulfils the next three necessities: (1) it’s new (i.e., the invention shouldn’t be the identical as beforehand disclosed applied sciences); (2) it’s creative (i.e., it can’t be simply created by one other particular person with experience within the technical sector); and (3) it may be used within the business.
If a software program or enterprise mannequin is developed by an worker or a contractor for a shopper, the financial rights over the mental property shall stay with that worker or contractor as its creator, except in any other case transferred to the shopper (for instance, below the employment settlement or service settlement). Employers in Indonesia usually embrace a clause in employment agreements concluded with workers or contractors that explicitly states that the employer has financial rights over any creations by its workers and contractors. Compensation for the switch of financial rights shouldn’t be required however generally offered.
ii Knowledge safety
The primary devices regulating information safety in Indonesia are as follows:
- Legislation No. 11 of 2008 concerning digital info and transaction, dated 21 April 2008, as amended by Legislation No. 19 of 2016, dated 25 November 2016;
- Authorities Regulation No. 71 of 2019 concerning the availability of digital programs and transactions, dated 10 October 2019 (GR 71); and
- Minister of Communication and Informatics Regulation No. 20 of 2016 concerning private information safety in digital programs, dated 1 December 2016 (MOCI Reg 20) (collectively, the Knowledge Safety Rules).
Insofar as shopper information falls below the definitions of non-public information offered by GR 71 and MOCI Reg 20, will probably be granted the safety offered inside the above devices. GR 71 defines private information as ‘sure private information which is saved, maintained, and guarded of its accuracy and guarded of its confidentiality’. MOCI Reg 20 defines private information as ‘each information concerning an individual, whether or not recognized or identifiable independently or together with different info straight or not directly by means of digital system or non-electronically’.
Safety afforded below the Knowledge Safety Rules contains however shouldn’t be restricted to safety of confidentiality and information accuracy and minimisation (i.e., previous to amassing the information, the information house owners have to be given the explanation for the gathering in addition to particulars of how their information could also be dealt with, and the information assortment shall be restricted the place doable to the extent vital for the gathering). Sure rules for particular forms of monetary companies suppliers, comparable to P2P lending platform operators and corporations deemed to be offering revolutionary digital finance companies, additionally require shopper information to be protected however don’t present for the next threshold of knowledge safety than what’s already offered within the Knowledge Safety Rules. Except for the aforementioned, there aren’t any particular guidelines on the digital profiling of shoppers.
12 months in overview
Following the issuance of BI Reg 22 in late 2020, Financial institution Indonesia issued two implementing rules, efficient since 1 July 2021, particularly BI Reg 23/6 and BI Reg 23/7. Present fee system suppliers are present process licence conversion primarily based on the brand new fee system regime below these rules.
The OJK has issued OJK Regulation No. 12/POJK.03/2021 on business banks, dated 30 July 2021 (OJK Reg 12/2021), which replaces and amends a number of earlier rules on banking issued by Financial institution Indonesia and the OJK. OJK Reg 12/2021 addresses standard banks in addition to digital banks. Nonetheless, it doesn’t classify digital banks in their very own class. Below OJK Reg 12/2021, banks are nonetheless categorised into two varieties: business banks and public credit score banks. This lack of clear categorisation permits business gamers extra flexibility in figuring out their enterprise mannequin, whether or not as a standard financial institution, a financial institution with digital banking services, hybrid digital financial institution, and many others. The issuance of OJK Reg 12/2021 seems to be in response to the steep rise in digital banking in Indonesia over the previous 5 years.
Outlook and conclusions
Authorized and regulatory initiatives associated to monetary know-how are not often made public and, as a consequence, it’s troublesome to foretell forthcoming initiatives by the federal government. Usually, the regulators will solely present draft rules to sure associations associated to the business to acquire suggestions and to permit affiliation members to hedge their enterprise choices.
BI Reg 22 and its implementing rules (i.e., BI Reg 23/6 and BI Reg 23/7) overhaul the earlier regulatory framework for fee system suppliers. As Financial institution Indonesia remains to be within the midst of navigating the sensible implementation of those rules, we don’t foresee any important rules – that’s, regulation that might have a big affect on the licensing necessities for business gamers – being issued within the close to future.