“With the issuance of POJK 57/2020, Financial Services Authority (OJK) has replaced the regulation governing crowdfunding activities Indonesia. As of December 2020, crowdfunding activities in Indonesia is allowed to include offerings of securities aside from equity-based securities, namely debt securities (obligation) and Sharia-based bonds (Sukuk).”
In December 2020, Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) promulgated OJK Regulation No. 57/POJK.04/2020 concerning Offering of Securities through Crowdfunding Services Based on Information Technology (“POJK 57/2020”). Previously, OJK regulated Crowdfunding Services by OJK Regulation No. 37/POJK.04/2018 of 2018 concerning Crowdfunding through Offering of Shares Based on Information Technology (“POJK 37/2018”). With the issuance of POJK 57/2020, OJK has revoked the applicability of POJK 37/2018 completely.
Expansion of Crowdfunding Activities
Previously crowdfunding activity is only allowed for securities in the form of equity, namely shares of a company and other equity-based securities. However, pursuant to POJK 57/2020, crowdfunding activities can now include the offering of securities in the following forms:
- Equity-based securities;
- Debt Securities (obligation); and
- Sharia-based bonds (“Sukuk”).
Debt Securities and Sukuk may only be subject to the crowdfunding activity under the following conditions:
- Issued in the currency of Indonesian Rupiah;
- Related to a specific project of the issuer which serves as the reason for the issuance of Debt Securities and Sukuk;
- Cannot be traded in the market;
- Have the maturity date in less than 2 (two) years of issuance;
- Can be repaid earlier than the maturity date, insofar as it has been consented by the majority of holders of Debt Securities or Sukuk who attend the general meeting of holders of Debt Securities or Sukuk;
- Payments of principal, interest, profit-sharing ratios, margins, service fees or yields can be made periodically or on the maturity date.
Particularly for Sukuk, the issuance thereof must have obtained the statement of compliance with the Sharia law.
Eligibility of Crowdfunding Organizer and Capital Requirements
Before the issuance of POJK 57/2020, provisions concerning the eligibility of the organizer of crowdfunding activities (“Organizer”) are limited to the form of entity, namely an Indonesian legal entity which can be one of the following:
- Limited liability company; or
- Cooperative, which is limited to cooperatives for services.
The provision concerning minimum capital for the Organizer remains unchanged, which is:
- For limited liability company, the Organizer must have the minimum paid-up capital of IDR 2,500,000,000 (two billion five hundred million Rupiah); and
- For cooperative, the Organizer must have the owner equity of IDR 2,500,000,000 (two billion five hundred million Rupiah).
Within POJK 57/2020, the provisions concerning Organizers in the form of limited liability company is extended to include the following:
- The limited liability company may be established and owned by Indonesian shareholders (individual or legal entity) and/or foreign shareholders (individual or legal entity).
- The limited liability company may only be owned by foreign shareholders (individual or legal entity) in the maximum percentage of 49% (forty-nine percent).
Licensing for Crowdfunding Organizer
Legal entities intending to become an Organizer must obtain the business license from OJK. The application for such license is submitted to OJK in the format provided in the attachment of POJK 57/2020, along with the following required documents:
- Deed of Establishment of the Organizer and any of its amendments;
- List and personal documents of the shareholders (if the Organizer is in the form of limited liability company);
- List and personal documents of the Board of Directors and Board of Commissioners;
- Certificate of Registration of Electronic System Organizer (Penyelenggara Sistem Elektronik or PSE) issued by Ministry of Communication and Informatics;
- Organization structure;
- Standard operating procedure related to anti-money laundering and anti-terrorism;
- Work plan for the first year of activities;
- Proof of electronic system compliance and information on operational activities;
- Proof of operational compliance (ownership or lease documents of the office and office equipment);
- Standard operating procedure related to services for users of the electronic system;
- Standard operating procedure related to the implementation of the crowdfunding activity;
- Taxpayer registration number (Nomor Pokok Wajib Pajak or NPWP);
- Agreement with the Custodian Bank and Depository and Settlement Institution (Lembaga Penyimpanan dan Penyelesaian);
- Statement letter to appoint the party responsible for supervision related to the implementation of Sharia principles for offerings of Sukuk, if the Organizer has yet to have a Sharia Supervisory Board;
- Recommendation from the association for crowdfunding organizers in Indonesia, namely Asosiasi Layanan Urun Dana Indonesia or ALUDI; and
- Proof of competence in the field of Information Technology for the employees.
For Organizers intending to conduct crowdfunding activities based on Sharia principles, the Organizers must provide the following additional documents:
- Articles of Association stating that the activities and business field, as well as the business management of the Organizers, have complied with the Sharia principles;
- Resolution of the general meeting of shareholders related to the appointment of Sharia Supervisory Board; and
- Sharia Capital Market Expert (Ahli Syariah Pasar Modal or ASPM) license obtained by the Sharia Supervisory Board.
Following the submission of the business license application, OJK may inquire more information, require other documents, and/or request a presentation of the Electronic System or other actions to the Organizer.
Within the maximum of 20 working days, OJK will issue an approval or rejection of the business license application after the submission of the complete documents. In the event, the period of 20 working days has elapsed, and there has yet to be approval or rejection by OJK, the Organizer is automatically deemed to have received an approval from OJK.
Author: Yohana Veronica Tanjung
Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas include Finance Law.
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