As the ECF provider carries out its equity crowdfunding activities using information technology, the Equity Crowdfunding Regulation requires ECF providers to use data centres and disaster recovery centres located within the Indonesian territory. Back to Banking Law Committee publications. We expect that OJK Regulation No. The Equity Crowdfunding Rule provides the following criteria for Investors: The Equity Crowdfunding Rule however exempts the above criteria for institutional Investors with sufficient investment experience in the capital market proven by ownership of a securities account for at least two years before the offering. conducting business activities other than as an Operator (except, among others, as underwriter, broker, and/or investment manager if the Operator is securities company, and information-technology based service provider that has been registered and/or has obtained license from OJK); being affiliated with any Issuer using the Equity Crowdfunding Service; providing financial assistance to Investors to invest in an Issuer’s shares; providing investment advice and/or recommendation to Investors and/or prospective Investors; or. Fax: +44 (0)20 7842 0091, Public and Professional Interest Division, Anti-Corruption Strategy for the Legal Profession, International Human Rights Fact-Finding Guidelines. Berkaitan dengan pesatnya pertumbuhan perusahaan rintisan (startup) di Indonesia, equity crowdfunding sangat cocok untuk dima… The Equity Crowdfunding Regulation also makes it mandatory for ECF providers to provide a safe and reliable information technology system. Based on these criteria, equity crowdfunding may be a perfect fundraising option for start-up companies and micro, small, and medium enterprises. there are no more than 300 parties being shareholders of the Issuer; and. The paid-up capital of the Issuer is not more than IDR 30 billion. 37/2018 as the carrying out of services on the offering of shares by issuers to sell shares directly to investors through an open electronic system network (“Equity Crowdfunding Service”). Indonesia has a number of companies engaged in equity crowdfunding activities but no regulations have been enacted, thereby creating uncertainties for equity crowdfunding providers (an ECF provider), users such as the parties in need of funds (issuers) and the parties providing the funds (investors). The Financial Services Authority (Otoritas Jasa Keuangan – OJK) issued OJK Regulation No. We use cookies to improve your experience on our website. Their own capital pursuant to Law No. Towards the end of 2018, the Financial Services Authority (Otoritas Jasa Keuangan or “ OJK ”) issued OJK Regulation No. Offering through a Platform. Investors are the parties that purchase the Issuers' shares through Providers. implement the basic principles of Users' protection, as follows: simple, fast and affordable Users' dispute resolution through the functions of internal dispute resolution and external dispute resolution. The purchase of shares is done by Investors transferring funds to the agreed escrow account stated in the relevant Provider-Investor Agreement. The Issuers must register the share ownership of the Investors in the shareholders register. OJK Regulation No. It can be a notarial deed or an electronic document. This allows them to participate in the general meeting of shareholders and sign deeds as well as other relevant documents, for example. The trading system may (1) provide a reasonable price as a reference for the sellers and the purchasers, and (2) provide a communication system for the users that may be used to purchase or sell shares. Should such cancellation occur, the ECF provider shall return the funds to the investors no later than two working days after the cancellation. An investor is entitled to cancel the plan for purchasing the shares through the equity crowdfunding by no later than 48 hours after purchasing the shares. maintain confidentiality, integrity and availability of personal data, transaction data, and financial data, use an escrow account to receive funds collected from the offering, utilize a data center and disaster recovery center that are located in Indonesia, fulfil the minimum standard of information technology system, information technology safeguard, disruption and failure of the system and transfer of information technology system management. Users are Issuers and Investors. Providers are prohibited to carry out other business activities, except for activities as: (i) IT based service providers registered at or licensed by OJK, and (ii) if they are licensed securities companies, underwriters, brokers and/or investment managers. The Provider should transfer the funds to the Issuer at the latest 21 days after the end of an offering period. Learn about our Pacific Alliance initiative. 37/2018 and is prohibited from entering into any new agreement with any Issuer until such license is obtained. The Operator is then to transfer the Investor’s funds to the Issuer at the latest 21 business days after the end of the offering period. The Equity Crowdfunding Rule describes the activity of equity crowdfunding as part of financial services activity falling under the capital market sector. OJK closed 2018 by issuing the long-awaited equity crowdfunding regulation. Under the Equity Crowdfunding Regulation, the issuance of shares can only be carried out by an Indonesian legal entity in the form of an Indonesian limited liability company. 37/POJK.04/2018 on Equity Crowdfunding (Equity Crowdfunding Rule) defines equity crowdfunding as a share offering service that is utilized by companies/issuers to sell their shares directly to investors through an open electronic system network (Platform). the total amount of funds raised through the shares offering does not exceed Rp10,000,000,000, or any other maximum amount as determined by OJK. The issuer is the entity offering its shares through the Operator by means of the Equity Crowdfunding Service (“Issuer”). Issuers may only offer shares through one ECF provider at the same time and the offering period shall be no more than 60 days. The Issuer shall deliver shares to the Operator to be distributed to the Investors at the latest 5 business days after the funds received by the Issuer, and the Operator is in turn required to distribute the shares to each Investor at the latest 10 business days after receiving shares from the Issuer. The Equity Crowdfunding Regulation sets out administrative sanctions, imposed by the OJK, for any violation. it is conducted through an Operator licensed by OJK; the shares offering is carried out for a maximum of 12 months; and. The total amount investment that an Investor can make through Equity Crowdfunding Services annually is limited in the following manner: Based on the Socialization, the above annual income verification is subject to the Operator. OJK Regulation No. Issuers are limited liability companies that offer their shares through Providers. Starting from 31 December 2018, only a limited liability company or a cooperative (koperasi) that has been licensed as an Operator by OJK may carry out Equity Crowdfunding Services. agreement between Provider and Investor (. 37/POJK.04/2018 on Equity Crowdfunding (“OJK Regulation No. 37/POJK.04/2018 on Equity Crowdfunding (“. An Issuer can only conduct share offerings with one Provider at the same time and the maximum funding collection obtained through the Platform is limited to IDR 10 billion within a period of 12 months. OJK may impose administrative sanctions for parties in violation of, or having caused the violation of, certain provisions of OJK Regulation No. 37/2018 sets out three main types of actors in equity crowdfunding: operators, issuers and investors. A party can only obtain a license as a Provider from OJK if it is a legal entity (whether a limited liability company or a cooperative) having a minimum amount of capital of IDR 2.5 billion. In recent years, Indonesia has experienced an increasing number of start-up companies and financial technology (fintech) companies. Terdapat 2 perusahaan penyelenggara yang sudah mendapat izin OJK. Provider-Issuer Agreements should include at least the following provisions: (i) commission and fee amount (ii) penalty (as applicable) (iii) amount of funds that will be collected and shares offered (iv) rights and obligations and (v) dispute resolutions. United Kingdom, Tel: +44 (0)20 7842 0090 The agreement to carry out the crowdfunding services between the ECF provider and the investor shall be drawn in the form of a standard form contract. Investors are entitled to cancel the purchase of shares within 48 hours after the payment. Gatot Subroto Kav. If the minimum target funding is not achieved during an offering period, the offering will be cancelled and the Issuer must return the collected funds to the Investors. 37/2018 on 29 January 2019 (“Socialization”). The Issuer must record the Investor’s shares ownership in the company’s shareholders’ register. An operator is the entity providing, administering and operating the Equity Crowdfunding Service (“Operator”). An Investor electing to purchase the shares must remit the purchase price into an escrow account as set out under the Equity Crowdfunding Service agreements. 37/2018. Under this definition, the offering of shares would only be considered as equity crowdfunding if it is done through the electronic system by the ECF provider. The rapid growth of financial services and the absence of regulation on equity crowdfunding in Indonesia have encouraged OJK to issue OJK Regulation No. 13/POJK.02/2018 on Financial Digital Innovation in Financial Services Sector. Investors 37/2018”) on 31 December 2018. An Operator in the form of a cooperative must be a service cooperative (koperasi jasa). There is no limitation for foreign ownership for the Operator. As a result, the Indonesian government, through Bank Indonesia (BI) and the Financial Services Authority (known in Indonesian as Otoritas Jasa Keuangan or OJK) has begun to regulate the Fintech sector, in addition to conventional banking and financial services. The maximum offer period of an offering of shares is 12 months. Layanan Urun Dana Melalui Penawaran Saham Berbasis Teknologi Informasi (Equity Crowdfunding) yang … 8 of 1995 on Capital Market (“Capital Market Law”), if: Additionally, the Issuer will not be considered as a public company as referred to in the Capital Market Law, if: Both individuals and legal entities can act as Investors.


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