Following the mandate introduced under Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“Law 4/2023”)[1], which has been aiming to further strengthen various supporting professionals operating within the financial sector (“Supporting Professionals”), the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently preparing a Draft Regulation (“Draft Regulation”) on Supporting Professionals Within the Financial Sector.[2]

As its title suggests, the Draft Regulation covers a wide range of prerequisites and provisions that specifically relate to Supporting Professionals (e.g. applicable requirements, relevant mandates, provision of services and so forth).[3] Moreover, the Draft Regulation aims to consolidate various existing frameworks that address matters relating to OJK-registered Supporting Professionals, with the result that if it is ultimately enforced, the Draft Regulation will simultaneously repeal and replace the following legal framework:[4]

1. Regulation of the OJK No. 38/POJK.05/2015 on the Registration and Supervision of Actuarial Consultants, Public Accountants and Appraisers Engaged in Activities Within the Non-Bank Financial Industry (“Regulation 38/2015”);
2. Regulation of the OJK No. 66/POJK.04/2017 on Legal Consultants Operating Within the Capital Market (“Regulation 66/2017”);[5]
3. Regulation of the OJK No. 67/POJK.04/2017 on Notaries Operating Within the Capital Market (“Regulation 67/2017”); and
4. Regulation of the OJK No. 68/POJK.04/2017 on Appraisers Operating Within the Capital Market (“Regulation 68/2017”).

It should be noted that the Draft Regulation is currently still being deliberated and may thus be subject to further changes. In this regard, the OJK is encouraging input from stakeholders up until a deadline of 27 September 2024. Said inputs can be submitted via email and/or through the following link.[6]

Against the above backdrop, this edition of Indonesian Legal Brief (“ILB”) offers an elaboration of the various provisions that are set out under the Draft Regulation. However, due to the broad nature of these provisions, our discussion has been limited to the following topics:

1. Expanded Scope of Supporting Professionals;
2. Adjusted Applicable Requirements; and
3. Redefined Obligations of Registered Professionals.

Expanded Scope of Supporting Professionals

At its core, the Draft Regulation expands the scope of Supporting Professionals that currently feature under the above-listed frameworks. As such, the following table offers a comparison between the various types of Supporting Professionals that are outlined under the Draft Regulation and the existing frameworks:

In terms of the addition of other professions, as outlined with asterisks (*) in the table above, the Draft Regulation states that said other professions may be relevant to the financial sector in the future, potentially including:[12]

1. Providers of registration statement documents;
2. Parties that engage in analysis and that provide services relating to certain corporate actions (e.g. current transactions, mining potentials, sustainable finances and so forth); and
3. Other types of service providers who are operating within the financial sector.

Adjusted Applicable Requirements

While the requirements that must be met by the majority of Supporting Professionals that feature under the Draft Regulation remain similar to those outlined under the existing regulatory frameworks (i.e. must secure permits for their professions from relevant authorities and/or register as active Supporting Professionals with the OJK),[13] the Draft Regulation now also states that Sharia Experts specifically must secure permits directly from the OJK.[14]

In the event that no relevant authority is authorized to issue permits to any of the above-outlined Supporting Professionals, the Draft Regulation states that said professionals must ultimately secure their permits from the OJK.[15] However, the Draft Regulation may also exempt Supporting Professionals from the mandatory registration requirement under the following conditions:[16]

1. In order to ensure ease of doing business for small- and medium-scale enterprises as regards access to capital market funding;
2. No professional associations have been established for said Supporting Professionals; and
3. Relevant parties have secured permits from foreign capital market authorities or no permits are required by the relevant countries in which the parties in question are operating.

Redefined Obligations of Registered Professionals

While the existing regulatory frameworks outline a wide range of obligations that Supporting Professionals are required to comply with after registering with the OJK and which may vary from one profession to another,[17] the Draft Regulation has now revised and compiled said professional obligations into a unified list that will apply to all types of Supporting Professionals. The Draft Regulation’s resultant list of eight obligations for Supporting Professionals broadly breaks down as follows:[18]

In addition to the above-outlined obligations, it should be noted that the Draft Regulation also obliges Supporting Professionals to comply with the following mandatory activities once they have registered with the OJK:[19]

1. Must participate in annual advanced professional training sessions (Pendidikan Profesional Berkelanjutan – “PPL”), as organized by OJK-recognized institutions;
2. Must submit mandatory reports to the OJK;
3. Must be willing to provide data and information and/or be physically present upon being summoned by the OJK for examination purposes; and
4. Must comply with various other obligations set by the OJK.

By way of comparison, the existing frameworks state that participation in PPL is only mandatory for notaries and appraisers operating within the capital market, as outlined under the frameworks of both Regulation 67/2017 and Regulation 68/2017.[20]

Key Takeaways

By expanding the list of Supporting Professionals that are permitted to operate within the financial sector from those that are currently outlined under the existing frameworks, the Draft Regulation has broadened opportunities for other types of professionals to engage in business as Supporting Professionals. This move may ultimately help to ensure that business activities that take place within the financial sector are implemented in line with relevant Laws and Regulations. Moreover, the Draft Regulation has now redefined and unified the various obligations that must be complied with by OJK-registered Supporting Professionals, an initiative that should help to ensure that all active Supporting Professionals are able to provide high-quality, standardized services to their financial sector clients.

Source: hukumonline.com