The Newly Ratified Law On Financial Sector Development And Strengthening

CONTRIBUTOR Budidjaja Internasional Lawyers In order to print this article, you will need to register or log in on Mondaq.com. The Law on Financial Sector Development and Strengthening ("Undang-Undang Pengembangan dan Penguatan Sektor Keuangan" or "PPSK Law") effectively modified 15 (fifteen), laws that apply to financial sector1 in relation 19 (nineteen). Financial ecosystems include capital market, banking, pension fund, insurance, and others. 2 The House of Representatives approved the PPSK Law on Thursday, 15 Dec 2022. It contains the following key provisions (among other things): Amendment to Law No.
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24 of 2004 on Indonesian Deposit Insurance Corporation (Lembaga Penjamin Simpanan, or "LPS Law") The LPS Law contains the following amendments: The LPS Law guarantees the liquidation of insurance companies and the performance insurance policies. The scope of work of LPS has been expanded by the government to: (i), protect public funds under insurance companies; and (ii) to ensure savings of public funds; (b), to guarantee insurance policies; and (c) to conduct activities to preserve financial stability. Banks under resolution include banks that are in financial difficulty and cannot be restructured or liquidated by the Financial Services Authority (Otoritas Jasa Keuangan, or "OJK") according to its authority. The LPS will also solve all problems of insurance companies whose licences have been revoked or suspended by OJK.
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The LPS must use funds from its assets to fulfill its obligations. The LPS may use funds from its assets if it is in a difficult financial position. 23 of 1999 Bank Indonesia ("BI Law") We note that BI has the authority to declare bankruptcy for certain financial institutions.
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7 of 1992 on Commercial Banks ( "Banking Law") - This amendment to Law No. 7 of 1992 (Banking Law): The following amendments are made to the Banking Law. Under the Banking Law, commercial banks are allowed to operate as digital bankers. However, they must have one (one) physical location as their head office.
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21 of 2008 Sharia Bank ("Sharia Banking Law") All banks and related parties must keep confidential information about depositing customers, their savings, and investor customers as well as their investments.
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16 Bank's confidentiality and secrecy would not apply to judicial interest in civil cases, criminal cases or curator's requests based on commercial court decisions, among other circumstances. 17 These circumstances require that the relevant agencies coordinate with OJK to release confidential information/bank's secrecy.
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The provisions stipulate that employees of sharia banks or conventional commercial banks with sharia business units will be imprisoned for two to eight years and fined IDR2,000,000,000 - IDR4,000,000,000 (two to four billion Rupiah). This law amends Law No. Amendment to Law No.
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OJK would regulate the maximum amount of funds that can be raised as well as the requirements for investors who are able to use the public offering of securities through the services of an operator of electronic systems. OJK must issue a license to crowd funding service providers who facilitate these public offerings. 24 Capital Market Law contains additional criminal sanctions for capital market activities
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OJK can decide not to proceed to the preinvestigation stage if there are possible criminal acts. OJK is authorized to enforce administrative sanctions and/or written orders. OJK will consider: (i) the transactional value and impact of the violation;(iii), whether there is a settlement; (iv) the effects on securities trading and/or bidding activities; and/or (v) the impact losses have on the capital market system and the interests of investors. OJK may impose administrative sanctions or written orders if it decides not to continue with the pre-investigation phase. Chapter XXIV Article 334, PPSK Law 2.
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Chapter II Part 3 Article 4 PPSK Law Chapter III Part3 Article 7 Number 3 PPSK Law Amendment to Article 4. of LPS Law 4 Chapter III Part3 Article 7 Number 7 PPSK Law Addition of Article 6A To LPS Law 5
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Chapter III Part 5, Article 9 Number 21 and 22, (addition to Chapter VIB, Article 35C, and Article 35D of BI Law). 6. Chapter IV Part 2 article 14 Number 3 of the PPSK Law (amendment to Article 7 of Banking Law). Chapter IV Part II Article 14 Number 4 PPSK Law (addition to Article 7A paragraph (2) of Banking Law)
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Elucidation Chapter IV Part 2, Article 14 Number 4, of PPSK Law (addition to Article 7A paragraph (2) of Banking Law). Chapter IV Part II Article 14 Number 4 PPSK Law (addition to Article 7B Banking Law). Chapter IV Part II Article 14 Number 7 PPSK Law (amendment to Article 12A paragraph (1) Banking Law).
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Chapter IV Part 2, Article 14 Number 24, of PPSK Law (amendment to Article 29 paragraph (1)) 12. Chapter IV Part II Article 14 Number 24 PPSK Law (amendment to Article 29 paragraph (2)) 13. Chapter IV Part II Article 14 Number 24 PPSK Law (amendment to Article 29 paragraph (3) Banking Law)
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Chapter IV Part II Article 14 Number 24 PPSK Law (amendment to Article 29 paragraph 4(4) of Banking Law). 15. Chapter IV Part 2 article 14 Number 48 of the PPSK Law (amendment to Article 49 paragraph (1)) 16. Chapter IV Part 3 Article 14 Number 48 of PPSK Law (amendment to Article 41 of UU Siariah Banking Law).
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Chapter IV Part 3 Article 15, Number 18 of the PPSK Law (addition to Article 41A and UU Syariah Bank Law) 18. Chapter IV Part 3 Article 5 Number 27 of the PPSK Law (addition to Article 48A and UU Syariah Bank Law) 19. Chapter IV Part 3 Article 15, Number 18 PPSK law (addition to Article 41B and UU Syariah banking Law) 20
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Chapter IV Part 3 Article 15, Number 20 of the PPSK Law (amendment to Article 43 of UU Siariah Banking Law). 21. Chapter IV Part 3 article 15 Number 22 PPSK Law (amendment to Article 45 of Syariah Banking Law). 22. Chapter IV Part 3 Article 35 Number of PPSK Law, amendment of Article 66 paragraph (3) Syariah Banking Law
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Chapter V Part 2 Article 22, Number 3 of the PPSK Law (addition to Article 5A paragraph (1) for Capital Market Law). 24. Chapter V Part 2 Article 22, Number 23 of PPSK Law, addition of Article 69A (Capital Market Law) 25. Chapter V Part II Article 22 Number 37 of PPSK Law. Addition of Article 110A. Capital Market Law. 26
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Chapter V Part II Article 22 Number 44 of PPSK Law. This article provides a guideline to the subject matter. You should seek specialist advice regarding your particular circumstances. POPULAR ARTICLES ON Finance and Banking in Indonesia FSR Outlook 2023 Herbert Smith Freehills Our Financial Services Regulatory team reviews the regulatory landscape for 2023 and examines the challenges facing regulators and firms.