News & Announcements

W&P – Newsletter – Indonesia’s Financial Sector Omnibus Law (Ppsk Law): Highlights of Major Changes To Existing Regulations (Part 2)

This is the 2nd part of our newsletter highlighting major changes to the PPSK Law on (i) the capital markets sector, (ii) carbon trading, (iii) insurance companies, (iv) financing services business (usaha jasa pembiayaan), (v) bullion business, and (vi) technology innovation in the financial sector.

To check out the 1st part of our newsletter on this matter, click here.


  1. Capital Markets
    The PPSK Law amends several provisions of Law No. 8 of 1995 on Capital Markets (“Capital Markets Law”), including the following:
    1. Broader definition of ‘Securities’ (Efek). The term ‘Securities’ is assigned a broader sense compared to the existing one, now to include (a) investment contracts of any nature whose holders are entitled to certain economic benefits from the issuer or other parties and (b) carbon units. The recognition of carbon units as part of ‘Securities’ is in line with the designation of the OJK as the regulatory and supervisory authority for carbon trading.
    2. Broader definition of ‘insider’. Prior to the PPSK Law, a party will be considered an insider only to the extent that such party ‘is fully aware’ that the information constitutes ‘insider information’. However, under the PPSK Law, such notion of ‘full awareness’ is stretched to the effect that the term ‘insider’ now has a wider sense, namely, any party deemed to be supposedly aware that the information constitutes ‘insider information’. As a consequence, a non-insider receiving confidential-in nature-information may be automatically treated as an insider and subject to insider trading rules even if the information is disclosed to the receiving party without any confidentiality restrictions.
    3. Shortened period of the public offering process. The PPSK Law shortens the period for the registration statement of a public offering to be effective, from previously 45 calendar days to 20 business days as of the complete submission of the registration statement (or any earlier date stipulated by the OJK).
    4. Limitation of the business activities of securities companies (perusahaan efek). The PPSK Law explicitly prohibits securities companies from simultaneously conducting both (a) sell-side business as a securities underwriter and broker, and (b) buy-side business as an investment manager. All existing securities companies concurrently carrying out both business activities described above are required to spin off their investment manager business by 12 January 2024 at the latest.
    5. Stricter rule of the single presence policy for securities companies (perusahaan efek). Under the previous regime, a party is prohibited from becoming a controller in more than 1 securities company holding an underwriting and/or brokerage license and holding shares in the Indonesia Stock Exchange (“IDX”), which may be taken to imply that a party is allowed to become a controller in 1 securities company while at the same time holding minority/non-controlling shares in another securities company. Such provision is now clarified by the PPSK Law by explicitly prohibiting a party from holding shares or acting as a controller in more than 1 securities company, regardless of the shareholding proportion, the type of the securities company’s license, and whether or not the securities company is a shareholder of the IDX.The PPSK Law requires all existing parties to comply with this new rule by 12 January 2026 at the latest.
  1. Carbon Trading
    The PPSK Law mandates the OJK to regulate and supervise the financial services on the carbon exchange and the system facilitating carbon trading and/or carbon unit ownership registry.Under the PPSK Law, all carbon exchange organizers must obtain a license from the OJK, and the carbon exchange center (pusat bursa karbon) must be domiciled in Indonesia. Further details on the carbon exchange and the related activities will be set out in an implementing regulation to be issued by the OJK.
  2. Insurance Companies
    The PPSK Law mandates the Indonesia Deposit Insurance Corporation (Lembaga Penjamin Simpanan or “LPS”) to be the “manager” of the Policy Guarantee Program (Program Penjaminan Polis or PPP”). The PPSK Law clarifies the primary function of the PPP,  namely, to protect policyholders, insured parties, or participants in a Sharia insurance agreement and guarantee their rights/claims in the event an insurance company or a Sharia insurance company gets into financial difficulties.Some of the key highlights of the PPSK Law concerning the PPP are as follows: (i) the procedure for an insurance company to join the PPP, (ii) the coverage and mechanism of the guarantee, and (iii) the obligations of an insurance company as a participant in the PPP.
  1. Financing Services Business (Usaha Jasa Pembiayaan)
    The PPSK Law broadens the OJK’s authorities in regulating and supervising financing companies (i.e., multi-finance companies; peer-to-peer lending, and venture capital), to include the following:
    1. determining the controller of a Financing Company;
    2. requiring a financing company facing hardships to undertake certain corporate actions, such as increasing its capital, replacing the members of its board of directors and board of commissioners, writing off its non-performing credits, and conducting a merger or consolidation with another financing company.

In addition, the PPSK Law also introduces criminal sanctions against those carrying on the financing services business without proper licensing, or conducting false bookkeeping.

  1. Bullion
    The PPSK Law officially recognizes and legalizes gold bullion business activities in Indonesia. Accordingly, Indonesian financial services institutions are now allowed to provide gold bullion services such as gold savings, financing, trading, and storage, subject to obtaining a business license from the OJK.The PPSK Law mandates the OJK to issue the implementing regulation on the gold bullion business activities by 2025 at the latest.
  1. Technology innovation in the financial sector
    The PPSK Law supports technology innovation in the financial sector.  It can be seen from the change of treatment towards cryptocurrency, which was previously seen as a commodity but is now recognized as a digital asset. In light of this recognition, the regulatory and supervisory authority of cryptocurrency-related activities will be shifted from the BAPPEBTI to the OJK and the process must be completed by 2025.