The development of Financial Technology (“Fintech”) in Indonesia continues to grow and cross-border transactions create substantial risks of irregularities that may harm users. In this context, on 29 September 2025, the Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) issued Circular Letter No. 21/SEOJK.07/2025 concerning the Fit and Proper Test and Reassessment for Key Parties in the Financial Sector Technology Innovation Sector, as well as Digital Financial Assets and Crypto Assets (“SEOJK No. 21/2025”). This regulation replaces some provisions under OJK Circular Letter No. 20/SEOJK/07/2024 concerning the Implementation of Digital Financial Asset Trading including Crypto Assets, which previously served as one of the regulatory bases for crypto trading activities.
SEOJK No. 21/2025 came into effect on 1 October 2025. With the enactment of this regulation, SEOJK No. 21/2025 now functions as the technical guideline for the implementation of the fit and proper test for key parties holding strategic roles in Fintech activities, including those in the Financial Sector Technology Innovation sector (“ITSK”), Digital Financial Assets, and Crypto Assets, which are collectively referred to as IAKD, implementing the regulations set out under OJK Regulation No. 16 of 2025.
Similar to other entities under the supervision of OJK, SEOJK No. 21/2025 focuses on parties categorized as “Key Parties,” namely parties who own, manage, supervise, and/or have significant influence over an IAKD Operator. More specifically, the fit and proper test applies to two groups of prospective Key Parties, i.e. (i) prospective Controlling Shareholders (Pemegang Saham Pengendali or “PSP”) and (ii) prospective management of the company (member of the board of directors or board of commissioners).These Key Parties must pass the fit and proper test first before they can control the management of the company. Prospective shareholders who have obtained the shares prior to passing the fit and proper test is prohibited from (i) influencing the IAKD’s policy, (ii) nominating/appointing members of the board of directors and board of commissioners, (iii) being present and casting votes in General Meeting of Shareholders (“GMS”) of the IAKD. Nominated member of the board of directors and commissioners is prohibited from carrying out any actions, duties, or functions as a member of the board of directors or board of commissioners.
The issuance of this regulation is closely linked to the need to maintain governance in an increasingly complex Fintech landscape, particularly within IAKD sectors that carry high-risk characteristics, ranging from fund misuse, fraud, manipulation, conflicts of interest, to violations of consumer data protection. In this regard, OJK requires prospective Key Parties to meet the following criteria: (i) Integrity Requirements; (ii) Financial Reputation Requirements; (iii) Financial Feasibility Requirements; and (iv) Competency Requirements.
- Integrity Requirements
This requirement aims to ensure that prospective Key Parties demonstrate compliance and good faith in managing, supervising, and/or conducting business processes within IAKD Operators. Integrity is assessed based on legal track records, compliance with regulations, commitment to prudential principles, and absence of involvement in certain criminal offenses within specified periods. For example, financial sector crimes within the past 20 years or crimes punishable by imprisonment of one year or more within a certain timeframe.
In addition, prospective Key Parties must demonstrate commitment to comply with all applicable regulations, evidenced through written statements, and must also show commitment to corporate development, including development direction and strategy, a minimum three year capital plan, and strategies for addressing financial distress.
Furthermore, prospective Key Parties must not have breached commitments agreed with IAKD supervisory authorities, must have a strong commitment not to commit or repeat actions that previously resulted in their inclusion in the list of prohibited Key Parties, particularly for those who were previously listed. They must not engage in actions that provide unfair benefits to shareholders, other Key Parties, employees, or certain parties that may harm or reduce consumer rights. They must also not act beyond their authority, must never have been declared incapable of exercising their authority, and for Key Parties overseeing consumer protection functions, must demonstrate commitment to handling and resolving consumer complaints.
- Financial Reputation Requirements
Provisions regarding financial reputation apply in the context of assessing prospective management Key Parties. The regulation emphasizes that the assessment aims to ensure that the financial condition and track record of prospective management Key Parties are sound and free from records that may undermine credibility. The assessment covers two main criteria. First, the candidate must not have non-performing loans and/or financing. Second, the candidate must not have been declared bankrupt and must not have served as a shareholder, member of the Board of Directors, or member of the Board of Commissioners found at fault for causing a company to be declared bankrupt within the past five years prior to nomination. This demonstrates that OJK assesses not only managerial capacity but also personal financial discipline and responsibility.
However, the regulation clarifies that non-performing loans do not include arrears arising from credit card annual fees, administrative fees, or other charges not resulting from actual credit card transactions. This means that the assessment of financial reputation considers the context and substance of the outstanding obligation, and does not automatically penalize minor administrative delays.
- Financial Feasibility Requirements
This requirement applies in the context of assessing prospective controlling Key Parties. The assessment aims to ensure that prospective controlling Key Parties possess sufficient financial capability to support the sustainability and development of the IAKD Operator’s business. In other words, OJK seeks to ensure that controlling parties have not only vision and intention, but also real financial support capacity.
The financial feasibility criteria include two main aspects. First, the candidate must have a good financial reputation as required under the financial reputation provisions. Second, the candidate must have financial capability to support the development of the IAKD Operator’s business. For individual controlling Key Parties, this capability must be evidenced by a financial capacity statement supported by documents such as annual tax returns (SPT) for the past two years and/or bank statements for at least the past three months showing capital injection transactions.
For corporate controlling Key Parties, assessment is conducted based on the latest annual financial statements audited by a public accountant (if available) or financial statements internally audited by authorized parties. Aspects considered include liquidity position, solvency, investment placement, and performance indicators such as return on assets and return on equity. In addition, prospective controlling parties must submit a written commitment to take necessary measures if the IAKD Operator faces financial difficulties. This provision underscores that the responsibility of controlling parties does not end at the time of investment but also includes readiness to support the company during challenging conditions.
- Competency Requirements
This requirement relates to the assessment of prospective management Key Parties. In addition to integrity and financial reputation, competency constitutes one of the main pillars in assessing prospective management Key Parties. The assessment ensures that candidates possess adequate and relevant knowledge, capability, experience, and expertise for the position to be held within the IAKD Operator. OJK emphasizes that positions within the Board of Directors and Board of Commissioners are not merely structural roles, but strategic positions determining the direction and sustainability of the company.
In terms of experience and expertise, candidates must have a background relevant to the financial services industry and/or IAKD Operators. Furthermore, competency is assessed based on the candidate’s ability to manage and strategically develop the IAKD Operator. This includes understanding risk management to ensure organizational objectives are achieved in a sound and sustainable manner. For members of the Board of Commissioners, basic understanding of supervision and internal control is required. For both Directors and Commissioners, leadership and conflict management skills are also important considerations.
At a strategic level, OJK also evaluates the candidate’s ability to formulate business development direction. For prospective members of the Board of Directors, this is reflected in the ability to formulate the company’s vision and mission, analyze internal conditions, set targets, and develop short, medium, and long-term strategies. Meanwhile, for prospective members of the Board of Commissioners, strategic competency is reflected in the ability to conduct basic analysis of the company’s situation, assess developments in internal conditions, including financial health, human resources, and information technology, and evaluate policies adopted by the Board of Directors.
Commentary
Given that IAKD typically involves public funds, it is imperative to conduct a thorough and appropriate assessment of the parties responsible for its control, whether as shareholders or management who will oversee the IAKD’s operations. The issuance of this SEOJK aims to facilitate a comprehensive assessment to ensure that the individual in charge of controlling and managing the IAKD possesses the necessary qualifications and sound judgment to perform their duties effectively. Ultimately, the objective is to mitigate the risk of problematic IAKD that could jeopardize public funds.
For further information, please contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
- A PSP refers to a party (legal entity, individual, and/or business group) holding 25% or more of shares, or less than 25% but proven to exercise control over an IAKD Company, whether directly or indirectly.
