Indonesia – Implementing Guidance On P2P Platform.

On 25 November 2022, the Financial Services Authority (Otoritas Jasa Keuangan / OJK) has issued OJK Circular Letter No. 21/SEOJK.05/2022 on the Implementation of License, Application for Approval, and Electronic Reporting of IT-Based Co- Financing Services (“SEOJK 21/2022”).

The Circular Letter aims to act as the implementing regulation for certain provisions under OJK Regulation No. 10/POJK.05/2022 on IT-Based Co Financing Services (“POJK 10/2022”), namely relating to procedures and mechanisms in business licensing, approvals, and electronic reporting for P2P Operator Companies. This article aims to summarize the provisions stipulated under SEOJK 21/2022.

Scope of Licensing Applications, Approval, and Reporting

SEOJK 21/2022 acts as the implementing regulation to conduct (a) business licensing applications, (b) approvals application, and (c) reporting obligations electronically.

With regards approval applications, SEOJK 21/2022 provides details on various activities of P2P Operator Companies which is subject to the approval and/or notification to the OJK, among others are:

• conversion from being a conventional P2P Operator Company to become a Syariah P2P Operator Company;
•  application for change of ownership;
• increase of paid-up capital;
• change of directors, commissioners, and/or syariah supervisory board members;
• conducting mergers or dissolutions;
• return plan of business license;
• extension of liquidation period; and
• liquidation team membership.

Furthermore, SEOJK 21/2022 also provide several reporting and notification requirements by a P2P Operator Company to the OJK. Among others, P2P Operator Companies must submit reporting and notification to the OJK when conducting the following activities: 

• establishment of controlling shareholder and any change in controlling shareholders;
• General Meeting of Shareholders (“GMS”) approving conversion to become a Syariah Principle P2P Operator;
• utilization of foreign manpower;
• training and education programme;
• cooperations;
• cooperations for transfer of data;
• establishment other offices other than head office;
• closure of offices excluding the head office;
• implementation of the changes of the P2p Operator and/or electronic system;
• changes of address of office(s);
• amendment in business model;
• realization of increase of paid-up capital
• GMS approving change of ownership;
• GMS approving mergers or consolidation ;
• Implementation of changes of ownership;
• Implementation of mergers or consolidation;
• Implementation of rights and obligations settlement;
• Realization of plan and budgeting on liquidation; and
• reporting of bankruptcy process.

Procedures in Licensing Applications, Approval, and Reporting

SEOJK 21/2022 clarifies the procedure in conducting licensing applications, approvals applications, and reporting obligations. Under the SEOJK 21/2022, all submission of licensing applications, approvals applications, and reporting obligations must also include an online submission of self-assessment form to be executed by the board of directors of the related P2P Operator Company. The online submission is made through OJK’s data communications network system.

The general procedure in conducting licensing applications, approvals, and reporting are as follows:

1. The P2P Operator Company submits a request for licensing application, approval application, and reporting to the OJK by a provided format provided in the annex of POJK 10/2022;

2. The P2P Operator Company must also include an online submission of self-assessment which must be executed by the board of directors of the related P2P Operator Company;

3. The license application, approval application, and reporting are submitted to the OJK online to the OJK’s data communication network;

4. The P2P Operator Company must also provide supporting documentation in the form of digital scan of the original submission documents;

5. In the event that the OJK System for such online application / submission is not available, the P2P Operator Company may submit the application / reporting via email provided by the OJK. Furthermore, if the application / submission is conducted via email, the board of directors of a P2P Operator Company must also provide an executed cover letter; 

6. The P2P Operator Company must state that the documents submitted to the OJK via online or through email is true and identical to its originals;

7. A P2P Operator Company is considered to have delivered its license application, approval application, and reporting if:
8. for submissions conducted through the OJK’s data communications network system, by an online receipt provided in the system;
9. for submission by email, receipt of acceptance sent via email from the OJK.

Data Storage

SEOJK 21/2022 provides certain requirements and obligations for P2P Operator Companies in conducting data storage. Among others, SEOJK 21/2022 obliges P2P Operator Companies to:

1.  maintain original documents of the licensing documents and approvals submitted to the OJK’s data communication network or via email, as long as such license and approval is applicable;

2. maintain original documents of reporting submitted to the OJK’s data communication network or via email for at least 5 years after the date of reporting;

The OJK may conduct verification / validation for the validity and propriety of the physical documents with regards the licensing applications, approval applications, and the reporting documentations which has been submitted to the OJK. Furthermore, The P2P Operator Company must provide the original documents of the licensing applications, approval applications, and reporting documentations during the verification / validation by the OJK.

Forms under SEOJK 21/2022

SEOJK 21/2022 provides several self-assessment forms which will be utilized by P2P Operator Companies in conducting licensing applications, approval applications, and reporting. The SEOJK 21/2022 provides the following self-assessment forms: 

Licensing applications:

1. Self-Assessment form for application of business license.

Approval applications:

1. Self-assessment form for conversion from being a conventional P2P Operator Company to become a Syariah P2P Operator Company;
2.  Self-assessment form for application for change of ownership;
3. Self-assessment form for increase of paid-up capital;
4. Self-assessment form for change of directors, commissioners, and/or syariah supervisory board members;
5. Self-assessment form for conducting mergers or dissolutions;
6. Self-assessment form for return plan of business license;
7. Self-assessment form for extension of liquidation period; and
8. Self-assessment form for liquidation team membership.

Reporting:

1. Self-assessment form for reporting of establishment of controlling shareholder and any change in controlling shareholders;
2. Self-assessment form for reporting of GMS approving conversion to become a Syariah Principle P2P Operator;
3. Self-assessment form for reporting of utilization of foreign manpower;
4. Self-assessment form for reporting of training and education programme;
5. Self-assessment form for reporting of cooperations;
6. Self-assessment form for reporting of cooperations for transfer of data;
7. Self-assessment form for reporting of establishment other offices other than head office;
8. Self-assessment form for reporting of closure of offices excluding the head office;
9. Self-assessment form for reporting of implementation of the changes of the P2P Operator Company name and/or electronic system;
10. Self-assessment form for reporting of changes of address of office(s);
11. Self-assessment form for reporting of amendment in business model;
12. Self-assessment form for reporting of realization of increase of paid-up capital
13. Self-assessment form for reporting of GMS approving change of ownership;
14. Self-assessment form for reporting of GMS approving mergers or consolidation;
15. Self-assessment form for reporting of implementation of changes of ownership;
16. Self-assessment form for reporting of implementation of mergers or consolidation;
17. Self-assessment form for reporting of implementation of rights and obligations settlement;
18. Self-assessment form for reporting of realization of plan and budgeting on liquidation; and
19. Self-assessment form for reporting of bankruptcy process.

The forms provided under the attachment of SEOJK 21/2022 also stipulates the requirements to fulfil the self-assessments to conduct application of business license, approval applications, and reporting. The following is the summary of the required information and documents for related application, among others:

Metalaw Notes:

With the issuance of SEOJK 21/2022, the OJK aims to govern certain details in the activities of a P2P Operator Company in Indonesia, specifically with regard licensing and supervision. This is necessary as the business activities of P2P Operator Companies is extensively developed and growing rapidly. Furthermore, by providing details on licensing applications, this might give an indication of the OJK’s plan to revoke the moratorium of issuing new license for P2P Operator Companies, which has taken effect since February 2020.

For Further Information, Please Contact:

MetaLAW, Legal Consultant, Jakarta, Indonesia

general@metalaw.id