On 31 January 2024, the Financial Services Authority (Otoritas Jasa Keuangan / “OJK”) has issued three Circular Letters which acts as an implementing regulations for compliance reporting by undertakings whose business comprise as: (i) Fintech Peer-to-Peer Lending (P2P), (ii) public housing savings management agency, and (iii) Secondary Housing Finance Company (herein collectively referred as the “Circular Letters”).
This article aims to highlight the key terms as introduced under the Circular Letters.
- Fintech Peer-to-Peer Lending (P2P)
The OJK has issued Circular Letter No.1/SEOJK.06/2024 on Procedures and Mechanisms of Delivery of Funding Transaction Data and Reporting of Information Technology Joint Funding Service Organizer (“SEOJK 1/2024”). This SEOJK 1/2024 acts as the implementing regulation to regulate the obligation of Fintech P2P Operators to conduct compliance reporting pursuant to Article 44 (2) and Article 66 (11) of OJK Regulation No. 10/POJK.05/2022 on IT-Based Joint Funding Services.
Under SEOJK 1/2024, the OJK regulates the obligatory reporting which must be conducted by Fintech P2P Operators. In general, the information which must be reported consists of (i) information on the users, (ii) information relating to the funding, and (iii) information on the quality of funding. Such information must be delivered in real time to the OJK. If the OJK’s fintech lending data center is not yet able to receive real time funding transaction data, the Fintech P2P Operator must deliver the funding transaction data to the OJK on a daily basis.
A.1 Periodical Reporting
Under Section III of SEOJK 1/2024, the periodical reporting which must be conducted by a Fintech P2P Lending Operator under SEOJK 1/2024 consists of (i) monthly reporting and (ii) audited annual financial report which is audited by a registered public accountant. The monthly reporting and audited annual financial report consist of among others information concerning financial position report, profit and loss statement report, cashflow report, change of equity report.
A.2. Incidental Reporting
Pursuant to section IV of SEOJK 1/2024, the incidental reports consist of:
- fraud reports, among others, embezzlement of company assets by the board of directors, board of commissioners, syariah supervisory board, or employee of the Fintech P2P Operator;
- implementation of internal audit report;
- implementation of education report;
- legal dispute reports; and
- operational disruptions report, including fires and demonstrations.
Under certain circumstances, the OJK may also request other form of incidental report in addition to the abovementioned.
The incidental report must include the following information (a) summary of the incidental events, (b) settlement actions taken by the P2P Operators, and (c) action plan for future remedy.
A.3. Published Reports
SEOJK 1/2024 also regulates on reports which must be informed to the public. This reports include the financial position report and income statement report which has been audited by a public accountant, along with an auditor’s opinion which must be published in the electronic system of the P2P Operator. Such publication must be made by 1 month after the end of the annual financial report submission period at the latest.
A.4. Reporting Procedures
- Periodical Reporting
Pursuant to Section III of SEOJK 1/2024, the periodical reporting must be conducted:
- Monthly reporting, at the latest 10 (ten) days after the reporting period has ended; and
- Annual reporting, at the latest 30 April of the following financial year.
- Incidental Reporting
The submission of an incidental report must be delivered at the latest 10 days after the occurrence of such incident or as requested by the OJK pursuant to a letter requesting to submit an incidental report. The incidental reports must consist of at least (i) general summary of the incidental event, (ii) settlement steps taken by the P2P Operator, (iii) action plan for future improvements conducted.
The submission of the reports must be conducted to the OJK’s reporting information system. In the event that the data communication network is not yet available or there are any technical issues or force majeure, the report submission must be conducted electronically via email to the following email address, mailingroomrp@ojk.go.id and addressed to the Head of Data Management and Statistics Department, with a copy to the Director of Supervision of Technology Based Financing Business.
Section VII of SEOJK 1/2024 also allows for business actors to amend any mistake in the incidental and/or periodical report submitted to the OJK. Any amendments to the periodical or incidental reports may be conducted online through the OJK’s data communication network system. Furthermore, such amendments must be conducted within the reporting period as provided by the OJK.
The reporting obligation as stipulated under SEOJK 1/2024 is effective since 1 July 2024 and Fintech P2P Operators must conduct trials of report submission under the procedure set out under SEOJK 1/2024 starting from 1 February 2024 until 30 June 2024.
- Reporting Representatives
The P2P Operators must appoint one of its BoD members to act as the Person in Charge (“PiC“) of the reporting obligations.
- Public Housing Saving Management Agency
OJK Circular Letter No.2/SEOJK.06/2024 on Monthly Report of the Public Housing Saving Management Agency (“SEOJK 2/2024”) acts to regulate the monthly reporting obligation of the Public Housing Saving Management Agency (Badan Pengelola Tabungan Perumahan Rakyat / “BP Tapera”).
The monthly reporting obligation pursuant to Section II of SEOJK 2/2024 consists of the following information:
- Financial position report
- Comprehensive income report;
- Change of net assets report;
- Cashflow report; and
- Other reports.
The monthly report must be submitted by the BP Tapera to the OJK at the latest on the 15th of the following month. The OJK may also determine another report submission deadline under certain conditions, e.g., upon the occurrence of force majeure and national holiday and collective holidays.
To conduct the reporting, the BP Tapera must appoint a deputy commissioner which is responsible for the preparation and presentation of the monthly reports. Such deputy commissioner must then appoint an officer to compile, verify, and submit the monthly reports. The BP Tapera must notify the OJK if there are any changes to the appointed deputy commissioner / officer responsible for conducting the monthly reporting.
Pursuant to Section V of SEOJK 2/2024, submission of the reports must be conducted to the OJK’s data communication network system. In the event that the data communication network is not yet available or there are any technical issues or force majeure, the reports may be submitted via email to the following email address, lb.ljkl@ojk.go.id and addressed to the Head of the Data and Statistics Management Department, with a copy to the Head of Financing Institution Supervision Department, Company Venture Capital, and Specialized Financial Institutions.
The obligation to submit the monthly report as in accordance with SEOJK 2/2024 is effective since May 2024 and the BP Tapera must conduct trials of report submission under the procedure set out under SEOJK 2/2024 starting from February 2024 until June 2024.
- Secondary Housing Finance Company
OJK Circular Letter No.3/SEOJK.06/2024 on Monthly Report of the Secondary Housing Finance Companies (“SEOJK 3/2024”) acts to regulate the monthly reporting obligation of the Secondary Housing Finance Companies (Perusahaan Pembiayaan Sekunder Perumahan / “PPSP”).
The monthly report by PPSP’s consists of:
- Financial position reports;
- Comprehensive profit and loss reports which is now known as terms of statement of profit or loss and other comprehensive income;
- Cashflow report;
- Asset and liabilities suitability analysis; and
- Other reports.
The reports must be submitted to the OJK at the latest on the 10th of the following month.
A PPSP must appoint a member of the board of directors which will be responsible for the preparation and presentation of the monthly report. The PPSP must notify the OJK if there are any changes to the appointed board of directors responsible for conducting the monthly reporting.
Pursuant to Section V of SEOJK 3/2024, the submission of the reports must be conducted to the OJK’s data communication network system. In the event that the data communication network is not yet available or there are any technical issues or force majeure, the reports may be submitted via email to the following email address lb.ljkl@ojk.go.id and addressed to the Head of the Data and Statistics Management Department, with a copy to the Head of Financing Institution Supervision Department, Company Venture Capital, and Specialized Financial Institutions.
The obligation to submit the monthly report as in accordance with SEOJK 3/2024 is effective since April 2024 and the BP Tapera must conduct trials of report submission under the procedure set out under SEOJK 3/2024 starting from February 2024 until March 2024.
- OJK Reporting Information System
From the Circular Letters, it can be concluded that the OJK has implemented the data communication network system as the primary report submission platform. In order to conduct reporting in the OJK’s reporting information system, an undertaking must first acquire an access right in the data communication network system. After acquiring the access right, the undertaking may conduct all mandatory reporting in the OJK reporting information system.
In the event that there is an issue with the primary reporting submission platform, the OJK allows the undertakings to submit the report via email or (in the event of failure of submission via email), by sending a physical letter to the OJK to the designated address by the OJK.
Furthermore, specifically for the reporting of financing transaction by Fintech P2P Operators, the reports must be submitted in the fintech lending data centre which must be integrated with the Fintech P2P Operator’s platform. The responsible BoD member or the PiC for submitting the reports in the fintech lending data centre must acquire an access right to be able to conduct reporting in the fintech lending data centre.
Conclusion
By issuing the Circular Letters, the OJK aims to issue some sort of guidance for the reporting obligations for P2P Operators BP Tapera, and PPSP. The OJK also has made the reporting submission seamless by introducing new technology for such reporting submission, in which a data communication network system will act as the primary platform for report submissions by the relevant undertakings.
We believe through the issuance of this Circular Letters, the OJK aims to boost the compliance of the relevant undertakings for such reporting obligations.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
