Assessment of Competence and Propriety for Principal Parties of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions

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Sector: PVML

Sub-Sector: Commercial Banks; Financing Institutions; Microfinance Institutions; Venture Capital Companies

Type of Regulation: OJK Circular Letter

Regulation Number: 22/SEOJK.06/2024

Effective Date: 12/24/2024

Appendix 1 SEOJK 22-SEOJK06-2024 Assessment of Competence and Propriety for Principal Parties of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions.pdf Abstract SEOJK 22-SEOJK06-2024 Assessment of Competence and Propriety for Principal Parties of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions.pdf FAQ SEOJK 22-SEOJK06-2024 Assessment of Competence and Propriety for Principal Parties of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions.pdf

Page Content Circular Letter of the Financial Services Authority Number 22/SEOJK.06/2024 regarding Assessment of Competence and Propriety for Principal Parties of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions

Abstract: Adjustment of the scope of the competence and propriety assessment (PKK) for prospective Principal Parties as a result of the reorganization of the Financial Services Authority (OJK) as an implementation of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK), which separates the Non-Bank Financial Industry sector into the Insurance, Guarantee, and Pension Fund sector (PPDP) and Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions (PVML); and. Addition of provisions regarding the implementation of the PKK process for prospective principal parties online via video conference media, which was previously regulated in Financial Services Authority Regulation Number 14/POJK.05/2020 concerning Countercyclical Policy due to the Spread of Coronavirus Disease 2019 for Non-Bank Financial Service Institutions and its amendments. The legal basis for this OJK Circular Letter (SEOJK) is: POJK No. 27/POJK.03/2016. The scope of financial service institutions regulated includes financing companies, infrastructure financing companies, venture capital companies, microfinance institutions (LKM), pawnshop companies, technology-based crowdfunding service providers, Indonesia Export Financing Institution (LPEI), PT Permodalan Nasional Madani (PT PNM), and PT Sarana Multi Infrastruktur (Persero) (PT SMI) or hereinafter referred to as PVML. Scope of parties required to undergo PKK: a. for financing companies, infrastructure financing companies, venture capital companies, pawnshop companies, technology-based crowdfunding service providers, and PT PNM, namely Controlling Shareholders (PSP), members of the Board of Directors, members of the Board of Commissioners, members of the Management, members of the Sharia Supervisory Board, and Statutory Managers; b. for LPEI, namely members of the Board of Directors, except for the appointment of Board of Directors members originating from government agencies/institutions, Executive Directors, and Statutory Managers; c. for LKM and PT SMI, namely members of the Board of Directors, members of the Board of Commissioners, members of the Management, members of the Sharia Supervisory Board, and Statutory Managers. Prohibition on performing actions, duties, and functions, as well as granting remuneration that is lower, for prospective members of the Board of Directors, members of the Board of Commissioners, members of the Management, or members of the Sharia Supervisory Board who have been appointed earlier by the General Meeting of Shareholders (RUPS) before the PKK is conducted. Requirements in the PKK, namely: integrity requirements, financial reputation requirements, financial feasibility requirements, and/or competency requirements. Procedures for PKK implementation, namely administrative assessment, presentation or exposition by prospective PVML PSPs, and clarification by prospective members of the Board of Directors, members of the Board of Commissioners, members of the Management, members of the Sharia Supervisory Board, members of the Board of Directors, Executive Directors, and Statutory Managers. Procedures for determining PKK results, namely the predicate "approved" or "not approved" for PVML other than LPEI and PT SMI, and the predicate "recommended" or "not recommended" for LPEI and PT SMI. Mechanism for consequences of assessment results and re-submission of PKK. Mechanism for imposing administrative sanctions is no longer conducted in stages. Transitional provisions: a. Educational requirements for prospective Principal Parties who have submitted PKK applications before this OJK Circular Letter takes effect shall be conducted in accordance with the provisions in OJK Circular Letter Number 31/SEOJK.05/2016 concerning Assessment of Competence and Propriety for Principal Parties of Non-Bank Financial Service Institutions. b. Submission of PKK application documents for prospective Principal Parties of Financing Companies and Technology-Based Crowdfunding Service Providers headquartered outside the Jakarta city area to the Head of the local OJK Office shall begin to take effect in accordance with the notification letter from the Financial Services Authority.

Notes: This OJK Circular Letter was established on December 24, 2024. This OJK Circular Letter takes effect on the date it was established. Upon the taking effect of this OJK Circular Letter, OJK Circular Letter Number 31/SEOJK.05/2016 concerning Assessment of Competence and Propriety for Principal Parties of Non-Bank Financial Service Institutions is revoked and declared invalid.