OJK Regulation No. 42 of 2025 on Financial Reporting Integrity for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions

Regulation of the Financial Services Authority Number 42 of 2025 concerning Financial Reporting Integrity for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions

Abstract: The Financial Services Authority (OJK), as the regulator and supervisor of financing institutions, venture capital companies, microfinance institutions, and other financial service institutions (PVML), processes Financial Information and Financial Reports regularly submitted by PVML for direct and indirect supervisory purposes. The PVML supervisory pillar will function effectively if the Financial Information and Financial Reports prepared by PVML are of high quality. In addition to being used by the regulator, the Financial Information and Financial Reports published regularly by PVML are also utilized by other stakeholders, including investors, depositors, and the public, in making economic decisions. In preparing Financial Reports, PVML refers to financial accounting standards and presents Financial Information that is relevant and accurately represents the condition of PVML. The integrity of Financial Information and Financial Reports is a primary factor that must be trusted to maintain the confidence of regulators and the public in the PVML industry, as well as to support decision-making by market participants and the public. To achieve Financial Information and Financial Reports with integrity, it is necessary to strengthen the implementation of governance and internal controls in the PVML financial reporting process. The aforementioned internal controls are expected to serve as a solid foundation to maintain the reliability, accuracy, and consistency of PVML Financial Information and Financial Reports, while simultaneously reducing the risk of errors or misuse in the financial reporting process. The role of various parties is required to support the implementation of good governance and internal controls in an effective financial reporting process, including the roles of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Audit Unit (PSP), Executive Officers, affiliated parties, and/or PVML employees. This is further reinforced by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector, which regulates prohibitions for members of the Board of Commissioners, supervisory board members, Board of Directors members, management members, managers, employees, and/or affiliated parties of Financing Business Service providers, including but not limited to:

1. making false entries in accounting books or financial reports and/or without being supported by valid documents;
2. omitting or failing to include correct information in business activity reports and financial reports; and
3. altering, obscuring, hiding, deleting, and/or eliminating entries in accounting books or financial reports, and in documents or business activity reports. The legal basis for this Financial Services Authority Regulation is: Law No. 2 of 2009 as amended by Law No. 4 of 2023; Law No. 21 of 2011 as amended by Law No. 4 of 2023; Law No. 1 of 2013 as amended by Law No. 4 of 2023; and Law No. 4 of 2023. Note: This Financial Services Authority Regulation takes effect on the date of its promulgation. This Financial Services Authority Regulation was promulgated on December 22, 2025, and established on December 22, 2025. PVML is required to have an integrity-based financial reporting process to ensure the truthfulness, accuracy, and transparency of the Financial Information and Financial Reports produced. The Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Audit Unit (PSP), Executive Officers, and/or PVML employees are prohibited from manipulating PVML Financial Information and/or Financial Reports so that they do not reflect the actual condition. PVML is required to formulate and establish internal control policies and procedures in the PVML financial reporting process to: a. ensure the truthfulness, accuracy, and transparency of Financial Information and Financial Reports; b. increase efficiency and effectiveness in the financial reporting process; c. ensure compliance with applicable laws and regulations in the financial reporting process; and d. ensure that Financial Reports are prepared in accordance with Financial Services Authority Regulations regarding financial reporting. PVML is required to: a. form a working unit; or b. appoint an Executive Officer, who is responsible for preventing fraud and manipulation in the recording of PVML Financial Information and Financial Reports.