OJK Circular on the Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies

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Sector: PVML
Sub-Sector: Venture Capital Companies
Regulation Type: OJK Circular
Regulation Number: 19/SEOJK.06/2024
Effective Date: 12/22/2024

Attachment 1
SEOJK 19-SEOJK.06-2024 Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies.pdf Abstract SEOJK 19-SEOJK.06-2024 Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies.pdf FAQ SEOJK 19-SEOJK.06-2024 Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies.pdf

Page Content

Circular of the Financial Services Authority of the Republic of Indonesia Number 19/SEOJK.06/2024 regarding the Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies

Abstract:
The Circular of the Financial Services Authority regarding the Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies is a mandate under Article 112 paragraph (2) of Financial Services Authority Regulation Number 25 of 2023 regarding the Conduct of Business by Venture Capital Companies and Sharia Venture Capital Companies.

The legal basis for this OJK Circular (SEOJK) is POJK No. 25 of 2023.

The OJK Circular regarding the Health Level Assessment of Venture Capital Companies and Sharia Venture Capital Companies regulates the following matters:
a. General principles of health level assessment, namely risk-oriented, proportionality, materiality and significance, and comprehensive and structured. b. Procedures for health level assessment, including:
1) Health level assessment uses an individual risk-based approach;
2) The scope of health level assessment covers good corporate governance factors, risk profiles, profitability, and capital adequacy; and
3) The individual health level assessment of UUS (Venture Capital Companies) is an inseparable part of the health level assessment of the parent venture capital company;
c. Assessment of corporate governance factors, including:
1) The assessment of good corporate governance factors is an assessment of the implementation of good corporate governance principles by the company, guided by POJK regarding good corporate governance for venture capital companies and its implementing regulations, while still considering the characteristics and complexity of the company's business;
2) The determination of the good corporate governance factor rating is based on analysis of:
a) Implementation of good corporate governance principles in the company; b) Adequacy of governance over the structure, processes, and results of governance implementation in the company; and c) Other information related to corporate governance based on relevant data and information;
3) The good corporate governance factor rating is categorized into 5 (five) ratings;
d. Assessment of risk profile factors, including:
1) The risk profile factor assessment is conducted on inherent risks and the quality of risk management implementation in company operations;
2) The risks assessed consist of 8 (eight) types of risks, namely strategic risk, operational risk, credit risk, market risk, liquidity risk, legal risk, compliance risk, and reputation risk; and
3) The risk profile assessment is conducted by considering the scope of risk management in POJK regarding the implementation of risk management for companies.

Notes:
This OJK Circular was established on December 16, 2024.
This OJK Circular takes effect as of December 22, 2024.
Upon the effective date of this OJK Circular, OJK Circular Number 7/SEOJK.05/2018 regarding the Financial Health Level of Venture Capital Companies is repealed and declared invalid.