OJK Prepares "Equity Crowdfunding" Policy Draft

The Financial Services Authority (OJK) is preparing a policy draft regarding public funding through equity crowdfunding. OJK calls it "Crowdfunding Service". The regulator is said to wait for responses from related industry and community regarding the draft.

"The target is to finish it soon," Sekar Putih Djarot, OJK's spokesperson explained, quoted from Cash.

She mentioned that the Crowdfunding Service is different from the initial public offering (IPO) in IDX. As seen from the scale of the stock offering, the value is lower. The offering process will be all electronic as determined by the operator.

"This could be an alternate funding for SMEs and startups. It also helps the development of startups in Indonesia."

Inarno Djayadi, IDX's President Director, gave a positive response regarding OJK's plan. "It's good for SMEs," he said.

Kiswoyo Adi Joe, Narada Asset Management's Head of Research added, this step brings out the positive impact on the domestic capital market, in fact, it'll increase product diversity in the local market.

He assumed the online stock sale would not stand in the way with the IDX step in making opportunities for the small-asset value companies to conduct initial public offerings through a stock exchange.

"The implementation is awaited, whether it's supporting each other or only add a different variant of products," Joe explained.

Equity crowdfunding regulation draft

In the equity crowdfunding regulation draft, OJK determines the operator may be a PT in the form of securities firm with OJK approval to be an operator; coop; and having a minimum capital of IDR 2.5 billion.

In terms of publishers, OJK confirms it has to be a PT; not having a complex structure in finance or commercial; not a public company; and not a company with a value of over IDR 10 billion, excluding land and buildings.

In terms of investors, OJK sets the income rate under IDR 500 million per year to be able to purchase stock up to 5% of its income per year; investors with an income over IDR 500 million per year can purchase stock up to 10% of its income per year.

It was mentioned in the draft that the maximum limit of stock offering is Rp6 billion per year; offering can be made more than once in a year; publishers can set a minimum target for fundraising; if it doesn't meet the amount, stock offering is canceled and investor's fund must be returned within two days.

Thus, the offering period must be no longer than 30 days; the operator may hold the secondary market but the trade will only be available between registered investors; if there's any secondary market, the operator shall provide a reasonable price as the reference.

- Original article is in Indonesian, translated by Kristin Siagian