OJK Encourages Registered Fintech Startups and Enters Regulatory Sandbox

OJK encourages fintech startups to register their businesses and enter regulatory sandbox, in line with the issuance of POJK No. 13/2018 regarding digital financial innovation in the financial sector. This rule was published in August 2018.

Deputy Chief Commissioner FSA Nurhaida said that since the POJK was published, OJK has only received 21 document submissions from fintech startups. 15 of them have not provided complete required documents.

OJK will wait for the 15 companies to complete it. It also encourages other companies to be listed until December 15, 2018. This is because the deadline is the first stage to start regulatory sandbox.

"On December 15, we will be selected to enter the university regulatory sandbox to in-review in depth. Later the results will be a reference for other business models that have not been regulated at the OJK," he said, Friday (2/11).

The 21 listed companies are engaged in the online gold buying and selling sector, auctions, aggregators, financial planner, p2p loans, through crowdfunding, credit scoring, online verification, insurance claims, and more.

"Indeed, there are p2p lending startups that have registered here. They claim that their business is different from the current p2p lending scheme. Later, we will see where they are leaning again. If it is in accordance with POJK 77, of course there is no need to participate sandbox, just register immediately."

So far, continued Nurhaida, OJK has not targeted the number of startups that apply for registration to the OJK. However, when referring to the AFTECH data, its members reach 167 companies operating in various business sectors.

He said companies that are not listed will be limited by the OJK's business. Among them are they are not allowed to have contact with banks and are difficult to join association.

"There's actually a lot benefits that can be obtained from being recorded because we want to create governance so that people believe."

Requirements documents that need to be met by startups to be registered with the OJK, including being in the form of a PT or cooperative, not being allowed to manage portfolios, filling out application forms, copies of the deed of establishment along with management data, product explanations, business plans, and registration certificates from associations.

Regulatory sandbox

In the flow of POJK No 13/2018, fintech companies need to register officially with the OJK regarding their business, then enter regulatory sandbox. After being explored further through the mechanism prototyping to accommodate innovation, one of three recommendations will be issued, namely not recommended, improved, and recommended.

If it gets a recommended mark, startups can follow the next process to register officially with OJK. If not, the company can make business improvements within six months.

When it gets a not recommended sign, it can mean that OJK does not recommend the company to continue so it must be closed because it endangers the community.

"Before entering the sandbox, later it will be combed out which one should follow the POJK 13 or POJK 77 procedures so that they do not overlap."

So regulatory sandbox When started, OJK will also look again at whether the companies that enter should temporarily stop their business or continue as usual. Everything will be seen again based on case by case.

"The form can limit the number of transactions, it really depends because case by case. No may be temporarily suspended. There is a scenario that will be mutually agreed upon."

This finctech startup that must be listed, in essence, must be a startup that does not yet have a legal umbrella. They are engaged in the transaction settlement sector, insurance, capital raising, collection and distribution of funds. Next, investment management, other digital financial support, market support, and other financial service activities.

"So there are still challenges, because this POJK is still new, so not too many people understand so there is not much awareness to be recorded. It is possible that the numbers will be much higher out there," concluded Nurhaida.