OJK Prepares "Equity Crowdfunding" Policy

The Financial Services Authority (OJK) is preparing a policy regarding the collection of public funds through technology-based share offerings (equity crowdfunding). OJK calls the term "Crowdfunding Service." It was revealed that the regulator was seeking responses from industry players and the public regarding the regulation.

"The target is the regulation is completed immediately," explained OJK spokesman Sekar Putih Djarot, quoted from Cash.

According to Sekar, this Crowdfunding Service is different from initial public offering (IPO) on the Indonesia Stock Exchange (IDX). When viewed from the scale of the share offering, the value is smaller. The share offering process will also be carried out electronically as determined by the organizer.

"This can be an alternative source of funds for small and medium businesses and startups. It can also help the development of start-up companies in Indonesia."

IDX President Director Inarno Djayadi gave a positive response regarding the OJK plan. "This is good for SMEs," he said.

Head of Research for Narada Asset Management, Kiswoyo Adi Joe, added that this OJK move has a positive impact on the domestic capital market, because it will increase product diversity in the local capital market.

According to him, it is believed that selling the company's shares online will not conflict with IDX's steps in opening up opportunities for companies with small asset values ​​to conduct initial public offerings through the stock exchange.

"We need to wait for the implementation of the rules, whether they support each other or add different product variations," explained Kiswoyo.

Draft rules equity crowdfunding

In the draft rule equity crowdfunding, OJK determines that the organizer can be a PT in the form of a securities company that has obtained OJK approval to become the organizer; cooperative; and have a minimum capital of IDR 2,5 billion.

In terms of issuers, OJK determines that they must be in the form of a PT; does not have a financially or commercially complex structure; not a public company or a subsidiary of a public company; and not companies with assets of more than Rp. 10 billion, excluding land and buildings.

The terms of the investor, OJK set they have an income of up to IDR 500 million per year can buy shares at most 5% of the income per year; investors with income of more than IDR 500 million per year may purchase shares of up to 10% of annual income.

The rules regarding share offerings, in the draft state that the maximum value of the share offering is IDR 6 billion per year; bidding can be made more than once a year; the issuer can set a minimum target for fundraising; if the amount is not met, the share offering is null and void and investors' funds must be returned within two days.

Then, the maximum offer period is 30 days; the operator may operate a secondary market, but trading can only be carried out between registered investors; if there is a secondary market, the operator is obliged to provide a fair price as a reference.