Does your jurisdiction regulate Fintech services under the traditional Financial Services laws or does it have any ad hoc regulatory frameworks for fintech services? (Financial Services Laws/Ad Hoc Framework/Hybrid)

Generally, financial technology (FinTech) companies in Indonesia are regulated and supervised by the Financial Service Authority (Otoritas Jasa Keuangan or ‚OJK) and Bank of Indonesia (BI). OJK is the authority that supervises the peer-to-peer (P2P) lending companies, while BI supervises the payment service providers and electronic money companies.

Make a list of fintech services that may obtain a licence in your jurisdiction? 

There are 3 different authorities that supervise fintech activities, please find the list below of fintech activities and the authorities to issue the licenses for such certain activities: 

1. OJK issues the license and supervises:

• a. P2P Lending Companies; 
• b. Equity Crowdfunding.

2. BI issues the license and supervises:

• a. Payment Service Providers; 
• b. Electronic Money Companies.

3. Bappebti issues the license and supervises:

• a. Crypto Asset Service Providers; 
• b. Futures Brokers. 

What is(are) the name(s) of the regulatory authority(ies) responsible to grant licences and regulate fintech service providers? If there is more than one, please list which fintech services are regulated by which authority.

1. OJK issues the license and supervises:

• a. P2P Lending Companies; 
• b. Equity Crowdfunding.

2. BI issues the license and supervises:

• a. Payment Service Providers; 
• b. Electronic Money Companies.

3. Bappebti issues the license and supervises:

• a. Crypto Asset Service Providers; 
• b. Futures Brokers.

Are there any specific restrictions on the types of fintech services that can be offered in and/or from your jurisdiction?

For the Payment Service Provider, BI (as the supervisory body for this type of fintech activities) prohibits any payment service provider from storing virtual currency together with fiat currency. Furthermore, P2P lending companies supervised by OJK cannot act as lenders and borrowers in their services. They are only allowed to become the providers for the lenders and borrowers. Additionally, BI prohibits any form of fintech company from utilizing a foreign currency within their services.

Is reverse solicitation allowed in your jurisdiction, for fintech firms licensed in other reputable jurisidictions? (Meaning that a third-country fintech firm can offer services to clients in your jurisdiction providing its at the exclusive initiative of the client).

Indonesian Law does not recognize Reverse Solicitation practice.

Are there any specific requirements for companies providing fintech services in your jurisdiction?

Fintech services operators must be registered to or licensed by the relevant authority (see our answers to questions 2 and 3 above). As these fintech services operators utilize the electronic services, it is mandatory for them to conduct Electronic System Operator Registration. 

Furthermore, P2P lending company must consider several requirements such as their foreign shareholder is permitted to hold not more than 85% of company’s capital and the minimum equity should be IDR 12.5 billion.

Are there any specific consumer protection measures that apply to fintech services in your jurisdiction?

Given a fintech service operator would control and process its consumers’ data, it is necessary for any company (as the controller and processor of personal data) to comply with Law No. 27 of 2022 on Personal Data Protection. As this law stipulates the obligations of the controller and processor of personal data.

Are there any other legal issues that companies should be aware of when providing fintech services in your jurisdiction?

A fintech service company needs to be aware of the regulations on Counter-Terrorism Financing (CTF) and Anti Money Laundering (AML) preventions, unfair commercial practices, personal data protection, consumer rights, and reporting obligations to the relevant authorities (i.e. OJK and BKPM)

Are virtual assets (such as cryptocurrencies and) permitted in your jurisdiction? (Yes/No)

Yes

If the answer is Yes, is there any licensing /authorisation/notification process that needs to be followed for a person to issue a new virtual asset? (Yes/No)

Yes

If the answer is Yes, please provide a summary of the process that needs to be followed by a person to issue a new virtual asset).

After the person or company issues a new virtual asset or crypto asset, Bappebti will conduct an assessment on the asset. This is because any crypto assets traded in the market must conform to certain requirements to make them lawful as tradable crypto assets based on Bappebti Regulation No. 8 of 2021. If the crypto asset is deemed tradable in the crypto asset market, Bappebti will issue a stipulation and the asset will be included in Bappebti’s list of crypto assets. 

Are Virtual Asset service providers regulated in your jurisdiction? (Yes/No)

Yes

If the answer to your previous question is Yes, please provide a summary of the framework that regulates such service providers explaining which licence(s) need to be obtained from which authority(ies).

A crypto assets service provider is recognized as Crypto Assets Physical Trader (CAPT). Bappebti is the only authority that issues the specific license for any CAPT. Prior to obtaining the license from Bappebti, the CAPT company must fulfill the several requirements, such as:

• a. having a minimum paid-up capital of IDR 100 billion;
• b. maintaining an equity of, at least, IDR 50 billion.

Once the CAPT has satisfied the above requirements, the Head of Bappebti would issue approval for the CAPT.

Are you as a firm providing services and advice relating to Virtual Assets? (Yes/No)

Yes

Please feel free to add any pertinent comments in addition to your answers.

N/A