In early January of this year, the Indonesian government enacted the ‘Omnibus Law for the financial sector’, or Law No. 4 of 2023 on Financial Sector Development and Reinforcement (“PPSK Law”). The PPSK Law, which became effective immediately upon issuance, amends 16 laws and revokes 1 law, i.e., Law No. 11 of 1992 on Pension Funds.
Broadly, the PPSK Law aims to revamp the country’s financial sector. It addresses not only the emergence of complex and high-risk financial instruments, such as crypto assets, but also the laxity, gaps, or overlap in the assessment, governance, and enforcement in the financial sector. The PPSK Law also amends the capital market regulatory regime as governed under Law No. 8 of 1995 on Capital Markets (“Capital Markets Law”) and Law No. 21 of 2011 on the Financial Services Authority.
This alert will focus on the notable changes to the capital markets regulatory regime.
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