The Financial Services Authority Regulates the Activities, Capital, and Risk Management of Securities Companies through Regulation of the Financial Services Authority Number 3 of 2026

Introduction

On April 29, 2026, the Financial Services Authority (Otoritas Jasa Keuangan, “OJK”) issued Regulation of the Financial Services Authority Number 3 of 2026 on the Organization of Business Activities of Securities Companies Conducting Business Activities as Underwriters and Broker-Dealers (“POJK 3/2026”). POJK 3/2026 revises and consolidates the institutional, capital, governance, and risk limit aspects for securities companies in conducting activities in the Indonesian capital market.

POJK 3/2026 was issued to align the provisions with the development of business activities in the capital market. On this basis, the OJK deemed it necessary to enhance the financial capacity and governance of securities companies to support their ability to fulfill obligations, protect client assets, and maintain operational reliability.

Comparison

POJK 3/2026 repeals the provisions and amends several provisions in the previous regulations, namely:

1. Regulation of the Financial Services Authority Number 20/POJK.04/2016 Number 20/POJK.04/2016 on the Licensing of Securities Companies Conducting Business Activities as Underwriters and Broker-Dealers (“POJK 20/2016”);

2. Article 18 paragraph (2) and Article 19 of Regulation of the Financial Services Authority Number 57/POJK.04/2017 on the Application of Governance for Securities Companies Conducting Business Activities as Underwriters and Broker-Dealers (“POJK 57/2017”);

3. Article 2 paragraph (1), Article 2 paragraph (2), Article 2 paragraph (3), and Article 2 paragraph (5) of Regulation of the Financial Services Authority Number 52/POJK.04/2020 on the Maintenance and Reporting of Adjusted Net Working Capital (“POJK 52/2020”); and

4. Article 14, Article 41 paragraph (1), Article 41 paragraph (2), Article 41 paragraph (3), Article 42, and Article 46 of Regulation of the Financial Services Authority Number 3/POJK.04/2021 on the Organization of Activities in the Capital Market Sector (“POJK 3/2021”).

The following is a comparison between POJK 3/2026 and the previous provisions:

Key Provisions

Classification and Operational Authority Limits

Article 4 through Article 14 govern the classification of the business activities of securities companies into three Securities Company Business Groups (Perusahaan Efek Kelompok Usaha, “PEKU”) with their respective authority limits as follows:

1. PEKU 1: Cannot conduct securities transactions for its own account and may only conduct securities marketing activities, including mutual funds, and act as a marketing partner.

2. PEKU 2: May conduct activities as a securities underwriter with a limited scope to small or medium-scale prospective issuers with a maximum asset limit of IDR 250 billion. In addition, it may conduct securities transactions, act as a custodian, and become a non-general clearing member.

3. PEKU 3: May conduct securities underwriting activities without asset limitations, provide transaction financing, act as a liquidity provider and standby buyer, and issue structured products. In addition, it may become a general clearing member serving other brokers.

Organization of Sharia Services and Corporate Identity Requirements

Article 15 stipulates that a securities company may organize Sharia services provided that the services and contracts comply with Sharia principles, use a certified transaction system, and have a Sharia Supervisory Board certified as capital market Sharia experts by the OJK or at least 1 (one) member of the Board of Directors or person in charge of such activities possessing adequate knowledge and/or experience in Islamic finance. Companies operating based on Sharia principles must state this in their articles of association. Furthermore, Article 18 governs corporate identity requirements. Every company must include the word "Sekuritas" in its company name and as part of its official corporate logo on all publication media.

Capital Strengthening and Authority Supervision

Article 19 through Article 23 govern the obligations of securities companies to strengthen their capital structure. The company must comply with Paid-Up Capital requirements and maintain the Adjusted Net Working Capital according to the stipulated minimum limits, as well as ensure that equity remains positive. In addition, the OJK may conduct supervisory measures if the value of the company's Adjusted Net Working Capital (Modal Kerja Bersih Disesuaikan, “MKBD”) approaches 110% (one hundred and ten percent) of the required minimum MKBD limit.

Management Structure, Independent Commissioners, and Prohibition of Concurrent Positions

The provisions on management govern the composition of the Board of Directors and the Board of Commissioners to support corporate governance. All members of the Board of Directors must be domiciled in Indonesia and cannot hold concurrent positions in other companies or institutions, except in certain permitted positions. For securities companies in the PEKU 3 group, the company must appoint one member of the Board of Directors to handle the compliance function, who is unaffiliated, does not own shares in the company, and holds a compliance certificate. Furthermore, PEKU 3 must meet a Board of Commissioners composition of at least 30 percent Independent Commissioners. Each member of the Board of Directors and the Board of Commissioners must also participate in a continuing education program at least once every two years. These provisions are set forth in Article 29 through Article 38.

Restrictions on Controlling Shareholders and Single Presence

The provisions on ownership govern restrictions on changes and ownership structures in securities companies. The company may not change its Controlling Shareholder within a period of 5 years from the commencement of operations, except with OJK approval as set forth in Article 63 and Article 66. In addition, each party may only control or own shares in one securities company; thus, in the event of ownership in more than one securities company, the controlling party must make adjustments through a merger, consolidation, or divestment of share ownership. The source of funds for capital deposits also cannot originate from loans, debt, or the proceeds of money laundering offenses as set forth in Article 57.

Business and Risk Strategy Documentation Requirements

Securities companies must prepare Compliance Strategy and Risk Management Strategy documents that include the identification of potential legal and operational risks, impact assessments, mitigation measures, and the designation of a person in charge in each work unit as set forth in Article 42 paragraph (2) letters y and z, as well as the Annexes in Format 9 and Format 10. Furthermore, the company must establish standard operating procedures in a format that includes the person in charge, implementers, process flow, implementation timeframe, and the documents and results of the procedure. In the event the company conducts other activities outside its core activities, the application shall be submitted using Format 15, accompanied by an analysis of legal aspects, implementation readiness, and integrated accounting information system documents.

General Meeting of Shareholders Agenda Reporting and Electronic Reporting

Securities companies must submit the agenda of the General Meeting of Shareholders to the OJK no later than 14 working days prior to the meeting as set forth in Article 75. This provision covers agendas such as dividend distribution, changes to the Board of Directors, capital changes, and business merger or separation plans. Additionally, periodic and incidental data reporting shall be conducted through the designated electronic system. In the event of a technical disruption in the OJK electronic system, the company must submit the report no later than 2 (two) working days after the OJK notifies that the technical disruption has been resolved. Meanwhile, if the company experiences force majeure, the company must submit a written notification letter to the OJK no later than 1 (one) working day from the occurrence of the force majeure event to obtain a postponement of the report submission deadline.

Compliance, License Revocation, and Education Obligations of Securities Companies

The provisions regarding the compliance function prohibit companies from dismissing compliance staff or directors for reporting violations to the OJK as set forth in Article 74. In addition, the OJK may revoke the business license of a company in distressed conditions that endanger business continuity, including in the event of a failure to settle securities transactions, a system failure for more than 7 (seven) working days, or the Adjusted Net Working Capital value falling below the minimum limit for more than 30 (thirty) working days, as specifically set forth in Article 83. A company whose business license has been revoked must cease business activities, settle obligations to clients, refrain from using the company name and logo, and form a liquidation team to dissolve the legal entity within a maximum period of 180 days. Furthermore, the company must allocate an annual budget for the education and training of human resources in accordance with the provisions of Article 91.

Business Activity Adjustments During the Transitional Period

Securities companies that have operated prior to the enactment of POJK 3/2026 must submit their choice of business activity group, namely PEKU 1, PEKU 2, or PEKU 3, along with an action plan to the Financial Services Authority no later than 6 months since the regulation was promulgated. If the company fails to submit a choice within that period, the OJK shall designate the company as a PEKU with the closest group based on capital as set forth in Article 93 and Article 101. Companies that have not met the capital requirements are granted a maximum period of 3 years to fulfill the Paid-Up Capital, Adjusted Net Working Capital, and the appointment of a Compliance Director for PEKU 3. The fulfillment of these capital obligations may be carried out through a merger, consolidation, or business acquisition. Specifically for companies that choose PEKU 3, the initial fulfillment of an Adjusted Net Working Capital of IDR 50 billion must be completed no later than 1 year since the regulation took effect. The company must also submit progress reports on the fulfillment of adjustment obligations to the OJK on a quarterly basis. If these obligations are not fulfilled, the company may be subject to measures in accordance with the provisions, including the revocation of its business license.

Closing

POJK 3/2026 re-regulates the activities of securities companies through the classification of PEKU 1, PEKU 2, and PEKU 3, which determines the scope of business activities and the limits of their respective authorities, and establishes increased Paid-Up Capital requirements of up to IDR 110 billion and Adjusted Net Working Capital of up to IDR 100 billion for certain groups. These provisions also govern governance, including restrictions on concurrent positions for the Board of Directors, the obligation to appoint a Compliance Director for PEKU 3, the composition of Independent Commissioners, and ownership restrictions to a single securities company. Furthermore, companies must fulfill reporting obligations, including submitting the agenda for the General Meeting of Shareholders no later than 14 working days prior to its execution and submitting reports through the electronic system, as well as preparing compliance and risk management strategy documents. Other regulations include the research function requirement for certain groups, the organization of Sharia services, the use of the "Sekuritas" identity, and the protection of the compliance function and provisions for license revocation under certain conditions. During the transitional period, securities companies must submit their choice of business activity group no later than 6 months since the regulation was promulgated and meet the capital requirements within a maximum period of 3 years, with a specific provision for PEKU 3 to fulfill its initial Adjusted Net Working Capital no later than 1 year, and submit periodic progress reports to the Financial Services Authority.