In an effort to streamline the licensing process in the financial services sector and also to keep up with technology advancement and globalization rapidly happening in the financial sector, Indonesian Financial Services Authority (“OJK”) introduces a one-stop electronic, integrated licensing system through the launching of an electronic licensing system (“E-Licensing System”) pursuant to OJK Regulation Number 26/POJK.01/2019 on Electronic Licensing in Financial Services Sector (“OJK Reg 26/2019”).

The electronic licensing system aims to provide efficiency, and transparency in the form of a licensing tracking system and simplified process. The electronic licensing system ensures the accuracy of data, speedy decision-making process, and the efficiency of licensing process monitoring, specifically those that requires coordination between 2 (two) or more monitoring sectors in OJK.

Content and Implications

As of the enactment of OJK Reg 26/2019 on 24 October 2019, all licensing application for all financial services sector under OJK, other than those that is yet to be accommodated, shall be submitted through the E-Licensing System. The E-Licensing System provides integrated licensing activity in the financial services sector encompassing the overall licensing process i.e., licensing application, approval, registration, registration statement and listing.

The E-Licensing System is accessible at OJK Reg 26/2019 does not specify the licenses that can be applied via the E-Licensing System, however it appears that the E-Licensing System is available for various types of licensing in the sector of banking, non-bank financial industry, capital market and digital finance innovation. No additional fees are payable by the user of the E-Licensing System.

Notable Provisions

  1. Users of E-Licensing System 

Pursuant to OJK Reg 26/2019, users of the E-Licensing system or applicant (“Applicant”) is defined as a financial service institution, individuals, as well as business entities, both legal entity and non-legal entity, companies, partnerships, association, or organized group who are conducting or will conduct any activity in the financial services sector who submitted application for licensing process through the E-Licensing System. 

Whereas financial service institution as referred to above includes any establishment conducting activities in the field of banking, capital market, insurance, retirement fund, financial institutions, and other financial services institutions as referred to in the law regarding OJK.

Based on the above, it can be understood that all entities providing financial services as referred to in the Law of OJK are permitted to utilize the E-Licensing System.

  1. Licensing Process

The details of the licensing process in the E-Licensing System may differ depending on the type of licenses the Applicant applied for. In general, the licensing process can be summarized as follows:

  1. Registration

In order to utilize the E-Licensing System, Applicant shall first conduct registration to obtain access right. While OJK Reg 26/2019 does not stipulate the requirement for registration, OJK publishes an E-Licensing user manual which states that in the registration process, the Applicant should provide (i) username and password of the Applicant’s OJK’s Proceeds Information System ID (Sistem Informasi Penerimaan Otoritas Jasa Keuangan/ SIPO ID); (ii) Applicant’s Taxpayer ID; and (iii) request letter.

  1. Licensing Application

Following the completion of registration process, the Applicant is granted the right to access the E-Licensing System. Further, if the Applicant wishes to submit application for licenses, the Applicant shall provide data and upload relevant documents as required to the E-Licensing System and appoint a person-in-charge for this licensing process. Afterwards, the Applicant will receive application receipt which can be printed from the application.

The Applicant is responsible for the accuracy and accountability of all documents and data uploaded to the E-Licensing System. There is no requirement to submit any physical documents to OJK however OJK reserves the right to request the Applicant to deliver the physical documents uploaded in the licensing application. All documents uploaded by the Applicant are irrevocable.

OJK will notify the Applicant through the E-Licensing System if they required any additional document or if the documents submitted by the Applicant were incomplete. The Applicant shall upload these additional documents through the E-Licensing System.

  1. Acceptance/ Rejection of Licensing Application.

Following the acceptance of complete documents, OJK will issue acceptance or rejection for the licensing application through the E-Licensing System in the form of electronic document with electronic signature or, in the event that OJK has yet to implement the electronic signature, it will be issued in the form of physical document and email to the Applicant.

  1. Other Services in the E-Licensing System

Based on the E-Licensing user manual, after obtaining access right to the E-Licensing System, aside from submitting license application, the Applicant also would be able to:

  1. Modify information regarding company profile, type of product and activities, type of business, company branches, directors, foreign workers and others; and 
  2. Schedule fit and proper test and interview.

Written by Ahmad Jamal Assegaf and Caroline Ignes Tando. Please click on the download button below to read this publication.

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