Why Did the OJK Relax the Issuance of Multi-Finance Debt Securities?

Summary

The Financial Services Authority (OJK) grants an additional relaxation for the financial industry, allowing multi-finance companies to easily issue debt securities. The head of the OJK 2B Non-Banking Finance Institution (IKNB), Bambang W. Budiawan, mentioned that the relaxation for multi-finance companies would appear in Article 20E of the Financial Services Authority Regulation (POJK) No. 58/2020 amendments to POJK 14/POJK.05/2020 on the policy of countercyclical impact of the COVID-19 spread for Nonbank Financial Services Institutions, which regulates three important points.

First, a finance company with an equity of more than Rp 100 billion can issue debt securities or Sukuk without going through a public offering. "Second, the regular and Islamic finance companies can report the plan to issue securities or Sukuk to the OJK no later than two months before the issuance," Bambang said.

Third, debt securities' issuance with a value of up to Rp 100 billion does not need to meet two conditions: the investment-worthy rating from a rating agency holding OJK's license. However, the rating process must be carried out regularly, at least once a year.

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