OJK Prepares Mechanism for the Mandatory Establishment of Financial Holding Companies

Through the issuance of Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“ P2SK Law ”), various provisions that specifically address the financial sector have now been revised, including arrangements on financial conglomerates. Amongst the adjustments that have been introduced, a number of new provisions were not included under the original legal framework on financial conglomerates, [1] specifically Regulation of the Financial Services Authority (Otoritas Jasa Keuangan– “ OJK ”) No. 45/POJK.03/2020 (“ Regulation 45/2020 ”). As such, the OJK is currently preparing a Draft Regulation (“ Draft Regulation ”) on Financial Conglomerates and Financial Holding Companies (Perusahaan Induk Konglomerasi Keuangan– “ PIKK ”) in order to implement the new mandates set under the P2SK Law. [2] When it comes into force, the Draft Regulation will ultimately repeal and replace Regulation 45/2020. [3]