OJK Sets Mechanism for Measurement of the Financial Soundness Levels of Venture-Capital Companies

The Financial Services Authority (“ OJK ”) recently issued Circular No. 7/SEOJK.05/2018 on the Financial Soundness Levels of Venture-Capital Companies (“ Circular 7/2018 ”), as mandated by OJK Regulation No. 35/POJK.05/2015 on the Organization of Venture-Capital Businesses (“ Regulation 35/2015 ”).In essence, both conventional and sharia venture-capital companies (“ Companies ”) are required to possess a minimum financial-soundness level of “healthy”. With this goal in mind, Circular 7/2018 sets out a mechanism for the measurement of financial-soundness levels based on the following two factors: 1) Productive-asset quality; and 2) Profitability (rentabilitas). [1] For reasons of brevity, this edition of Indonesian Legal Brief (ILB) will limit its discussion to the following related topics: