New OJK Regulation Expands Housing Financing

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently finalizing a Draft OJK Regulation (“RPOJK”) concerning Asset-Backed Securities in the form of Participation Notes for Secondary Housing Financing (“EBA-SP”). This regulation will replace the previous regulatory framework under POJK No. 23/2014 , as amended by POJK 20/2017 (collectively referred to as “POJK 23/2014”).

Based on the RPOJK matrix document obtained by Hukumonline, the new provisions are designed to provide broader structuring flexibility to align with the current characteristics of financial services industry players. This includes expanding the definition of financial assets that may be securitized.

“The regulation is intended to provide flexibility so that this instrument can adapt to the needs of industry players,” said Hasan Fawzi, Chief Executive of Capital Market, Financial Derivatives, and Carbon Exchange Supervision at OJK.

In addition, the RPOJK also includes a dedicated chapter on administrative sanctions that is quite comprehensive. Violations of fundamental provisions, such as the validity of financial assets or the true sale principle mechanism, may result in fines, suspension of business activities, or even revocation of an individual’s license.