OJK Updates the Objection Mechanism for Sanctions in the Financial Services Sector

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently preparing a Draft OJK Regulation (RPOJK) concerning the Submission of Objections to Sanctions in the Financial Services Sector. This objection mechanism will not only apply to sanctions imposed directly by OJK but will also cover sanction imposed by Market Operators in the capital market sector, such as Stock Exchanges, Clearing and Guarantee Institutions (Lembaga Kliring dan Penjaminan – “LKP”), and Depository and Settlement Agency (Lembaga Penyimpanan dan Penyelesaian – “LPP”). 

“This is intended to ensure fairness, legal certainty, and clear procedures, as well as to improve the effectiveness and efficiency of handling objections submitted by financial services industry player,” said Hasan Fawzi, Chief Executive of Capital Market, Derivative Financial Instruments, and Carbon Exchange Supervision at OJK.

Once this regulation officially comes into effect, several previous regulations will be repealed, including the Decree of the Chairman of Bapepam-LK No. Kep-642/BL/2012 (“KepBapepam-LK 642/2012”) regarding objections to sanctions in the capital market sector.  

The draft regulation also requires parties subject to Administrative Sanctions in the Form of Fines (Sanksi Administratif Berupa Denda/SABD) to settle the fines in full before submitting an objection. In addition, “financial hardship” is expressly stipulated as no longer being a valid basis for filing an objection.