The Financial Services Authority (OJK) has issued a regulation on equity crowdfunding that offers shares through information technology.

OJK Regulation No. 37/ POJK.04 /2018 issued on Dec. 31, 2018, is to provide space for startup companies to obtain funding through the stock market as well as expand financial inclusion.

"The OJK as the supervisory authority applies supervision based on market conduct on crowdfunding activities,” said the OJK as reported by kontan.co.id.

Under the regulation, the OJK is authorized to ensure information transparency by share issuers, the establishment of a credible website and establishment of a safe and reliable information technology system for crowdfunding.

The OJK said the absence of a legal basis would present a risk to providers of the platform's website, investors and share issuers. "Therefore, equity crowdfunding needs to be regulated and monitored to provide legal certainty and protection for those involved."

The regulation also rules that the public offering should be implemented in a maximum period of 12 months, with the maximum raised fund of Rp 10 billion (US$709,845).

Share issuers that are not public companies are required to have a maximum of 300 shareholders, while the maximum transferred capital is Rp 30 billion.

Meanwhile, website providers are required to have at least Rp 2.5 billion in capital when applying for licenses. They are also prohibited from having jobs as stipulated by the OJK, such as securities underwriters, securities brokers or investment managers.

Platform providers are also prohibited from having an affiliation with land issuers like giving financial assistance, investment advice or recommendations. (aak/bbn)