INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Monic N. Devina, D. Meitiara P. Bakrie and Ruth A. Mendrofa, ABNR Counsellors at Law
sector, regulatory convergence is occurring, par - ticularly in areas of AML, capital requirements and governance standards. Law 4/2023 marks a shift toward a more harmonised regulatory framework, where fintech players, especially those handling systemic transactions, face pru - dential and risk management expectations more akin to traditional financial institutions. 2.5 Regulatory Sandbox Indonesia has a regulatory sandbox that aims to assess the reliability of business processes, business models and financial instruments, and for the governance of unrecognised or unregu - lated fintech providers. BI maintains a regulatory sandbox for payment system fintech providers, while the OJK has a regulatory sandbox for pro - viders of non-payment system fintech. BI Regulatory Sandbox The legal basis for the BI regulatory sandbox is set out in BI Reg, 23/6 in conjunction with Law 4/2023. A regulatory sandbox is conducted by the BI to test the development of technological innovation (which includes products, activities, services and business models) against prevail - ing policies or provisions on payment systems. OJK Regulatory Sandbox Under OJK Reg, 3, a fintech provider in the non-payment systems sector – such as an aggregator, a financial planner or an innovative credit assessor – is mandated to apply to the OJK to participate in the OJK’s FSTI regulatory sandbox. Once the OJK issues the approval to participate in the sandbox, the provider will be assessed by the OJK while in a regulatory sand - box. Within a year, the OJK will issue the result of the assessment that will determine whether the provider passes or fails the regulatory sandbox. If it passes, the OJK will require the provider to apply for a business licence and may request the
provider to apply for registration before submit - ting the business licence application. 2.6 Jurisdiction of Regulators Indonesian regulators may co-ordinate with each other to confirm the boundaries of their respective regulatory authority. In 2019, the OJK decided to transfer its regulatory authority over crypto-assets and digital gold trading to Bap- pebti (a government agency under the Ministry of Trade that regulates futures trading, and, in this case, oversees crypto-assets trading). With the enactment of Law 4/2023, the regulatory authority over crypto-assets has been trans - ferred to the OJK since 10 January 2025. In addition, a joint task force of Indonesian regu - lators is also a concrete example of how such regulators co-operate with each other. In 2016, the Investment Awareness Task Force (IATF) was established by the following several Indonesian regulators and law enforcement institutions. However the IATF was modified as the Eradi - cation of Illegal Financial Activities Task Force (the “EIFA Task Force” ) in 2023 and through the addition of four governmental institutions into the composition, thus currently the task force consists of: • the OJK; • the Ministry of Trade; • the Investment Co-Ordinating Board; • the Ministry of Communication and Digital Affairs (MCD); • the Public Prosecution Service of Indonesia; • the National Police;
• the Ministry of Social Affairs; • the Ministry of Foreign Affairs; • the Ministry of Law; and • the State Intelligence Agency.
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