The Financial Services Authority (the FSA) has issued new regulations on electronic crowd funding.*

The new Regulations broaden the definition of equity crowdfunding to include the offering of equity-based securities (in the form of shares or similar), debt-based securities and Sukuk, a sharia-compliant bond-like instrument. The new Regulations set out detailed criteria in relation to debt-based securities and Sukuk before they can be offered to consumers via electronic crowdfunding.

In addition, the regulations set out the maximum time frame for the offer (reduced from 60 to 45 days) and list the criteria for staged offerings.

The Regulations give the FSA the authority to include other types of securities that may be offered through equity crowdfunding.

The requirements to become an issuer on an equity crowdfunding platform have also been simplified.  The previous requirement to be a limited liability company has been abolished and other business entities may become issuers.  The hope is that these new rules will stimulate economic growth as typically in Indonesia many small to medium enterprises are not limited liability companies. The new Regulations open the door to these smaller enterprises to seek funding in this way.

Secondary markets are also covered in the new Regulations. Eligible companies may provide investors with a system to trade the securities they have obtained via equity crowdfunding so long as certain criteria are met.

* Regulation No. 57/POJK/04/2020 on Securities Offerings Through Information-Technology-Based Crowdfunding Services.  This regulation revokes No. 37/POJK.04/2018 on Crowdfunding Services through Information Technology-Based Stock Offerings.