The Financial Services Authority, in Indonesian, Otoritas Jasa Keuangan, has recently issued the Financial Services Authority Regulation Number 22 of 2022 concerning Capital Participation Activities by Commercial Banks (the New Regulation).

For the purposes of the New Regulation, the term “capital participation” means a bank’s investment of funds in companies via various ownership instruments such as shares, bonds, certificates, and temporary capital investments, etc.

With some exceptions, the New Regulation states that banks are not permitted to invest, in companies other than those that operate in the financial sector.