JAKARTA (TheInsiderStories) – Indonesia Financial Services Authority (FSA) noted 10 equity crowd funding (ECF) license permit have been processed by the Financial Services Authority (FSA), said the official yesterday (10/10). Until this month, only one company has obtained the permission namely PT Santana Daya Inspiratama (Santara) from Yogyakarta.
The deputy commissioner at FSA Fakhri Hilmi revealed, the policy related to licensing was regulated in FSA Regulation Number 37 of 2018 concerning Equity Crowd Funding Services. Its hope that this permit can provide legal certainty and protection for ECF organizers as well as financiers and issuers.
The ECF Operators manage funds deposited from investors to buy shares from the issuer or operator. While the issuer is a legal entity that offers its shares to investors through an operator to obtain funding.
Issuers are middle to lower scale companies that require alternative sources of funding apart from banks. In accordance with FSA rules, ECF operators must be incorporated and have a minimum capital of Rp2.5 billion (US$177,305).
Like a listed company, the issuer in the ECF is also required to submit a mid-year report, annual report, and incidental report to FSA. Changes in the composition of the owner of the issuer are also required to be reported to the FSA.
In term of share ownership, FSA limits foreign ownership to a maximum of 49 percent. The issuer is also limited to offer shares with maximum of Rp10 billion in the 12-month offering period. Issuers are also prohibited from offering more shares in one operator at the same time.
In the ECF scheme, investors or so-called financiers are individuals who are considered to have analytical skills in stock investment. The investors are also regulated by number of policies.
Every investor who has an income of less than Rp500 million per year, is allowed to invest a maximum of 5 percent of income. Then, if this investor earns more than Rp500 million per year, then the maximum investment is 10 percent of income.
Hilmi explained, the profits achieved by investors are the distribution of dividends by the issuer and the return agreed by both parties. For example, Santara offers a profit-sharing projection in the range of 15 -25 percent per year obtained from company dividends.
The range of profit sharing provided depends on the issuer’s business profile chosen by the financier. It is because each business profile has a different level of profitability.
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