BOGOR (TheInsiderStories) – Indonesia’s Financial Services Authority (FSA) will release equity crowdfunding regulation, which can be a source of funding alternative for financial technology (FinTech) start-up companies. The rule-making is targeted to be released this year, a government official said on Monday (23/10).
According to the FSA’s director Luthfy Fuady, by participating in equity crowdfunding, investors may gain dividend and also have rights in shareholders meeting. The regulation stated, people with below Rp500 million (US$34,482.76) annual income only allowed to invest 5 percent of their income in crowdfunding for FinTech company, while others above that could participate to 10 percent.
Moreover, investors must be able to analyze the stocks risk. Considering crowdfunding has some risks such as not getting dividend, un-liquid stocks, share ownership dilution, capital loss, operational failure, and bad information system.
Fuady explained, the equity crowdfunding share purchase is different compared to the recent procedures for Indonesia Stocks Exchange’s listed companies. In crowdfunding, he stated, the share purchase must involve third-party platform.
Furthermore, the company shall inform its funding needs to platform. Then, the platform will seek funding from public, by doing assessment based on request. And until the funding meets company’s target, finances will be kept in the platform, to prevent un-liquidity, said Fuady.
He said, the FSA made the regulation not only for start-up companies, but also for small medium enterprises (SMEs). Fuady clarify, there are regulations required for start-up companies and SMEs to carry out in this crowdfunding.
He urged, the company must be an incorporated company, and not part of other companies or conglomeration. Also, it will not go public, and not a subsidiary of a listed company. Then, the company assets must not be more than Rp10 billion.
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