New Provision on Requirements for Securities Brokers

The Financial Services Authority (Otoritas Jasa Keuangan/OJK) has just issued Regulation No. 22/POJK.04/2016 on Licensing Segmentation for Securities Brokers  (“2016 Regulation”). The 2016 Regulation aims to ensure the professional skills of individuals who are working as securities brokers in the capital market by redefining the requirements which have to be met in order to be become a broker, as well as the scope of the profession itself.
 
The 2016 Regulation is of relevance to public companies and securities companies, as well as to individuals who are currently working as, or who are intending to become, securities brokers.
 
Types of Broker
The 2016 Regulation sets two types of securities brokers, namely: 1) Marketing Securities Brokers (Wakil Perantara Pedagang Efek Pemasaran/”WPPE”); and 2) Limited-Marketing Securities Brokers (“Limited-WPPE”).[1] In essence, both WPPE and Limited-WPPE share the same duties, that is to represent customers in the marketing of their securities to prospective investors.[2] However, there are number of differences between WPPE and Limited-WPPE as regards the scope of their various activities and responsibilities, as detailed below: