OJK Redefines Provisions for Commercial Banks Planning to Engage in Custodian Activities

The authority to regulate financial institutions operating within the capital market sector has now been transferred from the Financial Institutions and Capital Market Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan – “BAPEPAM-LK”) to the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”). This authority includes the authority to issue approvals to commercial custodian banks.[1]

In an effort to ensure greater certainty in relation to these matters, the OJK has issued Regulation No. 27/POJK.04/2019 on Approvals for Commercial Banks as Custodians  (“Regulation 27/2019”), which sets out an updated regulatory framework that repeals and replaces Decree of the Head of the BAPEPAM-LK No. Kep-34/PM/1996, which bore the same title (“Previous Regulation”).[2] Regulation 27/2019 specifically addresses the following matters: