OJK Set to Clarify Portfolio Percentage and Scope of Investees for Capital Participation by Commercial Banks

In order to accommodate greater flexibility for commercial banks in terms of capital-participation activities in the wake of various advances and innovations relating to banking activities, the financial-sector ecosystem and information technologies, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is aiming to ensure the continued and improved implementation of prudential principles through certain activities. In this regard, the OJK is currently preparing a Draft Regulation of the OJK on Capital Participation by Commercial Banks (“Draft Regulation”),[1] which will repeal and replace Regulation of the OJK No. 36/POJK.03/2017 on Prudential Principles for Capital Participation (“Regulation 36/2017”) when it is promulgated and finally comes into force.[2]