Jumat, Maret 3, 2023

OJK Regulates Minimum Capital Obligation for LPEI

The Financial Services Authority (Otoritas Jasa Keuangan – "OJK") has issued Circular No. 5/SEOJK.05/2023 ("Circular 5/2023") on the Mandatory Provision of Minimum Capital by Indonesian Export Funding Agencies (Lembaga Pembiayaan Ekspor Indonesia – "LPEI"), which has been in force since 21 February 2023.
The new circular states that in order to fulfill the requirement for the mandatory provision of minimum capital, LPEI must first satisfy the following requirements: 1) Must implement Internal Capital Adequacy Assessment Processes (ICAAP), whether individually or in consolidation with their subsidiaries; 2) Must carry out Supervisory Reviews and Evaluation Procesess (SREP) in order to evaluate the adequacy of internal controls, supervision and reporting, capital adequacy and the active supervisory roles of executives; 3) Must maintain a mandatory minimum capital ratio of 8% or of a level that is in accordance with their risk profile.
In terms of calculations of Risk-Weighted Assets (Aset Tertimbang Menurut Risiko – "ATMR"), Circular 5/2023 categorizes the available calculation methods in line with the following aspects: 1) Credit risk; 2) Market risk; and 3) Operational risk. Furthermore, LPEI are required to submit reports to the OJK that set out calculations of the minimum capital ratio based on their risk profiles by utilizing the format that is set out under the Appendix to Circular 5/2023.

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The Financial Services Authority (Otoritas Jasa Keuangan – "OJK") has issued Circular No. 5/SEOJK.05/2023 ("Circular 5/2023") on the Mandatory Provision of Minimum Capital by Indonesian Export Funding Agencies (Lembaga Pembiayaan Ekspor Indonesia – "LPEI"), which has been in force since 21 February 2023.
The new circular states that in order to fulfill the requirement for the mandatory provision of minimum capital, LPEI must first satisfy the following requirements: 1) Must implement Internal Capital Adequacy Assessment Processes (ICAAP), whether individually or in consolidation with their subsidiaries; 2) Must carry out Supervisory Reviews and Evaluation Procesess (SREP) in order to evaluate the adequacy of internal controls, supervision and reporting, capital adequacy and the active supervisory roles of executives; 3) Must maintain a mandatory minimum capital ratio of 8% or of a level that is in accordance with their risk profile.
In terms of calculations of Risk-Weighted Assets (Aset Tertimbang Menurut Risiko – "ATMR"), Circular 5/2023 categorizes the available calculation methods in line with the following aspects: 1) Credit risk; 2) Market risk; and 3) Operational risk. Furthermore, LPEI are required to submit reports to the OJK that set out calculations of the minimum capital ratio based on their risk profiles by utilizing the format that is set out under the Appendix to Circular 5/2023.

......