Draft Regulation on Financial Conglomerate Liquidity Risk Management: Late Reporting May Trigger Daily Fines of Rp2 Million Up to Rp200 Million

The Financial Services Authority (Otoritas Jasa Keuangan — “OJK”) is currently completing work on Draft Regulation (“Draft Regulation”) on Integrated Liquidity Risk Management for Financial Conglomerates Required to Establish a Financial Conglomerate Holding Company (Perusahaan Induk Konglomerasi Keuangan — “PIKK”).

The Draft Regulation requires PIKK to monitor and maintain adequate liquidity for PIKK and all financial conglomerate members to meet their funding needs, both under normal conditions and during periods of stress. Liquidity conditions and adequacy must be monitored to identify gaps between cash inflows and outflows across each time horizon, as well as potential liquidity needs of financial conglomerates required to establish a PIKK (Konglomerasi Keuangan Wajib PIKK — “KK Wajib PIKK”).[1]