Increase Startup Funding, OJK Issues Rules Related To Ventura Capital Companies

JAKARTA - The Financial Services Authority (OJK) issued POJK rules Number 25 of 2023 concerning the Implementation of Venture Company Businesses and Sharia Ventura Capital Companies as an effort to encourage the development of startups as well as micro, small and medium enterprises (MSMEs).

Head of the Literacy Department, Inclusion of Finance and Communication Aman Santosa said that this POJK is the mandate of the Regulation of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK) which is needed to support industrial development and legal needs in the current administration of venture capital companies.

According to Aman, venture capital companies and Islamic venture capital companies have an important role in funding companies in the early stages or startups.

"As well as companies/debtors with micro, small and medium enterprises (MSMEs) scale, which cannot be reached through funding by other financial service institutions," in his official statement quoted Thursday, January 18.

Aman menyampaikan Perusahaan startup serta perusahaan/debtor dengan skala UMKM merupakan entitas yang mampu memperluas lapangan kerja dan memberikan pelayanan ekonomi secara luas kepada masyarakat.

In addition, it plays a role in the equitable process and increases people's income, encourages economic growth, and plays a role in realizing national stability.

Meanwhile, one of the main arrangements in this POJK is the existence of a negotiator for venture capital companies and Islamic venture capital companies in carrying out their business activities.

Aman said that venture capital companies are required to carry out business activities according to the category, namely focusing on capital investment activities, participation through the purchase of conversion/conversion sukuk bonds, and/or the management of Ventura Funds, which is subsequently referred to as a company in the form of venture capital corporation.

In addition, venture capital companies must focus on financing through the purchase of debt securities issued by the Business Pair at the initial startup stage and/or business development, financing, and/or financing based on the principle of profit sharing, which is subsequently referred to as a venture debt corporation.

With this category, it is hoped that venture capital companies and Islamic venture capital companies can focus and optimally promote business activities according to the chosen line of business. In addition, POJK Number 25 of 2023 also strengthens several regulations, namely:

Prudential POJK Number 25 of 2023 regulates the obligations of venture capital companies and Islamic venture capital companies to maintain and/or increase health levels by applying the principle of prudence and risk management in carrying out business activities.

The management of the POJK Ventura Fund regulates more fully the regulations regarding venture funds, namely since the application for a permit to manage venture funds to disband venture funds.

In addition, the requirements for human resources and organizational structure of venture capital companies and Islamic venture capital companies will also be regulated which will manage venture funds, use the name of venture funds, agreement to form venture funds, placement of venture funds, requirements for holding venture fund participation units.

POJK Number 25 of 2023 concerning the Implementation of Venture Capital Companies and Sharia Venture Capital Companies revoked POJK Number 35/POJK.05/2015 concerning the Implementation of Venture Capital Company Business.