Indonesia Implements Risk and Capital Based Regime for Underwriters and Broker Dealers

Indonesia’s Financial Services Authority (OJK) has replaced the existing, less nuanced licensing regime for Indonesian securities companies with a tiered, risk  and capital based framework for licensed securities companies. The new rules recalibrate permitted securities business activities allowing greater flexibility based on capital requirements and governance standards. Securities underwriters and broker dealers are now required to determine their proposed classification and transition plans, having regard to their intended business activity scope, within prescribed timelines.

Regulatory background

On 1 April 2026, OJK issued OJK Regulation No. 3 of 2026 on the Implementation of Business Activities of Securities Companies conducting business as Underwriters and Broker Dealers (POJK 3/2026). The regulation came into effect on 29 April 2026.

POJK 3/2026 replaces OJK Regulation No. 20/POJK.04/2016 on the Licensing of Securities Companies Conducting Business Activities as Underwriters and Broker-Dealers (POJK 20/2016), apart from provisions on other business activities that do not contradict the new regulation. POJK 3/2026 represents a significant reform of the regulatory framework for securities companies, introducing a risk and capital based regime covering licensing, capitalisation, governance and permitted activities.

All existing licensed securities underwriters (PEE) and broker-dealers (PPE) must determine and report their business classification (Pengelompokan Kegiatan Usaha or PEKU) to OJK by 29 October 2026, along with their transition plans.

Introduction of PEKU tiering framework

Unlike the previous single-category regime, POJK 3/2026 introduces a three-tier PEKU system in which permitted activities are calibrated based on a company’s paid-up capital and net adjusted working capital (NAWC). PEEs and PPEs are prohibited from conducting activities outside their elected PEKU tier.

• PEKU 1: The first tier is available exclusively for broker-dealers engaged in marketing activities (and certain other activities with prior OJK approval), particularly as regards mutual funds and/or other investment products. PEKU 1 broker-dealers are prohibited from conducting securities transactions for their own account.
• PEKU 2: Companies in this category may operate as either an underwriter or a broker-dealer, but not both. A PEKU 2 underwriter may act as lead underwriter in a public offering only where: (i) the prospective issuer has small or medium-scale assets (up to IDR 250 billion); (ii) it has not been involved in any criminal offence under applicable capital market regulations within the past five years; and (iii) it maintains a research function.
• PEKU 3: This is the broadest tier, permitting operation as an underwriter, a broker-dealer, or both. The limitation on asset size applicable to PEKU 2 underwriters does not apply to PEKU 3, but the criminal offence history and research function requirements for lead underwriters do apply.

A summary of the business activities permitted under each PEKU tier is set out in the table.

POJK 3/2026 continues to permit underwriters and broker-dealers to conduct other activities with prior OJK approval. However, it now requires that the applicant must not be subject to a written order or administrative sanction in the form of either a licence suspension or a restriction on business activities at the time of the application.

Practical implications. Each existing licensed securities underwriter and broker-dealer must determine and report its proposed PEKU tier to OJK by 29 October 2026, together with an action plan covering capital, NAWC, and governance. Companies that fail to elect a tier will be classified by OJK based on their existing capital position.

POJK 3/2026 retains a general requirement that underwriters’ main business activities should be limited to securities activities related to the corporate actions of companies that intend to conduct or have already conducted a public offering (eg, financial advisory for securities issuances, mergers, acquisitions, and restructurings), suggesting a public offering nexus is generally required. However, as noted above, this limitation appears to no longer apply for PEKU 2 and PEKU 3 underwriters given the express broadened potential scope of their permitted activities.

Beyond compliance, the PEKU framework presents commercial opportunity for developing broader securities companies businesses. PEKU 3 unlocks activities that were previously not expressly available as main business activities under POJK 20/2016, including structured product issuance, general clearing membership, and pre-IPO financing. Underwriters and broker-dealers with the capital and operational capacity to achieve PEKU 3 should assess whether these broader new activities may fit with their business strategy.

Minimum paid-up capital and NAWC

POJK 3/2026 sets minimum paid-up capital and NAWC requirements by PEKU tier, replacing the one size fits all thresholds in place under POJK 20/2016.

The minimum paid-up capital and NAWC apply uniformly within each PEKU tier, regardless of whether the entity operates as an underwriter, as a broker-dealer or as a combined underwriter and broker-dealer. In addition, all underwriters and broker-dealers must maintain positive equity at all times.

Where NAWC approaches 110% of the applicable minimum threshold (eg, IDR 55 billion for a PEKU 2 company, being 110% of the IDR 50 billion minimum), OJK may take supervisory actions, including requiring the company to increase its NAWC.

Practical implications. The capital uplift is significant, particularly for PEKU 3. Existing PPEs that previously held licences as PPEs administering client accounts (with minimum paid-up capital of IDR 30 billion under POJK 20/2016) or existing PEEs (with minimum paid-up capital of IDR50 billion under POJK 20/2016) that then elect PEKU 3 status will need to increase their paid-up capital to IDR 110 billion. Capital compliance may be achieved through a merger, consolidation or acquisition, with progress being reported to OJK quarterly.

Board of Directors and Board of Commissioners

POJK 3/2026 also introduces tier-based governance requirements for the Board of Directors (BOD) and the Board of Commissioners (BOC) of licensed securities companies.

A PEKU 1 securities company must have at least one Director, who also serves as President Director. PEKU 2 and PEKU 3 securities companies must have at least two Directors, one of whom is appointed President Director. PEKU 3 entities must also designate one Director specifically responsible for compliance. A compliance director is subject to additional requirements, including (a) holding a compliance certificate, (b) not being affiliated with the company or its other directors, commissioners or controlling shareholders, and (c) not holding any shares in the company.

PEKU 1 and PEKU 2 entities must have at least one commissioner. PEKU 3 entities must have at least two commissioners, with independent commissioners comprising at least 30% of the total board.

Practical implications. The compliance director requirement is new and applies exclusively to PEKU 3 companies, with a compliance deadline of 29 April 2029. The independent commissioner requirement (applicable to at least 30% of the board) now applies only to PEKU 3 companies. PEKU 1 and PEKU 2 companies are not subject to this obligation. Securities companies currently maintaining independent commissioners solely due to regulatory requirements should review whether this obligation continues under their elected PEKU tier.

Mandatory functions

Importantly, POJK 3/2026 prescribes mandatory functions for each PEKU tier of underwriter and broker-dealer business, as set out in the following table. Detailed implementation requirements for these functions are prescribed in OJK Regulation No. 13 of 2025 on Internal Controls and Conduct of Securities Companies, unless specifically regulated otherwise in POJK 3/2026. Failure to maintain the required functions constitutes a violation subject to administrative sanctions.

Changed OJK approval for direct and indirect shareholding in securities company

POJK 3/2026 now explicitly extends the shareholding approval requirement to cover indirect shareholding changes (ie, changes in the ownership chain above the underwriter’s or broker-dealer’s direct shareholders), in addition to direct changes. Underwriters and broker-dealers that have conducted IPOs or that are public companies are exempt from this requirement.

The Elucidation of POJK 3/2026 clarifies that a “change of shareholding” includes changes in the structure and/or composition of the shareholders of a securities company. Direct shareholders hold shares in the company directly; indirect shareholders hold shares through another entity.

POJK 3/2026 also prohibits any change of a controlling shareholder of a licensed securities company within the first five years of its operation, except in certain OJK-approved situations. The Elucidation clarifies that these situations include: (a) corporate actions involving the merger of two or more securities companies, or corporate actions of the parent company, resulting in a change of controlling shareholder; (b) OJK determining that the controlling shareholder has not passed the reassessment for main parties; and/or (c) the controlling shareholder no longer meets the requirements to be a controlling shareholder under applicable laws.

Practical implications. Shareholders of a securities company contemplating any transaction that would alter the direct or indirect shareholding structure of a non-public underwriter and/or broker-dealer entity, including upstream group reorganisations or capital injections at the holding company level, should factor in the broader new OJK approval requirement. The application must be accompanied by, among other things, evidence of financial capability, a source of funds declaration, and proof of payment (if payment has been made prior to the application). The five-year restriction on changes to the controlling shareholder should also be factored into any exit strategy or change-of-control planning for companies operating for less than five years.

Transitional period

The transitional requirements under POJK 3/2026 are as follows:

• Existing licences and classification. Securities companies already holding OJK licences as underwriters and/or broker-dealers (including those administering client securities accounts) must determine their PEKU classification and report it to OJK together with an action plan within six months of its issuance (ie, by 29 October 2026). The action plan must include, at a minimum, details on fulfilment of paid-up capital, NAWC, and the required directors and functions.
• Compliance with new requirements. Existing securities companies must comply with the paid-up capital, NAWC and (for PEKU 3 companies) compliance director requirements within three years of its issuance (ie, by 29 April 2029).
• Interim NAWC for PEKU 3. Companies that elect or are deemed to fall within PEKU 3 must achieve an NAWC of at least IDR 50 billion within one year of its issuance (ie, by 29 April 2027).

Conclusion

POJK 3/2026 represents a significant step in strengthening and modernising the regulatory framework for securities companies in Indonesia. By introducing the PEKU classifications enhancing capital and governance requirements, and aligning permitted activities to each company’s capacity, the regulation provides a more structured and proportionate approach to securities company oversight and allows a broader and more flexible scope for securities company businesses in Indonesia.

As the new regulation is already in effect with transitional provisions in place, Indonesian securities companies should proactively assess their current position, ensure compliance with the new requirements, and take early steps to adapt their business strategies by putting in place clear transitional timelines.
Please reach out to one of the authors or your usual contact at our firm to discuss how these changes may affect your organisation.