Encouraging Regional Governments to Seek Funding in Capital Markets, OJK Issues Regional Bond and Sukuk Regulations

OJK issues OJK Regulation No. 10/2024 concerning the Issuance and Reporting of Regional Bonds and Regional Sukuk to expand sources of regional government fiscal financing through the utilization of funding sources in the capital market. (MI/RAMDANI)

The Financial Services Authority (OJK) issued OJK Regulation No. 10/2024 concerning the Issuance and Reporting of Regional Bonds and Regional Sukuk to expand the sources of regional government fiscal financing through the utilization of funding sources in the capital market.

“This OJK regulation was also issued with the aim of increasing information transparency and supervision of the issuance of regional bonds and sukuk,” said Head of the Literacy, Financial Inclusion and Communication Department of OJK Aman Santosa in Jakarta, Sunday (11/8).

OJK Regulation No. 10/2024, he continued, was issued to adjust and align the provisions of the Financial Services Authority Regulation governing regional bonds and regional sukuk with Law No. 1/2022 concerning Financial Relations between the Central Government and Regional Governments and Government Regulation No. 1/2024 concerning Harmonization of National Fiscal Policy as laws and regulations issued as an effort to overcome obstacles to the issuance of regional bonds and regional sukuk.

Aman said that OJK Regulation No. 10/2024 replaces, combines, and revokes three OJK Regulations that were previously issued in 2017.

The three OJK regulations are OJK Regulation No. 61/POJK.04/2017 concerning Registration Statement Documents in the Context of Public Offerings of Regional Bonds and/or Regional Sukuk, OJK Regulation No. 62/POJK.04/2017 concerning Form and Content of Prospectus and Summary Prospectus in the Context of Public Offerings of Regional Bonds and/or Regional Sukuk, and OJK Regulation No. 63/POJK.04/2017 concerning Reports and Announcements of Issuers of Regional Bonds and/or Regional Sukuk.

Adjustments to the rules in the latest OJK Regulation include the addition of the obligation to obtain regional bond and/or regional sukuk rating results, adjustments to the obligation to submit the latest period’s Regional Government Financial Report that has been audited by the Audit Board so that it is no longer mandatory to be submitted to the OJK, but must be available on the regional government’s website.

Then, adjustments related to the requirements for submitting regional regulation documents as a requirement for the registration statement, and the elimination of provisions regarding the obligation to submit other documents in the form of considerations from the Minister of Home Affairs. (Ant/E-2)