Definition of the Financial Services Authority

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This time we will discuss the meaning of OJK (Financial Services Authority) along with its duties, powers and principles. Here’s the explanation …

 

Table of contents :

Definition of OJK (Financial Services Authority)

Background of the establishment of the OJK

  1. Mandate of the Act
  2. Development of the Financial Services Industry
  3. Conglomeration of Financial Services Institutions
  4. Consumer Protection

Duties and Authorities of the OJK

OJK’s duties

OJK’s authority

Principles of the Financial Services Authority (OJK)

  1. Principle of Independence
  2. The Principle of Legal Certainty
  3. Principles of Public Interest
  4. The Principle of Openness
  5. Principles of Professionalism
  6. Principles of Integrity
  7. The Principle of Accountability

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Definition of OJK (Financial Services Authority)

OJK is a state institution that has the function and task of implementing an integrated system of regulation and supervision of the financial services industry.

 

Some of those included in the financial services industry that are under the supervision of the Financial Services Authority (OJK) include:

 

Banking

Capital market

Insurance

Pension fund

Financial institutions

And several other financial service institutions

The Financial Services Authority (OJK) was formed based on Law no. 21 of 2011. OJK is a state institution that is independent and free from interference from other parties in carrying out its duties.

 

Background of the establishment of the OJK

the meaning of OJK (Financial Services Authority)

 

The background for the establishment of the OJK was due to the need to formulate several implementing agencies tasked with regulating and providing supervision in the financial services sector.

 

Referring to the definition of the OJK above, here are some things that underlie the formation of the Financial Services Authority:

 

  1. Mandate of the Act

The mandate / mandate of this law is to establish a supervisory agency in the financial services sector which includes banking, insurance, securities, pension funds, venture capital, financing services, and other institutions that manage public funds.

 

  1. Development of the Financial Services Industry

Globalization and innovation in the financial system and rapid advances in information technology have made the financial industry very dynamic, complex and interconnected.

 

Also Read:   Examples of Financial Statements

  1. Conglomeration of Financial Services Institutions

Supervision needs to be carried out on financial services institutions that have several subsidiaries in the financial services sector with different business activities (conglomerates).

 

For example, the Bank has subsidiaries in the fields of Insurance, Financing, Securities and Pension Fund services.

 

  1. Consumer Protection

More complex financial services certainly increase problems and abuses in this industry.

 

Therefore, education, consumer protection and legal defense functions are needed for consumers from related parties.

 

Duties and Authorities of the OJK

As briefly stated in the definition of the OJK above, in general, OJK has the duties and authorities in implementing the regulatory and supervisory system for the financial services industry in Indonesia.

 

In accordance with the definition of the OJK above, here are some of the duties and authorities of the Financial Services Authority:

 

OJK’s duties

In general, there are 3 tasks for the OJK, including:

 

Regulate and supervise financial service activities, both in the Banking and Non-Banking sectors.

Regulate and supervise financial service activities in the Capital Markets sector.

Regulate and supervise financial service activities in the insurance sector, pension funds, financial institutions and other financial institutions.

OJK’s authority

The following are some of the OJK authorities in regulatory and supervisory duties:

 

Establish laws in the financial services industry.

Create and establish regulations on supervision in the financial services industry.

Create and determine policies related to the implementation of OJK duties.

Set up procedures for assigning legal managers in financial services institutions.

Organize the structure and infrastructure of the organization, and manage wealth and liabilities.

Create and establish regulations on procedures for imposing sanctions based on applicable laws and regulations in the financial services sector.

Create and establish policies on supervisory procedures for the financial services industry.

OJK can supervise, inspect, investigate and protect consumers, and other actions against Financial Service Institutions.

Providing administrative sanctions for parties who violate laws and regulations in the financial services sector.

OJK has the authority to provide and / or revoke business licenses, ratification and other provisions in the laws and regulations in the financial services sector.

Also Read:   Definition of State Finance

Principles of the Financial Services Authority (OJK)

The following are some of the principles in carrying out the duties of the Financial Services Authority (OJK):

 

  1. Principle of Independence

As stated in the OJK definition, these state institutions work independently in managing financial services in Indonesia.

 

  1. The Principle of Legal Certainty

In establishing and implementing OJK institutions based on the laws and regulations in force in Indonesia.

 

  1. Principles of Public Interest

OJK is formed and carries out its duties with reference to the public interest (consumers). In other words, in carrying out the duties of the FSA, it must protect and defend the interests of consumers.

 

  1. The Principle of Openness

OJK provides open access to the public if they wish to provide honest and non-discriminatory information related to violations in the financial services sector.

 

  1. Principles of Professionalism

OJK consists of professional individuals so that in carrying out its duties and authorities, OJK must be based on the principle of professionalism.

 

  1. Principles of Integrity

In carrying out its duties and authorities, OJK must comply with prevailing moral values ​​and norms.

 

  1. The Principle of Accountability

All actions and decisions made by OJK are for the good of consumers and can be accounted for to the public.

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