JAKARTA, RAKYATNEWS – The Indonesian Financial Services Authority (OJK) has issued Regulation OJK Number 10 of 2024 concerning the Issuance and Reporting of Regional Bonds and Sukuk (POJK 10/2024) to broaden fiscal financing sources for local governments through capital market funding.

“This regulation aims to enhance transparency and oversight of regional bond and sukuk issuances,” stated Aman Santosa, Head of the Financial Literacy, Inclusion, and Communication Department at OJK, in Jakarta. (August 12)

POJK 10/2024 was introduced to align and update previous regulations governing regional bonds and sukuk, bringing them in line with Law Number 1 of 2022 on Financial Relations between Central and Regional Governments and Government Regulation Number 1 of 2024 on National Fiscal Policy Harmonization. This adjustment is intended to address issues related to the issuance of regional bonds and sukuk.

Sukuk are Islamic financial certificates, similar to bonds, that comply with Sharia (Islamic law). Instead of earning interest, which is prohibited in Islam, sukuk represent partial ownership in an asset, project, or business venture. Investors earn returns through profit-sharing or lease income derived from these assets. Sukuk are used to raise capital in a manner consistent with Islamic principles and are often utilized in both corporate and government financing.

Aman Santoso explained that POJK 10/2024 replaces and consolidates three earlier regulations issued in 2017 are POJK Number 61/POJK.04/2017 on the Registration Statement Document for Public Offering of Regional Bonds and/or Sukuk.

POJK Number 62/POJK.04/2017 on the Form and Content of the Prospectus and Summary Prospectus for Public Offering of Regional Bonds and/or Sukuk.

The POJK Number 63/POJK.04/2017 on the Reporting and Announcement of Issuers of Regional Bonds and/or Sukuk.

Key updates in POJK 10/2024 include new requirements for obtaining bond ratings and adjustments to reporting obligations. While previously audited financial reports from local governments were required to be submitted to OJK.

“They now need only be available on the local government’s website,”

Additional adjustments involve requirements for local regulatory documents as part of the registration statement and the removal of previous requirements for additional documents from the Ministry of Home Affairs. (Uki Ruknuddin)