Indonesia’s Carbon Exchange is Here. What Businesses Need to Know

Back in January of this year, Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK Law) granted the authority to regulate and oversee financial services activities in the carbon exchange sector to the Financial Services Authority (Otoritas Jasa Keuangan or "OJK"). As a follow-up to this authority, OJK has issued:

• OJK Regulation No. 14 of 2023 on Carbon Trading through Carbon Exchange, which contains the guideline and reference for carbon exchange operators as well as OJK to regulate, supervise, and coordinate with relevant ministries or institutions for carbon trading in Indonesia through the nation’s carbon exchange.
• OJK Circular Letter No. 12/SEOJK.04/2023 on the Procedures for Organising Carbon Trading through Carbon Exchange.

Concurrently with the two rules, OJK approved PT Bursa Efek Indonesia (the operator of the Indonesia Stock Exchange, or "IDX") to become the operator of the carbon exchange. Upon such approval, IDX promptly issued a set of regulations to allow business owners to commence trading in the exchange. Lastly, on 26 September, President Joko Widodo officially launched the carbon exchange.

OJK Turns the Spotlight to Sharia Rural Banks

Among the many topics covered by the so-called "P2SK Law" or the Omnibus Law for the financial sector (i.e., Law No. 4 of 2023 on the Development and Strengthening of the Financial Services Sector) are rural banks (bank perekonomian rakyat or commonly called BPR) and sharia rural banks (bank perekonomian rakyat syariah or commonly called BPRS). The P2SK Law, which became effective in early 2023, solidify the roles and functions of rural banks in growing the nation’s economy, particularly with respect to small and medium enterprises.

In July of this year, the Financial Services Authority (Otoritas Jasa Keuangan or "OJK") issued OJK Circular Letter No. 10/SEOJK.03/2023 on the Implementation of Sharia Rural Banks' Products ("Circular"). The Circular is the implementing regulation of OJK Regulation No. 25/POJK.03/2021 on the Implementation of rural banks and sharia rural banks' products, and replaces OJK Circular Letter No. 37/SEOJK.03/2015 on Products and Activities of Rural Banks.

The Circular is also issued under the framework of the P2SK Law. Its abstract states that the Circular is issued to realise rural banks that are highly competitive and able to contribute significantly to the national economy and social development. Moreover, the Circular is aimed to align with other regulations to stimulate the development of products by sharia rural banks, by considering adequate capital, effective risk management, and prudential principles.

Guide to the Real Estate Industry in Asia

A keen understanding of the nature of real estate and the legal and regulatory issues related to this asset class is critical to working out any real estate deal. In this third edition of Rajah & Tann Asia's "Guide to the Real Estate Industry in Asia", we share with you a brief overview of certain key insights to the real estate industry in Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Topics covered include the legal framework, types of real estate, ownership and tenure, taxes and other important aspects for investors of real estate to note.

A key pillar of our strength is our Rajah & Tann Asia network with offices in Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, as well as dedicated desks focusing on Japan and South Asia. With the most extensive legal network in Asia, our lawyers have a tight grasp of the local culture, business practices, and language not just within their own home countries, but in the other markets in which they frequently conduct cross-border deals as well. Our depth of transactional and regulatory experience allows us to advise clients strategically and creatively, from structuring to eventual execution and implementation of the transaction. It is important to seek specific legal advice in any corporate real estate matters, and our team would be pleased to discuss your specific objectives and requirements.