DPR: Ratification of P2SK Law Revision a Momentum to Strengthen National Financial System Stability

Commission XI of the Indonesian House of Representatives (DPR RI) stated that the ratification of the Bill on Amendments to Law Number 4 of 2023 concerning Financial Sector Development and Strengthening (UU P2SK) is a crucial step to reinforce the foundation of the national financial sector amidst economic dynamics and the constantly evolving financial industry. According to Commission XI Chairman Mukhamad Misbakhun, pressure on the rupiah exchange rate, financial market volatility, and rapid digital transformation underscore the importance of Indonesia having a robust, adaptive legal framework for the financial sector capable of providing certainty for all stakeholders. ‘Through this revision of the P2SK Law, we want to ensure the national financial sector has an increasingly stronger legal foundation so it is better prepared to face various risks and future challenges,’ Misbakhun said in a written statement in Jakarta on Friday. Misbakhun explained that one of the key substances accommodated in the P2SK Law revision is the alignment of several norms in accordance with Constitutional Court rulings, including those related to the authority for investigating criminal offences in the financial services sector involving the Financial Services Authority (OJK) and the Indonesian National Police. Beyond providing legal certainty, the law revision also strengthens the risk mitigation framework and crisis management to safeguard the resilience of the national financial system. He noted this step is important because turmoil in the financial sector can have a direct impact on the national economy and the country’s fiscal space. ‘We want risks to be anticipated earlier so they do not become a greater burden on the state budget,’ he stressed. Additionally, Misbakhun stated that the development of financial technology was one of the DPR’s main considerations in approving the P2SK Law revision. Various new instruments and business models, from crypto assets to the tokenisation of Real World Assets (RWA), have developed much faster than the previously available regulatory framework. Through this law revision, the DPR is pushing for the creation of legal certainty for industry players as well as stronger protection for the public as users of financial services. Furthermore, Misbakhun explained that strengthening governance, transparency, and the modernisation of the financial sector are also vital parts of the P2SK revision, including to support the development of the Indonesia International Financial Centre and enhance the competitiveness of the national financial sector. ‘If we want to become a competitive financial centre, trust must be built through strong governance and legal certainty,’ concluded Misbakhun.