OJK Supports Formation of Regional Bond Bill, Provides Key Notes

The Financial Services Authority (OJK) has expressed its support for the formation of the Regional Bond Bill. OJK describes regional bonds as a potential instrument that can be utilised by regions to become more self-sufficient.

“One of the capital market instruments that we believe has great potential is regional bonds and sukuk. There is space for regions to raise funds, for example, through the issuance of instruments such as shares or other debt-based instruments from regional corporations or Regional Owned Enterprises (BUMD). We hope that through the issuance of regional bonds or sukuk, local governments will obtain alternative financing that allows them to be more independent,” said OJK Board of Commissioners member Hasan Fawzi during a public discussion on the Regional Bond Bill with the Golkar Party Faction of the MPR in Pondok Aren, South Tangerang, on Monday (8/6/2026).

Hasan explained that regional bonds have the potential to attract local residents to invest, allowing the community to contribute directly to the development of their respective regions.

“We hope that these regional bonds or sukuk will not only increase funding sources but also open opportunities for the public to participate and invest directly in regional development,” he said.

Furthermore, Hasan explained that several factors must be considered in the implementation of regional bonds. Local governments are expected to maintain information transparency regarding the issued bonds.

“To balance this, various risk mitigations must be present in the regulations. This is our suggestion and the regulatory nuance we will push for. Generally, this includes information transparency. This must be maintained not only during the initial public offering process but also after the bonds or sukuk have been issued,” he explained.

Local governments would also be required to establish a specialised unit to manage regional bonds. This measure is intended to mitigate the risks that may arise from bond issuance.

“To ensure the governance and accountability of regional bond issuance, local governments must have a dedicated unit to manage regional bonds or sukuk. This is also for risk mitigation purposes,” he added.