The Urgency of a Legal Protection on Equity Crowdfunding Services Based on the Regulation of the Indonesian Financial Service Authority No. 57/POJK.04/2020

Abstract

A crowdfunding service that is carried out through information technology-based stocks or commonly known as equity crowdfunding is an innovation in the development of the digital economy. It is a supporting factor of Indonesia’s economic development as stipulated in the Regulation of the Financial Service Authority (RFSA) No. 37/POJK.04/2018. In 2020, this regulation was perfected into RFSA No. 57/POJK.04/2020 concerning the crowdfunding activity expansion, starting from the issuer to the stock. In RFSA No.57/POJK.04/2020 there was a transitional provision that became a problem for equity crowdfunding service program organizers in expanding their business according to RFSA No.57/POJK.04/2020. It concerns the grace period and the revocation of the permit by the Financial Service Authority if the organizers fail to reregistered during the determined grace period, though in expanding the business activity, there needs to be a profound analysis to prevent users from experiencing loss. This limited grace period certainly brings loss to the organizers, thus there needs to be a solution to keep the crowdfunding services running. Because of that, this research analyses the transitional provision in the RFSA No.57/POJK.04/2020 concerning equity crowdfunding in Indonesia. This paper uses the normative approach with a literature review analysis. The results are presented qualitatively. Research results show that there needs to be an additional grace period in the transitional provisions so organizers have enough time to undergo analyses in expanding their business activities. This is to prevent organizers or users from experiencing losses in the future.