Indonesia to regulate foreign VC

Indonesia plans to bring in regulations around foreign venture capital investments in the country and also hopes to begin selling bond futures on the domestic stock exchange.

Indonesia’s Financial Services Authority has confirmed that the country will introduce new rules for foreign venture capital and start trading bond futures “as early as the first quarter of 2016”.

The Financial Services Authority is also planning to bring in more legislation around foreign venture capital firms investing in Indonesia, to ensure overseas investors will be subject to the same stringent controls that local VCs must adhere to.

The future bonds will be traded on the Indonesia Stock Exchange, where futures contracts for sovereign rupiah-denominated bonds will be available. The bonds will be used to expand the derivatives market for corporate bonds and to deepen the country’s financial markets.

Firdaus Djaelani, the non-bank financial institution chief supervisor for the Financial Services Authority, said: “There are rules for local companies, so the foreign ones must also follow the rules. We will ask foreign venture capital firms to apply for business licenses in Indonesia and if they can, to have local partners and joint ventures.”

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