The Indonesian securitisation market is characterised as sophisticated and diversified. While historically dominated by State-Owned Enterprises (SOEs) in the infrastructure and housing sectors, the market has recently undergone a strategic expansion into high-velocity consumer finance and digital economy assets. It serves as a premium liquidity tool for top-tier financial institutions and fintech innovators seeking to optimise their capital structures under the Indonesian Financial Services Authority (Otoritas Jasa Keuangan (“OJK”)) regulatory umbrella.

Typical Asset Classes:

• Residential Mortgage-Backed Securities (RMBS): These are systematically facilitated by PT Sarana Multigriya Finansial (Persero) (“SMF”), which acts as a secondary mortgage corporation to bridge the capital markets with primary mortgage lenders (e.g., Bank BTN).
• Buy now, Paylater loans (“BNPL”): The “new frontier” of Indonesian securitisation. This involves the use of the asset-backed securities collective investment contract (Kontrak Investasi Kolektif Efek Beragun Aset (“KIK-EBA”)) structure to securitise BNPL receivables. The recent securitisation of BNPL receivables via KIK-EBA represents a significant market shift, demonstrating OJK’s position with digital-native receivables and the ability of the KIK-EBA framework to accommodate securitisation of short-term, high-frequency and small-ticket financial assets.
• Future Receivables (Future Flow): A mature segment utilised by SOEs to monetise predictive revenue. Notable issuance involves:

– Infrastructure: toll road revenues from PT Jasa Marga (Persero) Tbk (“Jasa Marga”).

– Aviation & Transport Revenues (Ticket Sales): the market achieved a landmark milestone with the issuance of the KIK EBA Mandiri GIAA01 (structured by Mandiri Manajemen Investasi). Valued at IDR 2 trillion, this was Indonesia’s first securitisation directly backed by the future revenue rights of airline ticket sales, specifically monetising Garuda Indonesia’s highly predictable Jeddah and Madinah flight routes. The transaction’s successful bifurcation into a publicly offered, Pefindo AA+-rated Senior Class A (IDR 1.8 trillion) and a privately placed Subordinated Class B (IDR 200 billion) firmly validated investor appetite for non-traditional, bespoke SOE cash flows.

Market activity is currently bifurcated. The “Institutional Track” remains driven by sovereign-linked entities (SMF, Jasa Marga) focusing on long-tenor stability. Concurrently, a “Digital Track” is emerging, where private sector investment managers are structuring shorter-tenor, high-yield products backed by consumer receivables. We have also seen short-term receivables generated by an Indonesian company being subject to securitisation through funded participation scheme governed by foreign law.

For this guide, our analysis emphasises on KIK-EBA as the most common form of securitisation in Indonesia.

Financial assets that generate predictive cash flows are generally eligible. Under OJK Regulation No. 65/POJK.04/2017 on Asset-Backed Securities in the Form of a Collective Investment Contract (“OJK Reg. 65/2017”), the portfolio of a KIK-EBA must comprise financial assets that fall within the categories expressly permitted, which includes:

• receivables arising from commercial papers;
• credit card receivables;
• future receivables;
• receivables arising from credit extension;
• government guaranteed debt securities;
• credit enhancement instruments;
• future cash flows or securities representing rights to future cash flows;
• future income or securities representing rights to future income; and
• equivalent/related financial assets connected to the foregoing.

In addition to fitting within the above categories, OJK Reg. 65/2017 imposes substantive eligibility conditions, that the relevant assets must (a) have or generate cash flow, (b) be legally validly owned or controlled by the originator, and (c) be freely transferable to the KIK‑EBA.

As a matter of structure, OJK Reg. 65/2017 requires the KIK‑EBA to acquire the portfolio assets from the originator through a legal true sale.

There is no statutory “negative list” of prohibited assets. However, legal and practical constraints apply, such as the requirement that assets must be free of liens or disputes. If assets are encumbered (e.g., Fiduciary Security), the security must be released or transferred to the SPV upon sale. Assets subject to legal defects, restrictions on assignment, or structural features that prevent a compliant true sale transfer will typically be excluded (or remediated) because they cannot satisfy the regulation’s express transferability and true sale requirements. Assets selection and due diligence are critical in this process.

In Indonesia, securitisation is governed by a combination of primary legislation and implementing regulations issued by the OJK. The framework is principally situated within the capital markets regime.

Primary Legislation

The core statutory basis is:

• Law No. 8 of 1995 on Capital Markets, as amended by Law No. 4 of 2023 on the Financial Sector Development and Strengthening Law (“Law 4/2023”) (the “Capital Markets Law”).
  The enactment of Law 4/2023, dubbed the omnibus law within the financial sector, materially strengthened the legal underpinnings of securitisation. In particular, Law 4/2023 introduces express statutory recognition of securitisation structures, including special purpose vehicles (badan pengelola instrumen keuangan / SPVs) and trust‑based arrangements (pengelola dana perwalian / trustees), as dedicated legal entities authorised to receive asset transfers from originators and to issue securities to investors in securitisation transactions. This represents a legislative elevation of concepts that were previously regulated predominantly at the OJK regulation level.

OJK Implementing Regulations

The statutory framework is further elaborated through the following key OJK regulations:

• OJK Reg. 65/2017: This is the principal regulatory instrument governing securitisations structured through a collective investment contract between an investment manager and a custodian bank.
• OJK Regulation No. 23/POJK.04/2014 on Asset-Backed Securities in the Form of Participation Letters (EBA-SP), as amended by OJK Regulation No. 20/POJK.04/2017: This regulation applies specifically to secondary mortgage securitisation, particularly in transactions involving housing finance assets.
• OJK Regulation No. 20/POJK.04/2015 on Sharia Asset-Backed Securities: This regulation governs securitisations structured in compliance with Sharia principles.
• OJK Regulation No. 30/POJK.04/2019 on the Issuance of Debt Securities and/or Sukuk without a Public Offering (“OJK Reg. 30/2019”): While not a securitisation-specific regulation, this framework is relevant where asset-backed debt instruments are issued through private placements (i.e., without a public offering), subject to structural feasibility under capital markets law.

Scope of Transactions

Under Indonesian law, securitisation primarily encompasses:

• Asset-backed securities issued in the form of collective investment contracts (KIK-EBA);
• Mortgage-backed securities issued in the form of participation letters (EBA-SP);
• Sharia-compliant asset-backed securities; and
• Structurally comparable transactions conducted through private placements, provided they qualify as “securities” under capital markets law and fall within OJK supervision.

In current practice, Indonesian securitisation transactions are predominantly capital markets-based rather than structured as common law-style true sale SPV issuances. The KIK-EBA structure remains the most widely used securitisation vehicle in the Indonesian market.

Historically, Indonesia did not recognise a “trust” or a specialised “corporate SPV” for securitisation, leading to the creation of the contractual collective investment contract structure. However, Law 4/2023 has introduced a corporate SPV option though trust is still not recognised.

Structure A: KIK-EBA (Contractual – Most Common)

• A collective investment contract (Kontrak Investasi Kolektif or KIK) between an Investment Manager and a Custodian Bank. It is not a legal entity, but a contractual arrangement. KIK EBA is insolvency remote; it has its own assets and liabilities. Since it is not a legal entity, a KIK EBA cannot be subject to a claim in court and cannot be declared bankrupt.
• Mechanism: transfers a pool of receivables or financial assets into the KIK EBA portfolio, structured as a true sale under Indonesian law (supported by a legal opinion under OJK Reg.  65/2017).
• Key Parties:
  • Investment Manager: Manages the portfolio and issues the EBA.
  • Custodian Bank: A commercial bank approved by OJK to act as custodian, responsible for collective safekeeping of assets and settlement functions.
  • Originator: Sells the underlying receivables or assets to the KIK‑EBA.
  • Servicer: Typically, the Originator, responsible for collecting proceeds from obligors.

Structure B: EBA-SP

• This structure is statutory and institution specific, rather than a general securitisation SPV model. SMF, a state-owned enterprise established to support housing finance liquidity, purchases mortgage receivables from originating banks.
• SMF issues “Participation Letters” (Surat Partisipasi) to investors.

Structure C: Corporate SPV as per Law 4/2023

• Law 4/2023 introduces, for the first time, an express statutory basis for a corporate SPV. In nature, this is a limited liability company (Perseroan Terbatas or PT) specifically established for securitisation.
• The law contemplates that such an SPV may, among other things: conduct securitisation of a pool of assets; and issue securities to investors as beneficiaries.

OJK, it has broad authority to license market participants, approve public offerings (declaring the Registration Statement “Effective”), and supervise ongoing compliance.

Indonesian securitisation regulations do not impose strict limitations based on the legal form of participants.

On the sell side, any entity holding eligible financial assets may act as an originator, subject to a valid transfer of assets into the securitisation structure. In practice, originators are predominantly banks, financing companies, and state owned enterprises.

On the buy side, investor eligibility depends on the offering route. Public offerings of asset backed securities are not categorically restricted and may be accessed by domestic and foreign investors, although in practice the investor base is largely institutional due to product complexity. Non public offerings are restricted to Professional Investors under Indonesian capital market regime. There is no prohibition on originators participating on the buy side, and KIK EBA structures commonly include a junior, non fixed cash flow tranche that functions as credit enhancement through subordination. in practice this tranche is often held by the originator or its affiliate, though this is driven by structuring commercial considerations rather than an express statutory requirement.

No. Indonesia does not have a formal regulatory concept or designation of “simple, transparent and comparable” (STC) securitisations, as may be found in other jurisdictions.

While Indonesia’s banking prudential framework subjects to the Basel III securitisation framework, Indonesian regulations do not introduce an “STC” label or provide explicit preferential capital treatment tied to STC compliance. Nonetheless, OJK Regulation No. 11/POJK.03/2019 on the Prudential Principles in Asset Securitisation Activities for Commercial Banks, banks are required to apply securitisation risk weight calculations using either (i) the external rating-based approach or (ii) the standardised approach. If a bank is not able to use these approaches, the risk weight is set at 1,250% and if the bank does not meet the due diligence criteria, the risk weight is also set at 1,250%.

Yes. Indonesia draws a clear and fundamental distinction between public and non‑public securitisations, anchored in whether the offering constitutes a public offering under capital markets regulations and, in parallel, the specific issuance regime applicable to the relevant securitisation structure/instrument.

Public offering

An offering constitutes a public offering if it is conducted in Indonesia (or to Indonesian citizens) via mass media, or is offered to more than 100 parties, or has been sold to more than 50 parties.
For securitisations structured as KIK‑EBA, OJK Reg. 65/2017 permits EBA to be offered through a public offering, in which case the Investment Manager must submit a Registration Statement (Pernyataan Pendaftaran) to OJK and the offering may proceed only after the Registration Statement becomes effective. The Registration Statement becomes effective on the 45^th day following receipt of a complete filing (or earlier if OJK so declares). In addition, OJK Reg. 65/2017 imposes ongoing monthly and annual reporting obligations to EBA holders and to OJK.

Private / non‑public securitisations

For KIK‑EBA offered not through a public offering, OJK Reg. 65/2017 does not require a Registration Statement; however, the Investment Manager must submit the EBA disclosure document, the KIK‑EBA (note: the contract), and a specimen certificate to OJK within 10 days of signing the KIK‑EBA.
Separately, where the issuance is structured as a debt‑like private placement instrument (EBUS Tanpa Penawaran Umum), OJK Reg. 30/2019 provides a dedicated non‑public offering regime, including (among others) a 49‑holder cap, minimum denomination requirements, restrictions to professional investors, and pre‑issuance submission of issuance documentation (including an information memorandum) to OJK, with issuance to be completed within 30 days of submission.
In practice, the precise regime applied will depend on the chosen structure and instrument classification (e.g., KIK‑EBA versus EBUS private placement), and on how the offering is executed.

Yes. Indonesian securitisations, typically structured through a KIK-EBA as discussed, are subject to regulatory requirements at both the transaction and participant levels under the supervision of the OJK.

Transaction Level

• A public securitisation requires the submission of a Registration Statement (Pernyataan Pendaftaran) to the OJK. The filing is made by the Investment Manager and must be accompanied by, inter alia:
• the notarial deed of the KIK-EBA;
• legal opinion from the originator and KIK-EBA’s counsels;
• a credit rating report (from an OJK-licensed rating agency); and
• other supporting disclosure documents required under OJK regulations.

The securities may only be offered to the public once the Registration Statement becomes effective. Statutorily, the OJK review period is up to 45 days from the receipt of a complete Registration Statement, although in practice the timeline depends on the completeness of the submission and any regulatory comments issued during the review process.

• For securitisations conducted without a public offering (private issuance), there is no formal Registration Statement requirement under the prevailing regulations, provided that the offering does not qualify as a public offering under Indonesian law. However, in practice, the OJK expects similar process as public securitisation including the necessity to carry out the prior consultation and submission and review of transaction documents by OJK. While this process is not formally characterised as a “Registration Statement,” we understand that a de facto supervisory review and approval process before issuance is nonetheless required. Post-issuance reporting obligations to the OJK remain applicable for private issuance.

Participant Level

• Investment Manager and Custodian Bank: The KIK-EBA must be established between an Investment Manager and a Custodian Bank by signing a collective investment contract in notarial deed form, whereby each of the Investment Manager and the Custodian Bank must hold valid business licenses issued by the OJK.
• Capital Market Supporting Professionals: any legal counsel, notary, and public accountant providing professional services (including legal opinions or audit reports) in connection with the securitisation must be duly registered with the OJK as Capital Market Supporting Professionals.
• Credit Rating Agency: the credit rating agency must be licensed by the OJK.

Public securitisations in Indonesia are subject to a strict and prescriptive disclosure regime under OJK Reg. 65/2017, requiring the preparation of a comprehensive prospectus and ongoing disclosure. Issuers must comply with mandatory monthly reporting obligations using standardised templates prescribed by OJK, disclosing portfolio performance, asset composition, and distributions. Material information that may affect the value of the securities must also be disclosed promptly.

In contrast, private securitisations conducted without a public offering are governed by OJK Reg. 30/2019, which adopts a principles based approach. Disclosure is typically provided through an information memorandum tailored to professional investors, and there are no mandatory OJK templates for ongoing investor reporting, although the issuance itself must be reported to OJK in a prescribed format. In brief, similar process of disclosure to OJK for public securitisations applies as well for private securitisations.

Indonesian law does not prescribe a statutory minimum risk retention requirement for securitisations. Unlike as may be found in other jurisdictions, Indonesian securities regime does not mandate that originators retain a fixed percentage of economic risk.

In practice, however, risk retention is effectively mandatory. To obtain high credit ratings for senior tranches, Indonesian securitisations almost invariably incorporate credit enhancement through subordination or over collateralisation. The subordinated or equity tranche (often referred to as Class B) is typically retained by the originator and functions as a first loss position.

For bank originators, prudential considerations also play a role. While derecognition and capital relief require meaningful transfer of senior credit risk, retention of a junior tranche is consistent with regulatory expectations of sound risk management and alignment of incentives, particularly where the originator continues to act as servicer.

For KIK EBA securitisations specifically, the Investment Manager is required to act carefully and professionally in examining the Originator and the financial assets to be securitised, which in practice necessitates due diligence proportionate to the transaction’s complexity and risk. Such findings will need to be contemplated in the information memorandum or prospectus issued by the Originator and KIK-EBA, respectively, which would be available for the investors as part of the offering or placement process. In addition, regulated institutions in other sectors, such as banks, are subject to governance or risk management rules requiring analysis and monitoring around investment placement and product selection.

As part of this process, investors or the Investment Managers typically rely on deliverables from supporting professionals, such as, a true sale legal opinion, and that opinion itself is, in practice, expected to be grounded in legal due diligence.

Breaches of Indonesian capital market regulations, within the meaning of Article 102 of the Capital Markets Law, expose securitisation participants to administrative sanctions imposed by OJK, including written warnings, monetary fines, restrictions or suspension of business activities, revocation of licences, and cancellation of approvals or registrations. In addition, pursuant to OJK Regulation No. 45/POJK.04/2024 on the Development and Strengthening of Issuers and Public Companies, OJK may cancel or suspend the effectiveness of a registration statement, thereby halting a public offering of a securitisation.

Yes. Indonesia imposes both regulatory and practical restrictions on securitisation SPVs to ensure they operate solely as bankruptcy remote conduits. In the capital markets regime, as discussed, securitisations are typically conducted through a KIK-EBA, which is not a legal entity but a contractual arrangement managed by a licensed investment manager and custodian bank. The KIK-EBA is restricted to passive asset holding and cash flow distribution and may not conduct independent business activities.

Separately, under Law 4/2023, securitisations may also be conducted through a corporate SPV established as a limited liability company (PT). Such SPVs must be licensed by OJK, have strictly limited objects in their articles of association, and are subject to regulatory approval for major corporate actions. Both forms of SPV are subject to OJK supervision.

Bankruptcy remoteness of securitisation SPVs in Indonesia is achieved through a combination of structural and statutory measures. First, a valid “true sale” ensures that securitised assets are no longer legally owned by the originator and therefore do not form part of its bankruptcy estate (boedel pailit) under Law No 37 of 2004 on Bankruptcy and Suspension of Payments (as amended, the “Bankruptcy Law”).

Second, in a KIK EBA structure, OJK Reg. 65/2017 provides statutory segregation of assets, such that assets held in the KIK-EBA are separate from the assets of the Investment Manager and Custodian Bank and are not available to their creditors upon their bankruptcy or insolvency scenario.

Third, the regulatory framework introduced and reinforced by Law 4/2023 allocates standing to initiate bankruptcy proceedings against regulated capital market entities to OJK, effectively preventing ordinary creditors from filing bankruptcy petitions against securitisation vehicles and reinforcing asset isolation from the originator’s insolvency risk.

The principal forms of credit support used in Indonesian securitisations include subordination through senior and junior tranches, over collateralisation of the securitised receivables, cash reserve or liquidity accounts, and the trapping of excess spread. Subordination is the most common mechanism, with junior tranches absorbing first losses before senior noteholders.

Reserve accounts are frequently used to address temporary liquidity shortfalls, while excess spread provides an ongoing buffer against portfolio losses. In addition, third party guarantees, including corporate guarantees from the originator’s parent, may be used to enhance credit quality. All such mechanisms are permitted under Indonesian securitisation regulations, subject to full disclosure to, approval from and regulatory supervision by OJK.

In Indonesia, receivables are transferred by way of cessie pursuant to Article 613 of the Indonesian Civil Code, through a Deed of Assignment that effects a transfer of legal title from the originator to the assignee. For securitisation purposes, such transfer constitutes a “true sale” provided that it satisfies the outright sale and bankruptcy remoteness criteria under applicable OJK regulations.

Article 613 requires notification to or acknowledgment by the obligor for the assignment to be binding on the obligor. In such cases, the originator remains as servicer, obligors continue to make payments to the originator, and collections are contractually swept to the securitisation vehicle. Notification is contractually triggered only upon the occurrence of specified events, such as originator insolvency or servicer default which would then be intended to require the obligors to make payments to another account specified in the notice which is not owned by the originator or the servicer.

Under Indonesian law, transfers of assets may be challenged through actio pauliana proceedings pursuant to Articles 41 and 42 of the Bankruptcy Law. A transaction may be annulled where it is carried out within one year prior to bankruptcy, is not legally mandatory, causes prejudice to creditors, and was entered into with knowledge (or constructive knowledge) that creditor interests would be harmed. Article 42 establishes statutory presumptions of such knowledge in certain circumstances, shifting the evidentiary burden to the counterparty.

From a securitisation structuring perspective, ensuring a true sale at fair market value, demonstrating solvency at the time of transfer, and anchoring the transfer in a prior binding obligation are all directly relevant and legally grounded measures to mitigate actio pauliana risk.

Yes. Indonesian law imposes strict statutory and regulatory safeguards to protect obligor data in securitisation transactions.

Under Law No. 27 of 2022 on Personal Data Protection (“PDP Law”), the transfer of loan-level information relating to identifiable debtors constitutes “processing” of personal data. Such processing must be supported by a valid legal basis.

In a securitisation context, the originator typically acts as the data Controller, and any transfer of debtor data to an SPV, custodian bank, or other transaction party must satisfy one of the lawful grounds under the PDP Law, most commonly: (i) the data subject’s explicit consent, (ii) necessity for the performance of a contract to which the data subject is a party; or (iii) compliance with applicable laws and regulations.

The originator must also comply with the PDP Law’s principles of purpose limitation, data minimisation, and security safeguards.

Where the originator is a bank, additional confidentiality obligations apply under the Indonesian banking secrecy regime, as reflected in POJK No. 44/POJK.03/2024 and the prevailing banking framework.

Customer information is classified as confidential and may only be disclosed in limited circumstances permitted by law. In securitisation structures, disclosure is typically structured to fall within recognised exceptions, including customer consent and disclosures required in connection with lawful asset transfers.

Complete debtor-level information is disclosed only to essential transaction parties (e.g., the SPV and custodian bank) on a strict need-to-know basis and subject to robust confidentiality undertakings including, where necessary, Non-Disclosure Agreements (NDAs), as well as information security protocols consistent with PDP Law requirements.

Yes, comprehensively. Credit rating agencies in Indonesia are constructed as critical Capital Market Supporting Institutions and operate under strict regulatory oversight.

The prevailing framework is governed by OJK Regulation No. 38/POJK.04/2018 on the Licensing of Securities Rating Agencies. The activity of rating securities, including KIK-EBA issuances, can only be conducted by a corporate entity that has obtained a specific business license from OJK.

This overview is provided for general informational purposes only and does not constitute tax advice as authors are not authorised to advise on taxation; specific tax implications must be confirmed with qualified Indonesian tax advisers.

Indonesia has specific tax rules applicable to securitisation structures, including KIK EBA and investors. A KIK EBA is treated as a tax subject under Indonesian income tax law pursuant to Director General of Taxes Decree No. KEP-147/PJ/2003 of 2003 on Income Tax on Income Received or Earned by KIK-EBA and Its Investors. Income received by the KIK EBA constitutes taxable income; however, distributions to EBA holders are treated as deductible expenses, such that the structure is intended to be economically tax neutral at the vehicle level.

The transfer of receivables into a KIK EBA may have VAT implications depending on the nature of the assets and the status of the originator, whereas the issuance and trading of EBA securities themselves are not subject to VAT.

At the investor level, interest or similar income derived from EBA is generally subject to final withholding tax in accordance with Indonesian tax regulations, while payments to non resident investors are subject to withholding tax under Article 26 of the Income Tax Law (Law No. 36 of 2008).

The Indonesian legal and regulatory framework does not prohibit cross-border securitisation structures; however, in our view, in practice, it creates material structural and tax inefficiencies that render purely offshore models less attractive than onshore alternatives.

Foreign Investors

Foreign investors are permitted to invest in Indonesian securitisation instruments without material legal impediment. KIK-EBA may be purchased by non-resident investors, provided the securities are listed on the Indonesia Stock Exchange (Indonesia Stock Exchange) and settled through the Indonesian central securities depository, Kustodian Sentral Efek Indonesia.

There are no foreign ownership restrictions applicable to KIK-EBA notes. Accordingly, inbound portfolio investment into Indonesian securitisations is well accommodated within the existing framework.

Use of Offshore SPVs

Historically, certain Indonesian originators seeking foreign‑currency (primarily USD) funding have considered or utilised offshore special purpose vehicles. While structurally feasible, such models can be challenging in execution and may introduce meaningful friction, including (among others) (i) potential tax leakage and documentation complexity, (ii) a more sensitive true sale / re‑characterisation analysis under Indonesian law when the receivables are assigned cross‑border, and (iii) operational constraints around collections and debtor communication.

In particular, transfers of receivables are typically implemented by assignment (cessie) under Article 613 of the Indonesian Civil Code, which requires an assignment deed (authentic or underhand), and under which notification to (or written acknowledgement by) the obligor is required for the assignment to be binding on the obligor (i.e., absent notice or acknowledgement, the obligor can validly discharge by paying the original creditor).

Statutory Recognition per Law 4/2023

The enactment of Law 4/2023 was a watershed structural reform, finally elevating the Corporate SPV (as a limited liability company or PT) and the trustee function into primary legislation. This decisively resolves historical legal ambiguities surrounding the use of KIK-EBA, which is merely a contract, inability to easily hold title to non-financial assets or litigate in its own name, thereby fortifying the bankruptcy-remoteness of future transactions.

Mandatory requirement for disclosure on the assignment of BNPL receivables

In the context of BNPL securitisations, the mandatory electronic disclosure of receivable transfers under the newly issued OJK Regulation No. 32 of 2025 on BNPL Operations (“OJK Reg. 32/2025”), may, as a matter of structure, be leveraged to satisfy the notification requirement under Article 613 of the Indonesian Civil Code, thereby strengthening the enforceability of the assignment against obligors in large scale, digital first securitisations. Under Article 11 of OJK Reg. 32/2025, Originators (Commercial Banks or Multi-Finance Companies) are explicitly mandated to disclose to consumers via their Electronic Systems if their financing has been “transferred to another party” (telah dialihkan kepada pihak lain).

In the context of landmark BNPL securitisations (e.g., KIK EBA SPayLater), this regulatory mandate acts as a powerful structural mitigant. By executing this disclosure electronically within the platform’s UI, originators can effectively satisfy the archaic “notification” requirement mandated by Article 613 of the Indonesian Civil Code for the legal perfection of a cessie (assignment of receivables).

Areas for Improvement

On the corporate SPV, while Law 4/2023 provides the statutory regime for Corporate SPVs, as of February 2026, the market remains in a transitional phase.

Additionally, the broader market still lacks a central, electronic public registry for the assignment of general commercial receivables (similar to the established Fiduciary Registry for security interests). Establishing a centralised filing system would eliminate the legal uncertainties and evidentiary hurdles surrounding the perfection of a “true sale” against third-party creditors in traditional asset classes.

As discussed, under Indonesian law, a true sale of receivables is generally effected through an assignment by way of cessie pursuant to Article 613 of the Indonesian Civil Code. No regulatory filing or registration is required to constitute a valid transfer as between the parties. However, certain formalities must be satisfied for the transfer to be valid and enforceable.

Requirements for a Valid Legal Transfer (True Sale)

To constitute a legally effective transfer of receivables:

1. Deed of Cessie
   The assignment must be evidenced by a written instrument (akta), which may be executed either as a private deed (akta di bawah tangan) or as a notarial deed (akta notaris) between the originator (assignor) and the assignee.
   Indonesian law does not mandate notarial form; however, notarial deeds are commonly used in structured finance transactions for evidentiary robustness and certainty of date.
2. Transfer of the Receivable (Delivery Requirement)
   Under Indonesian law, cessie requires a written deed evidencing the transfer. There is no separate physical “handover” requirement in the proprietary sense. That said, as a matter of commercial practice, the underlying credit documentation is typically delivered for evidentiary and operational purposes.
3. Payment of Purchase Price
   Payment of the agreed purchase price supports the characterisation of the transaction as a sale rather than as secured financing. While not a statutory formality under Article 613, it is critical from a true sale and recharacterisation risk perspective.

Perfection and Enforceability Against the Obligor

1. Notification
   In order for the assignment to be enforceable against the obligor (debtor), the obligor must either:
   • be formally notified of the assignment; or
   • provide written acknowledgment of the assignment.

Absent notification or acknowledgment, the assignment remains valid as between assignor and assignee but is not opposable to the obligor, who may validly discharge its obligations by paying the original creditor.

In structured finance transactions, notification is frequently deferred for commercial reasons and effected upon the occurrence of specified trigger events.