LEGAL PROTECTION FOR INVESTORS IN CROWDFUNDING SERVICES THROUGH INFORMATION TECHNOLOGY OFFERS (EQUITY CROWDFUNDING)

Article Info Abstract Received : 01/07/2020 Approved: 20/07/2020 The readiness of the community in the era of information technology has opened up opportunities in online businesses such as equity crowdfunding, equity crowdfunding as an alternative capital is increasingly in demand, especially by novice businesses. The Financial Services Authority issues regulations regarding the Equity Crowdfunding transaction model by issuing the Financial Services Authority Regulation Number 37 / POJK.04 / 2018. This provides questions for the regulation of Equity Crowdfunding in Indonesian Capital Market Law. The writer in this study would like to examine and analyze the Equity Crowdfunding activities and legal protection for investors, because legal protection is a form of legal certainty. The research method used is a normative juridical types, the problem approach uses the legislation approach and the conceptual approach. The results show that equity crowd funding is a form of new innovation in funding sources. The service mechanism has many similarities with public offering activities in the capital market, only the implementation is simpler. Equity Crowdfunding legal protection for investors who have been registered in the provisions of Chapter 54 paragraph (2) POJK Number 37 / POJK.04 / 2018, providing the latest information is only placed on the organizer's website or website.

The history of the formation of capital markets in Indonesia began in the days of the VOC which continued into modern Indonesia. After gaining independence in 1945, Indonesia began to carry out development in various fields. The post-Old Order Indonesian government has concentrated on more systematic development since the last 1960s. The reality faced by the government at that time was that funding needs were very large, so that the Indonesian government try to raise funds for the development of funds in various ways, especially through loans from donor countries, such as European countries that were members of the Inter-Government Group on Indonesia (IGGI), Than (Consultative Group on Indonesia or CGI), Japan, and the United States. But for the Government of foreign loans is not a strategic way for development, the potential of Indonesian people must be optimized for use. For this reason, a capital market is formed which is intended as a vehicle to meet development financing needs. The strategic and important function of the capital market makes the government very interested in the development and progress of the capital market. Because of the potential for massive fundraising, it can be utilized to increase the volume of development activities. 1 The capital market brings together the supplier of funds with the user of fund for the purpose of meddle-term investment and long-term. Both parties buy and sell capital in the form of efect. The supplier of funds hand over a number of funds and the recipient of the fund (a public company) submits proof of ownership in the form of efect. According to the Indonesian Big Dictionary (KBBI), the understanding of the capital market is all activities that meet supply and demand or constitute activities that trade in securities. Law Number 8 of 1995 concerning the Capital Market (next is called as UUPM) provides the meaning explained in chapter1 Number 13 where the capital market is an activity concerned with Public Offering and Trading of Public Company Securities relating to the issuance of the securities, as well as institutions and professions related to effects. 2 Put simply, the capital market can be defined as a market that trades a variety of financial instruments (securities) long-term, both in the form of debt and equity issued by private companies. In general, the reason for the formation of the capital market is because it is able to carry out economic Syiah Kuala Law Journal : Vol.4(2) Agustus 2020 Novia Choirunnisa,Nahdlotul Fadilah 155 and financial functions. In carrying out its economic functions, the capital market provides facilities to move funds from lenders (fund owners) to borrowers (fund recipients) by investing excess funds owned by lenders (funders) by hoping to get a reward from the investment of the funds. Meanwhile, in terms of the interests of the borrower, the availability of funds from outside parties enables the company to develop business activities without having to wait.
The Capital Market as an activity as well as an alternative fundraising institution for entrepreneurs is a very dynamic business sector. This means that the Capital Market does not only involve various parties, ranging from the Financial Services Authority (OJK) as a supervisory and supervisory council, but also other supporting institutions such as the Custodian, Securities Administration Agency, Insurer, Securities Rating Agency and Trustee. Coupled with capital market supporting professions such as Accountants, Legal Consultants, Notaries, Appraisers and Investment Advisors, making this Capital Market are not only dynamic, but also a very complex business activity. 3 Because of the involvement of various parties in its implementation in order to comply with OJK regulations, fundraising activities through the Capital Market are actually an alternative to capital financing that is not simple either in terms of costs or procedures. However, when compared to the long-term benefits of conventional capital financing sources such as bank loans, companies can take into account efficiency rather than public offerings to reduce bank loan interest costs that are quite high. In addition, public offerings provide opportunities for companies that were originally limited / closed companies to become public companies. This can also be used to increase company reliability.
The rapid of this fintech phenomenon is influenced by the growth of internet users which is getting higher from year to year. Moreover, the fintech startup platform itself suits the needs of today's society. One of the platforms most people love is Crowdfunding. Crowdfunding is a small online fund-raising scheme but comes from a large community that has raised significant funds. 4 One type of Crowdfunding that is very attractive to the public is Equity-based Crowdfunding. 6,000,000,000.00 (six billion rupiah). As an alternative to fundraising with stock returns, internetbased equity crowdfunding provides benefits that can outperform the initial public offering of company shares (IPO). In general, the concept of equity-based crowdfunding is the same as shares where investors will deposit their money to businesses that need capital and then investors will get returns in the form of shares as proof of ownership. Therefore through this paper, research on legal protection for investors in equity based crowdfunding will be conducted in terms of existing the problems that will be discussed in this paper, namely regarding equity crowdfunding instruments in capital market activities as well as legal protection forms for investors in Equity Crowdfunding.
Formulation of the problem: 1. What is the regulatory of Equity Crowdfunding in Indonesian Capital Market Law ?
2. What is the Legal Protection for investors in Equity Crowdfunding activities ?

II. RESEARCH METHODS
The type of research used to discuss this problem is juridical normative, i.e. research based on laws and regulations relating to the capital market and all forms of activities in the capital market, Equity Crowdfunding transactions, and all forms of authority of the Financial Services Authority (OJK) to provide legal protection for investors in Equity Crowdfunding transactions.
This research for the first approach is the statute approach or the statutory approach. Statute approach is a legal research that puts the statutory approach as one of the approaches. The statutory approach is done by reviewing all the laws and regulations that relate to the issues at hand. 5 In this writing what is needed is a statutory regulation.
The second approach is a conceptual approach carried out by looking for theories and doctrines that already exist to be used as a reference in order to understand a viewpoints and doctrines in building a legal argument in solving the issues being faced. 6 This approach will link existing concepts with the legal issues of Equity Crowdfunding transaction activities.

Definition and History of Equity Crowdfunding
Understanding Equity Crowdfunding this matter is regulated in the Financial Services The other explanation given for the definition of Equity Crowdfunding is as follows: "Equity crowdfunding is a combination of crowd-funding and crowdlending. Backers spend money in equity crowdfunding campaigns to support a founder, who is working to develop a sustainable product or service, and expect a monetary return after the investment contract expires or the start-up company is bought by a venture capitalist. In the majority of the equity crowdfunding Syiah Kuala Law Journal : Vol.4(2) Agustus 2020 Novia Choirunnisa, Nahdlotul Fadilah 158 campaigns, however, back-ers do not pre-purchase the product or service to be developed. In the USA, equity crowdfunding was restricted for a long time to accredited investors and did not take place in any significant manner". 7 From the explanation above it can be seen that one form of crowdfunding is Equity crowdfunding which is a mechanism for funds to be collected from several people, these activities can be carried out for various purposes, both to support a business or for other activities.
"Crowdfunding generally means "an act of disclosing and advertising one's own project or venture through the internet by a person who needs funds for such a project or venture in order to raise many small amounts of money from a large and unspecified number of the general crowd". 8 "Precisely saying, it can also mean "an act of 'many a little makes a mickle' to raise a small amount of money from the general public for a certain project of a startup enterprise, micro business, artists or social activists who have difficulty borrowing money from financial institutions". 9 Completing the previous definition that can be said briefly that a crowdfunding is a form of action that starts from a small thing to something big where it is realized by an effort to raise a number of funds from the general public for a particular project from parties who have difficulty in get funds.
Crowdfunding, also sometimes referred to as alternative or distributed financing, is not a new phenomenon. Charities have long relied on donor drives that aggregate small donations to fund their causes. 10 The "Under purchase type crowdfunding, a platform provides a matching space for fundraisers and (potential) contributors. When a contributor finds that a specific project of a fund-raiser is an attractive one, they enter into a purchase agreement. Under the pur-chase agreement, the contributor Syiah Kuala Law Journal : Vol.4(2) Agustus 2020 Novia Choirunnisa, Nahdlotul Fadilah 159 is obliged to contribute a specific amount of money and the fund-raiser is obliged to deliver specific goods or services to the fund-raiser when the project becomes successful". 12 The pattern of crowdfunding from the explanation above can be seen that there is a platform space which provides a forum for collecting funds and the participation of contributors. In the event that a contributor agrees to participate in the container offered, it may shift at the stage of the purchase agreement. Under the purchase agreement, the contributor is obliged to contribute a certain amount of money and the fundraiser is obliged to deliver certain goods or services to the fundraiser when the agreed project has been successful.
"Understanding the large-scale patterns in crowdfunding is important for several reasons.
First, we know almost nothing about crowdfunding in the aggregate. The general academic impression is that crowdfunding is a relatively niche area of financing". 13 That there are several things that need to be considered in understanding a crowdfunding pattern, the first aspect is that crowdfunding is a relative field in financing, this means crowdfunding is a financing instrument that can develop and innovate over time.
"Second, a large body of theoretical and empirical literature suggests that access to financial systems is important in affecting economic growth and poverty in developing countries crowdfunding allows investors and entrepreneurs to connect directly, allowing investors access to new investment opportunities. However, incumbents oppose financial development that increases competition. Hence, it is unclear that countries with large unbanked populations will have last mover advantages in bypassing the formal financial system making it important to examine if crowdfunding plays a greater role in emerging markets than in developed markets.". 14 Secondly, the existence of crowdfunding makes it possible for investors and entrepreneurs to be able to connect directly this means it can create opportunities for business people and investors in carrying out their business activities.
"Third, the law and finance literature has argued that the extent to which a country's laws protect investor rights, and the extent to which those laws are enforced, fundamentally determines how corporate finance and corporate governance evolves in that country. However, both the financial policies studied in the prior literature and the regulatory regimes have co-evolved over long periods. From the existence of several explanations regarding the definition of Equity Crowdfunding above, it can be concluded that the definition of Equity Corwdfunding is an alternative method of business funding that is growing rapidly and is increasingly popular with both developed and developing countries. Equity Crowdfunding can also be used as a method of raising funds from the community to finance a project, loans to individuals / businesses or other needs through an internetbased platform.
The concept of crowdfunding is actually a derivative of the concept of crowdsourcing.
According to Jeff Howe, crowdsourcing is an activity or action carried out by an institution that takes one of the jobs that should be done by the employees of the company itself, to be distributed openly and freely so that it can be done by many people / the crowd announced through the internet network (Paul Whitla, 2009).
"To the best of my knowledge, there is no accepted framework for modeling crowdfunding.
It is unclear, however, that economic motivations form the sole motivators for individuals to participate on reward or donation-based platforms. I, therefore, develop a conceptual framework that

The Characterisric of Equity Crowdfunding
Basically crowdfunding is packaged in a web platform where the project owner meets with the public who will provide funds. The three main components of crowdfunding are: i) The collected money is forwarded by the organizer to the initiator / investee.

Types of Crowdfunding
In general, crowdfunding is grouped according to its purpose, can be divided into 2 (two)

types, namely: Community Crowdfunding and Investment Crowdfunding or Financial Return
Crowdfunding, in this study the discussion will be limited to the Financial Return Crowdfunding.
Investment crowdfunding or financial return crowdfunding aims to raise funds for profit. One of the main elements of investment crowdfunding is internet-based therefore investment crowdfunding is part of fintech or the implementation of a technology-based financial system. technology is the use of technology in the financial system that produces new products, services, technology and / or business models and can have an impact on monetary stability, financial system stability, and / or efficiency, fluency, security, and payment system reliability. However, Indonesia Bank as an independent institution whose task and authority is to regulate and maintain the smoothness of the payment system, is not an institution authorized to oversee investment activities as  lenders with loan recipients in the context of entering into loan agreements to borrow in rupiah directly through an electronic system with internet network. In this case the fund applicant submits a fund proposal to the P2P Lending Platform owner or Operator. The Provider when the administrative requirements of the fund applicant are complete the Operator will conduct an assessment of the fund applicant. Although applicants for funds are not required to provide guarantees, the implementation of P2P Lending for a signify amount in Indonesia is still carried out with guarantees. Therefore, P2P Lending is not carried out purely on a platform or purely electronic basis, but also with real assessment that requires face-to-face meetings between the Provider and the applicant for funds, following the implementation of business assessments and / or personal assessments as an obligation to carry out prudent financing principles. According to the provisions of Article 6 paragraph (2)  18,000,000,000.00 (eighteen billion rupiah). While the maximum limit value of shares offered by each Issuer through the Equity Crowdfunding Platform must not be more than Rp. 6,000,000,000.00 (six billion rupiah) in a period of 12 (twelve) months. In this case, the owner of the equity crowdfunding platform or the organization of funds through the offering of shares acts as an underwriter. Issuers and Organizers through an agreement can determine the minimum amount of funds that must be obtained in a stock offering through the equity crowdfunding platform, and in contrast to the underwriting agreement in the initial offering, the organizer as the underwriter has no options but performs its functions with full commitment of the minimum amount of funds that must be obtained. This is in accordance with the provisions listed in Article 22 paragraph (1)  At the other end, the Investor is the party that purchases the publisher shares through the equity crowdfunding platform. Investors must be legal subjects (both individuals and legal entities) who have the ability to also set criteria are investors who have income of up to Rp. 500,000,000.00 (five hundred million rupiah) per year, can buy equity crowdfunding shares at most 5% of total income per year and for investors who earn more than Rp. 500,000,000.00 (five hundred million rupiahs) per year can buy equity crowdfunding shares at most 10% of total annual income. Legal protection for investors is currently specified in chapter 42 POJK No. 37 / POJK.04 / 2018 that investors can cancel the plan to buy shares through the equity crowdfunding platform site within 48 Syiah Kuala Law Journal : Vol.4(2) Agustus 2020 Novia Choirunnisa, Nahdlotul Fadilah 165 hours after making a share purchase and before the settlement of the transaction is made through the Operator.
The regulation of Equity Crowdfunding in Capital Market Law is often considered to be the same as an IPO. According to the Black Law Dictionary, the Initial Public Offering (IPO) is a company's first public sale of stock; a first offering of an issuer equity securities to the public through a registration statement. According to chapter 1 Number 15 UUPM, a public offering is a security offering activity carried out by an issuer to sell securities to the public based on procedures set out in capital market regulations. According to the explanation of chapter 70 paragraph (1) of the Capital Market Law, public offering activities are one way to raise public funds. For this reason, the interests of the people who will invest their funds in securities need protection. Therefore, each party who intends to raise funds through a public offering is required to submit a registration statement to the FSA first and a public offering can only be made after the registration statement is effective. 17 But apparently between the two there are some substantial differences between the initial public offering (IPO) with equity crowdfunding is as follows: a. The term a company that sells its shares through an IPO is called an Issuer, while a company that sells its shares through equity crowdfunding is called an Issuer; b. Capital costs as a condition that must be met by the Issuer or Issuer, the Issuer has at least 300 (three hundred) shareholders and has paid up capital of at least Rp. 3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid up capital determined by Government Regulation. While the Issuer is not a company with a complex structure, and is not a public company. The issuer has no more than Rp. 10,000,000,000.00 (ten billion rupiah) the calculation of which does not include land and buildings or the amount of paid up capital of not more than Rp. 18,000,000,000 (eighteen billion rupiah), this is in accordance with Article 32 paragraph (1)  j. Disclosure, the principle of information disclosure must be equally applied to both the IPO and Equity Crowdfunding. The difference is that the requirements for the presentation of information, namely in the IPO, the disclosure of information is carried out in a format regulated by law, in this case the provision of Article 71 of the Capital Market Law that public offerings must be accompanied by a prospectus as a basis for knowledge of potential investors to obtain information about legality, financial conditions, potential and risks associated with the company. Meanwhile, the provisions on presenting information for Issuers at the time of a public offering are not specifically specified. However, in general the Organizer will introduce

Legal Protection For Investors In Equity Crowdfunding Activities
The functions of law are to protect the public and individuals against actions that disturb the public order carried out by other individuals or the government itself (abuse of authority by state officials) and foreign governments (aggression or subversion by foreign governments). 18 This is reinforced by the opinion of Roscue Pond which states that the law to protect human interests is a demand that is protected and fulfilled by humans in the field of law (Salim HS, 2010). M.H.
Tirtaatmidjaja argues that the law is all the rules (norms) that must be prosecuted in the conduct of actions in the association of life with threats in the form of compensation if breaking those rules will endanger oneself or property, for example people will lose their independence, be fined and so on. 19 According to Satjipto Rahardjo, legal protection is to provide protection for human rights harmed by others and that protection is given to the community so that they can enjoy all the rights provided by law. 20 Philosophically, legal protection boils down to a form of legal certainty provided by the government. Legal certainty by dogmatic juridical schools is seen as positive legal science. independent. Adherents of this opinion argue that the law is nothing but a collection of rules which is nothing but guaranteeing the realization of legal certainty. 21 Equity crowdfunding activities are business activities on the internet, where investors as stakeholders must be considered by the Organizer and Publisher who sell their shares through online sites. In relation to legal protection for internet consumers, according to Philipus M. Hadjon, that can be broken down according to the type of legal protection there are 2 forms, namely preventive and repressive legal protection. Preventive protection in terms of inclusion of this disclaimer serves to prevent consumers from being on the weak side and not merely harmed. Repressive legal protection in terms of resolution when a dispute occurs, divided again into two, namely through litigation and non-litigation. 22 Issuers ( Crowdfuning, where equity crowd funding is the result of innovation as well as breakthroughs in the development of capital markets that adapt to current patterns of market and economic development.
Equity crowdfunding is increasingly in demand as an alternative source of financing that is practical, simple and fast.
Legal protection of Equity Crowdfunding for registered Investors in providing up-to-date information on the Fund's collection service does not regulate the provision of up-to-date information on the Funding service to Investors that have been registered directly via telephone contact or email, only in the provisions of chapter 54 paragraph ( 2)  The law is an instrument that provides objectives in the form of certainty, fairness and expediency, always developing following the community. In fact, it is not strange if the law grows behind the activities that arise and grow in society. The more widespread practice of fund raising services through equity offering (equity crowd funding), it is necessary to have more up-to-date legal instruments that dynamically follow the development of human life. Capital Market Law (UUPM) regulates public companies and public companies that offer securities that are both equity and debt to the public. While the Issuer companies in equity crowdfunding activities are neither public companies nor public companies, so the Capital Market Law as an umbrella law overseeing information technology-based stock offering activities to the general public is inaccurate and inadequate. For this reason, it is recommended that the Government and the Parliament immediately create a new Capital Market Law, which is not only adjusted to the OJK Law but also which houses the offering of securities in accordance with its development in the community.