OJK Regulation No. 12 of 2025 on the Implementation of Risk Management and Health Level Assessment of Investment Managers

EXTRACT
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 12 OF 2025
CONCERNING
THE IMPLEMENTATION OF RISK MANAGEMENT AND HEALTH LEVEL ASSESSMENT OF INVESTMENT MANAGERS BY THE GRACE OF GOD ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: a. that the development and complexity of businesses, investment manager risk profiles, and investment products, as well as the development and complexity of transaction and investment activities in the capital market industry, affect the health level of investment managers; b. that to address the developments and complexities referred to in letter a, the implementation of risk management and health level assessment using a risk-based approach is required to avoid or minimize losses from investment manager business activities that could affect the sustainability of the investment manager's business;
c. that based on considerations as referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning the Implementation of Risk Management and Health Level Assessment of Investment Managers;
Recalling: 1. Law Number 8 of 1995 concerning Capital Markets (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608) as amended by Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);

2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253) as amended by Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
DECIDING:
Establishing: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE IMPLEMENTATION OF RISK MANAGEMENT AND HEALTH LEVEL ASSESSMENT OF INVESTMENT MANAGERS.
CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following definitions apply:
1. Securities are securities or investment contracts, whether in conventional and digital form or other forms according to technological developments, which give rights to owners to directly or indirectly obtain economic benefits from the issuer or from certain parties based on agreements and any derivatives over securities, which can be transferred and/or traded in the capital market.
2. Investment Manager is a party whose business activities manage portfolios of Securities, collective investment portfolios, and/or other investment portfolios for the benefit of a group of clients or individual clients, except insurance companies, sharia insurance companies, pension funds, and banks that conduct their own business activities based on legislation.
3. Investment Product is mutual funds, asset-backed securities in the form of collective investment contracts, infrastructure investment funds, real estate investment funds, individual client security portfolio management, multi-asset investment funds, collective investment contracts for pooling housing savings funds for the people, and other investment products established by the Financial Services Authority based on legislative provisions.
4. Risk Management is a series of procedures and methodologies used to identify, measure, monitor, and control risks arising from Investment Manager business activities.

5. Investment Manager Health Level is the result of an assessment of the Investment Manager's condition conducted against the Investment Manager's risks and performance, including the Investment Products managed.
6. Composite Rating is the final rating resulting from the Investment Manager Health Level assessment.
7. Market Risk is the risk arising in the Investment Product portfolio due to changes in market conditions, including price and interest rate changes.
8. Investment Product Liquidity Risk is the risk arising due to the inability of the Investment Product managed by the Investment Manager to meet its short-term obligations.
9. Credit Risk is the risk caused by the failure of other parties, specifically transaction counterparties and/or contracts, related to instruments in the portfolio to fulfill their obligations to the Investment Product.
10. Security Portfolio Concentration Risk is the risk arising due to cumulative investment activities from all Investment Product portfolios in one type of asset or instrument issued by a specific entity.
11. Operational Risk is the risk due to insufficient and/or non-functioning internal processes, human error, and failures of systems and information technology affecting Investment Manager operations.
12. Legal Risk is the risk arising from legal claims and/or judgments that can affect or have a negative impact on the Investment Manager's business.
13. Compliance Risk is the risk arising due to the Investment Manager not complying with and/or not implementing regulatory provisions.
14. Reputational Risk is the risk arising from negative perceptions of the Investment Manager that provide an impact on the continuity of the Investment Manager's business or business activities.
15. Strategic Risk is the risk caused by the Investment Manager's inaccuracy in making and/or executing strategic decisions and failure to anticipate changes in the business environment.
16. Investment Risk is the risk arising in the Investment Manager's financial condition due to investments made for the Investment Manager's own benefit.
17. Party is an individual, legal entity, company, joint venture, association, or organized group.

Article 2
(1) Investment Managers are required to safeguard, maintain, and manage the Investment Manager Health Level with prudence and implement Risk Management effectively against:
a. management of Security portfolios or Investment Products managed; b. execution of Investment Manager business activities; and
c. risks inherent in Investment Products and Investment Managers.
(2) The Board of Directors and Board of Commissioners are responsible for safeguarding, maintaining, and managing the Investment Manager Health Level as referred to in paragraph (1) in accordance with legislative provisions.
Article 3
Provisions regarding the implementation of Risk Management and assessment of Investment Manager Health Level as regulated in this Financial Services Authority Regulation apply mutatis mutandis to Sharia Investment Managers and Sharia investment management products.
Article 4
(1) Any Party violating the provisions as referred to in Article 2 shall be subject to administrative sanctions.
(2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties causing the violation as referred to in paragraph (1).
(3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) shall be imposed by the Financial Services Authority.
(4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; and/or f. cancellation of approval.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, or f may be imposed with or without being preceded by the imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, or f.

(7) The procedure for imposing administrative sanctions as referred to in paragraph (3) shall be carried out in accordance with legislative provisions in the field of capital markets.
CHAPTER II
SCOPE OF RISK MANAGEMENT
Article 5
(1) The implementation of Risk Management as referred to in Article 2 paragraph (1) must at least cover:
a. active supervision by the Board of Directors and Board of Commissioners; b. adequacy of Risk Management policies and procedures;
c. adequacy of the process for identifying, measuring, monitoring, and controlling risks; and
d. a comprehensive internal control system.
(2) The implementation of Risk Management as referred to in paragraph (1) must be adjusted to the size, business complexity, and capabilities of the Investment Manager.
Article 6
(1) Investment Managers are required to implement Risk Management as referred to in Article 5 paragraph (1) against risks on:
a. Investment Products; and b. Investment Managers.
(2) Risks on Investment Products as referred to in paragraph (1) letter a include:
a. Market Risk; b. Investment Product Liquidity Risk;
c. Credit Risk; and
d. Security Portfolio Concentration Risk.
(3) Risks on Investment Managers as referred to in paragraph (1) letter b include:
a. Operational Risk; b. Legal Risk;
c. Compliance Risk;
d. Reputational Risk; e. Strategic Risk; and f. Investment Risk.
Article 7
(1) Any Party violating the provisions as referred to in Article 5 paragraph (2) and/or Article 6 paragraph (1) shall be subject to administrative sanctions.
(2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties causing the violation as referred to in paragraph (1).
(3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) shall be imposed by the Financial Services Authority.

(4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; and/or f. cancellation of approval.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, or f may be imposed with or without being preceded by the imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, or f. (7) The procedure for imposing administrative sanctions as referred to in paragraph (3) shall be carried out in accordance with legislative provisions in the field of capital markets.
CHAPTER III
ACTIVE SUPERVISION BY THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS
Article 8
In the implementation of Risk Management, Investment Managers are required to establish clear authority and responsibilities at every level of position in the active supervision of the Board of Directors and Board of Commissioners as referred to in Article 5 paragraph (1) letter a.
Article 9
(1) Authority and responsibilities as referred to in Article 8 for the Board of Directors must at least:
a. formulate written and comprehensive Risk Management policies and strategies; b. be responsible for the implementation of Risk Management policies and the overall risk exposure taken by the Investment Manager;
c. evaluate and decide on transactions requiring Board of Directors approval;
d. develop a Risk Management culture throughout all levels of the organization; e. evaluate Risk Management policies, strategies, and procedures and risk exposures affecting Investment Manager business activities; f. ensure the improvement of human resources competence related to Risk Management; g. ensure that the Risk Management function has operated independently; and

h. carry out periodic reviews at least once within one year to ensure:
1. accuracy of risk assessment methodologies;
2. adequacy of Risk Management information system implementation; and
3. appropriateness of Risk Management policies and procedures.
(2) In carrying out authority and responsibilities as referred to in paragraph (1), the Board of Directors must have:
a. adequate understanding of risks inherent in all functional activities against:
1. Investment Products; and
2. Investment Managers; and
b. ability to take necessary actions according to the Investment Manager's risk profile.
Article 10
(1) Authority and responsibilities as referred to in Article 8 for the Board of Commissioners must at least:
a. approve and evaluate Risk Management policies; and b. evaluate and/or provide corrective guidance on the Board of Directors' accountability in implementing Risk Management policies as referred to in letter a. (2) Evaluation of Risk Management policies as referred to in paragraph (1) letter a is carried out periodically at least once within one year and whenever there are factors significantly affecting Investment Manager business activities. (3) Evaluation of the Board of Directors' accountability for the implementation of Risk Management policies as referred to in paragraph (1) letter b is carried out at least once within six months.
Article 11
(1) Any Party violating the provisions as referred to in Article 8 shall be subject to administrative sanctions.
(2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties causing the violation as referred to in paragraph (1).
(3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) shall be imposed by the Financial Services Authority.
(4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;

c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; and/or f. cancellation of approval.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, or f may be imposed with or without being preceded by the imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, or f. (7) The procedure for imposing administrative sanctions as referred to in paragraph (3) shall be carried out in accordance with legislative provisions in the field of capital markets.
CHAPTER IV
ADEQUACY OF RISK MANAGEMENT POLICIES AND PROCEDURES First Section Risk Management Policies
Article 12
(1) Investment Managers are required to have Risk Management policies established by the Board of Directors and approved by the Board of Commissioners.
(2) Risk Management policies as referred to in paragraph (1) must at least contain:
a. comprehensive Risk Management strategies for the Investment Manager including for Investment Products; b. determination of the use of methods for identifying, measuring, monitoring, and controlling risks, as well as Risk Management information systems;
c. early detection systems;
d. procedures for setting risk limits and tolerances; e. approval mechanisms in case of risk limit breaches; f. determination of risk profile rating assessments; g. preparation of business continuity plans; and h. determination of internal control systems in the implementation of Risk Management. (3) Risk Management strategies as referred to in paragraph (2) letter a must at least contain:
a. explanation of causes of risk emergence; b. explanation of implications of risk occurrence;
c. identification of possible risk occurrences;
d. determination of risk limits;

e. steps to be taken if risks occur; and f. risk monitoring and management.
(4) Investment Managers are required to create, document, and maintain all documents and/or records related to Risk Management policies including policy changes as referred to in paragraph (1) and paragraph (2). Second Section Risk Management Procedures
Article 13
(1) Investment Managers are required to have Risk Management procedures.
(2) Risk Management procedures as referred to in paragraph (1) must be adjusted to the level of risk to be taken against risks on Investment Managers.
(3) Risk Management procedures as referred to in paragraph (1) must at least contain:
a. clear accountability and delegation of authority levels; b. periodic review implementation of Risk Management procedures; and
c. adequate documentation of Risk Management procedures and determination of risk limits.
Article 14
(1) Any Party violating the provisions as referred to in Article 12 paragraph (1), paragraph (4), Article 13 paragraph (1) and/or paragraph (2) shall be subject to administrative sanctions. (2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties causing the violation as referred to in paragraph (1). (3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) shall be imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; and/or f. cancellation of approval.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, or f may be imposed with or without being preceded by the imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a.

(6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, or f. (7) The procedure for imposing administrative sanctions as referred to in paragraph (3) shall be carried out in accordance with legislative provisions in the field of capital markets.
CHAPTER V
ADEQUACY OF IDENTIFICATION, MEASUREMENT, MONITORING, AND RISK CONTROL PROCESSES First Section General
Article 15
(1) Investment Managers are required to carry out the process of identifying, measuring, monitoring, and controlling risks as referred to in Article 5 paragraph (1) letter c against material risk factors. (2) Implementation of the process of identifying, measuring, monitoring, and controlling risks as referred to in paragraph (1) must be supported by:
a. adequate Risk Management information systems; and b. accurate and informative reports regarding financial conditions, functional activity performance, and Investment Manager risk exposures. (3) Adequate Risk Management information systems as referred to in paragraph (2) letter a include reports or information at least:
a. risk exposures as referred to in paragraph (2) letter b; b. compliance with Risk Management policies and procedures as well as determination of risk limits as referred to in Article 12 and Article 13; and
c. realization of Risk Management implementation compared to established targets.
(4) Reports or information generated from Risk Management information systems as referred to in paragraph (3) must be submitted regularly to the Board of Directors.

Second Section
Identification, Measurement, Monitoring, and Risk Control Processes
Article 16
(1) In carrying out risk identification processes, Investment Managers are required to analyze at least:
a. risk characteristics inherent in Investment Managers; and b. risks from Investment Manager products and business activities.
(2) In carrying out risk measurement, Investment Managers are required to perform at least:
a. periodic evaluation of the suitability of assumptions, data sources, and procedures used to measure risks; and b. refinement of risk measurement systems in case of changes in size, business complexity, and Investment Manager capabilities. (3) In carrying out risk monitoring, Investment Managers are required to perform at least:
a. evaluation of risk exposures; and b. refinement of reporting processes and scope.
(4) Investment Managers are required to carry out risk control processes to manage risks that can endanger business sustainability.
Article 17
(1) Any Party violating the provisions as referred to in Article 15 paragraph (1), paragraph (2) and/or Article 16 shall be subject to administrative sanctions. (2) Administrative sanctions as referred to in paragraph (1) shall also be imposed on Parties causing the violation as referred to in paragraph (1). (3) Administrative sanctions as referred to in paragraph (1) and paragraph (2) shall be imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; and/or f. cancellation of approval.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, or f may be imposed with or without being preceded by the imposition of administrative sanctions in the form of a written warning as referred to in paragraph (4) letter a.

(6) Administrative sanctions in the form of a fine as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, or f. (7) The procedure for imposing administrative sanctions as referred to in paragraph (3) shall be carried out in accordance with legislative provisions in the field of capital markets.
CHAPTER VI
COMPREHENSIVE INTERNAL CONTROL SYSTEM
First Section
General
Article 18
Investment Managers are required to implement a comprehensive internal control system as referred to in Article 5 paragraph (1) letter d effectively, to detect weaknesses and deviations in the implementation of business activities and operations at all levels of the Investment Manager organization.
Article 19
In implementing a comprehensive internal control system as referred to in Article 18, Investment Managers are required to ensure:
a. compliance with legislative provisions as well as Investment Manager policies or internal regulations; b. effectiveness and efficiency in operational activities; and
c. effectiveness of risk culture in the entire Investment Manager organization.
Second Section
Internal Control of Risk Management Implementation
Article 20
(1) Internal control systems in the implementation of Risk Management as referred to in Article 5 paragraph (1) letter d must at least contain:
a. suitability of internal control systems with the types and levels of risks inherent in Investment Manager business activities; b. determination of authority and responsibilities for monitoring compliance with policies and

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