OJK Regulation No. 33 of 2024 on the Development and Strengthening of Investment Management in the Capital Market

COPY REGULATION OF THE FINANCIAL SERVICES AUTHORITY OF THE REPUBLIC OF INDONESIA NUMBER 33 OF 2024 CONCERNING THE DEVELOPMENT AND STRENGTHENING OF INVESTMENT MANAGEMENT IN THE CAPITAL MARKET BY THE GRACE OF ALMIGHTY GOD THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering : a. that to provide a positive contribution and support inclusive and sustainable economic growth, efforts to develop and strengthen the capital market sector, especially regarding investment management in the capital market, need to be carried out; b. that Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contract-Form Mutual Funds, Financial Services Authority Regulation Number 2/POJK.04/2020 concerning Amendments to Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contract-Form Mutual Funds, Financial Services Authority Regulation Number 4 of 2023 concerning Second Amendment to Financial Services Authority Regulation Number 23/POJK.04/2016 concerning Collective Investment Contract-Form Mutual Funds, Financial Services Authority Regulation Number 32/POJK.04/2017 concerning Guidelines for Company-Form Mutual Fund Management Contracts, Financial Services Authority Regulation Number 33/POJK.04/2017 concerning Guidelines for Company-Form Mutual Fund Management, and Financial Services Authority Regulation Number 34/POJK.04/2017 concerning Target Date Mutual Funds, need to be adjusted to the provisions in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector and the development of the investment management industry in Indonesia, thus requiring refinement of the provisions; c. that to implement the provisions of Article 24 paragraphs (1), (2), and (3) of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector, further regulation is needed in a Financial Services Authority Regulation;

• 2 - d. that based on the considerations as referred to in letters a, b, and c, it is necessary to stipulate a Financial Services Authority Regulation concerning the Development and Strengthening of Investment Management in the Capital Market; Recalling :

1. Law Number 8 of 1995 concerning the Capital Market (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 the 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 the 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); DECIDES: Stipulates : REGULATION OF THE FINANCIAL SERVICES AUTHORITY CONCERNING THE DEVELOPMENT AND STRENGTHENING OF INVESTMENT MANAGEMENT IN THE CAPITAL MARKET. CHAPTER I GENERAL PROVISIONS Article 1 In this Financial Services Authority Regulation, what is meant by:
3. Securities are valuable papers or investment contracts, whether in conventional and digital form or other forms in accordance with technological developments, that grant the owner the right to directly or indirectly obtain economic benefits from the issuer or from certain parties based on an agreement, and any derivatives of Securities, which can be transferred and/or traded in the capital market.
4. Mutual Fund is a vehicle used to collect funds from the investing public or investors to be subsequently invested in a portfolio of securities, collective investment portfolios, and/or other financial instruments by an investment manager.
5. Company-Form Mutual Fund is an issuer whose business activity is to collect funds by selling shares and then investing the funds from the sale of these shares in various types of securities traded in the capital market and money market.

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4. Foreign Mutual Fund is a Mutual Fund or other equivalent form managed by an investment manager of another country.
5. Target Date Mutual Fund is a Mutual Fund that has a specific term and an investment policy that adjusts to that term.
6. Sharia Mutual Fund Based on Foreign Sharia Securities is a sharia mutual fund that invests at least 51% (fifty-one percent) of its net asset value in foreign sharia Securities.
7. Collective Investment Contract is a contract between an investment manager and a custodian bank that collectively binds investors, where the investment manager is authorized to manage the collective investment portfolio and the custodian bank is authorized to carry out collective safekeeping.
8. Foreign Sharia Securities are sharia Securities offered through public offerings abroad and/or traded on foreign stock exchanges and comply with the provisions regulated in this Financial Services Authority Regulation.
9. Securities Portfolio is a collection of Securities owned by a Party.
10. Investment Portfolio is a collection of Securities and/or investment instruments other than Securities.
11. Investment Manager is a party whose business activity is managing Securities Portfolios, collective Investment Portfolios, and/or other Investment Portfolios for the benefit of a group of clients or individual clients, except for insurance companies, sharia insurance companies, pension funds, and banks that carry out their own business activities based on laws and regulations.
12. Capital Market is part of the financial system related to activities: a. public offering and transactions of Securities; b. investment management; c. issuers and public companies related to the Securities they issue; and d. institutions and professions related to Securities.
13. Party is an individual, legal entity, company, joint venture, association, or organized group.
14. Affiliation is: a. family relationship by marriage up to the second degree, both horizontally and vertically, namely the relationship of a person with:
15. husband or wife;
16. parents of husband or wife and husband or wife of children;
17. grandparents of husband or wife and husband or wife of grandchildren;
18. siblings of husband or wife along with their respective spouses;

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5. husband or wife of the person's sibling. b. family relationship by descent up to the second degree, both horizontally and vertically, namely the relationship of a person with:
6. parents and children;
7. grandparents and grandchildren; or
8. siblings of the person concerned. c. relationship between a Party and employees, directors, or commissioners of that Party; d. relationship between 2 (two) or more companies where there is one or more common members of the board of directors, management, board of commissioners, or supervisors; e. relationship between a company and a Party, whether directly or indirectly, by any means, controlling or being controlled by the company or that Party in determining the management and/or policies of the company or Party concerned; f. relationship between 2 (two) or more companies that are controlled, whether directly or indirectly, by any means, in determining the management and/or policies of the company by the same Party; or g. relationship between a company and its main shareholder, namely a Party who directly or indirectly owns at least 20% (twenty percent) of the voting shares of that company.
9. Participation Unit is a unit of measure that indicates the interest of each Party in a collective Investment Portfolio.
10. Clearing and Guarantee Institution is a party that provides clearing and/or guarantee services for the settlement of Securities transactions conducted through market organizers in the Capital Market, as well as other services that can be applied to support inter-market activities.
11. Accounting Provisions in the Capital Market Sector, hereinafter referred to as Accounting Provisions, are provisions regarding accounting treatment in the Capital Market that are in line with financial accounting standards and aim for transparency and public investor protection.
12. Financial Services Institution, hereinafter abbreviated as LJK, is an institution that carries out activities in the banking sector, Capital Market, insurance, pension funds, financing institutions, and other financial services institutions based on the provisions of laws and regulations in the financial services sector.
13. Securities Funding Institution, hereinafter abbreviated as LPE, is a Party that carries out business activities of funding Securities transactions.

• 5 - CHAPTER II MUTUAL FUNDS RECEIVING AND/OR PROVIDING LOANS Part One General Article 2 Mutual Funds in this Financial Services Authority Regulation must comply with: a. Financial Services Authority Regulation concerning collective investment contract-form mutual funds; b. Financial Services Authority Regulation concerning company-form mutual funds; and c. provisions of laws and regulations in the Capital Market sector that regulate other related mutual funds, unless specifically regulated in this Financial Services Authority Regulation. Article 3 Mutual Funds may receive and/or provide loans. Part Two Mutual Funds Receiving Loans Article 4 (1) In the event that the Investment Manager determines that a Mutual Fund receives a loan, the loan must be in the form of funds from an LJK and/or LPE. (2) The loan as referred to in paragraph (1) must meet the following provisions: a. for the fulfillment of repurchase transactions and/or redemption of shares of Company-Form Mutual Funds or Participation Units of Collective Investment Contract-Form Mutual Funds; b. is a short-term loan with a maximum term of 20 (twenty) trading days; and c. the total loan is a maximum of 10% (ten percent) of the net asset value of the Mutual Fund at the time the loan occurs. (3) In the context of fulfilling repurchase transactions and/or redemption as referred to in paragraph (2) letter a, the Investment Manager must ensure that the Mutual Fund is in a condition of: a. having features to accelerate the fulfillment of repurchase transactions and/or redemption; and/or b. failure to fulfill repurchase transactions and/or redemption due to liquidity pressure on the Investment Portfolio. (4) The custodian bank must monitor the total loan as referred to in paragraph (2) letter c.
• 6 - (5) In the event that the Investment Manager determines that a Mutual Fund receives a loan as referred to in paragraph (1) from: a. an LJK that is an Investment Manager; and/or b. an LJK that has an Affiliation relationship with the Investment Manager, the Investment Manager must ensure that the loan meets the following provisions:

1. carried out to resolve liquidity constraints as part of the fulfillment of repurchase transactions and/or redemption of shares of Company-Form Mutual Funds or Participation Units of Collective Investment Contract-Form Mutual Funds;
2. carried out on fair and independent principles; and
3. not subject to higher fees than those charged by other LJKs. Article 5 (1) In the event that a Mutual Fund receives a loan from an LJK and/or LPE, the Investment Manager must disclose this information in: a. the Mutual Fund management contract for Company-Form Mutual Funds or the Collective Investment Contract for Collective Investment Contract-Form Mutual Funds; and b. the prospectus. (2) The information as referred to in paragraph (1) must contain at least: a. the purpose of receiving the loan; b. conflicts of interest and mitigation, if there are conflicts of interest; and c. inherent risks of receiving the loan. Part Three Mutual Funds Providing Loans Article 6 (1) In the event that the Investment Manager determines that a Mutual Fund provides a loan, the loan must be in the form of Securities to a Clearing and Guarantee Institution. (2) The loan as referred to in paragraph (1) must meet the following provisions: a. the amount of Securities lent is a maximum of 30% (thirty percent) of the net asset value at any time; b. the Securities lent are Securities listed on a stock exchange in Indonesia and/or other Securities, in accordance with the provisions stipulated by the Clearing and Guarantee Institution; c. the Securities lent can be reclaimed by the Mutual Fund; and d. the Securities lent are not currently subject to legal encumbrances with other Parties.

• 7 - (3) In the event that the Investment Manager determines that a Mutual Fund provides a loan, the Investment Manager must consider: a. the liquidity risk of the Mutual Fund before carrying out the loan transaction; and b. efficient portfolio management used in the management of the Mutual Fund. Article 7 (1) In the event that a Mutual Fund provides a loan of Securities to a Clearing and Guarantee Institution, the Investment Manager must disclose this information in: a. the Mutual Fund management contract for Company-Form Mutual Funds or the Collective Investment Contract for Collective Investment Contract-Form Mutual Funds; and b. the prospectus. (2) The information as referred to in paragraph (1) must contain at least: a. the purpose of providing the loan; b. conflicts of interest and mitigation, if there are conflicts of interest; and c. inherent risks of providing the loan. Article 8 The form, type, amount of collateral, and risk management of guarantees for loan transactions by Mutual Funds shall be carried out in accordance with the Clearing and Guarantee Institution Regulation concerning Securities lending and borrowing. Article 9 Every loan transaction by a Mutual Fund must result in a change of ownership of the Securities lent. Article 10 (1) Rights related to the ownership of the Securities lent must remain with the Mutual Fund. (2) The accounting treatment for Securities lent must refer to the Accounting Provisions. Part Four Contracts and Reports Article 11 (1) Every Mutual Fund loan transaction must be based on a contract. (2) In carrying out loan receipt transactions, the Investment Manager must create a contract as referred to in paragraph (1) that contains at least: a. names and positions of the Parties; b. loan amount; c. loan period; d. loan fees; e. events of default;
• 8 - f. dispute resolution mechanism; and g. term, amendment, and termination of the contract. (3) In carrying out loan provision transactions, the Investment Manager must create a contract as referred to in paragraph (1) that contains at least: a. names and positions of the Parties; b. amount and type of Securities; c. loan period; d. collateral; e. rights related to the ownership of Securities including voting rights, pre-emptive rights, dividends, and interest; f. tax obligations; g. loan fees; h. events of default; i. dispute resolution mechanism; and j. term, amendment, and termination of the contract. Article 12 (1) In the event that a Mutual Fund receives and/or provides a loan, the Investment Manager must submit a monthly report to the Financial Services Authority no later than the 15th (fifteenth) of the following month. (2) The monthly report as referred to in paragraph (1) is submitted online through the Financial Services Authority's reporting system. (3) In the event that the Financial Services Authority's reporting system cannot yet be used for online submission of monthly reports as referred to in paragraph (1), the Investment Manager shall submit the monthly report offline to the Financial Services Authority. (4) In the event that the deadline for submitting the monthly report as referred to in paragraph (1) falls on a holiday, the Investment Manager must submit the monthly report on the next 1 (one) working day. (5) Further provisions regarding the format, filling guidelines, and submission application for the monthly report as referred to in paragraph (1) shall be stipulated by the Financial Services Authority. Article 13 (1) In the event that the Financial Services Authority experiences technical disruptions and/or system development at the deadline for submitting monthly reports, preventing the Investment Manager from submitting the monthly report, the Financial Services Authority shall notify the Investment Manager in writing and deliver it: a. directly to the Investment Manager; b. through the Financial Services Authority's reporting system; c. through the Financial Services Authority's email address; and/or d. through the Financial Services Authority's website.
• 9 - (2) The Financial Services Authority shall notify the Investment Manager that the technical disruptions and/or system development at the Financial Services Authority as referred to in paragraph (1) have been resolved or overcome through: a. the Financial Services Authority's reporting system; and/or b. the Financial Services Authority's email address. (3) The Investment Manager must submit the monthly report no later than 2 (two) working days after the Financial Services Authority notifies that the technical disruptions and/or system development at the Financial Services Authority as referred to in paragraph (1) have been resolved. (4) In the event that the Investment Manager experiences a force majeure event that prevents the submission of the monthly report by the deadline, the Investment Manager must submit a written notification to the Financial Services Authority to obtain a postponement of the monthly report submission deadline no later than 1 (one) working day from the occurrence of the force majeure event. (5) The Investment Manager must submit a notification letter regarding the force majeure event as referred to in paragraph (4) to the relevant capital market supervision department at the Financial Services Authority: a. through the Financial Services Authority's email address; and/or b. offline. Article 14 (1) In the event of damage to the monthly report due to technical disruptions or other disruptions in the Financial Services Authority's reporting system, the Financial Services Authority may request the Investment Manager to resubmit the monthly report. (2) The Investment Manager shall resubmit the monthly report upon the request of the Financial Services Authority as referred to in paragraph (1). Article 15 In making investment decisions in the form of receiving and/or providing Mutual Fund loans, the Investment Manager must comply with the Financial Services Authority Regulation concerning Investment Manager conduct guidelines. Part Five Administrative Sanctions Article 16 (1) Any Party that violates the provisions as referred to in Article 2, Article 4, Article 5, Article 6, Article 7, Article 9, Article 10, Article 11, Article 12 paragraphs (1) and (4), Article 13 paragraphs (3), (4), and (5), and Article 15, shall be subject to administrative sanctions.
• 10 - (2) Sanctions as referred to in paragraph (1) shall also be imposed on Parties who cause the violations as referred to in paragraph (1). (3) Sanctions as referred to in paragraphs (1) and (2) shall be imposed by the Financial Services Authority. (4) Sanctions as referred to in paragraph (1) consist of: a. written warning; b. fine, which is an 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 prior 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 sanctions as referred to in paragraph (3) shall be carried out in accordance with the provisions of laws and regulations in the Capital Market sector. CHAPTER III MUTUAL FUNDS PURCHASING SHARES OF COMPANY-FORM MUTUAL FUNDS AND/OR PARTICIPATION UNITS OF OTHER COLLECTIVE INVESTMENT CONTRACT-FORM MUTUAL FUNDS Part One General Article 17 Mutual Funds may purchase shares of Company-Form Mutual Funds and/or Participation Units of other Collective Investment Contract-Form Mutual Funds. Part Two Mutual Funds Article 18 Mutual Funds in this Financial Services Authority Regulation must comply with: a. Financial Services Authority Regulation concerning collective investment contract-form mutual funds; b. Financial Services Authority Regulation concerning company-form mutual funds; c. Financial Services Authority Regulation concerning the issuance and requirements of sharia mutual funds; and
• 11 - d. provisions of laws and regulations in the Capital Market sector that regulate other related mutual funds, unless specifically regulated in this Financial Services Authority Regulation. Article 19 (1) In the event that the Investment Manager determines that a Mutual Fund invests in Foreign Mutual Fund Securities, the Investment Manager must determine the composition of the Securities Portfolio of the Mutual Fund with the following provisions: a. at least 85% (eighty-five percent) of the net asset value of the Mutual Fund is invested in:

1. Securities issued, offered, and/or traded in Indonesia based on the provisions of laws and regulations in Indonesia;
2. Securities traded abroad, but issued by: a) the Government of the Republic of Indonesia; b) Indonesian legal entities that are issuers and/or public companies; c) foreign legal entities, a majority or all of whose shares are directly or indirectly owned by issuers or public companies as referred to in letter b) and such foreign legal entities are specifically established to raise funds from abroad for the benefit of the said issuers or public companies; and/or d) foreign legal entities, a majority or all of whose shares are directly or indirectly owned by State-Owned Enterprises; and/or
3. domestic money market instruments; and b. a maximum of 15% (fifteen percent) of the net asset value of the Mutual Fund is invested in:
4. Securities traded on foreign stock exchanges whose information is accessible from Indonesia through mass media or websites; and/or
5. Foreign Mutual Fund Securities, with the provision that the investment placement in each Security traded on a foreign stock exchange or Foreign Mutual Fund Security is a maximum of 10% (ten percent) of the net asset value.

• 12 - (2) The Investment Manager must determine the composition of the Securities Portfolio of the Sharia Mutual Fund Based on Foreign Sharia Securities with the following provisions: a. at least 51% (fifty-one percent) of the net asset value is invested in:

1. Foreign Sharia Securities; and/or
2. foreign sharia mutual fund securities; and b. a maximum of 49% (forty-nine percent) of the net asset value is invested in domestic sharia Securities, with the provision that the investment placement in each Foreign Sharia Security, Security

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