Background
The Financial Service Authority (Otoritas Jasa Keuangan – OJK) recently issued a draft regulation on investment manager activities (Rancangan Peraturan Otoritas Jasa Keuangan tentang Penyelenggaraan Kegiatan Usaha Manajer Investasi – Draft Regulation on Investment Manager Company). This new regulation will change some existing provisions outlined in OJK Regulation No. 3/POJK.04/2021 (OJK Reg No. 3/2021) and OJK Regulation No.52/POJK.04/2020
(OJK Reg No. 52/2020). Below, we highlight several key points from the draft regulation.
The Comparison: OJK Reg No. 3/2021, OJK Reg No. 52/2020, and Draft Regulation on Investment Manager Company
Reporting Obligation
Based on our analysis of the Draft Regulation on Investment Manager Company, OJK regulates that all investment manager companies are required to submit an action plan to comply with the requirements on (i) Capital Structure, (ii) Adjusted Net Working Capital, (iii) Asset Under Management; or (iv) the plan to conduct merger or consolidation to OJK, by the latest of 6 (six) months after the date of enactment of the Draft Regulation on Investment Manager Company. The investment manager is also required to submit the progress on the fulfilment of such an action plan to OJK on the 12th date of each month.
Our Remarks
Based on the foregoing, we are of the view that the new concept and regulation of several investment manager’s key aspects, as introduced by the Draft Regulation on Investment Manager Company, will significantly improve and strengthen the financial circumstance of investment manager companies. Further, we view that for large-size investment managers (specifically market leader investment managers), these proposed changes of regulation will not have a significant impact since, according to our analysis, the majority of large-size investment manager companies already fulfil the key points as we outlined above.
However, on the other hand, we view that the implementation of the Draft Regulation on Investment Manager Company may pose challenges for small to medium-scale investment manager business actors, since the requirements that required to be achieved by small to medium-scale investment manager companies may potentially trigger challenge by its shareholders and/or the management of investment manager companies.
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