Management of Pension Funds - Bapepam-LK Guidelines

The Capital Market Supervisory Agency and Financial Institutions (Bapepam-LK) is continuing to undertake all the necessary regulatory framework requirements demanded of it under the July 2006 Financial Sector Policy Package. The overall objective of the guidelines is to improve good corporate governance of pension fund activities focusing on 5 main principles; transparency, accountability, responsibility, independence, and fairness.

The principles are enumerated and defined in the Attachment to the Decision and in essence the Decision demands that these principles be applied in all aspects of pension funds management. More specifically the Guidelines will require the application of accepted norms in the pension fund sector and the creation of a uniform code of ethics and compliance with this code. Furthermore, the Guidelines will require the development of a regulatory framework that governs issues, among others, such as; rights and obligations, location, duties and functions, and authorities of all of the parties involved in the management of pension funds. This regulatory framework includes matters relating to guidelines for investment, accounting standards, participation, and information systems used, among others.