OJK Prepares Mutual Fund Regulation

Fathan Qorib, Jazmi Adlan Bohari
 
The Financial Services Authority (“OJK”) is currently drafting a regulation on mutual funds distribution. In order to make the regulation is thorough and comprehensive, the OJK also collecting collecting feedbacks from every financial service providers on the regulation.
 
The regulation itself aims to expand sales of mutual fund distribution channels and increasing domestic investor base, as well as increasing capacity building of mutual fund sales agent.
 
Additionally, the regulation will also provide procedures on mutual fund sales via distribution channels, which is expected to facilitate people in mutual fund transactions.
 
“The regulation is not made to complicate people, but to make it simple. For instance, face to face distribution in a regional level may be represented by other parties,” said M Noor Rachman, Deputy Commissioner for Capital Market at the OJK, in Jakarta last Wednesday.
 
I Nyoman Tjager, President Commissioner of Indonesia Stock Exchange, said that equitable distribution will simplify investors. He assessed that domestic investors in Indonesian capital market are minimum due to the lack of available information.
 
“Perhaps, public information, such as formal and informal education, has not felt thoroughly,” said Mr. Tjager.
 
According to Mr. Tjager, a regulation needs fairness principle, which he believed can be implemented by having equitable distribution to remote area.
 
“Fairness principle in a regulation should be guaranteed so that distribution will reach out every area,” he said.
 
Meanwhile, Legowo Kusumonegoro, President Director of Manulife Asset Management, said that he fully supported the OJK’s plan to issue such regulation. He hoped that the regulation could increase the number of domestic investors from middle class. Of 140 million middle-class entrepreneurs in Indonesia, only 500 thousand are willing to invest in stock market.
 
Mr. Kusumonegoro stated that there are ways to increase the number of middle-class investors, such as improve education and facilitate easy distribution so that people would invest in stock market. He also added that with the average of 5-6 percent of national economic growth per year will contribute to increasing stock market.
 
“Indonesia has massive population, rapid economic growth, and great number of productive people, this is a very good combination,” he said.
 
Further, Mr. Kusumonegoro assessed that middle-class entrepreneurs, which have average income of IDR 3.5 – 4 million per month, to invest in mutual fund is a correct step. This is due to mutual fund does not need expensive fee. Plus, mutual fund product which is purchased by investment manager will provide advantages, such as a guarantee of custodian bank.
 
“With IDR 100.000, you can purchase mutual funds. Mutual funds can be disbursed anytime, non-taxable because mutual funds itself is a tax object. No need to think, investment manager will help you,” he concluded.
 
(hot/kc)
Fathan Qorib, Jazmi Adlan Bohari
 
The Financial Services Authority (“OJK”) is currently drafting a regulation on mutual funds distribution. In order to make the regulation is thorough and comprehensive, the OJK also collecting collecting feedbacks from every financial service providers on the regulation.
 
The regulation itself aims to expand sales of mutual fund distribution channels and increasing domestic investor base, as well as increasing capacity building of mutual fund sales agent.
 
Additionally, the regulation will also provide procedures on mutual fund sales via distribution channels, which is expected to facilitate people in mutual fund transactions.
 
“The regulation is not made to complicate people, but to make it simple. For instance, face to face distribution in a regional level may be represented by other parties,” said M Noor Rachman, Deputy Commissioner for Capital Market at the OJK, in Jakarta last Wednesday.
 
I Nyoman Tjager, President Commissioner of Indonesia Stock Exchange, said that equitable distribution will simplify investors. He assessed that domestic investors in Indonesian capital market are minimum due to the lack of available information.
 
“Perhaps, public information, such as formal and informal education, has not felt thoroughly,” said Mr. Tjager.
 
According to Mr. Tjager, a regulation needs fairness principle, which he believed can be implemented by having equitable distribution to remote area.
 
“Fairness principle in a regulation should be guaranteed so that distribution will reach out every area,” he said.
 
Meanwhile, Legowo Kusumonegoro, President Director of Manulife Asset Management, said that he fully supported the OJK’s plan to issue such regulation. He hoped that the regulation could increase the number of domestic investors from middle class. Of 140 million middle-class entrepreneurs in Indonesia, only 500 thousand are willing to invest in stock market.
 
Mr. Kusumonegoro stated that there are ways to increase the number of middle-class investors, such as improve education and facilitate easy distribution so that people would invest in stock market. He also added that with the average of 5-6 percent of national economic growth per year will contribute to increasing stock market.
 
“Indonesia has massive population, rapid economic growth, and great number of productive people, this is a very good combination,” he said.
 
Further, Mr. Kusumonegoro assessed that middle-class entrepreneurs, which have average income of IDR 3.5 – 4 million per month, to invest in mutual fund is a correct step. This is due to mutual fund does not need expensive fee. Plus, mutual fund product which is purchased by investment manager will provide advantages, such as a guarantee of custodian bank.
 
“With IDR 100.000, you can purchase mutual funds. Mutual funds can be disbursed anytime, non-taxable because mutual funds itself is a tax object. No need to think, investment manager will help you,” he concluded.
 
(hot/kc)
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