OJK Revamps Sharia Banking Investment Products: Clear Segregation from Deposits Introduced, with Investor Customers Now Responsible for Potential Losses

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has issued Regulation No. 4 of 2026 (“Regulation 4/2026”) on the Implementation of Sharia Banking Investment Products (“Investment Products”). Regulation 4/2026 will now apply to sharia commercial banks (Bank Umum Syariah – “BUS”), sharia business units (Unit Usaha Syariah – “UUS”) and sharia people’s economic banks (Bank Perekonomian Rakyat Syariah – “BPRS”) (collectively referred to as “Sharia Banks”), as well as to various other types of financial institutions that act as investors (“Institutional Investors”).