Jakarta, CNBC Indonesia – The Financial Services Authority (OJK) released Circular Letter (SE) Number 17/SEOJK.04/2021 concerning Returns of Illegal Profits and Investor Loss Compensation Funds in the Capital Market Sector (disgorgement fund).
This SE was stipulated in Jakarta on June 30, 2021 and signed by the Chief Executive of the OJK Capital Market Supervision Hoesen. This SE has been officially in effect since last Thursday (1/7/2021).
This Circular Letter is published in connection with the enactment of Financial Services Authority Regulation (POJK) Number 65/POJK.04/2020 dated December 29, 2020 concerning Return of Illegal Profits and Investor Loss Compensation Fund in the Capital Market Sector.
What is meant by ‘Investor Loss Compensation Fund’ is the fund collected from the imposition of illegal profit returns with the aim of being administered and distributed to investors who are harmed and meet the requirements to file claims.
This SEOJK regulates more specifically related to the mechanism of illegal profit returns and investor loss compensation funds with the main points of regulation as many as 20 points:
1. Activities as Fund Account Providers are carried out by the Depository and Settlement Institution or other Party appointed by the Financial Services Authority.
2. Requirements to be appointed as Fund Account Provider.
3. Funds raised from the imposition of Illegal Profit Returns and/or Investor Loss Compensation Funds are not part of the assets belonging to the Fund Account Provider.
4. Charges for account opening, bank administration, book-entry, and account closing of Unauthorized Profit Returns or Investor Loss Compensation Funds.
5. Payment mechanism for Refund of Illegal Profits in the form of funds and/or fixed assets.
6. Terms and types of fixed assets that can be used to pay the Unauthorized Return obligation.
7. The disposal of fixed assets is carried out by auctioning the fixed assets.
8. The authority of the Financial Services Authority to instruct the Depository and Settlement Institution and/or financial services institution to block Securities accounts, block other accounts, and/or book-entry assets of Parties subject to Illegal Return of Profits, including prohibiting changes to the registration of share ownership of Parties who shall be subject to Illegal Profit Return in the shareholder register of the Issuer or Public Company in the event that the shares are in script form.
9. Actions taken by the Financial Services Authority if the Party subject to the Unauthorized Return of Profit does not make a payment.
10. Consideration of the Financial Services Authority in taking legal action.
11. Coordination between Fund Account Providers and Administrators regarding the mechanism for payment of claims to investors.
12. The report that must be submitted by the Fund Account Provider to the Financial Services Authority and the reporting period.
13. Criteria for the website as well as the information that must be contained in the website.
14. Administrator fees include experts appointed by the Administrator.
15. Administrator’s operational costs borne by the Investor’s Loss Compensation Fund.
16. The term of the Administrator’s assignment for each case.
17. Provisions on the amount of fee for Fund Account Provider services and fund account management fees.
18. Requirements for the management of the capital market industry development fund.
19. Reports that must be submitted by the party managing capital market industry development funds to the Financial Services Authority.
20. Mechanism of closing the Unauthorized Return of Profit account and Investor’s Loss Compensation Fund account.
At the end of last year, the OJK issued the POJK disgorgement fund or the return of investor losses by market participants who violated the provisions in the capital market, namely OJK Regulation Number 65/POJK.04/2020.
To ensure that the party who commits the violation cannot enjoy the profits that he obtained illegally through the transfer or disbursement of his assets in the financial service institution, OJK has the authority to issue a written order in the form of a request for blocking to the financial service institution in question as well as a written order in the form of book-entry and disbursement of assets. to parties who commit violations and financial service institutions.
Furthermore, the funds raised from the imposition of illegal profit returns can be used to provide compensation for losses to victims of violations and/or development of the capital market industry.
In return of illegal profits to the party who committed and/or the party that caused the said violation, OJK may take remedial action (remedial action) by establishing an Investor Loss Compensation Fund (Disgorgement Fund) which will be returned to the aggrieved investor.
Previously, the Head of the IA OJK Capital Market Supervision Department, Luthfy Zain Fuady, explained that this regulation is expected to restore the rights of investors who have been harmed due to violations of laws and regulations in the capital market sector through written orders to perpetrators of violations to return a number of profits. or losses that are unlawfully or unlawfully avoided.
This rule only applies to cases in the capital market which are decided after this rule is issued. However, for cases prior to the disgorgement fund, OJK has also imposed sanctions with orders to pay the loss money.
“We will use it for cases that will indeed be decided after the regulation is issued. May or June it can be applied, people who are disadvantaged from violations in the capital market can get more optimal compensation,” he said.
In its implementation, the OJK will later determine the individual/company/business group that is guilty of violating the provisions in the capital market by taking illegal profits. Then, OJK will impose sanctions asking the guilty party to return the loss.
In the process of collecting and recovering losses, OJK will also cooperate with the Ministry of Finance and the Attorney General’s Office for law enforcement.
On the previous occasion, the Acting Deputy Commissioner for Capital Market Supervision II OJK, Yunita Linda Sari, said the formation of the disgorgement fund was carried out because there were still many non-compliances in the capital market industry.
Violations that are compensated with these funds include pseudo -trading and insider trading (trade done by insiders).
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