Investor protection in the Indonesian Capital Market is both preventive and corrective.
Preventive protection includes OJK Consumer Protection, Pre-Transaction Protection by IDX, Transaction Protection by IDClear, and Asset Protection (Securities & Funds) by KSEI.
Meanwhile, there is also corrective Asset Protection. Who is the organizer?
Investor Protection Fund & the Organizing Institution
According to POJK Number 49 Year 2016, Investor Protection Fund is a pool of funds established to protect Investors from the loss of assets deposited with the Custodian.
Investor Protection Fund is managed by an organizer that has obtained a business license from the OJK. The organizer of the Investor Protection Fund in the Indonesian Capital Market is PT Penyelenggara Program Perlindungan Investor Efek Indonesia (P3IEI) or better known as Indonesia SIPF (Securities Investor Protection Fund).
Scope of Risks
Investor Protection Fund protects investors from the risk of loss of assets due to unauthorized administration by the Custodian, resulting in potential overbooking of assets without the knowledge of the investor.
Apart from that, Investor Protection Fund does not protect investors from risks such as a decline in market value, low liquidity, delisting of issuers, loss of scrip, default on investment instruments, and the like.
Protected Assets & Investors
Protected assets include:
Securities listed and registered at KSEI (equities, bonds, mutual funds, and derivatives).
Funds at the Custodian that are opened in the Customer Fund Account (RDN) at the Bank on behalf of the Investor.
Meanwhile, protected investors include investors who:
Deposits their assets and has a Securities Account with the Custodian.
Opened Securities Sub Account (SRE) at the Depository and Settlement Institution (KSEI).
Have SID (Single Investor Identification).
There are some exceptions of investors who are not protected:
Investors who are involved in or cause the loss of assets.
The investor is a controlling shareholder, member of the board of directors, member of the board of commissioners, or an officer one level below the Custodian's board of directors.
The investor is an affiliate of the party in number 1 or 2.
Investor Protection Flow
Investor loses securities listed in the SRE or funds in the RDN (showing an improper amount).
Investor requests clarification to the relevant Custodian. If there is no resolution, the investor can make a written report to OJK.
OJK conducts verification and investigation, then issues a statement covering the loss of investor assets, the inability of the Custodian to replace them, and consideration of revoking the Custodian's business license.
The Investor submits a claim and authorizes Indonesia SIPF to replace the Investor's position against the custodian.
Indonesia SIPF receives the claim from the Investor and conducts verification.
The investor receives a maximum compensation of IDR 200 million.
Where Does the Investor Protection Fund for Compensation Come from?
The Investor Protection Fund is established and derived from the following sources:
Initial fund contributions from IDX, IDClear, and KSEI.
Membership fees (Custodian Banks and Broker-Dealers, including KAF Sekuritas).
Fund for the execution of subrogation rights.
Investment returns of the Investor Protection Fund.
Other sources as determined by the OJK.
Secured Investment
Indonesia SIPF guarantees the safety of investors' assets so that we can invest with peace of mind. That way, each investor will be more confident in achieving their financial goals!
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Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).
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