JAKARTA (TheInsiderStories) – Indonesia’ Financial Service Authority (FSA) planned to establish investor protecting body in order to shield retail investors, said the official on Monday (02/18). The reasoned, many investors faced difficulties to claim loss after get recommendation from the fund manager.
The agency has an idea from United States (US) experienced to force the offender to pay the compensation if created losses to investors, FSA’ head of market supervisory Hoesen told reporters today. He said, “The money which is collected will be accumulated in a disgorgement fund.”
According to him, the FSA will do prior analysis before punishing the offender to pay the fine, caused not all of the investor‘ loss on their fault. Department head for market supervisory Djustini Septiana added, the FSA will collect the information from Indonesian Central Securities Depository and Indonesian Clearing and Guarantee Corporation before make a judgement.
“The loss that disgorgement fund handle will be only caused of fraud in trading mechanism, but if it is caused by IPO and right issue it won’t be handle,” she said.
However, FSA does not explain more about the new institution which will manage the disgorgement fund. “It still in discussing, whether it will need a new institution or FSA will handle it directly,” added Septiana.
In USA, the institution that handle disgorgement fund called The Securities and Exchange Commission (SEC). It assessed US$3.945 billion in disgorgement and penalties across 821 enforcement actions in 2018. The agency acknowledged in its 2018 report that a “significant amount” of the higher level of disgorgement and penalties came from a single case.
Beside planning to build a protecting institution for retail investors, FSA has also other plans to enhance supply and demand sides of the Indonesia market. Hoesen said, the regulator will speed up stock account opening, enhance region stock companies, improve e-book building, build a junior program and digitize mutual fund marketing. Building a disgorgement fund is one of the strategy to improve the demand side.
This year, FSA targeting around 100 new stock and bond emissions with fund raising up to Rp250 trillion (US$17.86 billion). In 2018, IDX recorded 62 new emissions with fund raising Rp116 trillion.
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