The Digitalization of Mutual

Fund Distribution in Indonesia

Deputy Director of Investment Management Licensing

Investment Management Directorate
Financial Services Authority
November 2nd, 2018
Investment Management Industry Statistic 2

AUM & Products of Mutual Fund Investor of Mutual Fund

(AUM in Trillion Rupiah) No. Of 1,000,000
AUM Products 900,000 858,484
600 2500
800,000
500 2044 700,000 622,545
1777 2000
600,000
400 Rp 493.41 T
1425 Rp 457.51 T 1500 500,000 444,946
300 1091 400,000 320,063 346,319
822 895 Rp 338.75 T 1000
200 300,000
Rp 271.97 T 200,000
Rp 241.46 T 500
100 Rp 192.54 T 100,000
0 0 0
2013 2014 2015 2016 2017 5-Oct-18
2014 2015 2016 2017 Aug-2018
AUM PRODUCTS

• AUM and Mutual Fund
significantly year by year
• On average, Mutual fund AUM grow 21 % per year,
and 244 additional products every year.
Products increase • In line with the growing of AUM and number of
products, investors of mutual fund increase 29 %
every year since 2014
• New investors mainly come from digital platform
during these past 3 years.
• However, it is only 0,3% of the total population of
Indonesia investing in Mutual Fund

The potential for Mutual Fund to grow continuously can be leveraged by digitalizing Mutual Fund
distribution accross Indonesia
Mutual Fund Online Digital Platform in Indonesia 3

Outlets Selling Agent

• Mobile Apps • Banks
• E-Commerce • Securities Companies
•
•
E-Money
HR Consultant
13 • Securities Companies
specialized in selling
45
•
•
Online Transportation
Investment Advisor DIGITAL
18 mutual fund

• Cooperative
• P2P Lening Platform PLATFORMS

Online Transaction

14 in Trillion Rupiah (per year)

Rp 3,604 Bil
Rp 3,200 Bil
Investment Manager
Direct selling through digital platform
Rp 1,185 Bil

2016 2017 Jan-Jul 2018

Source: Financial Services Authority and Selling Agent Report, 2018
Mutual Fund Digital Ecosystem 4

Payment e-commerce Consultant

Internet & Mobile Banking

Fund Manager & Selling Agent Platform

Efforts to Increase Mutual Fund Investor Base Through Digitalization

Allowing Fund
Regulations Integrated Manager and Intensive
Related to Investment Selling agent to Discussion with Increased
Electronic Management Cooperate with Market Players Investor Base
Transaction System Outlets to Grab and FinTech Penetration
and Payment (S-Invest) its Customer Community
Base
OJK Regulations to Make The Digitalization Possible

Since Indonesia is an archipelagic country, we aware that the digitalization of mutual fund distribution is
important, so that we have allowed mutual fund to be transacted eletronically since 2014...

OJK Circullar Letter Number: 7/SEOJK.04/2014 Concerning Guidelines to Subsctiption and Redemption
of Mutual Fund Electronically

• Allowing mutual fund to be transacted electronically by Investment Manager and Selling Agent
• Setting up requirements for Fund Manager and Selling Agent to perform mutual fund transaction
through electronic platform, including the reliability and the security of electronic platform
(recomended by Information Technology Ministry)

OJK Regulation Number: 23/POJK.04/2016 Concerning Mutual Fund in the Form of Collective
Investment Contract
• Providing more detail requirements and procedures to transact mutual fund electronically
• Allowing electronic payment (E-Money)

OJK Circullar Letter Number: 51/SEOJK.04/2016 Concerning The Implementation of Mutual Fund
Distribution Through Outlets

• Setting up requirements and procedures for distributing Mutual Fund electronically through
outlets
Digital Consumer Protection
Investor Data
Investor Assets
•Confidentiality of •Fund transfers
customer data (subscription &
(Article 47 of Law No.8 of redemption) are only
1995) execute between the
•Location of Data Center custodian bank account
(Article 17 Paragraph 2 of and the investor account
Goverment Regulation (Article 17&22 of OJK Rule
No.82 of 2012) No.23/POJK.04/2016)
•KYC Rule •The assets of an
(OJK Rule Investment Fund must
No.12/POJK.01/2017 and kept with a Custodian
OJK Circular Letter No. Bank
7/SEOJK.04/2014) (Article 25 Law No.8 of
1995)
•Liquidity of redemption
fund (max 7 day)
(Article 24 of OJK Rule
No.23/POJK.04/2016)
•Buy back by Investment
Manager provision
(Article 20 Paragraph 2 of
Law No.8 of 1995)
INFRASTRUCTURE
• S-INVEST Platform • Licensing (Entities, Product & Person)
• E-monitoring System • Monitoring (Based on Report)
• ARIA System • Supervision (Regular and Irregular)
Electronic
Transaction System
•Electronic system
provider Lisence from the
Ministry of
Communication and
Information
(Article 35 Paragraph 2 of
OJK Rule
No.23/POJK.04/2016)
•OJK Approval of electronic
transaction system
(chapter 3 number 1
letter c of OJK Circular
Letter No.
7/SEOJK.04/2014 )
•System reliability
(chapter 3 number 5 of
OJK Circular Letter No.
7/SEOJK.04/2014)
SUPERVISION
5
Information
Complaint Handling
Disclosure
•Custodian Confirmation •Consumer complaint
Letter to the customer service in the financial
(Article 28 of OJK Rule services sector
No.23/POJK.04/2016) (OJK Rule
•Custodian Monthly Report No.18/POJK.07/2018)
to the customer •Mutual Fund Investor
(Article 29 of OJK Rule Complaint resolution
No.23/POJK.04/2016) (Article 42&43 of OJK Rule
•Availabilty of Fund No.43/POJK.04/2015)
Prospectus (information
(including investor rights
and obligations,
information about funds,
provisions related to
transactions and fees)
(Article 71 of Law No.8 of
1995)
ENFORCEMENT
• Administrative Fine
• Certain Supervision Action
Thank You