New Sanctions for Investment Advisors

The Financial Services Authority (Otoritas Jasa Keuangan– “ OJK ”) has issued Regulation No. 5/POJK.04/2019 on Prohibited Behaviors for Investment Advisors (“ Regulation 5/2019 ”). Regulation 5/2019 sets out detailed provisions on prohibited behaviors for investment advisors ( "Advisors" ) as well as sanctions for non-compliance with its provisions.Prior to the issuance of Regulation 5/2019, these matters were regulated by the Capital Market Supervisory Agency ( “Bapepam-LK” ) through Regulation No. KEP-33/PM/1996 on the same matters (“ Regulation 33/1996 ”). [1] In essence, Regulation 5/2019 has not made any changes to the previous legal framework, with the addition of sanctions for violating Advisors.List of Prohibited BehaviorsAs background information, Regulation 5/2019 defines Advisors as a person who made available of advice with regard to securities trading on fee basis as return. [2] Moreover, in giving advice to their customers, Advisors are prohibited from conducting certain behaviors, specifically: [3]