OJK Finalizes New Regulation for Gold Exchange-Traded Fund (ETF) Mutual Funds

The Financial Services Authority (“ OJK ”) has finalized the Draft Regulation on Mutual Funds in the Form of Collective Investment Contracts whose Participation Units are Traded on the Stock Exchange with Underlying Assets in the Form of Gold (“ RPOJK on Gold ETF ”). The Chief Executive of Insurance, Guarantee, and Pension Fund Supervision at OJK, Ogi Prastomiyono, explained that this RPOJK offers high efficiency, liquidity, and transparency through a financial instrument backed by a tangible commodity (gold) in the Indonesian capital market.

Gold ETF instruments can serve as an alternative investment option for the insurance industry and pension funds amid the volatile stock market trend,” Ogi told Hukumonline.

According to the RPOJK obtained by Hukumonline, the gold ETF instrument will take the form of a Collective Investment Contract (Kontrak Investasi Kolektif–“ KIK ”) with underlying assets consisting of physical and/or digital gold with a high purity standard (minimum 99.5%–99.9%), accompanied by an Electronic Gold Certificate (“ EGC ”) as proof of ownership.

Furthermore, the OJK has also permitted insurance companies and pension funds to invest their managed funds in gold in accordance with OJK Regulation No. 71/POJK.05/2016 on the Financial Soundness of Insurance and Reinsurance Companies, which has been amended several times, most recently by OJK Regulation No. 5 of 2023 (collectively referred to as “ POJK 71/2016 ”).

“It is targeted to be finalized and issued in the third or fourth quarter of this year,” he concluded.