OJK Prepares Sanctions and Investor Loss Recovery in the Capital Market

The Financial Services Authority (“OJK”) is preparing a mechanism for investor loss recovery (disgorgement) in the capital market. Through this mechanism, the OJK will not only be able to impose sanctions on violators but also seek the return of unlawfully obtained profits and the recovery of investor losses.

Hasan Fawzi, the Chief Executive Officer for Capital Market, Derivatives, and Carbon Exchange Supervision at the OJK, stated that the application of disgorgement is part of strengthening fair law enforcement in the capital market. “The OJK has been given the authority not only to impose sanctions but also to seek the return of profits obtained unlawfully by violators and to recover losses for victims or investors,” said Hasan.

According to him, this mechanism adopts law enforcement practices in various global jurisdictions. During its development, the OJK also engaged in intensive collaboration with the U.S. Securities and Exchange Commission (“SEC”), particularly on the application of the disgorgement of illicit gains to compensate investors for their losses.

This authority is part of strengthening the OJK’s legal foundation for addressing violations in the capital market, as regulated in Article 100E paragraph (1) in conjunction with Article 100A paragraph (3) of the P2SK Law. “The form of the technical implementing regulations is still being formulated, whether in the form of Regulation of the Board of Commissioners (“PADK”) or a revision to an OJK Regulation (“POJK”),” he added.