OJK Bans Local Wealthtech Platforms from Promotion of Foreign Stock Investment Products

The Financial Services Authority (OJK) issues a ban for companies in the capital market sector from marketing, promoting, or advertising financial products and services, other than those licensed by the OJK, including securities issued overseas (offshore products).

The prohibition is intended to protect consumers and prevent misunderstanding of information received by the public regarding the financial service products offered.

This ban came out after regulators observed developments in marketing, promotion and advertising related to products and services that use the super app by a business group.

OJK found many super apps that contain investment product offerings in the form of securities (stocks, bonds) issued by entities abroad that are outside the authority of OJK supervision.

The Chief Executive of OJK Capital Market Supervision Hoesen emphasized that the marketing of foreign securities in Indonesia has not been allowed to date, considering that this product is not a product licensed by the OJK so it poses a considerable risk to the public.

Investment products supervised by OJK are securities issued by entities that are legal entities in Indonesia and have been declared effective by OJK to be offered to the public.

“Meanwhile, other investment products, such as securities issued by entities abroad, crypto assets, gold are not products that are licensed and supervised by the OJK,” said Hoesen in an official statement.

Steps Taken by Regulator

Furthermore, the regulator has provided guidance and taken strict steps for companies that violate the provisions in the practice of marketing, promotion or advertising of their products and services by requesting to:

Immediately stop services or product offerings outside the OJK’s permission and supervision through super apps that include the OJK logo or a statement that the products and companies are licensed and supervised by OJK.

Separate the use of applications, platforms and websites for products and services that are not under the supervision of the OJK from those that are licensed under the supervision of the OJK.

Previously, OJK had issued POJK Number 6 of 2022 concerning Consumer and Community Protection in the Financial Services Sector which contained provisions regarding norms and procedures for financial services business actors (PUJK) in marketing, promotion, and advertising related products and services to the public.

These points include the use of simple terms, phrases, and/or sentences in Indonesian and easy for consumers to understand, providing clear, accurate, easy-to-access, product information that does not have the potential to mislead consumers, and so on.

Wealthtech App

As is known, investment activities in Indonesia are supervised by two different institutions, namely OJK and CoFTRA. OJK only supervises stock and mutual fund transaction activities.

Beyond that, it is in the realm of Bappbeti. Meanwhile, on the other hand, the prohibition step taken by the OJK has an impact on the solutions offered by a number of wealthtech players.

Recently, players have been increasingly active in adding more than one asset class to their platform, with the aim of making it easier for users to diversify assets and reach more users.

In this category, Pluang and Ajaib come to mind because they have more than one asset class and are supervised not only by the OJK, but also by CoFTRA.

At the beginning of its establishment with the EmasDigi brand, Pluang provided gold investment products. Then continue to add to his portfolio, starting from index futures (micro e-mini S&P 500, micro e-mini NASDAQ 1000), US stocks (CFDs), crypto assets, and mutual funds.

Compared to its peers, Pluang is quite exploratory and dares to introduce asset classes because it has the ambition to embrace all users who come from various risk profiles.

All products in Pluang itself have actually been licensed by various regulators, including CoFTRA and OJK. In practice, index futures and CFD investment products in Pluang are managed by PG Berjangka with a license from CoFTRA and guaranteed 100% by JFX (Jakarta Futures Exchange) and KBI (Kliring Berjangka Indonesia).