Indonesia’s Financial Services Authority (the FSA) has issued new regulations relating to the return of unauthorised profits (disgorgement) and compensation for investor losses (the New Regulations).* The New Regulations will come into force in June 2021.

The New Regulations allow the FSA to compel parties who breach the laws governing capital market finance to return any profits gained as a result of the breach. The return is to be carried out through a specific account, provided by an FSA appointed financial institution. Fixed assets may be also used to repay illegally obtain profits.
If the FSA issues a repayment or disgorgement order, then the named party must make the payment within 30 days after receipt.

The Draft Regulations give the FSA further powers including compelling financial institutions to block accounts and to transfer assets from the account of the violating party.

Generally, the funds will be repaid to those who suffered losses. However, if that is not feasible, the funds will be used for the development of the capital market sector.

The FSA will appoint special administrators to oversee the disgorgement funds.

*Regulation No. 65/POJK.04/2020 on the Return of Unlawful Profits and the Compensation Fund for Investor Losses Within the Capital-Market Sector.