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 that have been granted permission by the OJK, including securities issued abroad (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 great app by a business group.

OJK found a lot super apps which contains investment product offerings in the form of securities (shares, bonds) issued by overseas entities that are outside the supervisory authority of the OJK.

The Chief Executive of OJK Capital Market Supervision Hoesen emphasized that the marketing of foreign securities in Indonesia has not yet been permitted, 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 overseas entities, crypto assets, gold are not products that are licensed and supervised by the OJK," said Hoesen in an official statement.

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

1. 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.
2. Separating 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 questions about the use of terms, phrases, and/or sentences that are simple in Indonesian and easily understood by consumers, providing information about products that are clear, accurate, easily accessible, and do not have the potential to mislead consumers, and so on.

Application wealthtech

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 ban measures taken by OJK have an impact on the solutions offered by a number of players wealthtech.

Recently, players have been actively adding more than one asset class within the platform, the goal is to make 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 OJK, but also by CoFTRA.

At the beginning of standing with brand EmasDigi, Pluang provides 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 peers-According to him, 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, investment products index futures and CFDs 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). Meanwhile for activities crypto asset investment, facilitated by PT. Bumi Santosa Cemerlang (BSC) as a trader of crypto assets, and gold investment in collaboration with PT Pluang Emas Sejahtera.

The same thing was done by Wonderful, although not as exploratory as Pluang. Now Ajaib has three asset classes, namely local stocks, crypto assets, and mutual funds. All of these products also have their respective licenses and all products are present in one application.

Due to cross-regulation, OJK is concerned that marketing practices with the wrong language could create chaos in the consumer sphere. It is feared that the general public will think that all investment products are under the supervision of the OJK.