Investor Protection Fund is a collection of funds which are formed in order to protect the investor from a loss of Investor Asset.
Investor is a client of Securities Broker Dealer (SBD) that performs the administration of Securities accounts of client and Custodian Bank.
Investor Asset is defined as Securities and other properties related to Investor’s Securities and/or funds kept in Custodian.
- Investor Asset in the form of Securities and other properties related to Securities which obtain protection from Investor Protection Fund is defined as Securities in Collective Custody in Custodian which are recorded in Securities Account in Securities Depository and Settlement Institution.
- Investor Asset in the form of funds which are protected by Investor Protection Fund is defined as funds kept and recorded in Client Fund Account in bank opened by the Custodian in name of respective investor.
Investor Protection Fund Institution is a Company which obtains its business license from the FSA to administer and manage Investor Protection Fund. In this case, it is mandated to ISIPF.
In performing its mandate and duty, Indonesia SIPF collects funds from the following sources:
- Initial Fund Contribution from Stock Exchange, Securities Clearing and Guarantee Institution, and Securities Depository and Settlement Institution.
- Membership Fee, the value of which shall be determined by the FSA, comprises of initial membership fee and annual membership fee.
- Fund which is collected by Investor Protection Fund from the Custodian as a compensation from the Investor for conducting subrogation right
- Investment yield of Investor Protection Fund, and
- Other sources determined by the FSA
Investor Protection Fund shall be administered and managed by Investor Protection Fund Institution, Indonesia SIPF (ISIPF). For that purpose, the following provisions shall apply:
- Investor Protection Fund shall not be owned by certain Party and cannot be utilized for any purpose other than stated in the FSA Rules Number VI.A.4.
- Investor Protection Fund shall be utilized for providing indemnity to the Investor on a loss of Investor Asset.
- Assets of Investor Protection Fund can only be invested in Government Securities and/or deposit in bank owned by the Government of the Republic of Indonesia.
- Assets of Investor Protection Fund cannot be lended or placed as collateral.
- Investor Protection Fund Institution reserves the right to get incentive on the management service provided for the investment of Investor Protection Fund by 10% (ten percent) of net income inflicted from the investment yield.
Timeline for Investor Protection Fund Collection Stages
June 30, 2013
Initial fund contribution was made by the SRO, namely Indonesia Stock Exchange (IDX), Indonesia Clearing and Guarantee Corporation (ICGC), and Indonesia Central Securities Depository (ICSD), with total contribution of Rp15 billion respectively, leaving a total amount of Rp45 billion.
January 1, 2014
- Initial Membership Fee of Rp100 million for each Securities Broker Dealer (SBD) that administers clients’ Securities Account shall be paid by IDX, ICGC, and ICSD.
- Annual Membership Fee by 0.001% of average monthly value of clients’ assets of previous year kept in SBD administering the clients’ Securities Account, shall be paid by IDX, ICGC, and ICSD.
January 31, 2014
The SRO shall make another fund contribution of Rp5 billion respectively, leaving a total amount of Rp15 billion.
January 31, 2015
Annual Membership Fee by 0.001% of average monthly value of clients’ assets of previous year kept in SBD administering the clients’ Securities Account, shall be paid by IDX, ICGC, and ICSD.
January 1, 2016
Implementation of Membership Fee for Custodian Bank shall be applied as of January 1, 2016, and the amount of such fee shall be determined by no later than September 30, 2015.
