“Should I have license as an Investment Manager from OJK to raise funds from public and manage those funds to buy shares of a private company? Is my activity included as a Non-Bank Financial Institution?”
Referring to the definition of Investment Manager as stated in Article 1 number 1 OJK Regulations Number 43/POJK.04/2015 concerning Investment Manager Code of Conduct, Investment Manager is a person whose business is managing the securities portfolio for the customers or managing the collective investment portfolio for a group of customers, except Insurance Company, Pension Fund, and Bank which conducting its own business activities under the applicable law.
What do securities mean?
According to provision under Article 1 paragraph (5) of Law on Capital Market, Securities are promissory notes, commercial paper, shares, bonds, evidences of indebtness, participant units of collective investment contract, futures contracts related to securities, and all redivatives of securities.
Thus, according to this definition, the activity of fundraising from public to buy shares in a private company, a person is not required to become an investment manager. A person is needed to be an Investment Manager only if the activities carried out in the capital market, relating to securities trading by the issuer.
Agreement in Contract
Then, what provision serves as a guidance for investors who want to invest shares through a person or legal entity?
If you are an investor, you must understand how the contract will be created between you, fundraiser, and the business itself. The fundraiser may act as a custodian. The agreement set forth in contract shall apply as a law to the parties. This is in line with provision under Article 1338 of Indonesian Civil Code.
Custodian Bank or Custodian is an institution responsible for safeguarding a company or individual’s finansial assets. Custodian bank acts as collective custody of assets such as stock, bonds, and perform administrative tasks such as collecting sales result, receiving dividends, collecting information on reference companies such as annual general meeting of shareholders, completing sales and purchasing transactions, conducting transactions in foreign currency if needed, and present reports of all its activities as a custodian to its clients.
Custodian is entitled to get a fee from its activities. It may receive fees as a fundraiser, and also receive fees in percentages of the investment value from the investor.
However, this is based on an agreement made between you and the fundraiser. The most important thing to note is whether this investment is in form of capital loan, equity participation with sharing profit from a particular business, or equity participation to the company?
It becomes important for both fundraiser and investor to agree upon the object of the agreement, so there is no misunderstanding about the form of investment.
Dalmy Nasution/Bimo Prasetio