New Rules, New Expectations: 8 Highlighted Points on the Newly Issued Regulatory Framework for Investment Managers

Issue 30, August 2026

The landscape of the Indonesian investment management industry is undergoing a fundamental transformation as the Financial Services Authority (Otoritas Jasa Keuangan or OJK) moves to elevate market integrity and institutional resilience. With the enactment of OJK Regulation No. 5 of 2026 on the Conduct of Investment Manager Business Activities ("POJK 5/2026"), the regulatory framework shifts from a "one-size-fits-all" approach to a tiered structure that demands higher capital commitments and more rigorous governance. This shift is a strategic mandate for investment managers to redefine their operational scale and for investors to reassess the institutional strength of their partners.

We set out below an overview of the key highlights of POJK 5/2026, with particular emphasis on the principal provisions, regulatory developments, and practical implications that may be of relevance to industry participants and other stakeholders.

1. What is an Investment Manager?

POJK 5/2026 defines an Investment Manager as a party whose business consists of managing securities portfolios, collective investment portfolios, and other investment portfolios for the benefit of a group of customers or individual customers. This definition excludes insurance companies, sharia insurance companies, pension funds, and banks conducting their own business in accordance with applicable laws and regulations.

POJK 5/2026 expands the definition by including "and/or other investment portfolios." providing greater flexibility to manage investment instruments that may not fall within the traditional definition of securities, such as stocks and bonds.

2. Who needs an Investment Manager license?

Unless specifically regulated under other laws and regulations, any party engaged in the management of securities portfolios, collective investment portfolios, and/or other investment portfolios for the benefit of a group of clients or individual clients must obtain an Investment Manager business license from the OJK.

POJK 5/2026 prohibits Investment Managers from acting as securities underwriters and/or securities brokers.

3. What are the permitted business activities of an Investment Manager?

The most significant change introduced in POJK 5/2026 is the classification of investment managers based on their business activities (Manajer Investasi berdasarkan Kegiatan Usaha or MIKU).

Investment Managers have a three-year grace period from the date they obtain their license to meet the minimum assets under management thresholds. Once they meet this threshold, their assets under management may not remain below the required minimum for more than 120 consecutive exchange days.

4. What are the key governance requirements?

• Board of Directors (BOD). MIKU 1 requires a minimum of two directors: one overseeing investment and one overseeing non-investment operations. MIKU 2 requires a minimum of three directors: one for investments, one dedicated to compliance, and one for remaining non-investment/non-compliance operations. Directors leading the investment function must hold an active Investment Manager Representative license. Conversely, directors overseeing non-investment functions must hold a Securities Company Representative license.
• Board of Commissioners (BOC). A MIKU 1 must have at least 2 commissioners. A MIKU 2 must also have at least 2 commissioners, but at least one of them must be an independent commissioner. If a MIKU 2 has more than 2 commissioners, at least 30% of the total BOC must consist of independent commissioners.
• Restrictions on Multiple Positions for Directors and Commissioners. The regulation imposes restrictions on concurrent positions held by directors and commissioners.

As a general rule, directors may not simultaneously serve as directors, commissioners, sharia supervisory board members, executive officers, or holders of certain functional roles in other companies in Indonesia or abroad or hold positions that create conflicts of interest or are otherwise prohibited by law. Limited carve-outs are also available in certain cases under POJK 5/2026.

Commissioners are also subject to restrictions on multiple positions, including limitations affecting service in other financial institutions and domestic non-financial companies.

5. What are the shareholder, Controlling Shareholder, and OJK Approval requirements?

POJK 5/2026 reinforces the importance of shareholder and controller oversight. Prospective shareholders, Controlling Shareholders (Pemegang Saham Pengendali/PSPs), directors, and commissioners must pass the relevant OJK’s fit and proper test, including standards relating to integrity, financial propriety, financial reputation, and competence.

6. What are the Foreign Ownership Rules for Indonesian Investment Managers?

Foreign ownership caps depend on the type of foreign investor. A foreign legal entity engaged in securities business and licensed or supervised by its home market regulator may hold up to 99% of the paid-up capital of a joint venture investment manager. A foreign legal entity engaged in financial services other than securities may hold up to 85% of paid-up capital. For a publicly owned Investment Manager, the foreign ownership percentage could be higher.

7. Does POJK 5/2026 apply a single ownership policy?

Yes. The regulation also applies a single ownership/control policy. As a general rule, a party may not own shares in and/or control more than one investment manager, directly or indirectly, subject to limited exceptions such as government ownership or passive capital markets investment not intended to confer control.

8. What are the transition rules for existing Investment Managers?

Any investment manager already licensed before POJK 5/2026 came into force must, within 6 months of promulgation, determine whether it will operate as MIKU 1 or MIKU 2 and submit an action plan to OJK for implementing that choice.

As the regulation was promulgated on 29 April 2026, the 6-month deadline falls on 29 October 2026, subject to any OJK administrative practice if the date falls on a non-business day. If an existing investment manager does not make the election within the required period, it is deemed to have elected MIKU 2 and must then submit the relevant follow-up action plan.

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If you have any questions, please contact

1. Maria Sagrado, Partner - maria.sagrado@makarim.com
2. Lebdo Dwi Paripurno, Senior Associate - lebdo.paripurno@makarim.com
3. Namira Assagaf, Associate - namira.assagaf@makarim.com

_{M&T Advisory is a digital publication prepared by the Indonesian law firm, Makarim & Taira S. It informs generally on the topics covered and should not be treated as legal advice or relied upon when making investment or business decisions. Should you have any questions on any matter contained in M&T Advisory, or other comments in general, please contact us at the emails provided at the end of this article.}