TEMPO.CO, Jakarta - The Financial Services Authority (OJK) will tighten supervision of Non-Bank Financial Institutions, in regards to the investment placed by these financial institutions. This is a result of the recent investment error allegedly done by PT Asuransi Jiwasraya as well as PT Asabri, which has caused massive financial losses.
"We need to reinspect the regulations, if it needs to be tightened or clarified," said OJK Chairman of the Board of Commissioners, Wimboh Santoso, in the Supreme Court Building, Jakarta on Monday, January 13, 2020.
Aside from that, Wimboh also stated that numerous new regulations in all financial sectors, not only in the industry of non-bank financial institutions, will be published this year. In terms of the manner of supervision done by OJK, whose strengthening of regulations has been done since 2018, Wimboh has clarified that OJK will do risk-based supervision.
"This is not just a jargon, but there are details in regards to how the supervision needs to be done, how the reporting needs to be done, the items that needs to be reported to OJK will also change," said Wimboh. In the future, the reporting not only covers the balance sheet, but also the instruments.
According to Wimboh, at least the details of the investment instruments must be reported to OJK on a monthly basis. With this, OJK will be able to monitor the placements of the aforementioned investments.
As of late, Jiwasraya and Asabri Insurance companies has been stated to bear loss due to their faulty investment practises in low quality stocks and mutual funds. "So, in the future everything (must be reported), so their exposure position and investments in stocks as well as mutual funds must be reported in detail to the authorities," stated Wimboh.
PT Asuransi Jiwasraya was previously suspected to have experienced losses upwards of Rp 10 trillion, as a result of their investment in low quality stocks and mutual funds.
For example, in terms of Jiwasraya's investments, Chief of the Supreme Audit Agency (BPK), Agung Firman Sampurna, has said that, an analysis on Jiwasraya's buying and selling of stocks has revealed it being done in pro forma, as opposed to being based on valid and objective data. Furthermore, the buying and selling of stocks have been done in a short span of time, indicating an attempt to avoid it being recorded as unrealized gross.
Continuing on, in terms of Jiwasraya's investments in mutual funds, Jiwasraya is estimated to experience a loss of around IDR 6.4 trillion, due to the devaluation in share value of the mutual funds. As of June 30, 2018, Jiwasraya is found to own 28 mutual fund products, and 20 mutual fund products with more than 90 percent ownership. Agung has claimed that most of the mutual funds are with low quality and illiquid underlying stocks.