Gov’t Issues Regulation on Investment Management Institution
The Indonesian Government issued Government Regulation Number 74 of 2020 on Investment Management Institution.
The regulation was signed by President Joko “Jokowi” Widodo on 14 December 2020.
The Investment Management Institution (LPI) referred to in the regulation means an institution that is given special authority (sui generis) pertaining to managing Central Government Investment as referred to in Law Number 11 of 2020 on Job Creation.
“The LPI aims to increase and optimize the investment value managed in the long term in order to support sustainable development,” Article 5 reads.
The LPI is an Indonesian legal entity fully owned by the Government and is responsible to the President. As stipulated in the regulation, the LPI may use the name “Indonesia Investment Authority”, abbreviated as INA.
This institution functions to manage investments and is tasked with planning, organizing, supervising and controlling, and evaluating investments.
The LPI’s authority as stated in Article 7 paragraph (1) includes:
- placing funds in financial instruments;
- carrying out asset management activities;
- cooperating with other parties including trust fund entities;
- determining potential investment partners;
- giving and receiving loans; and/or
- administering assets.
“In exercising the power as intended, the LPI may cooperate with investment partners, investment managers, SOEs, government agencies or institutions, and/or other entities both at home and abroad,” Article 7 paragraph (2) reads.
As stated in Article 8, the organs of this institution consist of a Board of Supervisors and a Board of Directors.
The Board of Supervisor has the duty to supervise the implementation of the LPI carried out by the Board of Directors. This Board is chaired by Minister of Finance (concurrently a member) and consists of Minister of SOEs and three other members of the professional element.
“Members of the Board of Supervisors as intended are appointed and dismissed by the President,” Article 9 paragraph (2) reads.
Meanwhile, the LPI Board of Directors consists of five people, all of whom come from professional elements. This board is in charge of organizing the operational management of the LPI.
The authorities possessed by the Board are, among others, to formulate and determine LPI policies, implement LPI policies and operational management, and represent the LPI inside and outside the court.
“The Presidential Regulation shall come into force as of the date of its promulgation,” Article 75 reads. The Regulation was promulgated by Minister of Law and Human Rights Yasonna Laoly on 15 December 2020. (UN) (FI/MUR)