Scope of Investment: Indirect Investment (Indirect Invesment)

Indirect investment, according to the World Bank, is stated as a form of short-term investment and is more speculative in nature, because investors can easily buy and sell securities (shares) as their investment instrument.

In contrast to direct investment, investors in indirect investment do not have control over the company, even though they are recorded as shareholders. In general, this investment is not the focus of investment law. Indirect investment is generally regulated in different rules from direct investment. 

Supervision of indirect investment is usually carried out by the central bank, the Minister of Finance, or a body specifically formed to supervise the capital market (security and exchange commissions). 

In Indonesia, indirect investment is regulated in capital market law, namely provisions that are subject to Law No. 8 of 1995 concerning the Capital Market (Law 8/1995). 

The Capital Market itself, according to article 1 number 13, is an activity related to securities trading activities, public companies that issue securities and institutions or professions related to securities. 

Article 1 number 5 states that securities are securities, which can be in the form of shares, bonds and other investment instruments regulated in this Law. In article 3 of Law 8/1995, it is explained that guidance, regulation and supervision of capital market activities are the duties and functions of the Capital Market Supervisory Agency (Bapepam). 

However, after the emergence of Law No. 21 of 2011 concerning the Financial Services Authority (OJK), the duties and functions of Bapepam as regulated in article 3 of Law 8/1995, were transferred to OJK.