Mutual Fund Agreement Template for Indonesia

The Mutual Fund Agreement is a fundamental document used in the Indonesian investment management industry to establish and operate collective investment schemes. It is required whenever a new mutual fund is launched in Indonesia, serving as the primary contractual framework between the Investment Manager, Custodian Bank, and investors. The agreement must comply with Law No. 8 of 1995 on Capital Market and various OJK regulations, particularly OJK Regulation No. 23/POJK.04/2016. It contains essential provisions regarding fund structure, investment policies, operational procedures, fee arrangements, and investor rights. This document is crucial for obtaining regulatory approval from OJK and provides investors with necessary information about their investment, including risk factors, investment strategy, and redemption procedures. The agreement's contents are scrutinized by regulators to ensure adequate investor protection and market stability.

1. Parties: Identifies the Investment Manager, Custodian Bank, and the Investor(s) entering into the mutual fund agreement

2. Background: Sets out the context of the agreement, including the establishment of the mutual fund and its basic investment objectives

3. Definitions: Defines key terms used throughout the agreement including but not limited to 'Units', 'Net Asset Value', 'Investment Manager', 'Custodian Bank', 'OJK', and 'Investment Guidelines'

4. Fund Structure and Characteristics: Details the type of mutual fund, its investment objectives, and risk profile

5. Investment Policy and Strategy: Outlines the fund's investment strategy, asset allocation, and investment restrictions in accordance with OJK regulations

6. Rights and Obligations of Parties: Details the rights and responsibilities of the Investment Manager, Custodian Bank, and Unit Holders

7. Subscription and Redemption: Procedures and requirements for purchasing and redeeming fund units

8. Fees and Expenses: Details all fees including management fees, custodian fees, and other expenses charged to the fund

9. Valuation and Pricing: Methods for calculating Net Asset Value and unit pricing

10. Reporting and Disclosure: Requirements for periodic reporting to unit holders and regulatory authorities

11. Risk Disclosure: Comprehensive disclosure of investment risks and risk management procedures

12. Term and Termination: Duration of the agreement and circumstances under which it may be terminated

13. Governing Law and Dispute Resolution: Specifies Indonesian law as governing law and outlines dispute resolution procedures