Indonesia’s capital market is preparing for a significant product innovation, the introduction of gold-backed exchange-traded funds (ETFs). Otoritas Jasa Keuangan (OJK) and the Indonesia Stock Exchange (IDX/BEI) have completed the essential regulatory groundwork to enable the launch of these instruments, marking an important step toward integrating gold into Indonesia’s formal investment ecosystem.

Gold has always been one of the most preferred investment assets in Indonesia. But for decades, access to gold has been largely limited to physical bullion, retail savings platforms, or digital gold services, none of which operate under the same level of transparency, governance, and investor protection as capital-market instruments. The forthcoming introduction of gold ETFs is expected to change that landscape by creating a regulated, exchange-traded, and professionally managed avenue for gold investment.

Regulatory Landscape: OJK & IDX Build the Foundation

OJK is finalizing the regulatory framework that will govern how gold ETFs may be structured, approved, and managed. Under this framework, the regulator will set out standards relating to product disclosure, valuation methods, custody arrangements, and investor protection. The rules will form part of OJK’s broader mandate under the Financial Sector Development and Strengthening Law (UU P2SK), which gives the regulator flexibility to introduce new financial products and strengthen market integrity.

In parallel, IDX is preparing the operational infrastructure required for the listing and trading of gold ETFs. This includes defining listing requirements, trading mechanics, settlement cycles, and ongoing reporting obligations for asset managers and market participants. Once the rulebook is formally issued, issuers will be able to bring gold ETF products to the market with a clear operational pathway.

Together, these regulatory and operational developments provide the framework needed for Indonesia to introduce gold ETFs that are aligned with global market practices.

Implications for Market Participants

The arrival of gold ETFs is expected to bring meaningful changes to investors, asset managers, custodians, and other market players. For investors, both retail and institutional, gold ETFs offer a more accessible and cost-efficient way to gain exposure to gold, without the challenges of storing, securing, or insuring physical bullion. Investors will also benefit from transparent pricing, liquidity supported by market makers, and regulatory oversight. Further, for asset managers, gold ETFs introduce a new product category that requires robust operational capabilities. These include precise valuation methods, real-time pricing mechanisms, inventory reconciliation, and clear disclosure of gold holdings. The product also increases the need for strong internal governance and risk management, especially given the volatility of global gold markets.

Custodian banks will play a critical role as well. They must be prepared to meet higher safekeeping standards for physical gold, including vaulting arrangements, insurance requirements, periodic audits, and compliance with OJK’s safekeeping and reporting rules. Finally, brokers and liquidity providers should anticipate adjustments to their systems and risk models to accommodate a new asset class traded on the exchange. Market-making obligations may require firms to manage spread, inventory, and volatility risks more actively.

Looking Ahead: Preparing for Launch

The introduction of gold ETFs represents a strategic evolution for Indonesia’s capital market. With a regulated framework almost complete, market participants should start preparing operationally and strategically for the product’s rollout.

We recommend that businesses begin by: (i) assessing whether gold ETFs align with their product strategy or portfolio objectives; (ii) reviewing internal governance, reporting frameworks, and risk-management processes; (iii) coordinating with custodians, brokers, and service providers to ensure operational readiness; and (iv) monitoring upcoming announcements from OJK and IDX regarding final regulatory issuance and launch timelines.

Gold-backed ETFs have the potential to become a widely adopted investment instrument in Indonesia, offering new opportunities for diversification and introducing global-standard practices in gold investment. Early preparation will allow industry participants to navigate this development effectively and capture emerging opportunities as the regulatory framework is finalized.