Indonesia’s regulator has been criticised for giving too much support to domestic asset classes, causing a lack of product variety in the country’s fund management industry, the Financial Times reported.

“The fund management community does not offer suitable [investment] solutions, and the regulator is blamed for that,” David O’Neil, chief investment officer of Asean Investment Management in Singapore, was quoted saying at a panel discussion at the Terrapinn Indonesia Investment Summit, Jakarta.

Over the past 20 years, the Indonesia Capital Market and Financial Institution Supervisory Agency, also known as Bapepam-LK, has not been very forward-thinking in developing a fully-fledged fund industry, he said.

The regulator had been “short-sighted” and taken a view that “only Indonesian equities and Indonesian bonds should be offered to Indonesian investors”, O’Neil reportedly said.

Managers often cite the relative immaturity of Indonesia’s fund management industry, even as they seek to expand their presence.

More positively, Indonesia has potential to be a major wealth management market, as this publication has reported.