Legal Convergence: An Analysis of Legality and Supervision for Investment-Based Multilevel Marketing
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Abstrak
The legality and supervision of multilevel marketing (MLM) companies offering investment models present a complex regulatory challenge in Indonesia, stemming from the convergence of trade and financial services sectors. This qualitative literature study aims to analyze the legal construction from both perspectives, assess the effectiveness of existing supervisory mechanisms, and formulate an ideal regulatory framework. The research finds that legal ambiguity arises due to the overlap between trade regulations, specifically Ministry of Trade Regulation No. 70 of 2019, which mandates real product sales, and financial services laws, primarily Law No. 21 of 2011 on the Financial Services Authority, which requires licensing for any public fund-raising activity. This duality creates regulatory gaps and fragmented supervision, often leading to reactive and ineffective oversight that fails to prevent public financial loss in a timely manner. The current mechanisms involving consumer protection law, criminal law, and corporate law operate in silos without robust inter-agency coordination. The study concludes that an ideal framework necessitates the creation of a special integrated regulation (lex specialis) that clearly defines this hybrid entity, establishes a single licensing door with joint assessment, and mandates a lead regulator. Furthermore, supervision must evolve into a proactive, technology-based model using an integrated digital reporting platform for early detection of fraudulent patterns. Enhanced public financial literacy specific to this model is also crucial. This research contributes to the academic discourse on regulatory design for convergent business models and provides practical recommendations for policymakers and supervisory authorities.
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Referensi
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