On 14 March 2017, the Financial Services Authority (Otoritas Jasa Keuangan - OJK) issued OJK Rule No. 11/POJK.04/2017 on Reporting of Share Ownership in Public Companies (New Rule). The New Rule, which has immediate effect, replaced OJK Rule No. 60/POJK.04/2015.
There are three significant changes introduced by the New Rule:
(a) The New Rule now officially recognizes the "indirect" share ownership concept. This is different with the previous rule, which, on the face of it, may be interpreted to apply only to direct ownership.
(b) While the threshold to report remains the same (ie, once a party holds at least 5% shares), there is now another threshold to file a subsequent report. Under the previous rule, any change of ownership once a party exceeds 5% must be reported (which means an increase of even 1 share will trigger a reporting obligation). However, under the New Rule the subsequent report must be submitted once there is a change of ownership of at least 0.5% (either in 1 transaction or in a series of transactions).
(c) OJK now provides a specific form for the report.
Who needs to file a report
Similar to the previous rule, the following parties (Reporting Parties) need to file a share ownership report to OJK:
(a) The directors and commissioners of a Public Company holding any shares, directly or indirectly, in that Public Company.
(b) Any Party holding, directly or indirectly, at least 5% shares in that Public Company.
Unlike the previous rule, the New Rule recognizes the "indirect" share ownership concept, which is intended to capture the ultimate beneficial owner of the shares.
When the report must be submitted
Similar to the previous rule, the deadline to submit the report is 10 calendar days after the Reporting Parties come to hold the shares. This deadline also applies to subsequent reporting.
The New Rule provides that the Reporting Parties can authorize another party to submit the share ownership report on their behalf. However, if the Reporting Parties authorize another party to submit the report, the deadline to submit the report is shorter than if the Reporting Parties submit the report directly to OJK. If the Reporting Parties authorize another party to submit the report, the deadline is 5 calendar days after the Reporting Parties come to hold the shares. This deadline also applies to subsequent reporting.
If the deadline falls on a public holiday in Indonesia, the deadline will be the first working day after the public holiday.
How the report must be submitted
OJK now provides a specific form for the report. The report must be submitted using the OJK form.
The following information must be provided in the report:
(a) Name, address and nationality of the Reporting Party
(b) Name of the public company whose shares are owned by the Reporting Party
(c) Number and percentage of shares, both before and after the transaction
(d) Number of shares purchased or sold
(e) Sale or purchase price
(f) Date of transaction
(g) Purpose of transaction
(h) Status of ownership (ie, direct or indirect)
If the Reporting Party authorizes another party to submit the report, a copy of the power of attorney must also be submitted to OJK.
The report submitted to OJK will be available to the public.
When the subsequent report requirement is triggered
Under the previous rule, any change of ownership (even 1 share) triggered a requirement to submit a subsequent report. Under the New Rule, that is still the case for directors and commissioners of a Public Company. However, for the party holding at least 5% shares, it is no longer the case. Under the New Rule, a subsequent report requirement will be triggered when the ownership of the party holding at least 5% shares changes by at least 0.5%, either in 1 transaction or a series of transactions. There is no time limit as to when the 0.5% changes must occur.
While this change will reduce the number of reports submitted to OJK (especially for those actively trading shares), it will create a burden on shareholders as shareholders will need to monitor when the last report was submitted and whether a 0.5% change has occurred.
Share ownership of a director or commissioner of the relevant public company
The New Rule now requires a Public Company to have a policy regarding the obligations of its directors and commissioners to report to the Public Company his/her share ownership in that Public Company (and any changes on his/her ownership). Unlike the report to OJK, the deadline to submit the report to the Public Company is 3 working days after he/she becomes a shareholder and any changes to his/her ownership. The implementation of the policy must be disclosed in the annual report or the website of that Public Company.