Certain holders, directors, and commissioners who own shares in Indonesian public companies must adhere to the new reporting requirements or face penalties.
On 14 March 2017, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan (OJK)) issued, with immediate effect, OJK regulation No. 11/POJK.04/2017 (Report of Ownership or Each Change of the Ownership over the Shares in a Public Company) (the “New OJK Regulation”), revoking OJK Regulation No. 60/POJK.04/2015 on Disclosure Requirements of Certain Shareholders (the “Previous OJK Regulation”).
The New OJK Regulation provides detailed reporting requirements for shareholders of Indonesian public companies to strengthen and protect investors’ interests and to uphold fair, efficient, and orderly principles in the Indonesian capital markets.
The key provisions introduced by the New OJK Regulation are as follows:
Direct or Indirect Share Ownership
The New OJK Regulation clarifies that the reporting requirements apply to both direct and indirect ownership of shares in Indonesian public companies. Under the Previous OJK Regulation, the industry had assumed that the reporting requirements only applied to direct share ownership.
Under the New OJK Regulation, the following parties must submit a report:
- Any member of the board of directors or board of commissioners of an Indonesian public company who directly or indirectly owns shares in the company or has had changes to such shares’ ownership
- Any beneficial owner who directly or indirectly owns shares of at least 5% of the paid-up capital of an Indonesian public company or has had subsequent changes to such share ownership of at least 0.5% of the paid-up capital of the Indonesian public company, whether in one or a series of transactions
The OJK requires the relevant reports to be submitted no later than 10 days from the effective date of the share ownership or changes thereto. If the reports are submitted through a proxy pursuant to a written power of attorney, the shareholders must submit the report to the OJK no later than five days from the effective date of the share ownership or changes thereto.
Substance of the Report
The prescribed report format under the New OJK Regulation will include, at a minimum, the following:
- Identity of the shareholder (e.g., name, address, and nationality)
- Identity of the Indonesian public company
- Details of the reporting party’s shareholding percentages before and after the relevant transaction
- Number of shares purchased or sold
- Purchase or sale price per share
- Date of transaction
- Purpose of transaction
- Status of the share ownership (whether direct or indirect)
- In the event of indirect share ownership, information from the beneficial owner relating to the shareholder listed in the shareholders register of the Indonesian public company
Reporting Requirements of the Public Company
The New OJK Regulation has stipulated that each Indonesian public company must establish an internal policy to inform its directors and commissioners of the obligation to report their direct or indirect ownership of shares (including changes thereto) in such Indonesia public company. Directors and commissioners are required to report such information to the public company at least three working days from the effective date of share ownership or changes thereto.
Indonesian public companies also are required to disclose such information in their relevant annual reports and on their websites.
Penalties for Noncompliance
Noncompliance with the above reporting requirements may cause the OJK to impose
- administrative penalties, including written warnings, fines, limitation on business activities, suspension of business activities, revocation of business licences, and rejection of regulatory approvals and registration applications; and/or
- specific actions which may, among other things, take the form of the postponement of granting the effective statement for a public company’s actions such as mergers or consolidations.