On 14 March 2017, Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or OJK) issued new rules for public companies. Below are highlights of what the new rules say:
Reporting of Share Ownership in Public Companies (OJK Rule No.11/POJK.04/2017)
There are three significant changes introduced by the new rule:
- 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.
- While the threshold to report remains the same (i.e., 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 one 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 one transaction or in a series of transactions).
- OJK now provides a specific form for the report.
Amendment to Plan and Procedures to Conduct General Meetings of Shareholders (GMS) for Public Companies (OJK Rule No.10/POJK.04/2017)
While generally there is no significant change in the procedures for convening a GMS (e.g., timeline), the new rule adds provisions regarding:
- GMS of public companies that have different classes of shares (such as preferred shares or shares without voting rights).
- The appointment and dismissal of a public company’s external auditor (public accountant).