Recently the Indonesian Capital Market and Financial Institution Supervisory Board (Bapepam-LK) updated some of its regulations to boost the financial and capital markets on (i) syariah securities issuance, and (ii) public offering of securities.

The revised Syariah Securities Issuance Regulation (Regulation IX.A.13), which was issued on June 30 2009 and came into force on the same day, expands the definition of a syariah deed (akad syariah) to include various syariah products so long as they do not contradict with syariah principles in the capital market. Regulation IX.A.13 also extends coverage of the syariah principles from all those issued by the National Syariah Board that were regulated by Bapepam-LK, to all those issued by the Board as long as they do not contradict capital market regulations related to syariah. Under this new rule, syariah mutual funds may invest in various Indonesian syariah securities, even though they are not on the syariah securities list.

On May 29 2009, Bapepam-LK also revised Regulation IX.A.2 regarding Registration Rules and Procedures in the Framework of Public Offering.

This regulation will only allow an issuer to publish its preliminary prospectus for book building or an abridged prospectus after the registration statement has been filed and Bapepam-LK has issued written approval.

The options to discontinue or postpone an offering for an issuer are introduced by Regulation IX.A.2 in event of unexpected unfavourable markets, or any urgent situation that may significantly damage the going concern of the issuer. An issuer is also given the opportunity to shorten the process of a public offering period to one working day. Various major provisions set forth in the old provisions such as allotment, responsibility of an issuer over completeness and correctness of all information disclosed in registration statement and its supporting documents, Bapepam-LK's rights to ask further information from an issuer, and time period for effectiveness for a registration statement have remained the same.

Oene Marseille and Freddy Karyadi