In a bid to better conform to international standards and improve the quality of information disclosure, the Financial Services Authority of Indonesia (OJK) issued a new regulation in March 2017 detailing public disclosure obligations of certain shareholders of Indonesian public companies.
Under the new regulation, for the first time, indirect shareholders owning five percent or more of the issued shares in an Indonesian public company are required to disclose their shareholding. The previous regulations on this subject only required direct shareholders to do this.
The new regulation defines 'indirect shareholders' as any party owning shares in an Indonesian public company through another party. Specifically, the new regulation calls for disclosure by the ultimate beneficial owners of the relevant shares as well as any other parties in the chain of ownership downstream from the ultimate beneficial owners.
These direct and indirect shareholders are required to report any change in their shareholding (through one or more transactions) if the change is equal to 0.5% or more of the total issued share capital in the public company. This de minimis reporting threshold is a new feature of the recently issued regulation.
The new regulation prescribes the particular format in which the disclosure must be drafted. The report needs to include details of the number of shares being transferred, the transfer price, and information regarding the direct or indirect shareholding of the relevant shareholders.
The disclosure must be made by the shareholders no later than 10 calendar days after the relevant transaction is completed. Alternatively, the disclosure may be made by an attorney, through an appropriate power of attorney, no later than five calendar days after the completion of the transaction.
The regulation became effective as of March 14 2017.
|Oene Marseille and Emir Nurmansyah|
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