New OJK Regulation Clarifies Financial Omnibus Law Changes for Issuers and Listed Companies

Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or OJK) has issued Regulation No. 45 of 2024 on the Development and Strengthening of Issuers and Public Companies (OJK Regulation 45), which came into effect on 27 December 2024 (the date of its issue).

In broad terms, OJK Regulation 45 clears up some practical issues and confirms some of the changes introduced by the 2023 Financial Omnibus Law.

We present here the notable changes and clarity provided by OJK Regulation 45.

Clearer Timeline for Public Offering Process

• OJK should declare that a public offering registration statement is effective no later than 20 working days after submission of the complete registration statement (previously, 45 working days). This change aligns the public offering procedures with the Financial Omnibus Law.
• The minimum book building period is reduced to three working days from seven.

Clearer Reporting Timeline for Material Information or Facts

OJK Regulation 45 requires a public company to make a report on material information or facts as soon as possible (and in any event no later than the first trading session of the Indonesia Stock Exchange (IDX) on the next business day) after it becomes aware of, or should reasonably be aware of, such material information or facts (compared with two working days previously). This change aligns the reporting timeline with the Financial Omnibus Law.

While OJK Regulation 45 has amended the reporting timeline, the subject matter and types of material information or facts that must be reported are unchanged.

Clearer Procedure for Going Private

• A going-private process arising from an OJK going private order or an IDX delisting order should commence within 30 calendar days after that order is issued, through submission of a shareholders’ meeting agenda to OJK. This timeline was not previously regulated.
• IDX can now directly issue a delisting order to commence a going-private process, whereas previously an OJK going-private order had to be requested by the IDX.
• The share buyback period in the context of going private is reduced to 12 months (previously, it was 18 months). This aligns with the applicable share buyback regulation (see our February 2024 bulletin on OJK’s regulation on share buybacks by public companies).
• Where a going-private process is not completed within 12 months, while there is no need to reobtain approval from the shareholders or independent shareholders, there should be an explanation in the annual report and general meeting of shareholders (previously, this was not regulated).

Clearer Conditions for OJK to Designate Controller

OJK Regulation 45 provides clarity on “certain conditions” where OJK is authorised to designate a controller of a public company, by explaining that these conditions may include, such party (a) being able to decide on the appointment and dismissal of the majority of a public company’s board of directors (BOD) and board of commissioners (BOC), by controlling voting rights of the public company; or (b) being able to control or determine material operations, the appointment of key personnel, and other matters relating to the public company.

Under the previous regulation, these “certain conditions” were only relevant in a situation where a public company was unable to determine its controller because the majority of its shares were held by the public, with the controller being determined by, among other things, inter-relationships between shareholders through affiliate and/or concerted party relationships (ie, not expressly based on ability to control the company).

The "certain conditions" now better align with the qualitative control criteria set out in the OJK public company takeover regulation (see our August 2018 bulletin).

Broader Responsibilities of Controllers

OJK Regulation 45 sets out four specific responsibilities of a controller:

1. convening annual general meetings of shareholders;
2. attending general meetings of shareholders;
3. ensuring the public company remains a going concern; and
4. appointing BOD and BOC members.

Clarity on Definition of Public Shareholders

OJK Regulation 45 introduces a definition of public shareholders as parties that:

• hold less than 5% of the public company’s issued and paid-up shares;
• are not a director, commissioner, substantial shareholder, controller or key employee of the public company;
• are not an affiliate of a director, commissioner, substantial shareholder, controller or key employee of the public company; and
• are not a nominee of a director, commissioner, substantial shareholder, controller or key employee of the public company.

OJK Regulation 45 adopts the protection rights for public shareholders upon the liquidation of a public company that are set out in the Financial Omnibus Law. As such, in the context of liquidation of a public company, the priority for distribution, ranked highest to lowest, is as follows: preferred creditors (eg, unpaid wages and taxes), secured creditors (eg, collateral right holders), unsecured creditors, public shareholders, and non-public shareholders. 

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Please reach out to your usual contact if you have any questions on how this might affect your business.