04 Sep 2020
Capital Markets: Indonesia’s FSA Tightens Material-transaction Rules for Public Companies
The Indonesian Financial Services Authority (Otoritas Jasa Keuangan / “OJK”) has issued a new regulation that tightens the rules on material transactions and shareholder-approval requirements in public companies, while at the same time providing some leeway for those in the financial-services sector in certain circumstances. The new rules are set out in OJK Regulation No. 17/POJK.04/2020 on Material Transactions and Changes in Business Activities (the “Regulation”), which comes into force in October 2020.
The Regulation restates the material-transaction threshold rules as follows:
are equal to 20% or more.
If a transaction satisfies any of the above thresholds, it will be deemed a material transaction.
The Regulation requires the approval of independent shareholders if a material transaction:
Previously, only a change in a company’s principal business activity required GMS approval, public disclosure and a feasibility study. Now all three are needed if the company intends to, among other things, do any of the following:
The OJK may, at its discretion in certain circumstances, exempt a public company in the financial-services sector from the material transaction (i) appraisal, (ii) public disclosure, and/or (iii) shareholder approval requirements prescribed by the Regulation. If such exemption is provided, the company will only need to report the transaction to the OJK within 2 business days of its occurrence.
Should you have any queries on the above or require legal advice as to how you can best protect your interests during this time of uncertainty, please contact the persons below, call us on +6221-2505125 or email us at email@example.com.
Mr. Emir Nurmansyah (firstname.lastname@example.org)
Mr. Nafis Adwani (email@example.com)
Mr. Agus Ahadi Deradjat (firstname.lastname@example.org)
 Peraturan Otoritas Jasa Keuangan No. 17 /Pojk.04/2020 Tentang Transaksi Material dan Perubahan Kegiatan Usaha
This edition of ABNR News and the contents hereof are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained herein. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.