11 Mar 2025
OJK Unveils New Regulation to Strengthen Issuers and Public Companies

To align with Law No. 4 of 2023 on Financial Sector Development and Reinforcement Law (“P2SK Law”) which amends several financial sector regulations, including Law No. 8 of 1995 on Capital Markets (“Capital Markets Law”), the Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) has introduced a new regulation: OJK Regulation No. 45 of 2024 on Issuers and Public Companies Development and Reinforcement (“OJK Reg. 45”).

Issued on 31 December 2024, this regulation implements the P2SK Law in capital markets, revising and clarifying existing key rules related to registration of public offerings, share buybacks, status changes, responsibility of controlling shareholders as well as position of public shareholders in liquidation. 

Here are some key highlights of the new regulation:

1. Faster Registration Process for Public Offerings

   Under OJK Reg. 45, the registration statement for a public offering will automatically become effective on the 20th business day after OJK receives the complete submission, or earlier if OJK declares it effective. In contrast, under the previous Capital Markets Law, this process could take up to 45 days. The new rule speeds up public offerings approvals, providing issuers and investors greater certainty.

   The regulation now requires bookbuilding to occur within 3 to 20 business days, a new requirement.

2. Stricter Rules for Forced Delisting Shares Buyback

   OJK Reg. 45 expands the list of parties responsible for share buybacks in the event of a company’s forced delisting, shifting more accountability to controlling shareholders. Previously, only the public company itself was required to buy back shares from investors. Under the new regulation, controlling shareholders must now take on this obligation to ensure public investors are protected.

   Controlling shareholders must buy back shares from public investors if the company is forcibly delisted due to:

• Failure to hold an Annual General Meeting (AGM) for two consecutive years.

• Failure to submit required financial reports for two consecutive years.

• Violations of capital market regulations, particularly if the controlling shareholder benefits.

• Other conditions determined by OJK.

OJK Reg. 45 sets clear rules on how the buyback must be carried out: 

• Strict timeline: The buyback must be completed by the delisting date or within six months of disclosure, whichever is sooner.

• No shareholder approval required: Does not require approval at a General Meeting of Shareholders (GMS).

• Buyback flexibility: The process may exceed 10% of the company’s paid-up capital and can be conducted on or off the stock exchange.

• Continuous buyback obligation: The buyback must continue until the number of shareholders drops below 50 within six months.

Companies must also report the buyback implementation plan at least five days before the buyback period ends.

3. Faster Disclosure of Material Information

   Public companies must now report and announce material facts or information as soon as possible, and at the latest, before the first trading session on the next business day.

   This is a major change from the previous rule, which allowed up to two business days for disclosure. The change is aimed at ensuring that the market receives timely and transparent updates.

4. Clearer Criteria for Public Companies

   OJK Reg. 45 refines the criteria of a public company, as follows:

• At least 300 shareholders

• Minimum IDR 3 billion in authorized capital

• Must have obtained an effective registration statement from OJK

Previously, the requirement for an effective registration statement was not explicitly stated as part of a company’s public status. The revision provides greater clarity on regulatory expectations for listed firms.

5. Clearer Rules for Status Changes of Company

   OJK Reg. 45 sets stricter timelines and obligations for companies changing their status, such as transitioning from public to private, as follows:

• Voluntary change of status: If not completed within 12 months, the company must disclose the delay in its financial statements and explain the reasons.

• OJK-ordered status change: The company must begin the process within 30 days and notify OJK of the GMS agenda for the change.

• Delisted companies: The Indonesia Stock Exchange (IDX) must inform OJK within two business days. For companies delisted after 31 December 2024 must complete the status change within 60 business days. Additionally, the process must begin within 30 days of the delisting's effective date, based on when OJK is notified of the GMS agenda.

6. Revised Rules for Share Buyback in Status Changes

   When a public company changes its status, the share buyback must now be completed within 12 months after the information disclosure announcement —shortened from the previous 18-month timeframe.

   Additionally, the buyback price must be the higher of the average trading price over the last 30 calendar days or the book value per share, based on the latest financial statements.

7. Strengthened Responsibilities for Controlling Shareholders

   OJK Reg. 45 expands the responsibilities of controlling shareholders, reinforcing their role in corporate governance. They are now required to:

• Hold and attend annual General Meeting of Shareholders (GMS) 

• Ensure the continuity of the public company’s business

• Appoint Board of Directors and Commissioners

These provisions aim to enhance accountability and ensure that controlling shareholders take an active role in the company’s operations and decision-making.

8. Stronger Protection for Public Shareholders in Liquidation

   OJK Reg. 45 grants public shareholders priority over non-public shareholders in the distribution of remaining assets when a public company is liquidated.

   Public shareholders are defined as those who:

• Hold less than 5% of shares

• Are not members of the Board of Directors, Board of Commissioners, major shareholders, or key employees

• Have no affiliation with major shareholders or company insiders

• Are not nominee shareholders

This provision strengthens protection for small investors, ensuring they receive fairer treatment in liquidation scenarios.

ABNR Commentary

OJK Reg. 45 introduces detailed provisions to enhance governance and operational standards for issuers and public companies, while addressing previous ambiguities. This regulation serves as the implementing framework for the P2SK Law in the capital markets sector, bringing key changes in areas such as status changes, delisting, public offerings registration, and shareholder rights and responsibilities. 

What Does This Mean for Public Companies, Issuers & Investors?

• Public companies must comply with accelerated disclosure timelines and stricter governance standards.

• Issuers of public offerings will experience a more efficient registration process.

• Investors—especially retail shareholders—will benefit from enhanced protections in forced delisting and liquidations.

By modernizing capital market regulations, OJK Reg. 45 aims to enhance legal certainty, strengthening corporate governance, and improve investor protection. Public companies and issuers should assess their governance frameworks and disclosure procedures to ensure compliance with the new requirements.

By partner Nurdin Adiwibowo (nadiwibowo@abnrlaw.com), senior associate Novario Asca H (nhutagalung@abnrlaw.com), and associate Marshel Miyata (mmiyata@abnrlaw.com)

This ABNR News and its contents 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 in this legal update. 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.