Disclosure Requirements - Indonesia
Disclosure Category: 3
CBL, as intermediary, has no obligation to disclose holdings or other information about its clients. Investors holding Indonesian securities are required to report if they exceed the set thresholds.
Consent
To align with relevant laws, clients involved in transactions in Indonesia’s domestic market, agree and are considered to have agreed to, and to comply with, disclosure requirements in Indonesia directly applicable to CBL’s clients, shareholders and beneficial owners.
Disclosure requirements
Clients are advised that, under local regulations, the Otoritas Jasa Keuangan (Financial Services Authority - OJK) is entitled to require the party (i.e. individual, company, joint venture, association or organisation):
- who owns (directly or indirectly) at least 5% in an issuer or a public company to report said shareholding (as well as each change in ownership).
- who pledges at least 5% (in aggregation) of shares of an issuer or a public company to report said pledge activity (as well as each change in pledged position)
Background and legal basis
The primary disclosure rule in Indonesia is provided in Law No. 8 of 1995 concerning Capital Market Law, dated 10 November 1995 (the “Capital Market Law”) as amended by Law No. 4 of 2023 concerning Financial Sector Development and Reinforcement dated 12 January 2023.
Both the Capital Market Law and Law No. 4 of 2023 concerning Financial Sector Development and Reinforcement set out the following key principles regarding disclosure as follows:
- Under both these Laws, the process for making disclosures and making them available to the public is determined by the Indonesian Capital Market and Financial Institution Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan - BAPEPAM-LK). Since 1 January 2013, this function is being carried out by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan - OJK) as the new capital market regulator.
- Persons are subject to both these Laws in the following circumstances:
- They hold at least 5% of the shares in an issuer or a public company;
- They hold 50% or more of a particular stock.
Sanctions
CBL will not be responsible for any penalties or sanctions or associated costs that could be imposed upon CBL’s safekeeping account with its appointed custodian due to a client’s failure to comply with one or more disclosure requirements. Such penalties, sanctions or associated costs will be automatically passed on to the failing client.
Obligation to report threshold crossings
Shareholding of 5% and above
In the event of a transaction (that is, purchase, sale, corporate action exercise, gift, inheritance, execution of pledge agreement, etc.) conducted in the capital market, OJK requires the party (that is, individual, company, joint venture, association or organisation) who owns (directly or indirectly) of at least 5% in an issuer or a public company to report said shareholding (as well as each change in ownership) to OJK within 5 business days after the date of the settlement
Any subsequent changes of ownership of at least a percentage unit1, equally require such shareholder to report to OJK. For example, a shareholding change from 5.9% to 6.2% is considered a change from 5% to 6%. Similarly, a shareholding change from 5% to 4.7% is considered a change from 5% to 4%. A shareholding change from 5.1% to 5.99%, however, is not considered a shareholding change of at least a percentage unit as both are rounded down to 5%.
The reporting shall include at least the following information:
- The name, address and nationality of the shareholder;
- The name of shares;
- Share quantity and percentage of ownerships before and after the transaction;
- Transaction type;
- The number of shares purchased or sold or transferred;
- Information on shares classification (single voting rights or multiple voting rights);
- The purchase/sale price (if relevant);
- The transaction date;
- The purpose of the transaction;
- Ownership status – whether direct or indirect. If indirect, then to indicate shareholder name that is registered/listed in the shareholder list of the issuer or public company. Note: Clients of CBL are considered as “indirect”;
- Whether investor holds controlling rights. If so, whether investor maintains controlling rights.
The report must be prepared following reporting format in the Annex of Regulation and should be addressed to:
Otoritas Jasa Keuangan (Financial Services Authority)
(Ex. Badan Pengawas Pasar Modal dan Lembaga Keuangan)
UP: Kepala Eksekutif Pengawas Pasar Modal, Keuangan Derivatif dan Bursa Karbon (Chief Executive Officer of Capital Markets Supervisory, Derivatives Finance and Carbon Exchange)
Gedung Soemitro Djojohadikusumo
Jalan Lapangan Banteng Timur No. 2-4
Jakarta 10710, Indonesia
In the event of a takeover and tender offer, an investor who owns 50% or more of the outstanding shares of a listed company is considered as the controlling shareholder, unless proven otherwise. The new controlling shareholder is required to make an announcement to the public and OJK within 2 working days after the takeover.
The reporting shall include at least the following information:
- Total shares that have been taken over;
- Total shareholding after takeover;
- Shareholder identity, which are name, address, phone number, fax number, business type; and
- Explanation on the purpose to control the company
The report should be submitted to the OJK at the address above.
Sanctions
Failure to comply with the obligation to disclose regarding the 5% threshold shall result in sanctions imposed by the OJK, at its own discretion, on the non-disclosing party. These sanctions include, but are not limited to:
- Written warning;
- Fine/financial penalty;
- Limitation of business activity (only applicable to local financial institutions under OJK supervision);
- Freezing of business activity (only applicable to local financial institutions under OJK supervision);
- Revocation of business license (only applicable to financial institutions under OJK supervision);
- Cancellation of agreement (only applicable to local financial institutions under OJK supervision); and
- Cancellation of registration (only applicable to local financial institutions under OJK supervision).
Meanwhile, failure to comply with the obligation to disclose regarding the 50% threshold shall result in monetary fines imposed by the OJK, at its own discretion, on the controlling shareholder.
Obligation to report pledge transactions
In the event of a pledge activity conducted in the capital market, OJK requires the party (i.e. individual, company, joint venture, association or organisation) who pledges at least 5% (in aggregation) of shares of an issuer or a public company to report said pledge activity to OJK within 5 business days after the signing date of the pledge agreement.
Any subsequent changes of pledged positions of at least a percentage unit1, equally require such pledgor to report to OJK. For example, a pledged position change from 5.9% to 6.2% is considered a change from 5% to 6%. Similarly, a pledged position change from 5% to 4.7% is considered a change from 5% to 4%. A pledged position change from 5.1% to 5.99%, however, is not considered a pledged position change of at least a percentage unit as both are rounded down to 5%.
Such reporting shall include at least the following information:
- The name, address and nationality of the pledgor;
- The name of pledged shares;
- Share quantity and percentage of ownership;
- Loan value guaranteed by pledged shares;
- Transaction that caused the change on number of pledged shares, if any;
- Date and terms of the pledge agreement;
- Affiliation relationship between parties in the pledge agreement, if any
The report must be prepared following reporting format in the Annex of Regulation and should be addressed to:
Otoritas Jasa Keuangan (Financial Services Authority)
UP: Kepala Eksekutif Pengawas Pasar Modal, Keuangan Derivatif dan Bursa Karbon (Chief Executive Officer of Capital Markets Supervisory, Derivatives Finance and Carbon Exchange)
Gedung Soemitro Djojohadikusumo
Jalan Lapangan Banteng Timur No. 2-4
Jakarta 10710, Indonesia
Sanctions
Failure to comply with the obligation to disclose regarding the 5% pledge transaction threshold shall result in sanctions imposed by the OJK, at its own discretion, on the non-disclosing party. These sanctions include, but are not limited to:
- Written warning;
- Fine/financial penalty;
- Limitation of business activity (only applicable to local financial institutions under OJK supervision);
- Freezing of business activity (only applicable to local financial institutions under OJK supervision);
- Revocation of business license (only applicable to financial institutions under OJK supervision);
- Cancellation of agreement (only applicable to local financial institutions under OJK supervision); and
- Cancellation of registration (only applicable to local financial institutions under OJK supervision).
1. A percentage unit is obtained by rounding down a percentage to zero decimal points. For example, both 5.1% and 5.9% are rounded down to 5%.