Disclosure Requirements - Indonesia
Disclosure Category: 3
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”).
The Capital Market Law sets out the following key principles regarding disclosure as follows:
- Under the Capital Market Law, 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 the Capital Market Law 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 purchase or sale conducted in the capital market, OJK requires the party (i.e. 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 10 calendar days after the date of the transaction.
Any subsequent changes of ownership of at least 0.5%, equally require such shareholder to report to OJK.
Such 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 settlement date;
- The number of shares purchased or sold;
- The purchase/sale price;
- 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 Clearstream Banking are considered as “indirect”.
The report must be prepared following reporting format in the Annex of Regulationand should be adressed to:
Otoritas Jasa Keuangan (Financial Services Authority)
(Ex. Badan Pengawas Pasar Modal dan Lembaga Keuangan)
UP: Kepala Eksekutif Pengawas Pasar Modal (Executive Head of Capital Market Supervision)
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.
Such 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);
- Free of business activity (only applicable to local financial institutions under OJK supervision);
- Revocation of business license (only applicable to local 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.