On 1 August 2018, the Indonesian Financial Services Authority (i.e. Otoritas Jasa Keuangan, hereinafter, "OJK") issued a new regulation, "OJK Regulation No. 11/POJK.04/2018 on Bonds and Sukuk Public Offerings to Professional Investors" ("POJK No. 11/2018"). POJK No. 11/2018 introduces: (i) the definition of Professional Investor; (ii) the requirements to be considered as a Professional Investor; (iii) a new category of Bonds and Sukuk that are issued only to Professional Investors; and (iv) registration process and requirements for Professional Investors only Bonds and Sukuk which are simpler in comparison to conventional Bonds and Sukuk offerings.
POJK No. 11/2018 defines Professional Investor as a person or entity having the capacity to purchase securities and understand the risks involved ("Professional Investor"). Generally, the key characteristic that differentiates a Professional Investor from a retail investor is its capability to conduct a risk analysis. POJK No. 11/2018 also sets certain businesses as a Professional Investor by default.
Key differences with Conventional Bonds/Sukuk:
- Ratings – Securities that are non-shelf registered under POJK No. 11/2018 are not required to obtain a rating.
- Prospectus – Prospectuses under POJK No. 11/2018 are not required to include the debt statement and important financial summaries. Issuers with outstanding securities do not need an audited financial statement and a legal opinion.
- Timeline – Simplified with only a maximum 3-business day offering period, with a 1-business day allotment date after it, and the securities to be distributed 2 business days after the allotment date.
- Tradability – Can only be traded amongst Professional Investors
The Indonesian Government has issued Government Regulation No. 36 of 2018 regarding the Recordation of Intellectual Property License Agreement ("GR No. 36/2018"). GR No. 36/2018 is the implementing regulation of Law No. 30 of 2000 regarding Trade Secrets, Law No. 31 of 2000 regarding Industrial Design, Law No. 32 of 2000 regarding Layout Designs of Integrated Circuits, Law No. 28 of 2014 regarding Copyright, Law No.13 of 2016 regarding Patent, and Law No. 20 of 2016 regarding Trademark and Geographical Indication.
GR No. 36/2018, which came into effect on 27 July 2018, sets out the procedure of recordation of intellectual property ("IP") license agreement at the Directorate General of Intellectual Property ("DGIP"), including the required documents for the application for recordation. GR No. 36/2018 also contains provisions on the amendment and revocation of recordation of IP license agreement.
Click here to read our client update.
The Financial Services Authority (i.e. Otoritas Jasa Keuangan, hereinafter, "OJK") has issued a new regulation governing takeovers of public companies. The regulation, OJK Regulation No. 9/POJK.04/2018 ("OJK Rule No. 9/2018"), entered into effect on 27 July 2018. It revoked Bapepam-LK Rule No. IX.H.1 on the same topic.
Key changes introduced in OJK Rule No. 9/2018 include:
- clarifying the documents that may prove the status of a party as indirect controller,
- such as:a shareholders' agreement showing that the party has more than 50% of voting rights
- the articles of association or an agreement showing the party's authority to set the financial and operational policy of the company
- documents or information showing the party's authority to appoint or replace the majority of the members of the company's board of directors and board of commissioners.
- documents or information showing the party's authority to control majority votes at the board of directors and board of commissioner's meetings so that they can control the company.
- restating the requirement that the takeover announcement must disclose the beneficial owner of a new controller.
- stating the required information to be included in the Mandatory Tender Offer ("MTO") announcement made by the new controller, such as:
- a statement from the new controller that it has sufficient funds to conduct the MTO, as well as information on the source(s) of the funds; and
- a plan of development for the company.
- permitting to conduct an MTO by a third party appointed by the new controller, to act for and on behalf of, provided that more than 50% of the share capital of such third party is controlled, whether directly or indirectly, by the new controller. The appointed party must implement all MTO procedures as stipulated in OJK Rule No. 9/2018.
- limiting MTO exemptions for takeovers of listed companies through a Rights Issue or an increase of capital without pre-emptive rights. With respect to the Rights Issue, the exemption from conducting a MTO is only applicable if the takeover occurs as a result of the existing shareholder exercise their rights in accordance with their portion. The exemption is also applicable if the takeover occurs in the event of the issuance of new shares without pre-emptive rights in order to improve the financial condition of the company.
On 21 June 2018, the Government of the Republic of Indonesia issued Government Regulation No. 24 of 2018 on Electronic Integrated Business Licensing Services ("GR No. 24/2018"). GR No. 24/2018 seeks to improve the ease of doing business and increase investment in Indonesia. It also reflects the Government's direction to shift from its pre-commencing supervision system to post-commencing supervision. This is done by reducing the number of required business licenses and permits, as well as simplifying their application processes.
One of the mandates of GR No. 24/2018 is to establish the so-called Online Single Submission ("OSS") portal, an online platform that integrates the process of applying for multiple regulatory permissions in one place. The OSS portal became operational on 9 July 2018.
The OSS system is meant to cater to all types of private sector business, with a few exceptions stated in BKPM Regulation No.6 of 2018 on Guidelines and Procedures for Investment Licensing and Facilities ("BKPM No. 6/2018"). The new BKPM No.6/2018 revokes and replaces the previous BKPM Regulation No. 13 of 2017 on the same matter. With this new regulation, it is now clear that licenses in geothermal, mining, oil & gas and property sectors and licenses for the establishment of certain foreign company representative offices still require applicants to use the existing BKPM online system, namely the SPIPISE system.
It was reported that the minimum equity requirement for a foreign investment company ("PT PMA") to register on the OSS system is IDR2.5 billion.
It is hoped that the establishment of the OSS system will help further improve Indonesia’s ranking in the World's Ease of Doing Business Index. Currently, Indonesia's ranking is 72nd, a dramatic leap from 129th in 2011.
Click here to read our client update when the OSS portal became operational.
