New Execution Guideline for the District Courts Aims to Simplify Execution Process

The application for and implementation of execution in Indonesia is a lengthy process and often, it may even exceed the duration of the trial. The Supreme Court acknowledged this difficulty and, through the Directorate General of the General Judiciary, issued a new guideline for the implementation of execution in district courts ("Guideline").

The Guideline aims to ease and expedite the execution process, particularly for civil court decisions, mediation and settlement resolutions, arbitration awards, decisions from the labour court, competition authority, consumer dispute settlement agency, information commission, as well as executorial deed and security execution.

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Legalisation of Crypto-Assets in Indonesia

The Indonesian Supervisory Board of Futures Commodities Trading, or commonly known as Bappebti, recently legalised the crypto-asset trading market in Indonesia by issuing a new regulation that aims to give certainty to the digital commodity market, in line with the increased trading of various crypto-assets in Indonesia ("Regulation").

Key points introduced in the Regulation are:

• definition of crypto-asset;
• requirements for parties involved in the crypto-asset trading (e.g. minimum capital requirement, employment of qualified human resources and IT infrastructure);
• criteria to be included in the list of tradeable crypto-assets in Indonesia;
• trading mechanism;
• restriction of short-selling trading; and
• obligation to use Indonesian Rupiah in crypto-assets trading in Indonesia.

In the transition period (i.e. 1 year as of the enactment of this Regulation), all brokers that have conducted crypto-asset trading prior to this Regulation must register themselves to Bappebti by fulfilling the requirements in the Regulation. During the transition period, the brokers can only conduct limited business activities.

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New Regulation Aims to Improve Transparency in Insolvency Proceedings

The Minister of Law and Human Rights issued a new regulation relating to insolvency practitioners. This regulation came into effect in December 2018 and repealed the previous regulation governing insolvency practitioners.

At a glance, this regulation:

• improves transparency in an insolvency process as stakeholders have more access to information;
• establishes an online system so registration and submission of reports can be done electronically; and
• requires an appointed receiver and administrator to submit online compulsory reports on:

1. their appointment as a receiver or administrator;
2. the insolvency process up to its completion, and
3. completion of the insolvency process.

This improvement evidences the Indonesian government's effort in increasing its ranking in the World Bank’s Ease of Doing Business programme, as one of the indicators for positive ranking is creditors’ participation index in resolving insolvency. It is also hoped that creditors will feel more confident in the insolvency process in Indonesia by, among others, being able to access debtors’ information online.

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Indonesia Introduces Regulation on Equity Crowdfunding

The Financial Services Authority ("OJK") closed 2018 by issuing the long-awaited equity crowdfunding regulation that became effective as of 31 December 2018. The new regulation regulates the direct offering of shares to investors through an open electronic system platform ("Equity Crowdfunding").

This regulation applies to any offering of shares or other equity securities (as determined by OJK) by an issuer directly to investors through an electronic platform that is managed and operated by a provider. The offering of a company’s equity securities through Equity Crowdfunding is not considered as a public offering as defined under Indonesian Capital Market law if:

1. the offering is performed through a provider licensed by the OJK;
2. the offering is conducted within a maximum of 12 months; and
3. the total funds raised do not exceed IDR 10 billion (or any other threshold amount determined by the OJK) on an annual basis.

Further, the issuer will not be deemed as a public company under the Indonesian Capital Market Law if the number of shareholders of the issuer is less than 300 and the paid-up capital of the issuer is less than IDR 30 billion. The parties involved in the Equity Crowdfunding will be subject to OJK’s supervision, particularly the capital market department.

This regulation provides an alternative source of funding for small and medium scale enterprises that are not yet able to enter the capital market. Often, Equity Crowdfunding can also be the first step for these enterprises to conduct an initial public offering. Moreover, it will also boost economic growth in Indonesia by providing access to start-up companies and small medium enterprises in raising funding electronically for the development of their business.

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IDX Issues New Listing Regulation

The Indonesia Stock Exchange ("IDX") issued a new IDX listing regulation that became effective on 27 December 2018 and replaced the previous regulation.

The following are the key changes under the new listing regulation:

• adjustment of the corporate governance provisions;
• no minimum requirement on nominal value;
• listing requirements;
• simpler listing procedures;
• lock-up on stock split or reverse stock;
• requirements for listed companies to remain listed at IDX;
• pricing regulation for additional shares; and
• deletion of lock-up provision.

Through the new listing regulation, the Indonesian government hoped to encourage more companies to list their shares on the IDX.

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