Besides issuing a new regulation on trustee agreement for debt securities or sukuk, Otoritas Jasa Keuangan ("OJK"), Indonesia’s Financial Services Authority, also issued a new regulation on private placement of debt securities or sukuk, being OJK Regulation No. 30/POJK.04/2019 ("Regulation No. 30"). The new Regulation No. 30 came into effect on 1 June 2020, and essentially tightens the private placement market by (a) prescribing criteria and procedure for a private placement of medium-term notes, sharia medium-term notes, long-term notes and perpetual bonds; (b) limiting issuers and purchasers in a private placement by prescribing eligibility criteria; (c) requiring the appointment of an arranger and a monitoring agent; and (d) mandating detailed documentation and reporting.
Following this regulation, OJK issued a letter to exempt any offshore issuance of debt securities or sukuk through a private placement if they are offered to non-Indonesian investors. In this case, the issuer can voluntarily comply with Regulation No. 30 or mandatorily comply as ordered by the regulator.
Following the issuance of the E-Commerce Regulation, Government Regulation No. 80 of 2019, the Ministry of Trade issued Regulation No. 50 of 2020 ("Regulation No. 50") to implement the E-Commerce Regulation. Regulation No. 50 contains various requirements for e-commerce players, specifically regarding licensing and advertising, as well as regulating the development and supervision of businesses in the e-commerce sector.
Clarifying past confusion, the new Regulation No. 50 explicitly requires local e-commerce players to obtain a business license, depending on the type of service that they provide. On the other hand, foreign e-commerce providers are not required to obtain a license but must appoint a representative in Indonesia to act on their behalf if such foreign providers satisfy certain thresholds based on the number of consumers or delivery.
To keep pace with the developing debt securities and sukuk market in Indonesia, OJK issued OJK Regulation No. 20/POJK.04/2020 on Trustee Agreement for Debt Securities or Sukuk ("Regulation No. 20"), to revoke Bapepam-LK Regulation No. VI.C.4.
One notable new change introduced by Regulation No. 20 is the requirement to include a force majeure provision on a trustee agreement. For the most part, the new Regulation retains and expands existing provisions from the old regulation. For example, a trustee must now also perform due diligence on assets that constitute the basis of the sukuk issuance, in addition to conducting due diligence on the issuer itself. On the replacement of a trustee, the new regulation introduces a 'catch-all' provision to allow an issuer to replace the trustee if that trustee no longer complies with the trustee requirements under prevailing law.
In light of the ongoing COVID-19 pandemic, the Minister of Land Affairs issued Decree No. 88.1/SK-HR.01/IV/2020 and Circular Letter No. 7/SE-100.HR.01/IV/2020, which extend the validity period of certain land rights due to the limitation of physical services at various land offices.
Under this Decree, the right to build (hak guna bangunan), right to use (hak pakai) and right to cultivate (hak guna usaha) that originally expired on 31 March 2020 will remain valid until 31 December 2020.
Further, the Circular Letter allows a land applicant to use a statement letter and proof of payment to register a transfer of right over land, as opposed to the usual validated evidence of a tax payment or duties.
One of the regulations issued by OJK in the early months of 2020 was OJK Regulation No. 17/POJK/04/2020 on Material Transactions and Change of Business Activities ("POJK 17"). This regulation revokes Bapepam-LK Regulation No. IX.E.2 on the same subject matter.
Among others, POJK 17 expands the definition of material transactions and changes in main business activities for public companies. Further, it also imposes stricter requirements by requiring approval by independent shareholders if a material transaction satisfies certain criteria.
With respect to change of main business activities, POJK 17 may require a company to hold a general meeting of shareholders, publicly disclose the change, and complete a feasibility study prior to adding or conducting a new business activity, or reducing or changing an existing business activity.
