The Indonesia Stock Exchange ("IDX") introduced Regulation No. I-N in May 2024 to strengthen transparency and accountability in its delisting and relisting processes for both shares and debt-linked securities or sukuk ("Regulation"). Under the Regulation, IDX has enhanced its oversight by mandating periodic announcements of potential delistings for companies whose shares remain suspended for six consecutive months. Delisting can occur either voluntarily by the company or upon orders from IDX or the Financial Services Authority (OJK). For instance, IDX can initiate delisting if a company fails to meet listing requirements, experiences significant financial or legal setbacks, or remains suspended for an extended period. The Regulation also streamlines the procedures for relisting, aligning with existing IDX frameworks.
The new rules aim to protect public investors by ensuring they have timely and comprehensive information about the status of listed companies. In cases of delisting, companies must disclose plans for share buybacks triggered by IDX's decision, enhancing transparency further. The Regulation also introduces stricter penalties, such as increased delisting fees, to discourage companies from voluntary delisting without due cause. Moreover, for debt or sukuk delistings, similar protocols apply, including public announcements and opportunities for companies to present recovery plans. Despite these advances, uncertainties remain regarding the exact impact on sukuk holders and the trading status of delisted debt instruments. Overall, IDX's Regulation represents a significant stride towards bolstering market integrity and investor confidence through enhanced regulatory oversight and transparency measures.
For more information, click here to read our Legal Update.
