Changes in reports on share ownership in public companies
08 April 2024
OJK recently issued POJK 4/2024, which will revoke POJK 11/2017 upon its enforcement date on 28 August 2024. This new regulatory framework (i) updates and expands several provisions related to share ownership reporting obligations in public companies to align with amendments under the Law 4 of 2023 on the Development and Strengthening of Financial Services Sector ("PPSK Law"), and (ii) introduces new mandates for public company shareholders to also report their share pledging activities in line with applicable international standards.
Several notable changes or new requirements introduced under POJK 4/2024 include:
a. clarity on criteria that applies to reporting parties ;
b. amendment of 0.5% threshold for subsequent report;
c. clarity on timing of report;
d. clarity on the reporting mechanism from organized groups; and
e. new mandatory report on share pledging activities.
Based on the above, it is now possible for an organized group to appoint one shareholder to report their collective shares ownership to OJK. Further, as POJK 14/2024 will only take effect on 28 August 2024, public companies and shareholders are encouraged to consider how these amendments might affect their present reporting and compliance obligations in the meantime.
POJK 11/2017 | POJK 4/2024 |
Directors and commissioners that, directly or indirectly, own shares in the said public company. | Directors and commissioners that, directly or indirectly, own shares with voting rights in the said public company. |
Any parties that, directly or indirectly, own a minimum of 5% shares in the said public company. | Any parties that, directly or indirectly, own a minimum of 5% shares with voting rights in the said public company. |
Silent | Any parties designated as controllers, including controlling parties with ownership of more or less 5% of the issued shares of a public company. |
Silent | Any parties whose ownership of shares falls below a threshold of 5% in a public company. |
The use of the phrase 'voting rights' aims to capture shareholders who, directly or indirectly, own shares with multiple voting rights (multi-voting shares). By including this phrase, certain shareholders holding less than 5% of the public company's shares may still be required to report if they hold certain multi-voting shares.
In line with the provisions of PPSK Law, POJK 4/2024 also shortens the timeframe to submit the report, from 10 calendar days to 5 business days (or 3 business days, if the electronic system has become available – see below) from the occurrence of the relevant change in shareholding.
Furthermore, POJK 4/2024 now clarifies that if the parties subject to the reporting obligation are organized groups (which, according to the relevant elucidation in POJK 4/2024 means parties who create plans, deals or make decisions to cooperate for a certain goal), then the obligation to report can be fulfilled by a single shareholder appointed to represent such group. This amendment clarifies interpretations arising from POJK 11/2017, which previously seemed to require each party within the same group, directly or indirectly owning shares in the public company, to submit standalone/separate reports.
POJK 4/2024 now expands the information that must be contained in the report, in which the following information must now also be included:
POJK 4/2024 introduces an electronic submission system that will be established by OJK, which must be used by the reporting party once the system is available.
Authors: Indra Sudrajat, Associate; and Sebastian Sormin, Legal Intern.
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