1 Februay, 2016
Source – http://www.123rf.com/profile_saiko3p
Introduction
On 22 December 2015, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan "OJK") issued OJK Rule No.31/POJK.04/2015 on Disclosure of Material Information or Facts ("POJK 31/2015"). POJK 31/2015 replaces Bapepam-LK Rule No. X.K.1, as attached to Decision of the Chairman of Bapepam No.Kep-86/PM/1996 on Disclosure of Information that Must be Made Public Immediately ("Rule X.K.1").
Compared to Rule X.K.1, POJK 31/2015 provides more clarity on the definition of Material Information or Facts (“Material Information”), and the procedure of disclosing the Material Information as well as examples of Material Information to be disclosed by a listed company.
POJK 31/2015 became effective on 22 December 2015.
What POJK 31/2015 Says
The Definition of Material Information
POJK 31/2015 defines Material Information as any important and relevant information or fact regarding events, incidents, or facts that may affect the price of Securities on the Stock Exchange and/or the decisions of any investor, potential investor or other Party (as defined in the Capital Market Law) who has an interest in that information or fact.
The Material Information must be reported to the OJK and announced to the public as soon as possible but in any event no later than two business days after the event occurs.
Example of Material Information
Material Information as set out in POJK 31/2015 includes:
- a merger, acquisition or consolidation, or the establishment of a joint venture;
- an offer to purchase the Securities of another company;
- a stock split or distribution of stock dividends;
- a change in the Board of Directors or Board of Commissioners;
- material litigation proceedings against a listed company and/or the members of its Board of Directors or Board of Commissioners;
- the replacement of the Accountant who audits a listed company;
- the replacement of a listed company's Trustee;
- a change in a listed company's fiscal year;
- a purchase or sale of shares of a company which has material value;
- an acquisition or loss of an important contract;
- a call for the purchase or redemption of debt Securities;
- an invention or launch of a new product that may add value to a listed
- company;
- restriction on an a listed company's business by a relevant regulator;
- material changes to or failure to achieve financial projections which have been published;
- a debt restructuring; or
- cessation or closure of part or all of a listed company's business segments.
The Substance and Procedure for the Reporting and Announcement
The disclosure of the Material Information based on POJK 31/2015 must contain, at least, the date of the event, type of Material Information, description of Material Information and the impact of that Material Information.
POJK 31/2015 also provides a standard form (template) to be used for the disclosure of Material Information, which must be prepared and submitted by the Director or the Corporate Secretary (based on the written power of attorney provided by the Director) of the relevant listed company.
With respect to a public announcement, POJK 31/2015 stipulates that:
(i) for a listed company, the announcement of Material Information must be made through (a) its own website and (b) the Indonesian Stock Exchange's website or one daily newspaper with nationwide circulation; and
(ii) for a non-listed public company, the announcement of Material Information must be made through its own website and one daily newspaper with nationwide circulation.
The announcement must be made in Bahasa Indonesia and a foreign language (at least in English). The information announced in another foreign language must be consistent with the information in Bahasa Indonesia, and if there is any discrepancy between the foreign language and Bahasa Indonesia, the information in Bahasa Indonesia will prevail.
Despite the permitted two business days gap, a listed company must immediately announce its Material Information to the public if such Material Information is already known by a third party (other than its insider parties). If that Material Information becomes known by a third party on a business day, the announcement must be made on the same day. If the Material Information becomes known by a third party on a holiday, the announcement must be done on the first business day after that holiday.
Miscellaneous
If the event of Material Information (other than a stock split, distribution of stock dividends, delisting or relisting of shares on the Stock Exchange, replacement of a listed company's Trustee and the replacement of a Securities Administration Bureau/Biro Administrasi Efek) occurs in a non-listed subsidiary controlled by the listed company whose financial statements are consolidated with that listed company, the obligation to disclose the Material Information lies with the listed parent company. If the subsidiary is a listed company, the obligation to disclose the relevant Material Information lies with the subsidiary and not with the listed parent company.
A listed company is not required to comply with POJK 31/2015 if it has reported to OJK and announced to the public the relevant Material Information in compliance with other OJK regulations.
Sanctions for Non-Compliance
If a listed company violates (including causes any violation of) POJK 31/2015, OJK may impose administrative sanctions in the form of:
(a) warning letters;
(b) fines;
(c) limitation of business activities;
(d) suspension of business activities;
(e) revocation of business license;
(f) cancellation of approval; and
(g) cancellation of registration.
The fines, limitation and suspension of business activities, revocation of business license, and cancellation of approval and registration may be imposed with or without warning letters. Fines may also be imposed separately from or jointly with other administrative sanctions as provided above.
