To encourage a more robust and transparent capital market scene in Indonesia, Indonesia Financial Services Authority/Otoritas Jasa Keuangan (“OJK”) issued a regulation setting out the provisions on the system, procedures and requirements of the electronic public offering or shall be known as electronic Indonesia public offering system (“e-IPO System”). With the issuance of the OJK Regulation No. 41/POJK.04/2020 on the Implementation of the Public Offering Activities of Equity Securities, Debt Securities, and/or Sharia Debt Securities by Electronic Means (“POJK 41/2020”), OJK also hopes that the securities public offering in Indonesia may be more accessible to the public.
Issuers must utilize the e-IPO System if the public offerings are carried out by using the services of the underwriter(s) andthe securities offered in the public offerings will be listed on the Indonesia Stock Exchange. Such public offerings include the public offerings of Equity Securities, Debt Securities and/or Sharia Debt Securities and others as determined by OJK.
The e-IPO System must encompass all activities in the public offering and must result in the report related to the Public Offering results. The activities at least include:
- initial offering (bookbuilding);
- securities offering;
- securities allotment; and
- order settlement of the offered securities.
Issuers that undertake the activities in the public offering using the e-IPO System must adhere to the provisions in the prevailing laws in the capital market sector, as referred to in Regulation of the Capital Market Supervisory Agency and Financial Services No. IX.A.2 on the Registration Procedures of the Public Offering, attachment to the Decree of the Head of Capital Market Supervisory Agency and Financial Services No. KEP-122/BL/2009 (“Rule IX.A.2”) unless regulated otherwise in POJK 41/2020. Issuers must announce the information regarding the public offering through the e-IPO System and nationally circulated daily newspaper in the Indonesian language. The announcement through the e-IPO System shall be carried out by the underwriter that is appointed as the Admin Participant of the e-IPO System (“e-IPO Admin Participant”). The Admin Participant shall input the data and information and upload the documents to the e-IPO System. The deadline for uploading the documents follows the deadline of the announcement as referred to in Rule IX.A.2.
If the Issuers undertake the initial offering (bookbuilding), the Issuers must announce the information regarding the public offering at least in one nationally circulated daily newspaper in the Indonesian language, except for the Small Medium Enterprise (“SME”) Issuers. For SME Issuers, the announcement obligation conducted by way of spreading the information related to the public offering in accordance with Section 2 of Rule IX.A.2. Such announcement or spreading of the information must be conducted by no later than two business days after receiving the statement from OJK that the Issuers may: (i) announce the abridged prospectus and/or undertakes bookbuilding; or (ii) for SME, undertakes the bookbuilding and/or spreading the information which is related to the public offering.
By no later than one business day after the registration statements is effective, the Issuers must announce the information regarding the public offering at least in one nationally circulated daily newspaper in the Indonesian language. In the event of the postponement or cancellation of the public offering period, the Issuers must announce it complying with the provisions on Section 6 of Rule IX.A.2. The announcement of said postponement or cancellation through the e-IPO System must be on the same day with the announcement in the newspaper.
Bookbuilding of the securities must be in a specific price range. Issuers may change the price range in the bookbuilding period by complying with the requirements under POJK 41/2020. Information on price range adjustment and the bookbuilding period shall be inputted and announced on the e-IPO System.
In determining the offering price and amount of offered securities, Issuers and the underwriters shall consider the result of the bookbuilding. If the determined price and amount of the offered securities are outside the proposed price range curve in the bookbuilding that was produced by the e-IPO System, the Issuer must disclose the explanation over the consideration of the set price and amount in the prospectus.
Public Offering proceeds shall be delivered to the e-IPO Admin Participant for and on behalf of the Issuer. Admin Participant shall deliver the proceeds to the Issuer no later than one trading day before the listing date on IDX. The obligation to deliver the public offering proceeds must be set out in the underwriting agreement.
POJK 41/2020 also governs the roles of the capital markets self-regulatory organizations, underwriters and investors with respect to the implementation of electronic public offerings. The new rule also sets out in detail the procedures of the submission of interests and delivery of the order, securities allocation and allotment.
By Aldi Prapanca