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New rules simplify IPO
The POJK 7/2017 also simplifies some of the unnecessary and cumbersome legal due diligence requirements for issuing Indonesian counsel legal opinions.
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Men look at an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo, Tuesday, April 25, 2017. (AP/Eugene Hoshiko)
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inancial Services Authority (OJK) regulations No. 7/ POJK.04/2017 on registration statement documents in public offerings (POJK 7/2017) and No. 8/POJK.04/2017 on the content of prospectus in public offerings of equity securities (POJK 8/2017) shorten the time to take an offering to market and generally improve the regulatory landscape for offerings.
Both regulations, issued in March, are expected to improve the overall investment environment for Indonesian securities and enhance the Indonesia Stock Exchange’s (IDX) competitiveness vis-à-vis exchanges in the region.
The POJK 7/2017, which will become effective as from September 2017, will shorten the review process for initial public offerings (IPOs) by up to three or four weeks by enabling parallel reviews by the OJK and the IDX.
Previously, the process required sequential submissions of the registration statement, first to the IDX and then to the OJK. POJK 7/2017 enables a parallel review by removing the requirement to include in the OJK submission the preliminary listing agreement, which is issued by the IDX upon its preliminary approval.
The POJK 7/2017 also simplifies some of the unnecessary and cumbersome legal due diligence requirements for issuing Indonesian counsel legal opinions.
POJK 8/2017, which became effective immediately, introduces additional disclosure requirements to enhance the quality of prospectus disclosure and formalizes in rule certain disclosure requirements that the OJK had previously required in practice. Some of the key changes are: (a) Item on use of proceeds: the issuer is required to disclose additional details in respect of this item, which formalizes what was previously required by the OJK in practice;
(b) Item on management discussion and analysis: the issuer is required to include enhanced disclosure relating to the issuer’s historical financial performance, including (i) a year-on-year comparison discussion of its financial performance for the last three years; and (ii) if relevant, a discussion of the contribution of the issuer’s business segments to its overall financials;
