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OJK-IDX integration of IPO process
The Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) recently launched an integrated system for initial public offerings (IPO). The Licensing and Registration System (SPRINT) was integrated with the IDX system.
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Posing during the last trading day of 2016 are (left to right) Indonesia Stock Exchange (IDX) president director Tito Sulistio, Financial Services Authority (OJK) chairman Muliaman Hadad, Coordinating Economic Minister Darmin Nasution, Bank Indonesia (BI) Governor Agus Martowardojo and OJK commissioner for capital market supervision Nurhaida. The Jakarta Composite Index (JCI) — the IDX benchmark — closed at 5,296.71 on Dec. 30, 2016, rising more than 15 percent throughout last year. (JP/Dhoni Setiawan)
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he Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) recently launched an integrated system for initial public offerings (IPO). It was launched at the opening of trading in the IDX, which simultaneously marked the 42nd anniversary of the reopening the stock market in Indonesia. The Licensing and Registration System (SPRINT) was integrated with the IDX system.
This integration is a positive sign for the industry. Such integration will make it much easier to submit registration statements to the OJK and listing registrations to the IDX for prospective issuers. This convenience is expected to increase interest among companies in going public.
Previously, a company had to submit an application for a listing registration to the IDX with hardcopy documents. It had to complete the required documents, e.g. the company profile, financial report, legal opinion, financial projection, etc. When all the requirements were fulfilled, the IDX would review the application and would grant an approval in principle called a Preliminary Share Listing Agreement.
After those processes, the prospective issuer also had to submit a registration statement together with supporting documents to the OJK, all in hardcopy form. The main supporting document was the prospectus.
During the review, the OJK might request amendments or additional information from the company to ensure that all the material facts were disclosed in the prospectus.
Prior to the publication of the summary of the prospectus in newspapers and the book-building process, the company had to wait until the OJK granted the permit. The company might also hold a public expose after the permit was granted.
The OJK would issue an effective statement after the company submitted the information regarding the offer price and other necessary disclosures. After the registration statement was declared effective by the OJK, the company could publish any revisions or additional information on the summary prospectus in the newspapers, publish the prospectus and then conduct the public offering.
