The following are some of the key modifications:
- Online application and streamlined requirement for listing
According to the new IDX regulations, appointment of an independent director is no longer required for listing approval. Many other requirements for listing approval have also been removed. Among these are having a company secretary, inner audit committee, and an independent commissioner. Supervision under the OJK has subsequently improved.
Also, the regulations provide that once issuance of the procedures for online submission by the IDX has been completed, the listing application should be done online.
Under the new IDX regulations, there is a considerable decrease in the number of required documents for the listing application.
The following is a list of the requirements:
- Payment proof of the application fee for listing
- Three-year financial budgets with feasibility studies
- Taxpayer number (NPWP)
- Copies of documents of license and concessions for companies in the forestry or mining sectors
- Declaration of agreement to terms and conditions regarding the new IDX listing regulations
- Flexibility in compliance with Requirements
The following are needed for a company to have a free float with IDX:
- Apart from the controlling or substantial shareholders, other parties of the listed company should hold at least 75% of the fully paid capital as well as at least 50 million shares.
- The shareholders holding security accounts should number at least 300
Any corporate action taken by any listed company leading to deviation from the rules guiding the operation is to be accompanied with a letter to the IDX within 2 days after being called to order with the compliance issue (which takes place when the company does not comply with free float principles). If after this, the listed company still fails to adhere with the requirements of free float that were put in place by the OJK, a period of two years is given to again fulfill the requirements.
- Prohibition of companies from conducting stock split or reverse within 12 months
A listed organization under the new IDX regulations is prevented from conducting stock split or reverse sooner than 12 months after its preliminary listing date or the most recent time of conducting a stock split or reverse.
- Principal listing approval
The primary mode of application is now different from the previous method. The old method which involved a two-step process is no longer required under the new IDX listing system. Listing applications are now done once and concurrently with the registration of documents with the OJK on the same day. Any additional documents needed by the OJK should also be submitted during this time. A principal approval of the listing process will be done by the IDX within 10 days of application provided all requirements are supplied. Failure to comply with the requirements will lead to revocation of the principal listing approval by the IDX.
- Financial requirements for listing
The financial standards for listing on the new IDX development board have been broadened. At least one of the following requirements must be fulfilled:
Assets of at least 5 billion rupiah
Last financial year profit of at least one billion rupiah and market capitalization of at least 100 billion rupiah prior to the date of listing
Last financial year revenue of at least 40 billion rupiah and market capitalization of at least 200 billion rupiah prior to the date of listing
Small and medium-sized companies will get a separate issuance of regulation for listing by the IDX.
- New guidelines for price tags of newly issued shares
New guidelines and principles apply for deciding the price rate for shares in the new listing method.
New shares will be placed in the framework of non-pre-emptive issued shares, except for shares issued for employees or management of listed companies (“sharing ownership scheme”). For 25 consecutive business days before the date of the application to register, the exercise price must be at least 90% of the average closing price on the regular market.
If the IDX suspends the actions of a company in the 12-month period before the last trading, the average price will be the averages of the highest daily trading price on the IDX.
In cases of non-preventive debt restructuring issuance, these exercise price provisions are no longer applicable to the extent that they are agreed between the parties, are issued on the basis of a limited bandwidth, are not in breach of applicable legislation, and do not impair the rights of minority shareholders. A general rule also stipulates that in regular and in cash markets, the exercise price is not to be less than the minimum equity price.
- Newly issued shares in the course of the shareholding must have their exercise rate either (a) for a period of 25 consecutive days prior to the date of the application, at least 90% of the average regular closing price, or (b) at least the lowest share price for regular and cash market trading. If the shares are suspended by the IDX, in the 12-month period before the shares were last traded the average daily maximum trading price is the average.
- Newly issued rights offering shares are no longer necessary in the former so-called “theoretical price”. The exercise price cannot be lower than the standard share price for regular and cash trading.
- The ‘theory prices’ of shares newly issued as they pertain to stocks, bonus shares, and dividend shares shall be at least 1,000 rupiah. They are to be calculated for 25 consecutive exchange days before notification by the General Shareholders ‘ Assembly of the shareholders’ approval of the stock, bonus shares or dividend shares. If the shares are currently suspended from the IDX, in the 12-month period before the shares were last traded the average daily trading price will be their highest average.
- Newly issued shares by guarantee: the price of exercise shall be, for 25 consecutive business days before the date the documents were registered with the OJK, at least 90 percent of the average closing price on the regular market. If IDX suspends its stocks, then the average daily price for IDX in the period of 12 months before last traded share will be the highest average daily trading price.
- Lack of obligatory lock-up
The new IDX listing regulations remove the listing date of the new shares issued under non-preventive issuances. They also do away with the previously mandatory lock-up period. Accordingly, a listed company may directly issue investors new shares with non-pre-emptive rights. This was previously structured through a top-up investment structure in which investors purchased only existing shares from a listed company’s controlling shareholder. In order to subscribe to shares newly issued without pre-emptive rights, the controlling shareholder would then use the proceeds from the sale of the shares.
- Change to checklist application period
Question of pre-emptive rights: The listing request should be made within two exchange days after the effective date of the OJK’s approved statement of registration. The application had to be submitted at least 10 days before the distribution date under the previous regulations.
Non-preventive issuance, dividend shares, and bonus shares: an application for the listing should be made for the newly issued shares not less than six exchange days prior to the listing date. According to the previous regulations, the request had to be filed for newly issued shares without pre-emptive rights at least 10 days before the disclosure of any bonus shares or dividend shares.
Warrant and share ownership program: listings should be submitted at least 10 days prior to the listing date of newly issued warrant shares and at least 10 days prior to the start of the share ownership program. The application for newly issued bond shares and ownership programs had to be made at least 10 days before the date of distribution under the previous regulations.
- Lack of prerequisites for prelisted shares to become effective
The new IDX listing regulations clarify that the share conversion report is only considered to be a post-reporting obligation for listed companies for the submission of reports such as the share allocation report. The share conversion report no longer has any influence on the effectiveness of the new stock listing.