Financial Services Authority Regulation Number 13 of 2023 on Policies to Maintain Capital Market Performance and Stability in Conditions of Significant Market Fluctuation

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHABILITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 OF 2023
ON
POLICIES TO MAINTAIN CAPITAL MARKET PERFORMANCE AND STABILITY IN CONDITIONS OF SIGNIFICANT MARKET FLUCTUATION BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS' COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to mitigate and reduce the impact of markets fluctuating significantly and potentially putting pressure on capital market stability, including the performance of capital market industry players, the Financial Services Authority is authorized to take steps to establish policies for handling volatility, stimulus, and/or relaxation for financial services industry players in the capital market sector; b. that in order to maintain good governance in establishing policies and accelerating the policy establishment process as referred to in letter a, regulations are needed that provide space for the Financial Services Authority to improve the performance of Capital Market industry players, maintain Capital Market stability and Indonesia's economic growth while still paying attention to the principles of transparency, prudence, risk management, good corporate governance, and in accordance with current Capital Market conditions;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation on Policies to Maintain Capital Market Performance and Stability in Conditions of Significant Market Fluctuation;
Recalling:

1. Law Number 8 of 1995 on Capital Markets (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608) as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
2. Law Number 21 of 2011 on the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253) as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION ON POLICIES TO MAINTAIN CAPITAL MARKET PERFORMANCE AND STABILITY IN CONDITIONS OF SIGNIFICANT MARKET FLUCTUATION.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Capital Market is a part of the financial system related to activities:
   a. public offerings and securities transactions; b. investment management;
   c. issuers and public companies related to the securities they issue; and
   d. institutions and professions related to securities.
2. Stock Exchange is a market organizer in the Capital Market for exchange transactions.
3. Securities are financial instruments or investment contracts, whether in conventional or digital forms or other forms in accordance with technological developments, which give the owner the right to directly or indirectly obtain economic benefits from the issuer or from certain parties based on agreements and any derivatives of Securities, which can be transferred and/or traded in the Capital Market.
4. Clearing and Guaranteeing Institution is a party that provides clearing and/or guaranteeing services for the settlement of Securities transactions conducted through market organizers in the Capital Market, as well as other services that can be applied to support inter-market activities.
5. Depository and Settlement Institution is a party that:
   a. provides central custody services for custodian banks, securities companies, and other parties; and b. provides other services that can be applied to support inter-market activities.
6. Party is an individual, legal entity, company, joint venture, association, or organized group.
7. Market Organizer is a Party that organizes and provides systems and/or facilities to bring together Parties conducting transactions on Securities or financial instruments in the Capital Market or organized financial markets.
8. Open Company is an issuer that has conducted a public offering of equity securities or a public company.
9. Issuer is a Party conducting a public offering.
10. Public Company is a corporation with the number of shareholders and paid-up capital determined by the Financial Services Authority Regulation.
11. Public Offering is the activity of offering Securities conducted by an Issuer to sell Securities to the public based on procedures regulated in Law Number 8 of 1995 on Capital Markets as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector and its implementing regulations.
12. Investment Manager is a Party whose business activities manage portfolios of Securities, collective investment portfolios, and/or other investment portfolios for the benefit of a group of clients or individual clients, except insurance companies, Islamic insurance companies, pension funds, and banks conducting their own business activities based on legislation.
13. Investment Management Product is mutual funds, individual client securities portfolio management, real estate investment funds, infrastructure investment funds, asset-backed securities in the form of collective investment contracts, asset-backed securities in the form of participation certificates, collective investment contracts for mobilizing people's housing savings, multi-asset investment funds in the form of collective investment contracts, and other investment products regulated based on legislation in the Capital Market sector.

CHAPTER II
PARAMETERS OF CONDITIONS OF SIGNIFICANT MARKET FLUCTUATION
Article 2
Significant market fluctuation conditions occur in the following situations:
a. a substantial or total decline in the prices of Securities listed on a Stock Exchange or Market Organizers outside the Stock Exchange, which is so materially significant that it occurs suddenly (crash); b. Capital Market conditions experiencing significant pressure;
c. regional and global economic conditions experiencing pressure and slowdown, thereby impacting or potentially impacting Capital Market stability significantly;
d. the occurrence of natural or non-natural disasters that impact Capital Market stability pressure; e. the resale (redemption) of shares or investment units of investment products that is so large and materially significant that it occurs suddenly (crash), the suspension of trading of Securities for most of the portfolio of investment product Securities on the Stock Exchange, or the closure of the Stock Exchange where most of the portfolio of investment product Securities is traded; f. trading system or transaction settlement failures that cause the market to fluctuate significantly; and/or g. other conditions established by the Financial Services Authority.

CHAPTER III
SCOPE AND PURPOSE OF THE FINANCIAL SERVICES AUTHORITY'S AUTHORITY IN CONDITIONS OF SIGNIFICANT MARKET FLUCTUATION
Article 3
(1) The Financial Services Authority is authorized to establish regulations and/or policies related to handling conditions of significant market fluctuation in the Capital Market sector. (2) The establishment of regulations and/or policies as referred to in paragraph (1) aims to maintain Capital Market performance and stability through:
a. policies on Securities transactions; b. relaxation policies on investment management and/or Investment Management Products;
c. provision of stimulus; and/or
d. relaxation for financial services industry players in the Capital Market sector.
(3) In establishing conditions of significant fluctuating pressure, the Financial Services Authority may coordinate with relevant authorities.
Article 4
(1) Regulations and/or policies as referred to in Article 3 paragraph (1) are established by the Head of the Capital Market, Derivative Finance, and Carbon Exchange Supervisory Executive. (2) Regulations and/or policies as referred to in paragraph (1) include:
a. issuing orders to Stock Exchanges, Market Organizers outside Stock Exchanges, Clearing and Guaranteeing Institutions, and/or Depository and Settlement Institutions in the form of regulation adjustments to support the realization of Capital Market stability without going through the regulation drafting procedures as regulated by the Financial Services Authority; b. establishing relaxation policies on compliance with reporting obligations for financial services institutions in the Capital Market sector, as well as relaxation policies on the implementation of corporate actions, Public Offerings, and reporting by Issuers or Public Companies to maintain their business continuity and/or support Capital Market stability;
c. establishing relaxation policies on investment management and/or Investment Management Products to maintain Capital Market stability; and/or
d. establishing policies for other Capital Market industry players necessary to support the realization of Capital Market stability.
(3) The implementation of regulations and/or policies as referred to in paragraph (1) is carried out while still paying attention to the application of transparency, prudence, risk management, good corporate governance principles, and in accordance with current Capital Market conditions. (4) For the establishment of regulations and/or policies and evaluating policies and/or regulations as referred to in paragraph (2), the Financial Services Authority is authorized to request additional data and information from Capital Market industry players beyond the reporting obligations as referred to in Capital Market legislation.
Article 5
Regulations and/or policies that have been established regarding handling conditions of significant market fluctuation in the Capital Market sector as referred to in Article 4 paragraph (1) are concluded by a determination by the Head of the Capital Market, Derivative Finance, and Carbon Exchange Supervisory Executive.

CHAPTER IV
REPURCHASE OF SHARES ISSUED BY OPEN COMPANIES IN CONDITIONS OF SIGNIFICANT MARKET FLUCTUATION
Section One
General
Article 6
In the event of significant market fluctuation conditions, Open Companies may repurchase their shares without violating the provisions of:
a. Article 91 and Article 92 of Law Number 8 of 1995 on Capital Markets as amended in Article 22 of Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector; and b. Article 95 and Article 96 of Law Number 8 of 1995 on Capital Markets, as long as they comply with this Financial Services Authority Regulation.
Section Two
Requirements for Open Company Share Repurchase
Article 7
In the event of significant market fluctuation conditions, Open Companies may conduct share repurchases without shareholder meeting approval.
Article 8
Share repurchases by Open Companies as referred to in Article 7 amount to a maximum of 20% (twenty percent) of paid-up capital.
Article 9
(1) Open Companies may conduct share repurchases as referred to in Article 8 after submitting information disclosure to the Financial Services Authority and the Stock Exchange and making announcements to the public through:
a. the Stock Exchange website and the Open Company's website, for Open Companies whose securities are listed on the Stock Exchange; or b. daily newspapers in Indonesian circulating nationally or websites provided by the Financial Services Authority and the Open Company's website, for Open Companies whose securities are not listed on the Stock Exchange. (2) Information disclosure as referred to in paragraph (1) may be conducted since the Financial Services Authority establishes significant market fluctuation conditions. (3) Information disclosure as referred to in paragraph (1) may be conducted for a maximum of 7 (seven) trading days after the establishment of the end of significant market fluctuation conditions. (4) Share repurchases as referred to in Article 8 may only be conducted within a maximum period of 3 (three) months after information disclosure as referred to in paragraph (1). (5) Information disclosure regarding share repurchases as referred to in paragraph (1) contains information:
a. estimated schedule, costs of share repurchases, and estimated total nominal value of all shares to be repurchased; b. estimated decrease in Open Company revenue as a result of implementing share repurchases and the impact on the Open Company's financing costs;
c. proforma earnings per share of the Open Company after the share repurchase plan is implemented, considering the decrease in revenue;
d. price limits for share repurchases; e. time limits for share repurchases; f. methods to be used to repurchase shares; and g. management discussion and analysis regarding the impact of share repurchases on the business activities and future growth of the Open Company.
Article 10
If share repurchases are conducted through the Stock Exchange, buy transactions are conducted through 1 (one) Stock Exchange member.
Article 11
Any Party that is:
a. commissioners, directors, employees, and major shareholders of the Open Company; b. individuals who, due to their position, profession, or business relationship with the Open Company, are able to obtain insider information; or
c. Parties who within the last 6 (six) months are no longer Parties as referred to in letters a and b,
are prohibited from conducting transactions on the shares of such Open Company during the share repurchase period or on the same day as the sale of shares resulting from repurchases conducted by the Open Company through the Stock Exchange.
Article 12
(1) Reports on the results of share repurchases are submitted to the Financial Services Authority on the same day as the implementation of share repurchase transactions after the closing of stock trading on the Stock Exchange. (2) The submission of reports as referred to in paragraph (1) is conducted until the end of the share repurchase period.
Section Three
Transfer of Shares Resulting from Repurchases
Article 13
The transfer of shares resulting from repurchases is implemented in accordance with Financial Services Authority regulations regarding share repurchases issued by Open Companies.
Article 14
The transfer of shares resulting from repurchases must be implemented after 30 (thirty) days:
a. since the Open Company's share repurchases have been fully executed; or b. since the end of the share repurchase period as referred to in Article 9 paragraph (4).
Article 15
In the event that Open Companies conduct corporate actions resulting in changes to the nominal value of shares resulting from repurchases, the calculation of share repurchase prices is adjusted to follow the ratio between the nominal value of shares at the time of repurchase and the nominal value of shares resulting from the aforementioned corporate actions.

CHAPTER V
ADMINISTRATIVE SANCTIONS
Article 16
(1) Any Party violating the provisions as referred to in Article 11 and Article 14 is subject to administrative sanctions.
(2) Sanctions as referred to in paragraph (1) are also imposed on Parties causing the violations as referred to in paragraph (1).
(3) Sanctions as referred to in paragraphs (1) and (2) are imposed by the Financial Services Authority.
(4) Administrative sanctions as referred to in paragraph (1) include:
a. written warnings; b. fines, namely the obligation to pay a certain amount of money;
c. business activity restrictions;
d. business activity suspension; e. business license revocation; f. approval cancellation; and/or g. registration cancellation.
(5) Administrative sanctions as referred to in paragraph (4) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of fines as referred to in paragraph (4) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (4) letters c, d, e, f, or g. (7) The procedures for imposing sanctions as referred to in paragraph (3) are implemented in accordance with legislation provisions.
Article 17
In addition to administrative sanctions as referred to in Article 16 paragraph (4), the Financial Services Authority may take specific actions against any Party violating the provisions of this Financial Services Authority Regulation.
Article 18
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 16 paragraph (4) and specific actions as referred to in Article 17 to the public.

CHAPTER VI
TRANSITIONAL PROVISIONS
Article 19
Open Companies may still conduct information disclosure based on Financial Services Authority Regulation Number 2/POJK.04/2013 on Share Repurchases Issued by Issuers or Public Companies in Conditions of Significant Market Fluctuation for a maximum of 7 (seven) trading days since this Financial Services Authority Regulation takes effect.

CHAPTER VII
CLOSING PROVISIONS
Article 20
At the time this Financial Services Authority Regulation takes effect, Financial Services Authority Regulation Number 2/POJK.04/2013 on Share Repurchases Issued by Issuers or Public Companies in Conditions of Significant Market Fluctuation (State Gazette of the Republic of Indonesia Year 2013 Number 143, Supplement to the State Gazette of the Republic of Indonesia Number 5439) and implementing regulations regarding other conditions as conditions of significant market fluctuation in the implementation of share repurchases issued by Issuers or Public Companies are repealed and declared invalid.
Article 21
This Financial Services Authority Regulation takes effect on the date of its enactment.

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja

For the information of everyone, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Established in Jakarta on July 14, 2023
CHAIRMAN OF THE COMMISSIONERS' COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
MAHENDRA SIREGAR
Enacted in Jakarta on July 20, 2023
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2023 NUMBER 21/OJK

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 13 OF 2023
ON
POLICIES TO MAINTAIN CAPITAL MARKET PERFORMANCE AND STABILITY IN CONDITIONS OF SIGNIFICANT MARKET FLUCTUATION

I. GENERAL
That in order to reduce the impact of markets fluctuating significantly so that it can impact pressure on financial system stability and the performance of Capital Market industry players, the Financial Services Authority as the regulator in the financial sector, specifically in the Capital Market sector, needs to prepare policies that need to be taken in a relatively short time within the framework of handling volatility, stimulus, and/or relaxation for financial services industry players in the Capital Market sector. In the event that the Financial Services Authority does not establish appropriate policies in conditions of significant market fluctuation, this can have a very significant impact on financial system stability, including in the Capital Market sector, and can disrupt the performance of business actors in the financial services sector. Therefore, a mechanism is needed to establish policies when conditions of significant market fluctuation occur. To maintain good governance in establishing policies and to accelerate the policy establishment process, regulations are needed that provide space for the Financial Services Authority to improve the performance of Capital Market industry players, maintain Capital Market stability and Indonesia's economic growth while still paying attention to the principles of transparency, prudence, risk management, good corporate governance, and in accordance with current Capital Market conditions. Regulations regarding the establishment of such policies are very necessary for the Financial Services Authority, so that guidelines or manuals are obtained in the framework of policy establishment by the Financial Services Authority in conditions of significant market fluctuation.

II. ARTICLE BY ARTICLE
Article 1
Clear enough.
Article 2
Letter a
A substantial or total decline in the prices of Securities occurring suddenly (crash) is exemplified by the year 2020 where the composite stock price index dropped more than 5% on 1 (one) day and reached -5.63% over 6 (six) consecutive days, and the position comparison of the composite stock price index on March 9, 2020, with the composite stock price index at the end of the previous year, showing a material decline of more than 15%. Letter b Capital Market conditions experiencing significant pressure occur among others:

1. stock trading on the Stock Exchange experiencing significant pressure caused by the deterioration of domestic or global financial services sectors;
2. assets under management experiencing a decline and/or significant redemptions; and/or
3. bid-ask spreads in stock market trading experiencing significant widening.
   Letter c
   Clear enough.
   Letter d
   The term "disaster" refers to events or series of events that threaten and disrupt the livelihood of the community, caused by natural and/or non-natural factors or human factors, resulting in human casualties, environmental damage, property loss, psychological impact, disruption of performance of industry players in the financial services sector, and/or affecting community economic conditions. Examples of natural disasters include natural events such as earthquakes or floods. Examples of non-natural disasters include wars, strikes, sabotage, riots, and disease outbreaks. Letter e Clear enough. Letter f Examples of trading system or transaction settlement failures include technical disruptions in trading systems so that transactions are not processed normally. Letter g Clear enough.
   Article 3
   Paragraph (1)
   Clear enough.
   Paragraph (2)
   Clear enough.
   Paragraph (3)
   Coordination with relevant authorities is conducted, among others, in the Systemic Risk Committee forum.

Article 4
Paragraph (1)
What is meant by "policy" includes, among others, letters issued by the Head of the Capital Market, Derivative Financial, and Carbon Exchange Supervisory Executive.

Paragraph (2)
Letter a
"orders to the Stock Exchange, Market Organizers outside the Stock Exchange, Clearing and Guarantee Institutions, and/or Custody and Settlement Institutions in the form of regulation adjustments to support the realization of Capital Market stability without going through the regulation drafting procedure as regulated by the Financial Services Authority" includes, among others, orders to:

1. adjust the upper and/or lower limits of auto rejection in the trading regulations of the Stock Exchange;
2. adjust Stock Exchange regulations regarding trading halts for a certain period if the Composite Stock Price Index experiences a decline within certain limits;
3. adjust regulations regarding the haircut value of shares for calculating collateral and net working capital adjusted for clearing members;
4. adjust regulations regarding shares that can be traded via margin, short selling, and shares that can be traded in the pre-opening session at the Stock Exchange; and/or
5. adjust trading hours at the Stock Exchange and Market Organizers outside the Stock Exchange.

Letter b
"provisions in order to fulfill the reporting obligations for financial service institutions in the Capital Market sector as well as policy relaxations regarding the implementation of corporate actions, Public Offerings, and reporting submissions by Issuers or Public Companies to maintain business continuity and/or support Capital Market stability" includes, among others:

1. relaxation of reporting submission deadlines for financial service institutions in the capital market sector;
2. share repurchases issued by Public Companies under conditions of significant market fluctuation;
3. extension of the initial offering period for public offerings;
4. conditions that can serve as the basis for postponing and/or cancelling public offerings; and/or
5. extension of the implementation period for corporate actions.

Letter c
"policy for relaxing the management of investments and/or Investment Management Products to maintain Capital Market stability" in these provisions includes, among others:

1. policies regarding the extension of fund collection periods for Investment Management Products;
2. policies regarding the extension of the adjustment period for the investment portfolio composition of Investment Management Products;
3. conditions that can serve as the basis for postponing and/or rejecting the purchase and/or sale of Investment Management Products;
4. extension of the implementation period for the dissolution and liquidation of Investment Management Products; and/or
5. extension of the deadline for submitting the annual financial reports of Investment Management Products.

Letter d
"policies for other capital market industry actors that are necessary to support the realization of Capital Market stability" includes, among others:

1. policies regarding the procedures and deadlines for submitting periodic and incidental reports by capital market industry actors;
2. policies regarding the procedures for granting permits, approvals, and/or registrations in the capital market sector; and/or
3. policies regarding the validity period for the use of documents in the capital market sector.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Article 5
Sufficiently clear.

Article 6
Sufficiently clear.

Article 7
Sufficiently clear.

Article 8
Sufficiently clear.

Article 9
Sufficiently clear.

Article 10
Sufficiently clear.

Article 11
What is meant by "transactions on shares" are activities or contracts, among others, aimed at obtaining, releasing, or using shares that result in a change of ownership or do not result in a change of ownership.

Letter a
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
What is meant by "within the last 6 (six) months" is calculated from the date the relevant Party is no longer a Party as referred to in letters a and b until the execution of the share repurchase transaction by the Public Company or the share sale transaction resulting from the repurchase.

Article 12
Sufficiently clear.

Article 13
Sufficiently clear.

Article 14
Sufficiently clear.

Article 15
What is meant by "corporate actions that result in changes to the nominal value of shares resulting from repurchases" includes, among others, stock splits and share consolidations by Public Companies.

Example of calculating adjusted repurchase prices following the ratio between the nominal value of shares at the time of repurchase and the nominal value of shares resulting from corporate actions such as stock splits:
The nominal value of ordinary shares of PT A Tbk is Rp200,- when PT A Tbk conducts share repurchases at a repurchase price of Rp600,-. After completing the share repurchase, the Public Company conducts a stock split corporate action with a ratio of 1:2, so the nominal value of ordinary shares of PT A Tbk becomes Rp100,-. With the stock split resulting in a change in nominal value, the repurchase price is adjusted to Rp300,-.

Article 16
Sufficiently clear.

Article 17
What is meant by "certain actions" includes, among others, the postponement, prohibition, and restriction of corporate actions.

Article 18
Sufficiently clear.

Article 19
Sufficiently clear.

Article 20
Sufficiently clear.

Article 21
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 46/OJK