Financial Services Authority Regulation Number 43/POJK.04/2020 on Information Disclosure and Corporate Governance Obligations for Small-Scale and Medium-Scale Asset Issuers

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 43 /POJK.04/2020
CONCERNING
INFORMATION DISCLOSURE OBLIGATIONS AND CORPORATE GOVERNANCE FOR ISSUERS OR PUBLIC COMPANIES THAT MEET THE CRITERIA FOR SMALL-SCALE ASSET ISSUERS AND MEDIUM-SCALE ASSET ISSUERS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to improve capital market funding access for prospective issuers as well as issuers that meet the criteria for small-scale asset issuers and medium-scale asset issuers, which are adjusted to the conditions of the issuers or public companies, it is necessary to provide relaxation on the obligations of issuers and public companies whose registration statements have become effective, specifically regarding information disclosure and corporate governance obligations adjusted to the capabilities and conditions of issuers or public companies that meet the criteria for small-scale asset issuers and medium-scale asset issuers; b. that the reporting obligations, information disclosure, and corporate governance of issuers and public companies whose registration statements have become effective currently apply equally without distinguishing the capabilities and conditions of the issuers or public companies;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA

c. that existing legislation regulating information disclosure and governance obligations for small-scale asset issuers and medium-scale asset issuers is not in line with market needs, thus requiring adjustment;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning Information Disclosure Obligations and Corporate Governance for Issuers or Public Companies that Meet the Criteria for Small-Scale Asset Issuers and Medium-Scale Asset Issuers;

Recalling:

1. Law Number 8 of 1995 concerning 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);
2. Law Number 21 of 2011 concerning 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);

DECIDES:
Establishes: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING INFORMATION DISCLOSURE OBLIGATIONS AND CORPORATE GOVERNANCE FOR ISSUERS OR PUBLIC COMPANIES THAT MEET THE CRITERIA FOR SMALL-SCALE ASSET ISSUERS AND MEDIUM-SCALE ASSET ISSUERS.

CHAPTER I
GENERAL PROVISIONS

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

1. Public Offering is the activity of offering securities conducted by an Issuer to sell securities to the public based on procedures regulated in the Capital Markets Law and its implementing regulations.
2. Issuer is the party conducting a Public Offering.
3. Public Company is a corporation whose shares are held by at least 300 (three hundred) shareholders and has paid-up capital of at least IDR 3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid-up capital determined by Government Regulation.
4. Open Company is an Issuer that has conducted a Public Offering of equity securities or a Public Company.
5. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, investment contract units, futures contracts on securities, and any derivatives of securities.
6. Registration Statement is a document that must be submitted to the Financial Services Authority by an Issuer in the context of a Public Offering or Public Company.
7. Small-Scale Asset Issuer, hereinafter referred to as Small-Scale Issuer, is an Issuer in the form of a legal entity established in Indonesia that:
   a. has total assets or equivalent terms not exceeding IDR 50,000,000,000.00 (fifty billion rupiah); and b. is not controlled, directly or indirectly, by:

1. controllers of Issuers or Public Companies that are not Small-Scale Issuers or Medium-Scale Asset Issuers; and/or
2. companies that have assets exceeding IDR 250,000,000,000.00 (two hundred fifty billion rupiah).

8. Medium-Scale Asset Issuer, hereinafter referred to as Medium-Scale Issuer, is an Issuer in the form of a legal entity established in Indonesia that:
   a. has total assets or equivalent terms exceeding IDR 50,000,000,000.00 (fifty billion rupiah) up to IDR 250,000,000,000.00 (two hundred fifty billion rupiah); and b. is not controlled, directly or indirectly, by:

1. controllers of Issuers or Public Companies that are not Small-Scale Issuers or Medium-Scale Issuers; and/or
2. companies that have assets exceeding IDR 250,000,000,000.00 (two hundred fifty billion rupiah).

9. Periodic Financial Reports are the annual financial reports and mid-year financial reports of Issuers or Public Companies.
10. Annual Report is the report of accountability of the Board of Directors and Board of Commissioners in managing and supervising the Issuer or Public Company over a 1 (one) fiscal year period to the General Meeting of Shareholders, prepared based on provisions in Financial Services Authority Regulations concerning Annual Reports of Issuers or Public Companies.
11. General Meeting of Shareholders, hereinafter abbreviated as GMS:
    a. for Issuers in the form of limited liability companies or Public Companies, is the organ of the Open Company that has authority not granted to the Directors or Board of Commissioners as referred to in the Law concerning Limited Liability Companies and/or the Articles of Association of the Open Company; and b. for Issuers in the form of legal entities other than limited liability companies, is the organ that has authority not granted to the organs executing management and supervisory functions, within limits determined by legislation and/or the Articles of Association regulating that legal entity.
12. Material Information or Material Fact is important and relevant information or facts regarding events, occurrences, or facts that can influence the price of Securities on the Securities Exchange and/or the decision of investors, prospective investors, or other parties interested in such information or facts.
13. Website is a collection of web pages containing information or data that can be accessed through an internet network system.

Article 2
Small-Scale Issuers and Medium-Scale Issuers whose Registration Statements have obtained an effective statement from the Financial Services Authority are required to follow capital market sector legislation regulating other Issuers or Public Companies, unless specifically regulated in this Financial Services Authority Regulation.

Article 3
This Financial Services Authority Regulation applies to:
a. Small-Scale Issuers and Medium-Scale Issuers, whose average market capitalization value during a 1 (one) year period before the end of the last annual financial reporting period does not exceed IDR 250,000,000,000.00 (two hundred fifty billion rupiah); and b. Public Companies, that meet the asset and control criteria as referred to in Article 1 number 7 and Article 1 number 8, based on the last audited annual financial report.

CHAPTER II
MATERIAL TRANSACTIONS AND AFFILIATED TRANSACTIONS

Article 4
Small-Scale Issuers and Medium-Scale Issuers that conduct Public Offerings of equity securities conducting material transactions and affiliated transactions are not required to use appraisers, except for material transactions and affiliated transactions that require GMS approval as regulated in Financial Services Authority Regulations regarding:
a. material transactions and changes in business activities; and b. affiliated transactions and conflicts of interest transactions.

CHAPTER III
CORPORATE GOVERNANCE

First Section
Independent Commissioners

Article 5
Small-Scale Issuers and Medium-Scale Issuers are required to have at least 1 (one) independent commissioner.

Second Section
Resignation of Directors and Commissioners

Article 6
(1) In the event that Directors and/or Commissioners resign, Small-Scale Issuers or Medium-Scale Issuers in the form of limited liability companies must convene a GMS to decide on the resignation request no later than 90 (ninety) days after receipt of the resignation letter by the Small-Scale Issuer or Medium-Scale Issuer. (2) In the event that a Small-Scale Issuer or Medium-Scale Issuer in the form of a limited liability company does not convene a GMS within the period referred to in paragraph (1), the resignation of Directors and/or Commissioners becomes valid without requiring GMS approval. (3) Resigning Directors and/or Commissioners as referred to in paragraph (2) are required to submit accountability reports in the nearest GMS. (4) The provisions as referred to in paragraph (2) do not apply if all or most of the Directors and/or Commissioners resign simultaneously or if more than 1 (one) Director and/or Commissioner resigns within the period referred to in paragraph (1). (5) Resignation of Directors and/or Commissioners as referred to in paragraph (4) must first obtain GMS approval to decide on the resignation request.

Article 7
Small-Scale Issuers and Medium-Scale Issuers are required to disclose information to the public and submit it to the Financial Services Authority no later than 2 (two) working days after:
a. the date of receipt of the resignation letter of Directors and/or Commissioners as referred to in Article 6 paragraph (1); and b. the date of the GMS implementation as referred to in Article 6 paragraph (1), in the event that the GMS is convened or the resignation of Directors and/or Commissioners becomes valid as referred to in Article 6 paragraph (2).

Third Section
Audit Committee

Article 8
(1) Small-Scale Issuers and Medium-Scale Issuers are required to have an audit committee function.
(2) The implementation of the function as referred to in paragraph (1) must be carried out by independent commissioners.

CHAPTER IV
USE OF LANGUAGE AND ANNOUNCEMENT MEDIA IN REPORTS AND INFORMATION DISCLOSURE

Article 9
(1) Small-Scale Issuers and Medium-Scale Issuers are required to use at least the Indonesian language in presenting information on:
a. Websites as regulated in Financial Services Authority Regulations concerning Issuer and Public Company Websites; b. announcements of Material Information or Material Facts as regulated in Financial Services Authority Regulations concerning Disclosure of Material Information or Material Facts by Issuers or Public Companies; and
c. Annual Reports as regulated in Financial Services Authority Regulations concerning Annual Reports of Issuers and Public Companies.
(2) In the event that information presented on Websites, announcements of Material Information or Material Facts, and Annual Reports as referred to in paragraph (1) use a foreign language, the foreign language used must be at least English. (3) Information presented in a foreign language as referred to in paragraph (2) must contain the same information as that presented in the Indonesian language. (4) In the event of differences in interpretation and/or information presented in a foreign language compared to information presented in the Indonesian language, the Indonesian language used serves as the reference for the information presented.

Article 10
(1) Small-Scale Issuers and Medium-Scale Issuers whose Securities are listed on a Securities Exchange are required to conduct:
a. announcements of Periodic Financial Reports as regulated in Financial Services Authority Regulations concerning submission of periodic financial reports by Issuers or Public Companies; b. information disclosure as referred to in Article 7; and
c. announcements of Material Information or Material Facts as regulated in Financial Services Authority Regulations concerning Disclosure of Material Information or Material Facts by Issuers or Public Companies, at least through:

1. The Website of the Small-Scale Issuer or Medium-Scale Issuer; and
2. The Website of the Securities Exchange.
   (2) Small-Scale Issuers and Medium-Scale Issuers whose Securities are not listed on a Securities Exchange are required to conduct:
   a. announcements of Periodic Financial Reports as referred to in Financial Services Authority Regulations concerning submission of periodic financial reports by Issuers or Public Companies; b. information disclosure as referred to in Article 7; and
   c. announcements of Material Information or Material Facts as regulated in Financial Services Authority Regulations concerning Disclosure of Material Information or Material Facts by Issuers or Public Companies, at least through:
3. The Website of the Small-Scale Issuer or Medium-Scale Issuer; and
4. a daily newspaper in Indonesian with national circulation or a Website provided by the Financial Services Authority.

Article 11
The implementation of announcement provisions through Websites provided by the Financial Services Authority as referred to in Article 10 paragraph (2) number 2 is established by the Financial Services Authority.

CHAPTER V
OTHER PROVISIONS

Article 12
(1) Small-Scale Issuers and Medium-Scale Issuers that no longer meet the criteria as Small-Scale Issuers or Medium-Scale Issuers are required to fulfill all capital market sector legislation provisions applicable to Issuers. (2) The obligations as referred to in paragraph (1) must begin no later than 6 (six) months from:
a. the date of the audited annual financial report showing that the Small-Scale Issuer or Medium-Scale Issuer no longer meets the criteria as a Small-Scale Issuer or Medium-Scale Issuer; or b. the date of the announcement of the takeover of an open company by a new Controller showing that the Small-Scale Issuer or Medium-Scale Issuer no longer meets the criteria as a Small-Scale Issuer or Medium-Scale Issuer, except for the obligation to present and disclose financial reports as regulated in legislation concerning guidelines for disclosure and presentation of financial reports of Issuers or Public Companies, for Small-Scale Issuers that no longer meet the criteria as Small-Scale Issuers. (3) The obligation to present and disclose financial reports as referred to in paragraph (2) for Small-Scale Issuers must begin to apply for financial reporting periods starting 1 (one) year after the Small-Scale Issuer no longer meets the criteria for Small-Scale Issuers. (4) Small-Scale Issuers or Medium-Scale Issuers as referred to in paragraph (1) remain required to fulfill all capital market sector legislation provisions applicable to Issuers even if the Issuer again meets the criteria for Small-Scale Issuers or Medium-Scale Issuers.

Article 13
(1) For Small-Scale Issuers that have not yet met the provisions regarding organs and/or corporate governance functions, they are required to meet the provisions regarding organs and/or corporate governance functions no later than 12 (twelve) months since the enactment of this Financial Services Authority Regulation. (2) For Medium-Scale Issuers that have not yet met the provisions regarding organs and/or corporate governance functions, they are required to meet the provisions regarding organs and/or corporate governance functions no later than 6 (six) months since the enactment of this Financial Services Authority Regulation.

Article 14
The provisions applicable to Small-Scale Issuers and Medium-Scale Issuers as referred to in Article 4, Article 5, Article 6, Article 7, Article 8, Article 9, Article 10, Article 11, Article 12, and Article 13, apply mutatis mutandis to Public Companies that meet the asset and control criteria of Small-Scale Issuers and Medium-Scale Issuers.

CHAPTER VI
ADMINISTRATIVE SANCTIONS

Article 15
(1) Any party that violates the provisions as referred to in Article 2, Article 5, Article 6 paragraph (3) and paragraph (5), Article 7, Article 8, Article 9 paragraph (1) and paragraph (3), Article 10, Article 12 paragraph (1), paragraph (2), and paragraph (3), and Article 13 shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) are also imposed on parties causing the violation as referred to in paragraph (1). (3) Sanctions as referred to in paragraph (1) and paragraph (2) are imposed by the Financial Services Authority. (4) Administrative sanctions as referred to in paragraph (1) consist of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and g. cancellation of registration.
(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 an administrative sanction in the form of a written warning as referred to in paragraph (4) letter a. (6) Administrative sanctions in the form of a fine 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 procedure for imposing sanctions as referred to in paragraph (3) is carried out in accordance with legislation provisions.

Article 16
In addition to administrative sanctions as referred to in Article 15 paragraph (4), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 17
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 15 and specific actions as referred to in Article 16 to the public.

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

CHAPTER VII
CLOSING PROVISIONS

Article 18
This Financial Services Authority Regulation takes effect on the date of enactment.

To ensure that everyone knows it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on July 1, 2020
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Promulgated in Jakarta on July 2, 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 158

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 43 /POJK.04/2020
CONCERNING
INFORMATION DISCLOSURE OBLIGATIONS AND CORPORATE GOVERNANCE FOR ISSUERS OR PUBLIC COMPANIES THAT MEET THE CRITERIA FOR SMALL-SCALE ASSET ISSUERS AND MEDIUM-SCALE ASSET ISSUERS

I. GENERAL
The issuance of regulations for Small-Scale Issuers and Medium-Scale Issuers in conducting Public Offerings through Financial Services Authority Regulation Number 53/POJK.04/2017 concerning Registration Statements in the Context of Public Offerings and Capital Increases by Giving Preemptive Rights by Small-Scale Asset Issuers or Medium-Scale Asset Issuers (Financial Services Authority Regulation Number 53/POJK.04/2017) and Financial Services Authority Regulation Number 54/POJK.04/2017 concerning the Form and Content of Prospectuses in the Context of Public Offerings and Capital Increases by Giving Preemptive Rights by Small-Scale Asset Issuers or Medium-Scale Asset Issuers (Financial Services Authority Regulation Number 54/POJK.04/2017) has the impact that Small-Scale Issuers and Medium-Scale Issuers whose Registration Statements have become effective are required to follow capital market sector legislation provisions.

That the obligations for Small-Scale Issuers and Medium-Scale Issuers whose Registration Statements have become effective, namely information disclosure and corporate governance obligations, follow the same provisions applicable to Issuers.

That with the issuance of Financial Services Authority Regulation Number 53/POJK.04/2017 and Financial Services Authority Regulation Number 54/POJK.04/2017, it has not been possible to effectively become a funding alternative for prospective Issuers or Issuers having small-scale and medium-scale assets.

Based on the above, it is necessary to provide relaxation for Small-Scale Issuers and Medium-Scale Issuers in the form of information disclosure and corporate governance obligations adjusted to the capabilities and needs of Small-Scale Issuers and Medium-Scale Issuers.

Furthermore, the main points of regulation in this Financial Services Authority Regulation include, among others:
a. Small-Scale Issuers and Medium-Scale Issuers are not required to use Appraisers when conducting affiliated transactions and material transactions, except for transactions that require GMS approval; b. for Small-Scale Issuers and Medium-Scale Issuers whose Securities are listed on a Securities Exchange, they are only required to announce to the public through the Issuer's Website and the Exchange's Website;
c. for Small-Scale Issuers and Medium-Scale Issuers whose Securities are not listed on a Securities Exchange, they are required to announce to the public through the Issuer's Website and a daily Indonesian newspaper with national circulation or at the Website provided by the Financial Services Authority;
d. the language required to be used in reports to the Financial Services Authority and announcements to the public is sufficient in Indonesian. Small-Scale Issuers and Medium-Scale Issuers have the option to use a foreign language or not;

In addition to the above, flexibility is also provided in the application of corporate governance provisions for Small-Scale Issuers and Medium-Scale Issuers, including, among others: the number of independent commissioners is sufficient at 1 (one) person and simplification of resignation procedures for Directors and Commissioners.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Clear enough.

Article 3
Clear enough.

Article 4
Clear enough.

Article 5
For Small-Scale Issuers and Medium-Scale Issuers that are not in the form of limited liability companies, independent commissioners are replaced by parties having an equivalent role to independent commissioners.

Article 6
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Example of more than 1 (one) Director and/or Commissioner resigning within a 90 (ninety) day period: Director A resigns on August 1, 2019, and Director B resigns on October 25, 2019. At the time Director B's resignation is submitted, the GMS to decide on Director A's resignation has not been held, and Director B's resignation is still within the 90 (ninety) day period since...

Upon the resignation of a Director, a Small-Scale Asset Issuer or Medium-Scale Asset Issuer must convene a General Meeting of Shareholders (GMS).

Paragraph (5)
This is clear enough.

Article 7
For Small-Scale Asset Issuers and Medium-Scale Asset Issuers that are not limited liability companies (Perseroan Terbatas), if there are members of the management or other bodies equivalent to the Board of Directors and/or members of the supervisory board or other bodies equivalent to the Board of Commissioners who resign, Small-Scale Asset Issuers or Medium-Scale Asset Issuers that are legal entities other than limited liability companies must comply with statutory regulations.

Article 8
This is clear enough.

Article 9
This is clear enough.

Article 10
This is clear enough.

Article 11
This is clear enough.

Article 12
Paragraph (1)
Regulatory provisions in the capital market sector governing Issuers or Public Companies.

Paragraph (2)
Example:
PT A Tbk has total assets of IDR 51,000,000,000.00 (fifty-one billion rupiah) or is controlled by a company that is not a Small-Scale Asset Issuer or Medium-Scale Asset Issuer based on annual financial reports for the period ending December 31, 2015. Financial reports for the period from January 1, 2016, to December 31, 2016, may still choose not to use the presentation and disclosure guidelines for financial reports as regulated in Regulation Number VIII.G.7 regarding Guidelines for Disclosure and Presentation of Financial Reports of Issuers or Public Companies. PT A Tbk is required to use the presentation and disclosure guidelines for financial reports for financial statements starting from January 1, 2017.

If PT A Tbk experiences a decrease in assets during the period from January 1, 2016, to December 31, 2016, thereby meeting the criteria for a Small-Scale Asset Issuer, PT A Tbk remains required to use the presentation and disclosure guidelines for financial reports.

Letter a
The date of the annual financial report indicates the end date of the fiscal year of a company's financial report, which is generally December 31.

Letter b
The date of the takeover announcement refers to the date the takeover of a Public Company is announced by the new controller in accordance with Financial Services Authority Regulations regarding the takeover of Public Companies.

Paragraph (3)
This is clear enough.

Paragraph (4)
This is clear enough.

Article 13
This is clear enough.

Article 14
This is clear enough.

Article 15
This is clear enough.

Article 16
The term "specific actions" includes, among others, the postponement of the issuance of an effectiveness statement for a registration statement in the context of a Public Offering.

Article 17
This is clear enough.

Article 18
This is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6533 ---