Implementation of General Meeting of Shareholders of Open Companies Electronically

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 16 /POJK.04/2020
CONCERNING
IMPLEMENTATION OF GENERAL MEETING OF SHAREHOLDERS OF OPEN COMPANIES ELECTRONICALLY BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS BOARD OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in accordance with the procedure for organizing the General Meeting of Shareholders of an Open Company, there is an obligation to hold a General Meeting of Shareholders; b. that the magnitude of the number of shareholders and the geographical distribution of share ownership of open companies create obstacles in the implementation of the General Meeting of Shareholders, both in determining the location of the General Meeting of Shareholders, fulfilling the quorum of attendance, the quorum for decision-making, nor the form of the minutes of the General Meeting of Shareholders decisions;
c. that to implement the provisions of Article 23 paragraph (1) letter c of Government Regulation in Lieu of Law Number 1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the Corona Virus Disease 2019 (COVID-19) Pandemic and/or in order to Face Threats that Endanger the National Economy and/or Financial System Stability;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA

d. that based on considerations as referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning the Implementation of General Meeting of Shareholders of Open Companies Electronically. 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);
3. Government Regulation in Lieu of Law of the Republic of Indonesia Number 1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the Corona Virus Disease 2019 (COVID-19) Pandemic and/or in order to Face Threats that Endanger the National Economy and/or Financial System Stability (State Gazette of the Republic of Indonesia Year 2020 Number 87, Supplement to the State Gazette of the Republic of Indonesia Number 6485);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE IMPLEMENTATION OF GENERAL MEETING OF SHAREHOLDERS OF OPEN COMPANIES ELECTRONICALLY.

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

1. Open Company is an issuer that conducts a public offering of equity securities or a public company.

2. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the organ of the Open Company that has authority not delegated to the Board of 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.

3. Electronic GMS is the implementation of GMS by the Open Company using teleconferencing media, video conferencing, or other electronic media facilities.

4. Board of Directors is the organ of the Open Company that has the authority and is fully responsible for the management of the Open Company for the interests of the Open Company, in accordance with the purpose and objectives of the Open Company and represents the Open Company, both inside and outside the court in accordance with the provisions of the Articles of Association of the Open Company.

5. Board of Commissioners is the organ of the Open Company that is tasked with conducting general and/or specific supervision in accordance with the Articles of Association and providing advice to the Board of Directors of the Open Company.

6. Electronic GMS Organization System, hereinafter abbreviated as e-GMS, is an electronic system or facility used to support the provision of information, implementation, and reporting of the Open Company's GMS.

7. Proxy Recipient is a party appointed by shareholders to attend and exercise voting rights in the GMS.

8. e-GMS Provider is a party that provides and manages e-GMS.

9. Depository and Clearing Institution is a party that conducts central custody activities for custodian banks, securities companies, and other parties.

10. e-GMS User is the Open Company, participants, securities administration bureaus, shareholders, and other parties determined by the e-GMS Provider.

Article 2
The organization of GMS by Open Companies must follow the provisions of the Financial Services Authority Regulation concerning the plan and organization of the General Meeting of Shareholders of Open Companies, unless otherwise specifically regulated in this Financial Services Authority Regulation.

CHAPTER II
PROVISIONS ON THE IMPLEMENTATION OF ELECTRONIC GMS OF OPEN COMPANIES
Article 3
In addition to the implementation of GMS as referred to in the Financial Services Authority Regulation concerning the plan and organization of GMS of Open Companies, Open Companies may implement GMS electronically.

Article 4
(1) The implementation of GMS electronically as referred to in Article 3 may be done using:
a. e-GMS provided by the e-GMS Provider; or b. a system provided by the Open Company.
(2) The e-GMS Provider as referred to in paragraph (1) is:
a. the Depository and Clearing Institution designated by the Financial Services Authority; or b. another party approved by the Financial Services Authority.
(3) In the event that an Open Company implements GMS electronically using e-GMS provided by the e-GMS Provider, the Open Company must follow the e-GMS usage provisions established by the e-GMS Provider. (4) In the event that GMS electronically is organized by:
a. the e-GMS Provider which is a party approved by the Financial Services Authority as referred to in paragraph (2) letter b; or b. the Open Company, using a system provided by the Open Company as referred to in paragraph (1), The e-GMS Provider or the Open Company must be connected to the Depository and Clearing Institution and the securities administration bureau to ensure that shareholders entitled to attend the GMS are identified. (5) Other parties approved by the Financial Services Authority as referred to in paragraph (2) letter b must be in the form of an Indonesian legal entity and domiciled within the territory of the Unitary State of the Republic of Indonesia.

Article 5
(1) The e-GMS Provider as referred to in Article 4 paragraph (2) may provide and manage the organization of other meetings besides the GMS of Open Companies.
(2) The organization of other meetings as referred to in paragraph (1) is determined by the Financial Services Authority.

CHAPTER III
OBLIGATIONS OF THE E-GMS PROVIDER
Article 6
(1) The e-GMS Provider must at least:
a. be registered as an electronic system organizer from the competent agency in accordance with applicable legislation; b. provide access rights to e-GMS Users to access e-GMS;
c. have and establish standard operating procedures for the implementation of GMS electronically via e-GMS;
d. ensure the implementation of GMS electronically; e. ensure the security and reliability of e-GMS; f. inform e-GMS Users in the event of system changes or developments, including the addition of e-GMS services and features; g. provide an audit trail of all data processing activities in e-GMS for supervision, law enforcement, dispute resolution, verification, and testing purposes; h. have and place replacement data center and disaster recovery facilities related to the organization of e-GMS within the territory of Indonesia in a safe and separate location from the main data center;
i. meet minimum standards for information technology systems, information technology security, system disturbances and failures, and information technology system management;
j. store all data of the electronic GMS implementation; and k. be responsible for losses caused by errors or negligence in the provision and management of e-GMS.
(2) In the event that an Open Company implements GMS electronically using a system provided by the Open Company, the obligations of the e-GMS Provider as referred to in paragraph (1) also apply to the Open Company, except for the obligation to place replacement data center and disaster recovery facilities within the territory of Indonesia as referred to in paragraph (1) letter h.

Article 7
(1) The e-GMS Provider establishes provisions regarding procedures and methods for using e-GMS.
(2) The provisions regarding procedures and methods for using e-GMS as referred to in paragraph (1) become effective after obtaining approval from the Financial Services Authority. (3) The e-GMS Provider as referred to in Article 4 paragraph (2) letter a must have provisions regarding procedures and methods for using e-GMS no later than 6 (six) months after this Financial Services Authority Regulation comes into force. (4) The provisions regarding procedures and methods for using e-GMS as referred to in paragraph (1) must cover at least:
a. requirements and procedures for registration and/or granting of access rights to e-GMS Users, including cancellation of e-GMS User registration; b. registration and/or usage fees for e-GMS;
c. procedures for using e-GMS;
d. rights and obligations of e-GMS Users; e. limitations on e-GMS usage access; f. confidentiality, integrity, and availability of GMS implementation information contained in e-GMS; g. reporting mechanisms and data retrieval in the context of fulfilling the Open Company's reporting obligations; h. personal data protection in accordance with applicable legislation; and
i. temporary suspension of services to e-GMS Users.

CHAPTER IV
PROCEDURES FOR IMPLEMENTING ELECTRONIC GMS
Article 8
(1) In the implementation of GMS electronically, the Open Company must:
a. include information regarding the plan to implement GMS electronically in the notification of GMS agenda to the Financial Services Authority, GMS announcements, and GMS summonses; and b. organize GMS physically with the attendance of at least:

1. the GMS chairperson;
2. 1 (one) member of the Board of Directors and/or 1 (one) member of the Board of Commissioners; and
3. capital market support professions assisting in the implementation of GMS.
   (2) The location of the electronic GMS implementation is the location of the physical GMS implementation as referred to in paragraph (1) letter b.
   (3) Shareholders or Proxy Recipients of shareholders may attend physically or electronically via e-GMS provided by the e-GMS Provider or the system provided by the Open Company.
   (4) The number of shareholders or Proxy Recipients of shareholders who may attend physically as referred to in paragraph (3) may be determined by the Open Company with the provision that shareholders or Proxy Recipients of shareholders who declare their intention to attend physically earlier have priority to attend physically over those who declare later, until the determined number is fulfilled. (5) The attendance of shareholders electronically via e-GMS provided by the e-GMS Provider or the system provided by the Open Company can replace physical attendance and is counted as fulfilling the attendance quorum. (6) GMS is implemented sequentially and efficiently, which must include at least the following activities:
   a. opening; b. determination of attendance quorum;
   c. discussion of questions or opinions submitted by shareholders or shareholder proxies electronically for each agenda item;
   d. determination of decisions for each agenda item based on the decision-making quorum; and e. closing.

Article 9
(1) Under certain conditions, the Open Company may not organize GMS physically as referred to in Article 8 paragraph (1) letter b or limit physical attendance of shareholders, either partially or fully, in the implementation of GMS electronically. (2) Certain conditions as referred to in paragraph (1) are determined by the Government or with the approval of the Financial Services Authority. (3) In the event that the Open Company does not organize physical GMS as referred to in paragraph (1), the GMS organization location is the domicile of the e-GMS Provider or the domicile of the Open Company in the event that the Open Company implements GMS electronically using a system provided by the Open Company.

Article 10
(1) e-GMS or the system provided by the Open Company must have features:
a. to display rules of procedure, GMS materials, and GMS agenda items required for shareholders to make decisions on each GMS agenda item; b. that allow all GMS participants to participate and interact in the GMS;
c. for calculating the GMS attendance quorum;
d. for voting and vote counting, including if there is more than 1 (one) classification of shares; e. to record all interactions in the GMS, in the form of audio, visual, audio-visual, or non-audio-visual electronic recordings; and f. for electronic proxy granting. (2) The form of participation and interaction as referred to in paragraph (1) letter b can be done through audio, visual, audio-visual, or other than audio and visual means. (3) e-GMS as referred to in paragraph (1) may be equipped with interactive audio-visual features.

Article 11
(1) Voting in GMS electronically may be done after the GMS summons until the opening of each agenda item requiring voting in the GMS.
(2) The e-GMS Provider must keep the votes given as referred to in paragraph (1) confidential until the time of vote counting is carried out.
(3) Shareholders who have voted electronically before the GMS is held are considered to have validly attended the GMS.
(4) Shareholders who have voted electronically as referred to in paragraph (1) may change or withdraw their vote choice no later than before the GMS chairperson starts voting for decision-making on each respective GMS agenda item. (5) If votes given before the GMS implementation are not changed or withdrawn, those votes are binding when the GMS chairperson closes voting for decision-making on each respective GMS agenda item. (6) Shareholders with valid voting rights who have attended electronically but do not use their voting rights or abstain are considered to have validly attended the GMS and are deemed to have voted in the same manner as the majority of shareholders who voted, by adding their votes to the majority of shareholders' votes.

Article 12
(1) The minutes of GMS electronically must be made in the form of a notarial deed by a notary registered with the Financial Services Authority without requiring signatures from the GMS participants. (2) The e-GMS Provider must submit to the notary a printed copy containing at least:
a. a list of shareholders who attended electronically; b. a list of shareholders who granted proxy electronically;
c. a recapitulation of attendance quorum and decision quorum; and
d. a transcript of the recording of all interactions in the GMS electronically to be attached to the GMS minutes draft.
(3) In the event that the Open Company implements GMS electronically using a system provided by the Open Company, the Open Company must also submit to the notary a printed copy as referred to in paragraph (2). (4) The submission of the printed copy as referred to in paragraph (2) does not relieve the e-GMS Provider of the responsibility to store all data of the electronic GMS implementation. (5) In the event that the Open Company implements GMS electronically using a system provided by the Open Company, the submission of the printed copy as referred to in paragraph (3) does not relieve the Open Company of the responsibility to store all data of the electronic GMS implementation.

CHAPTER V
ADMINISTRATIVE SANCTIONS
Article 13
(1) Any party that violates the provisions as referred to in Article 2, Article 4 paragraph (3), (4), and (5), Article 6, Article 7 paragraph (3), Article 8 paragraph (1), Article 10 paragraph (1), Article 11 paragraph (2), and Article 12 paragraph (1), (2), and (3) shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) are also imposed on parties who cause the occurrence of violations 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/or g. cancellation of registration.
(5) Administrative sanctions as referred to in paragraph (4) letter b, letter c, letter d, letter e, letter f, or letter g may be imposed with or without prior imposition of administrative sanctions 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) letter c, letter d, letter e, letter f, or letter g. (7) The procedure for imposing sanctions as referred to in paragraph (3) is carried out in accordance with applicable legislation.

Article 14
In addition to administrative sanctions as referred to in Article 13 paragraph (4), the Financial Services Authority may take certain actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 15
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 13 paragraph (4) and certain actions as referred to in Article 14 to the public.

CHAPTER VI
TRANSITIONAL PROVISIONS
Article 16
(1) Open Companies that have submitted the GMS agenda to the Financial Services Authority before this Financial Services Authority Regulation comes into force may follow the provisions as regulated in this Financial Services Authority Regulation. (2) At the time this Financial Services Authority Regulation comes into force until:
a. 6 (six) months after this Financial Services Authority Regulation comes into force; or b. the approval of the e-GMS Provider's provisions as referred to in Article 7 paragraph (3) by the Financial Services Authority, The e-GMS Provider as referred to in Article 4 paragraph (2) letter a may provide services as an e-GMS Provider based on agreement with e-GMS Users.

CHAPTER VII
CLOSING PROVISIONS
Article 17
This Financial Services Authority Regulation comes into force on the date of its promulgation.

This copy is in accordance with the original
Deputy Director of Legal Consultation and
Harmonization of Banking Regulations 1
Legal Directorate 1
Legal Department signed
Wiwit Puspasari

In order that everyone may know it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Determined in Jakarta on 20 April 2020
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Promulgated in Jakarta on 21 April 2020
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2020 NUMBER 104

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 16 /POJK.04/2020
CONCERNING
IMPLEMENTATION OF GENERAL MEETING OF SHAREHOLDERS OF OPEN COMPANIES ELECTRONICALLY

I. GENERAL
In accordance with the Law concerning Limited Liability Companies and the Financial Services Authority Regulation concerning the Plan for Organization of the General Meeting of Shareholders of Open Companies, Open Companies are obligated to hold an Annual General Meeting of Shareholders (GMS). The Law concerning Limited Liability Companies has regulated the organization of GMS using teleconferencing media, video conferencing, or other electronic media facilities that allow all GMS participants to see and hear each other directly. In addition, the Law concerning Limited Liability Companies also regulates that every GMS implementation using teleconferencing media, video conferencing, or other electronic media facilities must have meeting minutes approved and signed by all GMS participants. The provisions in the Law concerning Limited Liability Companies encounter obstacles and cannot be applied well to Open Companies that have a large number of shareholders and a wide geographical distribution of share ownership, particularly regarding the fulfillment of requirements to see and hear each other, GMS attendance quorum and decision quorum, nor the form of GMS decision minutes. The effective and efficient organization of GMS of Open Companies will ultimately increase the effectiveness and efficiency of corporate business decision-making. The effectiveness and efficiency of corporate decision-making, particularly for Open Companies, are very important for the smoothness of Open Company business activities and broadly will strengthen the stability of the financial system from the potential occurrence of financial system crises. These problems have received attention from the Government and are embodied in Government Regulation in Lieu of Law Number 1 of 2020 concerning State Financial Policy and Financial System Stability For Handling the Corona Virus Disease 2019 (COVID-19) Pandemic and/or In the Context of Facing Threats That Endanger the National Economy and/or Financial System Stability. In order to facilitate Open Companies to organize GMS effectively and efficiently, it is necessary to do so by utilizing information technology, which is regulated by a Financial Services Authority Regulation.

II. ARTICLE BY ARTICLE
Article 1
Clearly sufficient.

Article 2
The term "organization of GMS" includes all activities, whether in the context of preparation, implementation, or post-implementation obligations, including notification to the Financial Services Authority, announcements, summonses, including correction of summonses and re-summoning, GMS quorum, GMS rules of procedure, and announcement of GMS minutes summary.

Article 3
Clearly sufficient.

Article 4
Paragraph (1)
Electronic GMS implementation can only be done using 1 (one) electronic system.

Paragraph (2)
Clearly sufficient.

Paragraph (3)
Clearly sufficient.

Paragraph (4)
The term "connected" means either electronically through the system or based on a direct cooperation agreement with the Depository and Clearing Institution and the securities administration bureau.

Paragraph (5)
Clearly sufficient.

Article 5
Paragraph (1)
Examples of other meetings besides the GMS of Open Companies include GMS conducted by the Depository and Clearing Institution, stock exchanges, and clearing and guarantee institutions (self-regulatory organizations), general meetings of bondholders or sukuk holders conducted by Issuers, and equity crowdfunding platform meetings in the form of cooperatives.

Paragraph (2)
Clearly sufficient.

Article 6
Clearly sufficient.

Article 7
Clearly sufficient.

Article 8
Paragraph (1)
Clearly sufficient.

Paragraph (2)
Clearly sufficient.

Paragraph (3)
Clearly sufficient.

Paragraph (4)
The provisions of this paragraph affirm that an Open Company may set a quota or limit for shareholders or their proxies who may attend in person at the General Meeting of Shareholders (RUPS). If the number of shareholders or their proxies declaring they will attend in person exceeds the available quota, the determination of which shareholders or proxies are entitled to attend in person is based on the first in first served method. Shareholders or their proxies who declare they will attend in person but do not obtain a place based on the first in first served method may still attend electronically.

Paragraph (5)
Clearly stated.

Paragraph (6)
Clearly stated.

Article 9
Clearly stated.

Article 10

Paragraph (1)
Letter a
Clearly stated.

Letter b
Clearly stated.

Letter c
Clearly stated.

Letter d
Clearly stated.

Letter e
Examples of interaction recordings in the RUPS include evidence of written communication from meeting participants (chatting).

Letter f
The power of attorney feature, in addition to being necessary to accommodate shareholders who will appoint proxies in the implementation of the RUPS, is also necessary to anticipate situations where the e-RUPS or the system provided by the Open Company does not have the capacity to be accessed by entitled RUPS participants at one time due to technical reasons or the occurrence of technical disruptions, including the disconnection of electronic connections during the implementation of the electronic RUPS.

Paragraph (2)
Clearly stated.

Paragraph (3)
Clearly stated.

Article 11
Clearly stated.

Article 12
Clearly stated.

Article 13
Clearly stated.

Article 14
The term "specific actions" may include, among others, the postponement of the implementation of the RUPS.

Article 15
Clearly stated.

Article 16

Paragraph (1)
Clearly stated.

Paragraph (2)
Agreements between e-RUPS Providers and e-RUPS Users are carried out in accordance with applicable legislation.

Article 17
Clearly stated.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6491 ---