FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 25/POJK.04/2017

REGARDING

RESTRICTIONS ON SHARES

ISSUED PRIOR TO A PUBLIC OFFERING

BY THE GRACE OF THE ALMIGHTY GOD,

THE COMMISSIONERS' COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that with the enactment of Law Number 21 of 2011 concerning the Financial Services Authority, since December 31, 2012, the functions, duties, and authority for regulating and supervising financial services activities in the capital market sector, including regulations regarding restrictions on shares issued prior to a public offering, have transferred from the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority; b. that to provide clarity and certainty regarding regulations on restrictions on shares issued prior to a public offering, existing capital market sector regulations concerning such restrictions issued prior to the establishment of the Financial Services Authority need to be incorporated into a Financial Services Authority Regulation;

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY

c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation regarding Restrictions on Shares Issued Prior to a Public Offering;

Recalling:

1. Law Number 8 of 1995 concerning the Capital Market (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:

To Establish: A FINANCIAL SERVICES AUTHORITY REGULATION REGARDING RESTRICTIONS ON SHARES ISSUED PRIOR TO A PUBLIC OFFERING.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation:

1. Public Offering is the offering activity conducted by the issuer to sell securities to the public based on procedures regulated in Law Number 8 of 1995 concerning the Capital Market and its implementing regulations.
2. Issuer is the party conducting a Public Offering.
3. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, investment contract unit participations, derivative contracts over Securities, and any derivatives of Securities.
4. Registration Statement is the document that must be submitted to the Financial Services Authority by the Issuer in the context of a Public Offering or a public company.
5. Prospectus is any written information related to a Public Offering with the aim of enabling other parties to purchase Securities.

Article 2

(1) Any party that acquires equity securities from an Issuer at a price and/or conversion value and/or exercise price below the initial public offering price of shares within a period of 6 (six) months prior to the submission of the Registration Statement to the Financial Services Authority is prohibited from transferring part or all of their ownership of such equity securities of the Issuer until 8 (eight) months after the Registration Statement becomes effective. (2) The prohibition referred to in paragraph (1) does not apply to ownership of equity securities, whether directly or indirectly, held by the central government, local government, or institutions that have the authority to conduct banking rehabilitation based on applicable laws and regulations.

CHAPTER II

REPORTS AND STATEMENTS IN THE PROSPECTUS

Article 3

The Issuer is required to report to the Financial Services Authority and state in the Prospectus any transactions that can be categorized as transactions referred to in Article 2.

Article 4

(1) Information in the report and statements in the Prospectus as referred to in Article 3 must at least contain:
a. the name of the holder of equity securities; b. the number of equity securities held;
c. the value received by the Issuer in connection with the issuance of such equity securities, as well as the form of payment and valuation method;
d. the transaction date and/or the exercise or conversion date of the equity securities; and e. plans for the transfer of ownership of equity securities by the parties referred to in Article 2 paragraph (2) within a period of 8 (eight) months after the Registration Statement becomes effective. (2) Information regarding plans for the transfer of ownership of equity securities as referred to in paragraph (1) letter e must at least include:
a. the number of equity securities to be transferred; b. the method or manner of transfer; and
c. other relevant information.

CHAPTER III

SANCTION PROVISIONS

Article 5

(1) Without prejudice to criminal provisions in the capital market sector, the Financial Services Authority has the authority to impose administrative sanctions on any party violating the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction on business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and/or g. cancellation of registration.
(2) Administrative sanctions as referred to in paragraph (1) 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 (1) letter a. (3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed independently or jointly with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 6

In addition to administrative sanctions as referred to in Article 5 paragraph (1), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 7

The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 5 paragraph (1) and specific actions as referred to in Article 6 to the public.

CHAPTER IV

CLOSING PROVISIONS

Article 8

Upon the commencement of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Agency Number Kep-06/PM/2001 concerning Restrictions on Shares Issued Prior to a Public Offering, along with Regulation Number IX.A.6 as its attachment, is revoked and declared invalid.

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

Article 9

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

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

Established in Jakarta on June 21, 2017

CHAIRMAN OF THE COMMISSIONERS' COUNCIL
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD

Enacted in Jakarta on June 22, 2017

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 125

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 25/POJK.04/2017

REGARDING

RESTRICTIONS ON SHARES

ISSUED PRIOR TO A PUBLIC OFFERING

I. GENERAL

Since December 31, 2012, the functions, duties, and authority for regulating and supervising financial services activities in the capital market, insurance, pension funds, financing institutions, and other financial service institutions have transferred from the Minister of Finance and the Capital Market Supervisory Agency and Financial Institutions to the Financial Services Authority.

In light of the above, it is necessary to reorganize the existing regulatory structure, particularly those related to the capital market sector, by converting Capital Market Supervisory Agency and Financial Institutions regulations related to the capital market sector into Financial Services Authority Regulations. This reorganization is conducted to ensure that there are Financial Services Authority Regulations related to the capital market sector that are consistent with Financial Services Authority Regulations in other sectors.

Based on the background and aspects mentioned, it is necessary to replace existing capital market sector regulations regarding restrictions on shares issued prior to a Public Offering, specifically the Decision of the Head of the Capital Market Supervisory Agency Number Kep-06/PM/2001 concerning Restrictions on Shares Issued Prior to a Public Offering, along with Regulation Number IX.A.6 as its attachment, with a Financial Services Authority Regulation regarding Restrictions on Shares Issued Prior to a Public Offering.

II. ARTICLE BY ARTICLE

Article 1

Sufficiently clear.

Article 2

Paragraph (1)
The prohibition on transferring equity securities to parties who acquired equity securities at a price below the initial public offering price of shares within a period of 6 (six) months prior to the submission of the Registration Statement to the Financial Services Authority applies to all equity securities owned by such parties (both those acquired within the 6 (six) months prior to the submission of the Registration Statement and those acquired outside the 6 (six) months prior to the submission of the Registration Statement).

Example:
Capital structure of PT ABC:
Authorized capital of Rp100,000,000,000.00 consisting of 200,000,000 shares with a nominal value of Rp500.00.
Paid-up capital of Rp25,000,000,000.00 consisting of 50,000,000 shares.
Shareholder structure:
Mr. A owns 25% of the paid-up capital, thus holding 12,500,000 shares with a nominal value of Rp6,250,000,000.00.
Mr. B owns 25% of the paid-up capital, thus holding 12,500,000 shares with a nominal value of Rp6,250,000,000.00.
Mr. C owns 50% of the paid-up capital, thus holding 25,000,000 shares with a nominal value of Rp12,500,000,000.00.

5 (five) months prior to the submission of the Registration Statement for the initial public offering of PT ABC shares to the Financial Services Authority, PT ABC increased its paid-up capital by Rp25,000,000,000.00 with 50,000,000 shares. Each shareholder of PT ABC (Mr. A, Mr. B, and Mr. C) participated in the increase of PT ABC's paid-up capital proportionally at the nominal price, i.e., Rp500.00 per share, so that after the capital increase, Mr. A holds 25,000,000 shares, Mr. B holds 25,000,000 shares, and Mr. C holds 50,000,000 shares.

PT ABC conducts an initial Public Offering by offering 50,000,000 shares to the public at a Public Offering Price of Rp1,000.00 per share.

In this case, since the shareholders of PT ABC (Mr. A, Mr. B, and Mr. C) acquired shares of PT ABC at a price below the Public Offering Price within a period of 6 (six) months prior to the Public Offering, the shareholders of PT ABC (Mr. A, Mr. B, and Mr. C) are prohibited from transferring part or all of their shares in PT ABC until 8 (eight) months after the Registration Statement becomes effective.

Paragraph (2)
Sufficiently clear.

Article 3

Sufficiently clear.

Article 4

Sufficiently clear.

Article 5

Sufficiently clear.

Article 6

The term "specific actions" includes, among others, the postponement of the issuance of the effectiveness statement for the Registration Statement in the context of a Public Offering.

Article 7

Sufficiently clear.

Article 8

Sufficiently clear.

Article 9

Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6072