Stock Split and Stock Merger by Public Companies

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 15 /POJK.04/2022
CONCERNING
STOCK SPLIT AND STOCK MERGER BY PUBLIC COMPANIES BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to realize orderly, fair, and efficient capital market activities and protect the interests of investors and the public, regulation of all activities in the capital market sector is required; b. that there are currently no specific regulations regarding stock split and stock merger by public companies;
c. that in order to provide legal certainty and protection to shareholders and the public, regulation regarding stock split and stock merger by public companies is needed;
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 Stock Split and Stock Merger by Public Companies; 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:
   Establish: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING STOCK SPLIT AND STOCK MERGER BY PUBLIC COMPANIES.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation:

1. Public Company means an issuer that has conducted a public offering of equity securities or a public company.
2. Public Offering means the activity of offering securities conducted by an issuer to sell securities to the public in accordance with the procedures regulated in the Capital Markets Law and its implementing regulations.
3. Stock Split means a legal act conducted by a Public Company to split its shares from 1 (one) share into 2 (two) shares or more, or to split its shares with a specific ratio, resulting in an increase in the number of shares of the Public Company.
4. Stock Merger means a legal act conducted by a Public Company to merge its shares from 2 (two) or more shares into 1 (one) share, or to merge its shares with a specific ratio, resulting in a decrease in the number of shares of the Public Company.
5. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the organ of the Public Company that has authority not delegated to the Board of Directors or Board of Commissioners as referred to in the Limited Liability Company Law and/or the Articles of Association of the Public Company.
6. Stock Exchange means a party that organizes and provides systems and/or facilities to match buy and sell offers of securities between other parties with the aim of trading securities among them.
7. Appraiser means an individual who, based on their expertise, conducts valuation activities in the capital market.

Article 2
Stock Split and Stock Merger by Public Companies must cover all shares of the Public Company in the same share classification.

CHAPTER II
REQUIREMENTS FOR STOCK SPLIT AND STOCK MERGER
First Section
GMS Approval
Article 3
(1) A Public Company conducting Stock Split and Stock Merger must first obtain GMS approval.
(2) The implementation of the GMS as referred to in paragraph (1) must follow the regulations of the Financial Services Authority regarding the planning and implementation of GMS of Public Companies.
Article 4
In the event that a Public Company with more than 1 (one) share classification conducts Stock Split or Stock Merger that results in changes to share rights, the Public Company must obtain GMS approval with the agenda item regarding changes to share rights as regulated in the Financial Services Authority regulations regarding the planning and implementation of GMS of Public Companies.

Second Section
Stock Exchange Approval
Article 5
(1) In the event that the shares of a Public Company are listed on a Stock Exchange, the Public Company must obtain a principal approval regarding the plan for Stock Split and the plan for Stock Merger of the Public Company from the Stock Exchange where the Public Company's shares are listed. (2) The principal approval from the Stock Exchange as referred to in paragraph (1) must be obtained by the Public Company before the announcement of the GMS for the purpose of approving the Stock Split or Stock Merger.
Article 6
(1) In providing principal approval regarding the plan for Stock Split and the plan for Stock Merger as referred to in Article 5 paragraph (1), the Stock Exchange must consider the interests of public shareholders and consider at least:
a. the trading liquidity of the Public Company's shares; b. the share price and share price fluctuations of the Public Company;
c. the fundamental financial performance of the Public Company;
d. the Stock Split and Stock Merger ratio; e. the number of shares held by the public; and f. the trading supervision of the Public Company's shares.
(2) If necessary, in addition to considering matters as referred to in paragraph (1), the Stock Exchange may request:
a. a share valuation report prepared by an Appraiser; and/or b. consideration from the Financial Services Authority, before providing principal approval as referred to in Article 5 paragraph (1).
Article 7
(1) In the event that the shares of a Public Company are listed on a Stock Exchange, the Public Company must list the shares resulting from Stock Split and Stock Merger on the Stock Exchange. (2) The listing of shares resulting from Stock Split and Stock Merger as referred to in paragraph (1) must obtain approval from the Stock Exchange.
Article 8
The Stock Exchange must issue regulations regarding the request for Stock Exchange approval for Stock Split and Stock Merger by Public Companies whose shares are listed on the Stock Exchange, at the latest 3 (three) months from the effective date of this Financial Services Authority Regulation.

Third Section
Valuation of Public Company Shares
Article 9
(1) A Public Company not listed on a Stock Exchange conducting Stock Split or Stock Merger must first obtain a share valuation report prepared by an Appraiser.
(2) The valuation results based on the share valuation report as referred to in paragraph (1) must be used as consideration in determining the Stock Split or Stock Merger ratio.
Article 10
(1) The requirements to obtain a share valuation report as referred to in Article 9 paragraph (1) also apply to Public Companies whose shares are listed on a Stock Exchange that will conduct Stock Split or Stock Merger, if:
a. at the time of submitting the principal approval request to the Stock Exchange, the trading of the Public Company's shares on the Stock Exchange has been temporarily suspended for a minimum period of 3 (three) months; and/or b. the share price of the Public Company on the Stock Exchange is at the lowest share price limit set by the Stock Exchange for at least 30 (thirty) trading days within a 3 (three) month period prior to the submission of the principal approval. (2) The share valuation report as referred to in paragraph (1) must be submitted to the Stock Exchange to obtain principal approval. (3) The Stock Exchange must use the share valuation report as referred to in paragraph (1) as material consideration in providing principal approval regarding the plan for Stock Split and Stock Merger.
Article 11
The time period between the valuation date on the share valuation report as referred to in Article 6 paragraph (2) letter a, Article 9 paragraph (1), and Article 10 paragraph (1) and the GMS implementation date for approving Stock Split or Stock Merger must be at the latest 6 (six) months.

Fourth Section
Prohibition of Stock Split and Stock Merger and Prohibition of Capital Increase Without Preemptive Rights
Article 12
(1) Public Companies are prohibited from conducting Stock Split or Stock Merger within the following time periods:
a. 24 (twenty-four) months from the listing date of shares in the context of the initial public offering of shares; and/or b. 12 (twelve) months from:

1. the effective date of the registration statement in the context of capital increase by the Public Company by granting preemptive rights;
2. the implementation date of the capital increase by the Public Company without granting preemptive rights, excluding capital increases in the context of the Public Company's share ownership program;
3. the implementation date of the previous Stock Split or Stock Merger; or
4. the effective date of the merger or consolidation statement,
   whichever is the most recent.
   (2) The prohibition period for Stock Split or Stock Merger as referred to in paragraph (1) is calculated based on the GMS implementation date with the agenda item for approving Stock Split or Stock Merger. (3) If the 12 (twelve) month period as referred to in paragraph (1) letter b is less than 24 (twenty-four) months from the listing date of shares in the context of the initial public offering of shares, the applicable prohibition period is 24 (twenty-four) months from the listing date of shares in the context of the initial public offering of shares.
   Article 13
   (1) Within 12 (twelve) months after the implementation of Stock Split or Stock Merger, Public Companies are prohibited from implementing capital increases without granting preemptive rights, except for the purpose of improving financial position. (2) The provisions as referred to in paragraph (1) are excluded for capital increases without granting preemptive rights, except for the purpose of improving financial position, conducted in the context of the Public Company's share ownership program.
   Article 14
   (1) The prohibitions as referred to in Article 12 paragraph (1) and Article 13 paragraph (1) do not apply to Public Companies that:
   a. are financial service institutions under certain conditions; and/or b. undergo restructuring in the context of improving financial position.
   (2) The prohibition as referred to in Article 13 paragraph (1) does not apply to Public Companies that are issuers conducting public offerings of equity securities in the form of shares with multiple voting rights, which conduct capital increases without granting preemptive rights to maintain voting rights ownership of more than 50% (fifty percent) of all voting rights. (3) Financial service institutions under certain conditions as referred to in paragraph (1) letter a are determined by the Financial Services Authority.

Fifth Section
Shares Not Meeting Trading Unit Standards at the Stock Exchange and Fractional Shares
Article 15
(1) A Public Company whose shares are listed on a Stock Exchange and conducting Stock Merger must appoint 1 (one) party to purchase shares that do not meet the trading unit standards at the Stock Exchange due to Stock Merger. (2) The share purchase offer as referred to in paragraph (1) must be implemented:
a. 1 (one) working day after the implementation date of Stock Merger; and b. within a minimum period of 5 (five) trading days.
(3) The share purchase price as referred to in paragraph (1) must follow the regulations regarding the purchase price of shares amounting to less than 1 (one) trading unit of shares as regulated in Stock Exchange regulations.
Article 16
(1) In the event that shares resulting from the share purchase by the party as referred to in Article 15 paragraph (1) do not meet the trading unit standards at the Stock Exchange, the Public Company may issue new shares to such parties so that they meet 1 (one) trading unit of shares. (2) The issuance of shares as referred to in paragraph (1) is not required to follow the regulations as regulated in Financial Services Authority regulations regarding capital increase by Public Companies by granting preemptive rights. (3) The issuance of shares as referred to in paragraph (1) must obtain prior GMS approval.
Article 17
In the event that a Public Company conducts the issuance of new shares as referred to in Article 16 paragraph (1), the implementation of such new share issuance must be conducted at the latest 30 (thirty) days after the implementation date of Stock Merger of the Public Company.
Article 18
Public Companies whose shares are not listed on a Stock Exchange and conducting Stock Merger must have a resolution mechanism for fractional shares resulting from Stock Merger.

CHAPTER III
PROCEDURES FOR STOCK SPLIT AND STOCK MERGER
First Section
Information Disclosure
Article 19
(1) A Public Company planning to conduct Stock Split or Stock Merger must announce information disclosure regarding the plan for Stock Split or Stock Merger on the same day as the announcement of the GMS for approving Stock Split or Stock Merger. (2) The information disclosure as referred to in paragraph (1) along with supporting documents must be submitted to the Financial Services Authority on the same day as the announcement of information disclosure.
Article 20
Information disclosure as referred to in Article 19 must contain at least:
a. the title of information disclosure regarding the plan for Stock Split or Stock Merger; b. information regarding share classification;
c. information regarding changes in nominal value of shares as a result of Stock Split or Stock Merger, except for Public Company shares without nominal value;
d. the number of shares before and after Stock Split or Stock Merger; e. the Stock Split or Stock Merger ratio; f. the date of principal approval from the Stock Exchange regarding the plan for Stock Split or Stock Merger for Public Companies whose shares are listed on the Stock Exchange; g. the reasons and objectives for conducting Stock Split or Stock Merger; h. the impact of Stock Split or Stock Merger on the number and price of equity securities other than shares that have not yet been converted into shares in the event that the Public Company issues equity securities other than shares;
i. a summary of the share valuation report if the Public Company uses a share valuation report, at least:

1. party identity;
2. valuation object;
3. valuation purpose;
4. assumptions and limiting conditions;
5. valuation approaches and methods; and
6. value conclusion;
   j. the forecast of Stock Split or Stock Merger implementation; k. information regarding GMS implementation;
   l. information regarding corporate action plans that will affect the number of shares and/or capital of the Public Company to be conducted within 6 (six) months after the implementation date of Stock Split or Stock Merger; and
   m. the Board of Directors' statement of responsibility for the truthfulness of information in the information disclosure regarding the plan for Stock Split or Stock Merger.
   Article 21
   In addition to meeting the information disclosure as referred to in Article 20, information disclosure regarding the plan for Stock Merger must contain information regarding:
   a. the resolution of shares that do not amount to 1 (one) trading unit at the Stock Exchange, regarding at least the methods or means of purchase and purchase price; b. shareholders entitled to sell their shares to the party appointed to purchase shares that do not amount to 1 (one) trading unit at the Stock Exchange;
   c. the party appointed to purchase shares that do not amount to 1 (one) trading unit at the Stock Exchange;
   d. the forecast schedule regarding the purchase of shares that do not amount to 1 (one) trading unit at the Stock Exchange; e. the issuance of new shares as referred to in Article 16, if there is new share issuance; and f. the resolution mechanism for fractional shares for Public Companies not listed on the Stock Exchange.

Second Section
Implementation of Stock Split and Stock Merger
Article 22
(1) The implementation of Stock Split or Stock Merger must be conducted at the latest 30 (thirty) days after the GMS implementation that approved the plan for Stock Split or Stock Merger. (2) In the event that the time limit as referred to in paragraph (1) falls on a holiday, the implementation of Stock Split or Stock Merger must be conducted at the latest on the next working day. (3) The provisions regarding the time period as referred to in paragraph (1) do not apply to Stock Merger conducted in relation to the need for capital increase by the Public Company.
Article 23
Stock Merger related to the need for capital increase by the Public Company as referred to in Article 22 paragraph (3) must be implemented with the following provisions:
a. for capital increase by granting preemptive rights, the implementation of Stock Merger is conducted at the latest 5 (five) working days before the distribution date of preemptive rights; and b. for capital increase without granting preemptive rights, the implementation of Stock Merger is conducted within a minimum period of 9 (nine) working days and at the latest 4 (four) working days before the implementation of capital increase.
Article 24
(1) Public Companies must announce information disclosure before implementing Stock Split or Stock Merger that has been approved by GMS and submit such information disclosure to the Financial Services Authority. (2) Information disclosure as referred to in paragraph (1) must contain at least:
a. the GMS that approved Stock Split or Stock Merger; b. the Stock Split or Stock Merger ratio;
c. the old nominal value of shares and the new nominal value of shares;
d. the number of shares before and after Stock Split or Stock Merger; e. the schedule regarding the implementation of Stock Split or Stock Merger; f. the procedures for implementing Stock Split or Stock Merger; and g. the schedule regarding the purchase of shares that do not amount to 1 (one) trading unit at the Stock Exchange, if the Public Company conducts Stock Merger. (3) The announcement and submission of information disclosure as referred to in paragraph (1) must be conducted at the latest 4 (four) working days before the implementation date of Stock Split or Stock Merger.
Article 25
Public Companies are not required to announce information disclosure and submit reports to the Financial Services Authority as regulated in Financial Services Authority regulations regarding disclosure of information or material facts by issuers and public companies regarding Stock Split or Stock Merger.

CHAPTER IV
POSTPONEMENT AND CANCELLATION OF STOCK SPLIT AND STOCK MERGER First Section Postponement of Implementation of Stock Split and Stock Merger
Article 26
Public Companies may postpone the implementation of Stock Split or Stock Merger for at the latest 30 (thirty) days after the time limit as referred to in Article 22 paragraph (1), if:
a. there are conditions:

1. the composite stock price index on the Stock Exchange falls by more than 10% (ten percent) for 3 (three) consecutive trading days;
2. natural disasters, war, riots, fires, strikes that significantly affect the continuity of the Public Company's business; and/or
3. other events that significantly affect the continuity of the Public Company's business;
   b. the Public Company has not obtained Stock Exchange approval for the listing of shares resulting from Stock Split or Stock Merger; and/or
   c. the Stock Exchange postpones the implementation of Stock Split or Stock Merger by the Public Company.
   Article 27
   (1) In the event that there is a postponement of the implementation of Stock Split or Stock Merger as referred to in Article 26, the Public Company must submit a report on such postponement to the Financial Services Authority and announce it to the public at the latest 2 (two) working days:
   a. before the end of the implementation time limit for Stock Split and Stock Merger as referred to in Article 22 paragraph (1); or b. after the Public Company receives the Stock Exchange decision regarding the postponement of the implementation of Stock Split or Stock Merger, whichever is earlier. (2) The report on the postponement of the implementation of Stock Split or Stock Merger as referred to in paragraph (1) must contain at least:
   a. the reasons for postponement; and b. the forecast time for implementing Stock Split or Stock Merger after the postponement.

Second Section
Cancellation of Stock Split and Stock Merger
Article 28
Stock Split and Stock Merger by Public Companies become void if:
a. not implemented within the time limit as referred to in Article 22 paragraph (1); b. not implemented within the time limit as referred to in Article 26, for Public Companies that postpone the implementation of Stock Split or Stock Merger; and/or
c. not obtaining approval from the Stock Exchange for the listing of shares resulting from Stock Split or Stock Merger.
Article 29
(1) In the event that Stock Split or Stock Merger becomes void as referred to in Article 28, Public Companies must submit a report regarding the voiding of Stock Split or Stock Merger to the Financial Services Authority and announce it to the public at the latest 2 (two) working days after:
a. the end of the implementation time limit for Stock Split and Stock Merger as referred to in Article 22 paragraph (1) or Article 26 in the event of postponement; or b. the receipt of the decision from the Stock Exchange as referred to in Article 28 letter c, whichever is earlier. (2) The report as referred to in paragraph (1) must contain the reasons causing the voiding of Stock Split or Stock Merger.
Article 30
In the event that Stock Split or Stock Merger becomes void, in addition to fulfilling the obligations as referred to in Article 29, Public Companies must:
a. provide special explanations regarding the voiding of Stock Split or Stock Merger in the nearest GMS; and b. disclose the explanation of the voiding of Stock Split or Stock Merger in the annual report for the current period.

CHAPTER V
MEDIA AND LANGUAGE OF ANNOUNCEMENT
Article 31
(1) Announcements as referred to in Article 19, Article 24, Article 27, and Article 29 for Public Companies whose shares are listed on the Stock Exchange must be conducted through the Stock Exchange website. (2) Announcements as referred to in Article 19, Article 24, Article 27, and Article 29 for Public Companies whose shares are not listed on the Stock Exchange must be conducted through 1 (one) daily newspaper in the Indonesian language circulated nationally or a website provided by the Financial Services Authority. (3) Announcements as referred to in Article 19, Article 24, Article 27, and Article 29 must be available on the Public Company's website.
Article 32
Public Companies whose shares are not listed on the Stock Exchange must submit proof of announcement through a newspaper as referred to in Article 31 paragraph (2) to the Financial Services Authority at the latest 2 (two) working days after the announcement date.
Article 33
The implementation of announcement provisions through a website provided by the Financial Services Authority as referred to

as referred to in Article 31 paragraph (2) is determined by the Financial Services Authority.

Article 34
(1) Announcements as referred to in Article 19, Article 24, Article 27, and Article 29 must be presented in Indonesian and a foreign language, with the condition that the foreign language used is at least English. (2) Foreign language announcements as referred to in paragraph (1) must contain the same information as the information in the Indonesian language announcements. (3) In the event of differing interpretations of information announced in a foreign language compared to that announced in Indonesian as referred to in paragraph (2), the information in Indonesian shall be used as the reference.

Article 35
(1) Public Companies that are small-scale issuers and medium-scale issuers and meet the average market capitalization value requirements in accordance with the Financial Services Authority regulations regarding information disclosure obligations and corporate governance for issuers or public companies meeting the criteria for small-scale asset issuers and medium-scale asset issuers may follow the regulations regarding announcement language as regulated in the Financial Services Authority regulations. (2) The provisions as referred to in paragraph (1) also apply to Public Companies meeting the asset and control criteria as regulated in the Financial Services Authority regulations regarding information disclosure obligations and corporate governance for issuers or public companies meeting the criteria for small-scale asset issuers and medium-scale asset issuers.

CHAPTER VI
IMPACT OF STOCK SPLIT AND STOCK CONSOLIDATION ON EQUITY-LIKE SECURITIES OTHER THAN SHARES

Article 36
(1) In the event that a Public Company issues equity-like securities other than shares that have not yet been exercised into shares, the Public Company must adjust:
a. the number of equity-like securities other than shares; b. the number of shares resulting from the exercise of equity-like securities other than shares; and/or
c. the exercise price of equity-like securities other than shares,
to the Stock Split or Stock Consolidation ratio.

(2) Changes as referred to in paragraph (1) apply to relevant parameters affected by the Stock Split or Stock Consolidation.
(3) In the event that equity-like securities other than shares as referred to in paragraph (1) are listed on the Stock Exchange, the Stock Exchange must automatically list the adjusted equity-like securities resulting from the Stock Split or Stock Consolidation of the Public Company.

Article 37
Provisions regarding the obligations of Public Companies regarding shares that do not meet the trading unit requirements of the Stock Exchange as referred to in Article 15 and Article 16 apply mutatis mutandis to equity-like securities other than shares that do not meet the trading unit requirements of the Stock Exchange due to adjustments resulting from Stock Consolidation.

CHAPTER VII
ADMINISTRATIVE SANCTIONS

Article 38
(1) Any party violating the provisions as referred to in Article 2, Article 3, Article 4, Article 5 paragraph (1), Article 8, Article 11, Article 12 paragraph (1), Article 13 paragraph (1), Article 15, Article 16 paragraph (3), Article 17, Article 18, Article 19, Article 20, Article 21, Article 22 paragraph (1) and paragraph (2), Article 23, Article 24 paragraph (1) and paragraph (2), Article 27 paragraph (1), Article 29, Article 30, Article 31, Article 32, Article 34 paragraph (1) and paragraph (2), and Article 36 paragraph (1) and paragraph (3) shall be subject to administrative sanctions. (2) Sanctions as referred to in paragraph (1) shall also be 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 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 concurrently 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 carried out in accordance with applicable legislation.

Article 39
In addition to administrative sanctions as referred to in Article 38 paragraph (4), the Financial Services Authority may take specific actions against any party violating the provisions of this Financial Services Authority Regulation.

Article 40
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 38 paragraph (4) and specific actions as referred to in Article 39 to the public.

CHAPTER VIII
CLOSING PROVISIONS

Article 41
This Financial Services Authority Regulation shall come into force 6 (six) months after the date of enactment.

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

To ensure everyone is aware, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Determined in Jakarta on 18 August 2022
CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed,
MAHENDRA SIREGAR

Enacted in Jakarta on 22 August 2022
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed,
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2022 NUMBER 17/OJK

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 15/POJK.04/2022
REGARDING
STOCK SPLIT AND STOCK CONSOLIDATION BY PUBLIC COMPANIES

I. GENERAL
Stock Split (stock split) and Stock Consolidation (reverse stock split) are corporate actions that have no direct impact on Public Companies. Stock Split and Stock Consolidation result in changes to the number of shares issued by Public Companies but do not change the composition and percentage of share ownership. These corporate actions also have no impact on the capital structure or financial fundamentals of Public Companies. Public Companies generally execute Stock Split to increase the trading liquidity of their shares on the Stock Exchange. Meanwhile, Stock Consolidation is usually executed to comply with legal regulations regarding capital increases by Public Companies. Stock Split and Stock Consolidation are necessities for Public Companies in the capital market. In recent years, every year there are Public Companies executing Stock Split or Stock Consolidation. However, to date, there have been no specific regulations governing Stock Split and Stock Consolidation, neither Financial Services Authority regulations nor Stock Exchange regulations. Based on Law Number 8 of 1995 concerning Capital Markets in Article 4, it is stated that supervision, regulation, and oversight as referred to in Article 3 are carried out by the Financial Services Authority (formerly Bapepam) with the aim of creating orderly, fair, and efficient capital market activities and protecting the interests of investors and the public. Furthermore, in Law Number 21 of 2011 concerning the Financial Services Authority Article 4, it is stated that the Financial Services Authority is established with the aim that all activities within the financial services sector are conducted in an orderly, fair, transparent, accountable manner, and able to realize a financial system that grows sustainably and stably, as well as being able to protect the interests of consumers and the public. Based on these matters, the Financial Services Authority needs to regulate the requirements and procedures for executing Stock Split and Stock Consolidation with the aim of providing legal certainty in fulfilling shareholders' rights, investor protection, and supporting the realization of well-maintained share trading.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.

Article 2
In practice, Public Companies may issue several classifications of shares, including common shares and preferred shares. One classification of shares may also consist of several series of shares with the same rights. For example, a Public Company issues common shares series A, series B, and series C. In the event that such Public Company executes Stock Split or Stock Consolidation on common shares, such Stock Split or Stock Consolidation must cover all common shares, namely common shares series A, series B, and series C.

Article 3
Sufficiently clear.

Article 4
Sufficiently clear.

Article 5
Sufficiently clear.

Article 6
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
Sufficiently clear.
Letter c
Sufficiently clear.
Letter d
Sufficiently clear.
Letter e
The term "number of shares in circulation owned by the public" refers to free float shares as regulated in the Indonesia Stock Exchange regulations regarding the listing of shares and equity-like securities other than shares issued by listed companies. Letter f Sufficiently clear. Paragraph (2) Sufficiently clear.

Article 7
Sufficiently clear.

Article 8
Sufficiently clear.

Article 9
Paragraph (1)
The term "Appraiser" refers to an Appraiser registered with the Financial Services Authority in the capital market supervision sector.
Paragraph (2)
Sufficiently clear.

Article 10
Sufficiently clear.

Article 11
Sufficiently clear.

Article 12
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
Number 1
Sufficiently clear.
Number 2
The term "date of execution of capital increase by Public Companies without granting pre-emptive rights" refers to the date of capital deposit execution or the date of debt conversion execution in the context of capital increase without granting pre-emptive rights. Number 3 The term "execution of Stock Split or Stock Consolidation" refers to:
a. for listed companies, the first date of trading of shares resulting from Stock Split or Stock Consolidation on the regular and negotiation markets; b. for unlisted companies, the date of obtaining approval for the amendment of the Articles of Association from the minister in charge of legal and human rights affairs. Number 4 Sufficiently clear. Paragraph (2) Example 1:
A Public Company has listed its shares for an Initial Public Offering on the Stock Exchange on June 2, 2021. Such Public Company is prohibited from executing Stock Split and Stock Consolidation within a period of 24 (twenty-four) months from the listing of such shares, starting from June 2, 2021, to June 1, 2023. The Public Company may convene an Annual General Meeting of Shareholders (AGMS) for Stock Split or Stock Consolidation no earlier than June 2, 2023.

Example 2:
A Public Company has executed a capital increase by granting pre-emptive rights with an effective date of June 2, 2021, a capital increase by Public Companies exempted from the obligation to grant pre-emptive rights other than the Public Company's share ownership program on March 3, 2021, a stock split with a ratio of 1:2 on February 5, 2021, and a merger execution on October 10, 2020. Therefore, based on these provisions, such Public Company is prohibited from executing Stock Split or Stock Consolidation within a period of 12 (twelve) months from the most recent corporate action, namely the capital increase by Public Companies granting pre-emptive rights. The Public Company may convene an AGMS for Stock Split or Stock Consolidation no earlier than June 2, 2022. Paragraph (3) Example:
A Public Company has listed its shares for an Initial Public Offering on the Stock Exchange on June 2, 2020, and has executed a capital increase by granting pre-emptive rights whose registration statement has obtained an effective statement on February 2, 2021. Therefore, such Public Company is prohibited from executing Stock Split and Stock Consolidation within a period of 24 (twenty-four) months from the date of listing shares for an Initial Public Offering, namely from June 2, 2020, to June 2, 2022. The Public Company may convene an AGMS for Stock Split or Stock Consolidation no earlier than June 3, 2022.

Article 13
Sufficiently clear.

Article 14
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
The term "Public Companies executing restructuring to improve financial position" refers to Public Companies executing restructuring to improve financial position because they meet the conditions for capital increase to improve financial position as regulated in Financial Services Authority regulations regarding capital increase by Public Companies granting pre-emptive rights. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear.

Article 15
Paragraph (1)
Shares that do not meet the trading unit requirements of the Stock Exchange are shares whose quantity does not meet 1 (one) trading unit of shares on the Stock Exchange and are commonly known as odd lot shares, including fractional shares. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear.

Article 16
Paragraph (1)
The issuance of shares by Public Companies is conducted to complete the number of shares owned by designated parties so that ownership of such shares meets 1 (one) trading unit of shares on the Stock Exchange. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear.

Article 17
Sufficiently clear.

Article 18
Sufficiently clear.

Article 19
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Examples of supporting documents include share valuation reports for Public Companies that have obtained share valuation reports.

Article 20
Letter a
Sufficiently clear.
Letter b
Sufficiently clear.
Letter c
Information regarding changes in nominal value is disclosed for all nominal values of shares of Public Companies that differ.
Example:
A Public Company has common shares consisting of series A shares with a nominal value of Rp1,000.00 (one thousand rupiah) per share, series B with a nominal value of Rp500.00 (five hundred rupiah) per share, and series C with a nominal value of Rp100.00 (one hundred rupiah) per share. Thus, information disclosure includes changes in nominal value for each series of shares based on the ratio of Stock Split or Stock Consolidation to be executed. Letter d Sufficiently clear. Letter e Sufficiently clear. Letter f Sufficiently clear. Letter g Sufficiently clear. Letter h Sufficiently clear. Letter i Sufficiently clear. Letter j Sufficiently clear. Letter k Sufficiently clear. Letter l Corporate actions that affect the number of shares and/or capital of Public Companies include:
a. capital increase by granting pre-emptive rights; b. capital increase by Public Companies exempted from the obligation to grant pre-emptive rights, except for capital increases in the context of share ownership programs;
c. mergers or consolidations;
d. bonus share distributions; e. repurchase of shares issued by Public Companies; and f. transfer of shares resulting from the repurchase of shares by Public Companies.
Letter m
Sufficiently clear.

Article 21
Sufficiently clear.

Article 22
Paragraph (1)
Example:
A Public Company that has obtained AGMS approval with an agenda item for a Stock Split plan on April 21, 2021, must execute such Stock Split no later than May 21, 2021.
Paragraph (2)
Example:
A Public Company that has obtained AGMS approval with an agenda item for a Stock Split plan on April 22, 2021, and the execution deadline for Stock Consolidation falls on May 22, 2021, which is a holiday, must execute such Stock Split no later than the next working day, namely May 24, 2021. Paragraph (3) Sufficiently clear.

Article 23
Letter a
Sufficiently clear.
Letter b
The term "execution of capital increase" refers to the date of capital deposit execution or the date of debt conversion execution in the context of capital increase exempted from the obligation to grant pre-emptive rights.

Article 24
Sufficiently clear.

Article 25
Sufficiently clear.

Article 26
A Public Company obtained AGMS approval with an agenda item for a Stock Split plan on April 21, 2021. According to Article 22 paragraph (1), such Stock Split must be executed no later than May 21, 2021. When a delay in the execution of such Stock Split occurs, the execution must be completed no later than June 20, 2021.

Article 27
Sufficiently clear.

Article 28
Sufficiently clear.

Article 29
Sufficiently clear.

Article 30
Sufficiently clear.

Article 31
Sufficiently clear.

Article 32
Sufficiently clear.

Article 33
Sufficiently clear.

Article 34
Sufficiently clear.

Article 35
Sufficiently clear.

Article 36
Paragraph (1)
The term "equity-like securities other than shares" refers to securities that can be exchanged for shares or securities containing the right to obtain shares, including warrants, options, and debt-like securities that can be converted into shares such as convertible bonds and mandatory convertible bonds. Paragraph (2) Equity-like securities other than shares issued by Public Companies may have different parameters according to their issuance agreements. These parameters include the number of equity-like securities issued, the exercise price of equity-like securities other than shares, and the number of shares that can be converted. Example 1:
PT A Tbk. has issued 1,000,000 (one million) warrants where each 1 (one) warrant has the right to be exercised into 1 (one) share with an exercise price of Rp1,000.00 (one thousand rupiah) per share. None of these warrants have been exercised into shares by warrant holders. Subsequently, PT A Tbk. executes a Stock Split with a ratio of 1:5. Thus, the number of warrants of PT A Tbk. is adjusted to 5,000,000 (five million) warrants with an exercise price of Rp200.00 (two hundred rupiah) per share. Example 2:
PT B Tbk. has issued 1,000,000 (one million) warrants where each 1 (one) warrant has the right to be exercised into 1 (one) share with an exercise price of Rp1,000.00 (one thousand rupiah) per share. None of these warrants have been exercised into shares by warrant holders. Subsequently, PT B Tbk. executes a Stock Consolidation with a ratio of 5:1. Thus, the number of warrants of PT B Tbk. is adjusted to 200,000 (two hundred thousand) warrants with an exercise price of Rp5,000.00 (five thousand rupiah) per share. Example 3:
PT C Tbk. has issued convertible bonds with a value of Rp1,000,000,000,000.00 (one trillion rupiah) where such convertible bonds have the right to be exercised into 1,000,000,000 (one billion) shares with an exercise price of Rp1,000.00 (one thousand rupiah) per share. None of these convertible bonds have been converted into shares. Subsequently, PT C Tbk. executes a Stock Split with a ratio of 1:5. Thus, the number of shares that can be converted from such convertible bonds is adjusted to 5,000,000,000 (five billion) shares with an exercise price of Rp200.00 (two hundred rupiah) per share. Example 4:
PT D Tbk. has issued convertible bonds with a value of Rp1,000,000,000,000.00 (one trillion rupiah) where such convertible bonds have the right to be exercised into 1,000,000,000 (one billion) shares with an exercise price of Rp1,000.00 (one thousand rupiah) per share. None of these convertible bonds have been converted into shares. Subsequently, PT D Tbk. executes a Stock Consolidation with a ratio of 5:1. Thus, the number of shares that can be exercised from such convertible bonds is adjusted to 200,000,000 (two hundred million) shares with an exercise price of Rp5,000.00 (five thousand rupiah) per share. Sometimes, for equity-like securities issued by Public Companies, the number of shares resulting from exercise and the exercise price are not specified with certainty but refer to certain parameters. In such conditions, adjustments are made to the number of equity-like securities, the number of shares resulting from the exercise of equity-like securities, and/or the exercise price, whichever is relevant to the terms and conditions of such equity-like securities. Example 1:
PT E Tbk. has issued convertible bonds with a value of Rp1,000,000,000,000.00 (one trillion rupiah) where such convertible bonds have the right to be exercised into shares with an exercise price equal to the average price over 20 (twenty) trading days before the conversion execution or at least Rp1,000.00 (one thousand rupiah) if the share price is below Rp1,000.00 (one thousand rupiah). None of these convertible bonds have been converted into shares. Subsequently, PT E Tbk. executes a Stock Split with a ratio of 1:5. Thus, for such convertible bonds, the exercise price equal to the average price over 20 (twenty) trading days will automatically adjust due to the Stock Split. However, the minimum exercise price of Rp1,000.00 (one thousand rupiah) is adjusted to Rp200.00 (two hundred rupiah) per share if the share price is below Rp200.00 (two hundred rupiah) considering this parameter is affected by the Stock Split. Example 2:
PT F Tbk. has issued convertible bonds with a value of Rp1,000,000,000,000.00 (one trillion rupiah) where such convertible bonds have the right to be exercised into shares with an exercise price equal to the average price over 20 (twenty) trading days before the conversion execution or at least Rp1,000.00 (one thousand rupiah) if the share price is below Rp1,000.00 (one thousand rupiah). None of these convertible bonds have been converted into shares. Subsequently, PT F Tbk. executes a Stock Consolidation with a ratio of 5:1. Thus, for such convertible bonds, the exercise price equal to the average price over 20 (twenty) trading days will automatically adjust due to the Stock Consolidation. However, the minimum exercise price of Rp1,000.00 (one thousand rupiah) is adjusted to Rp5,000.00 (five thousand rupiah) per share if the share price is below Rp5,000.00 (five thousand rupiah) considering this parameter is affected by the Stock Consolidation. Paragraph (3) Sufficiently clear.

Article 37
Sufficiently clear.

Article 38
Sufficiently clear.

Article 39
The term "specific actions" includes, among others, the postponement of AGMS execution.

Article 40
Sufficiently clear.

Article 41
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 10/OJK