A total of 13 issuers  to comply the minimum 7.5 percent of free float requirement in this year - Photo: Privacy

JAKARTA (TheInsiderStories) – The Indonesia Stock Exchange (IDX) plan to remove the obligation of issuer to have an independent director, said one official today. The new rule will start to implement this week.

For background, in general to accommodate good corporate governance rules and limited liability obligation, public listed company must own an independent director and commissioner.

According to the Director, I Gede Nyoman Yetna the rules had received the green light from the Financial Services Authority (FSA) at the end of last week. Furthermore, he said, the local bourse aimed to simplifies the requirements of the initial public offering (IPO) to increase the number of listed companies.

He explained that his party is currently drafting the concept of amending the recording of shares and equity rule in addition to shares issued by listed companies.

Several changes such as an alternative net tangible asset requirements at least Rp5 billion (US$344,827) on the development board, operating profit minimum Rp1 billion, market cap at least Rp100 billion or a minimum operating income of Rp40 billion.

Then, no longer regulates the minimum nominal value of the shares of Rp100 but the initial share price of at least Rp100. While, IDX will also revoke the stock lock-up provisions resulting from additional capital without pre-emptive rights.

Furthermore, said Yetna, the bourse will simplify the administration from 40 to 15 documents. While, the application for recording securities to the IDX can be submitted together with the submission of the registration statement to the FSA.

Currently, the integration of the application process with FSA through the OJK Integrated Licensing and Registration System (SPRINT) in a process. He stated, “It is expected to shorten the time of the recording and public offerings process.”

IDX also will introduce Electronic Bookbuilding (e-Bookbuilding) to spread the investor-based for IPO. He revealed, the program is an IDX project with other self-regulatory organizations (SRO) like Indonesian Central Securities Depository and Indonesian Clearing and Guarantee Corporation.

At present, he added, the supply of the IPO‘ shares does exist for certain investors and with e-Bookbuilding is expected could reached retail investors more easily. Unfortunately, Yetna hasn’t told when the plan for e-Bookbuilding to be implemented.

 In addition, the bourse will launch the acceleration of market transaction settlement from T+3 to T+2, aspire to expedite capital flow liquidity. Indonesia becomes the second country in South ASEAN that implements such system.

Some other countries like United States, Canada, Japan, and Saudi Arabia have implemented the T+2 transaction settlement. Head of executive for Capital Market Supervisory at FSA Hoesen explained, the T+2 program aims to develop the Indonesian capital market so that it can more competitive compared to other market.
The implementation of the T+2 transaction is also to boost the liquidity in the market, accelerating the re-investment, operational cost efficiency as well as increasing the transaction capacity of the securities companies.

In a legal basis for implementing T+2, FSA has issued OJK Regulation Number 21/POJK.04/2018 concerning the Time of Exchange Transaction Settlement. While, in order to implement the new regulation, the players in the capital market industry have adjusted the system in their companies.

All parties stated that they were ready to carry out the accelerated migration of exchange transaction settlement from T+3 to T+2. In line with that, the IDX and the Clearing Guarantee body have also adjusted the relevant regulations regarding the settlement.

On the other hand, the IDX also changes the methodology of the LQ45 and IDX 30 index using free float to calculate the market capitalization, which previously used the weighted average method. The method uses all shares listed as the weight of the stock price index calculation.

The implementation of the LQ45 index methodology changes is carried out in stages and starts Feb. 1, 2019 and ends August 1, 2019. IDX said in circular letter, the changes in the methodology of the LQ45 and IDX30 indices, it was conducted to describe the actual market conditions.

Previously the method used with the method of weighted average or market capitalization weighting using the method of using all shares was recorded as the weight of the stock price index calculation. However, not all listed shares are traded

US$1: Rp14,500

Email: linda.silaen@theinsiderstories.com