JAKARTA (TheInsiderStories) – New rule related to the issuance of debt or SUKUK notes without public offering, including medium term note (MTN) rule, will take effect today (06/01). Last year, he Financial Services Authority (FSA) has issued the regulations in POJK Number 20 of 2019 signed by the chairman Wimboh Santoso.
In this rule, the agency set a number of criteria like for the maturity of more than one year, the amount at least worth of Rp1.0 billion (US$66,667 million) or in that amount in several times issuances in one year period. Other provisions, the notes issued in a script-less form, kept in collective custody at the depository and settlement institution, and guaranteed by the issuer if issued by a other party. Then, for no less than Rp25 million or multiples the investors not more than 49 parties.
In the last two years, the market recorded several cases of default and principal issuance of MTN, which tarnished market confidence in the instrument. Some examples of cases are the failure of interest pay by leasing firm, PT Sunprima Nusantara Financing (SNP Finance).
The default precedent even ended with the ban of SNP Finance because there were creditors who refused to make peace such as state-owned lender, PT Bank Mandiri Tbk (IDX: BMRI) with a bill of Rp1.4 trillion, PT Bank Central Asia Tbk (IDX: BBCA) with amount of Rp209.80 Billion, and PT Bank Panin Indonesia Tbk (IDX: PNBN) worth of Rp140.13 billion.
At the end of 2019, other publicly listed firm, PT Armidian Karyatama Tbk (IDX: ARMY) also failed to pay its obligation. The instrument, which was distributed on Sept. 2 2019, offers floating yields and is worth a total of Rp100 billion. The MTN Shariah has a tenor of five years.
In this year, FSA targeting total emissions in the capital market to reach Rp200 trillion and 70 issuer become a listed company in 2020, said Santoso. Last year, public offering at the local bourse recorded Rp161 trillion and 60 firms listed at the Indonesia Stock Exchange (IDX).
He stated, his office will continue to work hard to attract more companies use the capital market to fulfill their needs, through IPO, bond issuance, and other instrument. The ways that FSA, government and Bank Indonesia (BI) will do are create conducive market, rise the ease of doing business, produce friendly policies and incentives.
Then, he asserted, the government will also facilitate the licensing of companies going to initial public offering and also facilitate companies to get projects so the financing needs of the capital market also increase.
“The government is also multiplying supporting instruments to increase the number of companies that will issue shares or bonds,” said the chairman.
While, IDX will conduct an alternative market operator, new product, and new stock exchange service. As an initial step, the self regulatory office, will develop new ETP platform for bond trading. Then, derivative products, including structured warrants, index futures, single stock future and optimization of ETF trading.
The development of new services is carried out through the development of an electronic public offering system (e-IPO), the development of Securities Lending and Borrowing, the development of new industry classifications, enhancing trading system technology and increasing efficiency of developing trading systems.
Beside, the bourse also continues to support the strengthening of the investor. To support the number of new investor at the bourse, IDX developed SLX services with the Indonesian Clearing and Guarantee Corporation, developed securities funding for investors through Indonesian Securities Funding, and expanded members’ business expansion through regional securities companies.
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