INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat, Gustaaf Reerink and Adri Dharma, ABNR Counsellors at Law
involved in Indonesian capital markets. The OJK also approves initial public offerings (IPOs) in Indonesia. Self-governing bodies relating to capital market activi - ties in Indonesia include: • the IDX, which monitors trading, settlements and listed company compliance with its regulations and receives corporate action notifications from com - panies and announces them to the market – super - vision also includes listing applications by Indone - sian companies to be listed on the IDX; • the KPEI, a clearing and guarantee institution for clearing and stock exchange transaction settle - ment guarantees; and • the KSEI, a central depository for equity and cor - porate bonds in the Indonesian market, set up as a private limited liability company. Since the enactment of the Capital Markets Law, scri - pless trading has been used, and the KSEI was estab - lished to facilitate this. Despite Indonesia being a civil law jurisdiction that generally does not recognise the distinction between legal and beneficial ownership, the Capital Markets Law does acknowledge such a separation. An investor holds its securities beneficially in a secu - rity account maintained by the KSEI through the inves - tor’s custodian or securities broker. For equities, the KSEI acts as a global custodian and is recorded in the register of members of the relevant issuer. Investors also maintain a cash account into which payments related to their securities are made (such as dividend distributions, coupon payments or payments related to the sale of securities). Capital market funding has been recognised by Indo - nesian companies as a funding alternative to bank financing. As of November 2025, 955 companies had listed their shares on the IDX, with 23 new listings recorded for the year up to that month. There is no limit to the funds that can be obtained from IPOs. The funds obtained by the company will depend on the number of shares offered to investors and the share price. The company can take into account the funding needs for a company’s business plan and how
much the founding shareholders are willing to reduce their ownership percentage by. A company that wishes to make an IPO must submit a registration statement to the OJK supported by docu - mentation including:
• a cover letter; • a prospectus; • an audited financial statement; • a letter of comfort from the accountant; • a financial forecast statement; • a due diligence report and legal opinion; • underwriting agreements (if any);
• a corporate structure document that describes the position of the company vertically, starting from the individual shareholders up to the subsidiaries at the highest level, and the position of the company horizontally; • a statement on the completeness and validity of the public offering documents submitted by (i) the company, (ii) the underwriter and (iii) capital mar - ket-support professionals; and • other information requested and deemed neces - sary by the OJK, and which can be made avail - able to the public without adversely affecting the interests of the company. Registration may become effective on the 20th work - ing day from (i) the date the registration statement is fully received by the OJK or (ii) the date on which the OJK receives the latest amendments or additional information submitted by the issuer in response to the OJK’s request for amendments and/or additional information – or on an earlier date, if declared effec - tive by the OJK. In practice, it takes four to six weeks as of the first IPO submission for an IPO to receive a statement on effectiveness from the OJK. 5.2 Securities Regulation General provisions on the listing of shares on the IDX include the following: • equity securities that may be listed on the IDX include shares and equity securities other than shares accompanying the public offering, including
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