In a Nutshell: Listing, Delisting, and Relisting on the Stock Exchange

OVERVIEWThe Indonesian capital market is the domain of many different institutions and parties. When engaging with the market, entities such as issuers, underwriters, custodians and supporting professionals are bound by the provisionsset out in LawNo. 8 of 1995on the Capital Market (“Capital Market Law”). This law governs an extensive range of activities, from public offerings to the simple trading of commercial papers.Although many commercial instruments such as promissory notes, bonds, shares, and other securities derivatives are traded on the capital market, another important activity is the listing process itself, despite the fact that this happens far less often. This process allows private companies to sell their shares to the general public. Delisting and relisting are two related processes and also involve listed companies.This week’s Indonesian Law Digest (“ILD”) will analyze and discuss issues relating to company listings, as well as the delisting and relisting processes as they occur within the bounds of the capital market. Our analysis will confine itself to the following topics:a.      UnderstandingPerseroan Terbuka;b.      General background and how to become a Listed Company;c.       Requirements and Procedures for Delisting (both Voluntary and Forced); andd.      Requirements and Procedures for Relisting.The discussions will refer mainly to the Capital Market Law and its implementing regulations, particularly regulations that were issued by the Capital Market and Financial Institutions Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan– “Bapepam-LK”) before this institution was dissolved and replaced by the Financial Service Authority (Otoritas Jasa Keuangan– “OJK”) on 31 December 2013, pursuant to LawNo. 21 of 2011on the OJK. The discussions will also take a look at regulations issued by the Indonesian capital market (Indonesian Stock Exchange –IDX) and its predecessors – the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX).LISTED COMPANIESPerusahaan TerbukaIn order for companies to be allowed to engage in trading activities through the capital market, they must first secure a “Tbk” suffix after their names. The “Tbk” suffix means that the company in question has become aPerseroan Terbuka. The definition of the term “Perseroan Terbuka”, as well as other legal definitions which fall under the general scope ofPerseroan Terbuka, are referenced in LawNo. 40 of 2007on Limited-Liability Companies (“Company Law”), as well as the Capital Market Law. Broadly speaking, these terms can be defined as follows: