Script Securities No More: Issuers Be Ready

In an effort to address the mandatory issuance and conversion of scripless-form securities (“ Scripless Securities ”) and the management of equity securities that are classified as unmanaged assets (“ Unclaimed Assets ”), the Financial Services Authority (Otoritas Jasa Keuangan– “ OJK ”) is currently preparing a Draft Regulation on the Dematerialization of Equity Securities and the Management of Unclaimed Assets (“ Draft Regulation ”). [1] In addition to setting out various applicable provisions on the management of Unclaimed Assets, this new framework will also address mechanisms for the transitioning of scrip-based document ownership and physical transfers of equity securities into securities that take electronic form (“ Dematerialization ”). [2] As a consequence, the OJK will ultimately mandate that all equity, debt and/or sukuk securities will have to be issued in scripless form. [3]