Draft Bill on Company to Strengthen Share Ownership Tracing

Indonesia’s Draft Bill on Business Entities (“Draft Bill”) is expected to strengthen the mechanism for tracing share ownership. Andi Taletting Langi, Director of Business Entities at the Ministry of Law, stated that the Draft Bill will introduce a permanent serial number for each share certificate, enabling the ownership history of shares to be tracked more transparently and accurately.

“When a person sells their shares, only the name of the owner will change. The serial number of the shares, however, will never change regardless of how many times the shares are transferred,” Andi told Hukumonline.

Andi explained that the stricter rules governing shares are intended to reinforce the principles of transparency and legal certainty in the management of business entities. The government hopes that the measure will help safeguard the integrity of the national economic system and further enhance investor confidence.

According to Andi, in drafting the legislation, the Ministry of Law will cooperate with Indonesia Stock Exchange (“IDX”), Indonesian Central Securities Depository (“KSEI”), and the Financial Services Authority (“OJK”) in its capacity as the regulator overseeing share trading in Indonesia.