In order to construct financial services sector that is organized, just, transparent, and accountable, as well as to develop a financial system that is sustainable and stable, and to protect the interests of consumers and the public, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) issued Regulation No. 30/POJK.04/2019 regarding Issuance of Debt Securities and/or Sharia Bonds Without Public Offerings (“POJK No. 30/2019”) acted upon as the implementing regulation from Law No. 8 of 1995 regarding the Capital Market.
POJK No. 30/2019 shall serves as a guideline for Issuers aiming to issue Debt Securities and/or Sharia Bonds (Efek Bersifat Utang dan/atau Sukuk – “EBUS”) Without Public Offerings. However, this guideline does not apply to Issuers of equity securities which are looking to issue EBUS that feature bond-to-equity conversion option without any process of public offering.
There are several matters that need to be considered:
1. Criteria and Requirements of EBUS issued Without Public Offerings
EBUS Without Public Offerings shall meet the following criteria:
a. The due date shall be longer than a year with an issuance value of equals to or less than Rp1.000.000.000,- (one billion Rupiah), whereby the issuances are made several times so that by the end of year 1, it will have reached a total value of at least Rp1.000.000.000,- (one billion Rupiah); or
b. The due date does not exceed one year and the EBUS is not under the supervision of other authorities (such as Bank Indonesia), with an issuance value of equals to or less than Rp1.000.000.000,- (one billion Rupiah), whereby the issuances are made several times, so that by the end of year 1, it will have reached a total value of at least Rp1.000.000.000,- (one billion Rupiah).
EBUS Without Public Offerings must comply with the following requirements:
a. Shall be issued in the form of scriptless securities and deposited within the depository and settlement institution;
b. Shall be rated or guaranteed/insured by means of a guarantee/insurance with a minimum value of 100% (one hundred percent) of the relevant EBUS Without Public Offerings value, IF they are issued by parties who are neither Issuers nor Public Companies;
c. Can only be repurchased after one year has elapsed from the relevant issuance or distribution date of the EBUS in question; and
d. The overbooking unit of the relevant EBUS must total to at least Rp25.000.000.000,- (twenty five billion Rupiah) or a multiple thereof, and the holders of the EBUS Without Public Offerings shall not total to any more than 49 (forty nine) parties.
Issuers of EBUS Without Public Offerings shall repurchase their EBUS in certain circumstances which is also prevailed for EBUS Without Public Offerings that has not reached one year since the issuance or distributed date.
2. Procedure for the Issuance of EBUS Without Public Offerings
Parties aiming to issue EBUS Without Public Offerings which are not Issuers, Public Companies, Collective Investment Agreement, or parties issuing EBUS in the form of collective investment funds with limited participation only, shall submit issuance documents to OJK. The documents shall consist of Cover Letter of the Issuance of EBUS and Memorandum of Information that provides detailed information or material facts regarding the issuance of EBUS Without Public Offerings and/or information that may affect the decisions of the investors. The submissions of the documents shall be completed within in a period of one year counted from the issuance date of rating result of the related EBUS Without Public Offerings.
After the submission of the issuance documents, EBUS Without Public Offerings shall be issued in a term of 30 (thirty) days from when the issuance documents were submitted to OJK. If there is any change of information of the issuance documents, the Issuer of EBUS Without Public Offerings will be required to resubmitted the entirety of the issuance documents and the issuance of EBUS Without Public Offerings will need to be completed in a period of 30 (thirty) days counted from the submission date of the new issuance documents.
After the issuance of EBUS Without Public Offerings, the result of the issuance of EBUS Without Public Offerings shall be reported to the OJK within 5 (five) business days at the very latest. The report shall be submitted by the Issuers both manually and electronically to the OJK.
3. Parties Entitled to Buy EBUS Without Public Offerings
EBUS Without Public Offerings shall only be sold to parties that not only has the ability to purchase, but also possesses the ability to conduct risk analysis in relation to the investment of securities (hereinafter referred to as “Professional Investors”), which is regulated under OJK Regulation No. 11/POJK.04/2018 regarding Public Offering of Debt Securities and/or Sharia Bonds to Professional Investors.
Any party aiming to buy EBUS Without Public Offerings shall submit a statement letter stating that the party has fulfilled the criteria to be considered as Professional Investors to the Issuer and the statement letter shall then become an integral and inseparable part of the EBUS Without Public Offerings order form, afterward a Securities Trading Broker or a Custodian shall ensure that the party has fulfilled the Professional Investors criteria.