March 20, 2025, [News] After the Jakarta Composite Index (IHSG) suffered a historic decline, the Indonesian Financial Services Authority (OJK) officially issued new regulations to allow listed companies to implement stock repurchase plans without holding a general meeting of shareholders (RUPS). The emergency policy will take effect on March 18 and will be valid for six months.
Inarno Jayadi, head of capital market, financial derivatives and carbon trading supervision, said that the policy adjustment was due to the continuous pressure on the Indonesian stock market since September 19, 2024. Data shows that on March 18, the composite index plummeted 1,682 points (a drop of 21.28%) in a single day, setting a record for the largest drop in history.
According to Article 2, Item g and Article 7 of Financial Regulatory Regulation No. 13 of 2023, when the market fluctuates violently, listed companies can exempt the shareholders' meeting approval procedure and directly implement repurchases. The repurchase must comply with Regulation No. 29 of 2023 on the Repurchase of Shares of Listed Companies, and the validity period of the policy is linked to the announcement date of the Financial Services Regulatory Authority, which can last up to six months.
Referring to the precedent during the 2020 epidemic, the upper limit of the repurchase of a single listed company is 20% of the total share capital. Nine blue-chip companies have responded to the policy, including financial institutions such as Bank Rakyat Indonesia (BBRI), Bank Mandiri Indonesia (BMRI), Bank Negara Indonesia (BBNI), and physical companies such as Japfa Comfeed and Avia Avian. The Financial Services Regulatory Authority expects more listed companies to follow suit and is currently receiving formal filing materials from companies. Policy driving force The introduction of this emergency policy is closely related to the pressure from Deputy Speaker of Parliament Dasco Ahmed."
On March 18, after the Jakarta Composite Index plunged 7.02% in a single day, Dasco led a delegation to visit the Indonesia Stock Exchange (BEI), prompting the OJK to approve the emergency stock repurchase policy originally scheduled for implementation in April 2025. The traditional shareholder meeting procedures will seriously hinder the ability of enterprises to rescue the market. On Wednesday (March 19), the Indonesian Financial Services Regulatory Authority and the Stock Exchange held a press conference. The policy was implemented ahead of schedule. The Indonesian Stock Exchange activated the circuit breaker mechanism at noon that day, when the composite index had fallen by 5.02%. According to the rules, all unfulfilled orders during the circuit breaker period will be retained in the automatic trading system, and brokers can withdraw their commissions.
Industry voice Agus, chairman of the Supervisory Board of Oman Mining (AMMN), called for a simplified repurchase process at the capital market seminar on March 3: "The current market liquidity continues to shrink, and the traditional shareholder meeting procedures will seriously hinder the ability of enterprises to rescue the market." The seminar was jointly organized by the Financial Services Regulatory Authority and the Stock Exchange, focusing on capital market reform issues.
