By : Benny Handoko, Uvani M.Rodoputri



The Indonesia Financial Services Authority (Otoritas Jasa Keuangan, OJK”) continues to enhance capital market activities by enacting OJK Regulation Nr. 29 of 2023 concerning buyback of shares issued by listed companies (“OJK Regulation Nr. 29/2023”), which came into effect on December 29, 2023. This regulation revokes the previous regulation on the same matter, namely OJK Regulation Nr. 30/POJK.04/2017 (“OJK Regulation Nr. 30/2017”).


Buy Back

I. Limitations

In addition to the general restriction to conduct buyback under Law Nr. 40 of 2007 regarding Limited Liability Company and the obligation to maintain a minimum public float[1] of 50 million shares and 7.5% of the issued shares, listed company shall also pay attention to additional limitations introduced by OJK Regulation Nr. 29/2023, being:

  1. buyback shall not be conducted simultaneously with buyback conducted under significantly fluctuating market conditions as regulated under OJK Regulation Nr. 13 of 2023 regarding Policies to Maintain the Performance and Stability of the Capital Market under Significantly Fluctuating Market Conditions (“OJK Regulation Nr. 13/2023”).OJK states that listed company shall firstly stop the ongoing buyback under the OJK Regulation Nr. 29/2023 before it may conduct buyback under the framework of OJK Regulation Nr. 13/2023. From our view, this limitation is intended to separate the 2 buybacks as each of them is subject to different procedures and rules, for instance, the maximum number of shares that listed company may buyback.
  2. listed company may not conduct another buyback if it has not fully re-float the shares from previous buyback after the lapse of initial 3 years re-float period. From the said limitation, there might be a question of whether listed company is permitted to conduct another buyback in the event (i) the percentage of buyback shares has not exceeded the permitted threshold and (ii) it has not fully re-floated the treasury shares from the previous buyback, but the initial 3 years re-float period has not lapsed yet. From regulatory perspective, our view is such buyback is still allowed. We have seen instances in the past where OJK allowed another buyback in the situation set out in (i) and (ii) above. It remains to be seen if OJK will still adopt this policy, but even if it does, OJK might give its approval on a case-per-case basis.


II. Buyback Period

OJK Regulation Nr. 29/2023 shortens the maximum period for conducting buyback from 18 (eighteen) months from the date of approval of the general meeting of shareholders to 12 (twelve) months therefrom.

Nevertheless, OJK Regulation Nr. 29/2023 expressly allows listed company to stop the ongoing buyback process provided that it informs OJK and announces such information to public no later than 2 (two) business days after the decision to stop the ongoing buyback is made. Similar procedure also applies to the termination of ongoing buyback before listed company conducts separate buyback under OJK Regulation Nr. 13/2023. 


III. Source of Funds

Previously, OJK Regulation Nr. 30/2017 did not expressly regulate the source of funds for shares buyback although OJK based on its discretion typically requires listed company to disclose the source of funds to finance the shares buyback.

OJK now requires listed company to disclose the source of funds for its shares buyback and further regulates (i) shares buyback shall not significantly affect the financial capability[2] of listed company to settle its outstanding obligations, (ii) shares buyback shall be financed by listed company’s internal cash, (iii) shares buyback shall not be financed by public offering’s proceeds or via borrowing / debt.


Re-Float Obligation

I. Re-Float Method

OJK Regulation Nr. 29/2023 adds two new methods for the re-float of buyback shares, namely (i) settlement (payment-in-kind) of certain transaction[3] (e.g. asset purchase or debt settlement) and (ii) distribution to the existing shareholders in proportion to their shares ownership in the listed company.


II. Re-Float Period

OJK Regulation Nr. 29/2023 still adopts the “3 + 2 + 1 rule” in relation to the re-float period of buyback shares albeit with stricter approach.

After the expiry of initial 3 years re-float period, listed company may get a maximum of additional 2 years re-float period only if (i) the listed company has re-floated at least 10% of the total buyback shares or (ii) market price of such listed company has not surpassed the average shares buyback price for the period of 3 years following completion of shares buyback. Listed company will get additional 1 year to re-float the remaining buyback shares (if any) after the expiry of the additional 2 years re-float period.

For listed company that does not qualify to get additional 2 years re-float period as contemplated above, it must complete the re-float within 1 year after the expiry of the initial 3 years re-float period.


III. Disclosure


OJK adopts more details disclosure approach in respect of the re-float of buyback shares. The followings are some key disclosure items depending on the re-float method selected by listed company:


Re-Float Method

Key Disclosure Items


via stock exchange


·    number of re-float shares and timing of re-float; and

·    name of member of stock exchange that is appointed to facilitate the re-float.





·    identity of the transferee (including the business activity in case the transferee is a business entity) including any affiliate relationship with listed company (if any); and

·    timing of re-float.



implementation of employee / management shares ownership program


·    criteria for participants of the shares ownership program;

·    exercise period[1];

·    exercise price OR pricing methodology; and

·    lock-up provisions (if any).


settlement (payment-in-kind) of certain transaction


·    settlement method;

·    description of the transaction to be settled (including the value); and

·    number of re-float shares that will be used to settle the transaction.



conversion of equity securities (other than shares) issued by listed company


·    formula of exercise price to convert the equity securities into shares;

·    description of the equity securities;

·    identity of the holder of the equity securities;

·    number of buyback shares to be issued for conversion purpose; and

·    number/value of the equity securities to be converted.



Distribution of buyback shares to the shareholders


·    basis for determining the price of the shares;

·    ratio of shares distribution;

·    tax treatment for shareholders; and

·    recording date, cum date, and ex-date in respect of the eligible shareholders.



Listed company shall obtain approval from the general meeting of shareholders before commencing the re-float, save for re-float methods in points (a) and (b).



IV. Transitional Provision

OJK Regulation Nr. 30/2017 is still applicable towards listed company that has obtained approval from the general meeting of shareholders to conduct shares buyback and/or is still within the given re-float period prior to 29 December 2023. On the latter, we see it as the applicable re-float period the listed company is in.

So if a listed company is still in the initial 3 years re-float period prior to 29 December 2023, the rules under OJK Regulation Nr. 30/2017 will still apply until the expiry of such 3 years re-float period. Extension of the re-float period then will follow the terms and conditions under OJK Regulation Nr. 29/2023.



[1] Based on Indonesia Stock Exchange Regulation Nr. I-A regarding Listing of Shares and Equity Securities other than Shares issued by Listed Companies, free float shares are: (i) shares owned by shareholder less than 5% (five percent), (ii) not owned by controller and affiliate of the listed company, (iii) not owned by commissioner or directors of the listed company and (iv) not the existing buyback shares (treasury shares).

[2] The capability can be assessed by, among others, current ratio (current asset divided into current liabilities) of the listed company shall be more than 110% based on the latest publicly-available financial statements of the listed company.

[3] Listed company shall also comply with OJK regulation on material transaction and/or affiliated party and conflict of interest transactions (as the case may be) in the event the transaction to be settled falls under the category of material transaction, affiliated party and/or conflict of interest transactions.

[4] Exercise period shall not exceed the relevant re-float period of buyback shares.



This summary only highlights certain issues under OJK Regulation Nr. 29/2023 and may not be complete and comprehensive.  

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