Draft OJK Regulation on Stock Splits and Reverse Stock Splits Undertaken by Public Companies

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently preparing a Draft Regulation on Stock Splits and Reverse Stock Splits Undertaken by Public Companies (“Draft Regulation”), which has been prompted by an increase in the number of stock-split and reverse-stock-split transactions over the last five years, as well as by the lack of any statutory regulations that address these two transaction types.[1] If promulgated, the Draft Regulation will serve as a set of guidelines for public companies that are looking to engage in stock-split and reverse-stock-split transactions in relation to shares that fall into a similar share classification.[2] The new guidelines specifically address the following matters: