Script Securities No More: Issuers Be Ready

In an effort to address the mandatory issuance and conversion of scripless-form securities (“Scripless Securities”) and the management of equity securities that are classified as unmanaged assets (“Unclaimed Assets”), the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently preparing a Draft Regulation on the Dematerialization of Equity Securities and the Management of Unclaimed Assets (“Draft Regulation”).[1] In addition to setting out various applicable provisions on the management of Unclaimed Assets, this new framework will also address mechanisms for the transitioning of scrip-based document ownership and physical transfers of equity securities into securities that take electronic form (“Dematerialization”).[2] As a consequence, the OJK will ultimately mandate that all equity, debt and/or sukuk securities will have to be issued in scripless form.[3]

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