JAKARTA - The Financial Services Authority (OJK) issued a regulation on share buybacks in market conditions that fluctuate significantly without the approval of the General Meeting of Shareholders (GMS). The policy was released in response to the decline in the Composite Stock Price Index (CSPI) by 1,682 points or minus 21.28% from the highest to date, yesterday (18/3).

Inarno Djajadi, Chief Executive Officer of Capital Market Supervision, Derivative Finance and the OJK Carbon Exchange, said that the share buyback policy without a GMS had been conveyed to the directors of public companies through an official OJK letter. ‘With regard to the conditions mentioned above, OJK determines the status of other conditions as referred to in Article 2 letter g of POJK Number 13 of 2023 (POJK 13/2013) as market conditions that fluctuate significantly,’ he said in a press release quoted on Wednesday (19/3).

He said that the regulation is expected to increase confidence and reduce pressure on the market. In addition, the policy was made as a follow-up to a meeting with stakeholders in the capital market two weeks ago (3/3). The issuer's move to buyback shares without obtaining GMS approval refers to article 7 of POJK 13/2023. The implementation of this corporate action due to significantly fluctuating market conditions is also required to fulfil the provisions of POJK Number 29 of 2023 concerning Buyback of Shares Issued by Public Companies.

Meanwhile, the determination of significantly fluctuating market conditions is valid for up to six months after the date of the Letter issued by OJK. (LK/LM)