Otoritas Jasa Keuangan (OJK) issued the Financial Services Authority Regulation (POJK) Number 22/POJK.04/2021 concerning the implementation of stock classification with Multiple Voting Shares (MVS) on Tuesday (12/7). According to Anto Prabowo, Deputy Commissioner for Public Relations and Logistics OJK, the issuance of the new POJK is an effort to strengthen the financial market, particularly the capital market sector, by allowing companies that create innovations with high productivity and growth rates to conduct Initial Public Offerings of equity securities in the Indonesia Stock Exchange. "This POJK regulates the application of shares with multiple voting rights, specifically one share grants more than one voting right to shareholders who meet certain requirements," said Anto, Tuesday (12/7). The purpose of MVS regulation in this new POJK is to safeguard the company's vision and mission while expanding the company's commercial operations by following the founders' intentions. Therefore, it is envisaged that the presence of this new POJK would serve as an incentive for unicorn enterprises to list on the Indonesia Stock Exchange.
The term MVS refers to a form of share that contains more than one voting right for each share, as is often recognized. Ideally, the implementation of dual-class shares (two classes of shares with MVS classification) in several global exchanges is limited to the founders who act and manage it or other key parties who can ensure the long-term sustainability of the company's vision recommended by industry experts. In order to ensure that public shareholders are protected, the installation of MVS is done while also paying attention to the regulations governing public shareholders, which are comprised of: The MVS will be in effect for a term of 10 years, and it will be possible to extend it once for a further period of another ten years with the agreement of the independent shareholders at the General Meeting of Shareholders (GMS); For the first two years following the effective date of the registration statement, each MVS shareholder is restricted from transferring any portion or all of the MVS they possess; MVS have voting rights comparable to ordinary shares in the GMS for specific agenda items on the board of directors; A further requirement is that the amount of ordinary shares represented at each GMS should account for at least 1/20 (one-twentieth) of the total voting rights of ordinary shares represented at the GMS held by shareholders other than MVS shareholders.
The question is, can the Indonesia Stock Exchange keep up with global stock exchanges to compete for the potential Unicorn IPO? Sucor Sekuritas analyst, Paulus Jimmy, is pessimistic that the new regulation will not significantly yield efforts to prevent unicorns from IPO abroad, as it is only a minor factor for the overall consideration that the company made to acquire targeted reserves. According to him, the main concern is the funds that the company can potentially achieve and the public's interest in the sector, industry, and the respective company. However, he believes that corporations' interest to IPO in Indonesia should also expand with the late MVS regulation. One specific reason is that the founders who are still in the company's management can still contribute and run the company. In essence, the issuance of this regulation is a positive measure for the future of the Indonesia Stock Exchange. Within our ever-changing capital market landscapes, it encourages more technology companies to acquire equity funding in Indonesia rather than global exchanges.