Journal of Law, Policy and Globalization www.iiste.org ISSN 2224-3240 (Paper) ISSN 2224-3259 (Online) Vol.111, 2021 47 The Regulations of Corporate Action in Capital Market in Indonesia Dwi Elok Indriastuty Sekaring Ayumeida Kusnadi Farina Gandryani Rahmadi Mulyo Widiyanto Chamdani Faculty of Law, Wijaya Putra University Abstract Disclosure principles is the main principle in capital market which must be obeyed by issuers since the general offering until the company became public company, should do corporate action. The regulation of corporate action procedure in capital market is fundamentally an effort of law protection for the minority shareholders and independent shareholders. There is a collision between the regulation of company act and capital market act in the practice. This condition, by law, can be called as conflict of norm, as there is conflict between the statute. In facing the problem, principle of justice can be applied to legitimize and have normative influence. Principle of justice that underlies the application of preference to the two laws and regulations is lex specialis derogat legi generali principle. This principle is a method of resolving conflict of norm between specific norm and general norm. It means that the application of the preference principle is done by putting a side the norms or provisions, in this case is the company act by norms or specific provisions, which is the capital market act. Keywords: Corporate Action, Capital Market, Conflict of Norm, Preference. DOI: 10.7176/JLPG/111-05 Publication date:July 31 st 2021 1. Introduction The implementation of disclosure principles by issuers in capital market is not conducted only at the general offering but also must be obeyed after the company became public company. Disclosure principle is obliged when public companies do corporate action. Fundamentally, company activity that impacted to the alteration of capital structure and financial position can be categorized as corporate action. Beside that, in every corporate action will influence the cost and the published amount. This view is told by Francis Groven who stated that corporate action occurs when changes are made to the capital structure or financial position of an issuer of a security that affect any of the securities it has issued. 1 As seen in the purpose of corporate action, it can be divided into some types: 1. Corporate action to distribute opulence, as in the distribution of dividend and bonus stock; 2. Corporate action to get new capital, as in the first stock offering, right issue and bond publishing; 3. Corporate action to reconstruct finance, as in capital alleviation and stock split; 4. Corporate action to reconstruct company, as in takeover, merger and consolidation. 2 The emerging problem is the regulation in capital market act associated to the corporate action has special characteristic if it juxtaposed to the regulation in Law Number 40 of 2007 regarding Limited Liablity Company (“Company Act”). This case is seen after a company carries out initial public offering. Besides the status that will change into public company, as the consequency, the issuers are not only submissive to Company Act, but in some specific matters, they also obey the provisions in Law Number 8 of 1995 regarding Capital Market (“Capital Market Act”). Likewise, in associated to corporate action carries out by public company, other than complying with the provisions stipulated in the Company Act, they are also required to follow special requirements stipulated in Capital Market Act. 2. Discussion 2.1. Regulations of Corporate Action in the Capital Market The procedural regulations concerned to corporate action in the capital market are basically to implement the principle of transparency and as an effort to provide legal protection for minority shareholders and independent shareholders. There are several provisions for corporate action, including the takeover of public company, mergers and consolidation of business. 2.1.1 The Takeover of Public Company The terminology of the takeover of the company is regulated in Article 1 number 11 Company Act which determines "… A takeover is a legal act carries out by legal entity or individual to take over the shares of the company that cause the transfer of control on the company.” The point in the provision of this article is that a 1 Francis Groves, Corporate Actions-a Concise Guide: An Introduction to Securities Events, Harriman House Ltd, Great Britian, 2008, p.4. 2 Michael Simmons and Elaine Dalgleish, Corporate Actions: A Guide to Securities Event Management, Hoboken: Jhon Wiley & Son, 2006, p.3, quoted from Mutiara Rengganis and Richele S. Suwita, The Regulation of Corporate Action in Capital Market by Financial Service Security, Law & Capital Market Journal, Capital Market Law Consultant Association, Vol.VIII.ED.13/2017, p.49.