DECREE
AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE GOVERNMENT'S DECREE NO. 14/2007/ND-CP OF JANUARY 19, 2007, DETAILING A NUMBER OF ARTICLES OF THE LAW ON SECURITIES
THE GOVERNMENT
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 29, 2006 Law on Securities;
At the proposal of the Minister of Finance.
DECREES:
Article 1. To amend and supplement a number of articles of the Government's Decree No. 14/2007/ND-CP of January 19, 2007 detailing a number of articles of the Law on Securities, as follows:
1. To amend Article 1 as follows:
1. "Article 1. Scope of regulation
This Decree details a number of articles of the Law on Securities regarding public offering of securities, public companies, securities listing, securities companies, fund management companies and securities investment companies."
2. To add the following Article 3a to Article 3:
"Article 3a. General provisions on public offering of securities
1. Organizations and individuals may not offer securities to the public in the following cases:
a) Enterprises are ineligible to offer securities to the public under Article 12 of the Law on Securities:
b) They offer securities to the public for establishing enterprises, except the cases specified in Clauses 4 and 5 Article 4 of this Decree.
2. Public offering of securities must be registered by issuing organizations, except the following cases:
a) Stale owners (including also state economic groups and corporations) sell state capital held by them to the public in order to exercise the right to represent the owner of state capital at enterprises.
b) Major shareholders sell to the public their own capital in public companies.
The Ministry of Finance shall specify the order and procedures for public offering of securities in the cases specified at Points a and b Clause 2 of this Article.
3. The issuing organization shall open a separate account at a commercial bank for blocking the proceeds from a round of public offering. The issuing organization that is a commercial bank shall select another commercial bank for blocking the proceeds from a round of public offering. Within 10 days after finishing a round of public offering, the issuing organization shall report to the State Securities Commission on offering results, enclosed with certification of the proceeds from this round by the commercial bank at which the blocked account is opened. Later, the issuing organization may have such proceeds released.
4. Every 6 months during the period from the time of finishing a round of public offering to the time of completing capital disbursement, the issuing organization shall disclose information on the progress of using the proceeds from this round. In case of change of capital use purposes, the issuing organization shall publicize reasons for and the Board of Directors" resolution on such change, or a competent investment licensing agency's approval, for foreign issuing organizations defined in Article 17a of this Decree."
3. To add the following Clauses 7, 8 and 9 to Article 4:
"7. Dossiers, order and procedures for public offering of shares to establish credit institutions as joint-stock companies comply with the Finance Ministry's guidance.
8. In order to offer securities to the public, a joint-stock company formed from the consolidation or merger of enterprises must have operated for at least one year and made profit by the time of registration for public offering.
9. The dossier, order and procedures for public offering of securities for swap of stocks and merger. consolidation and acquisition of enterprises comply with the Finance Ministry's guidance."
4. To add the following Point c to Clause 1, Article 5:
"c) When an issuing organization plans to issue more stocks or bonds within the term of convertible bonds, a dossier of public offering must state risks to the benefits of bond buyers, enclosed with a plan on compensation for investors to ensure their benefits."
5. To add the following Point d to Clause 1, Article 6:
"d) Observing regulations on foreign exchange management."
6. To amend Point b, Clause 2, Article 6 as follows:
"b)Documents evidencing full satisfaction of the conditions specified in Clause 1 of this Article and information to be disclosed according to a form set by the Ministry of Finance."'
7. To add the following Chapter Ha to Chapter II:
"Chapter II a
PUBLIC COMPANIES
Article 7a. Securities transactions of public companies
1. Securities of public companies eligible for listing under Articles 8 and 9 of this Decree may be traded at stock exchanges.
2. Securities of public companies not yet listed at a stock exchange may be traded under the Finance Ministry's guidance.
Article 7b. Termination of the status of a public company
1. Except for public companies that have offered securities to the public or listed their stocks at a stock exchange, a public company defined in Clause 2. Article 25 of the Law on Securities shall notify in writing to the State Securities Commission and disclose information to the public on the termination of its status within thirty (30) days from the time it no longer has sufficient one hundred (100) owning investors, excluding professional securities investors, or its charter capital is adjusted to be less than VND ten (10) billion.
2. The State Securities Commission shall publicize on its website the termination of the status of a public company within seven (7) days after receiving the company's notice of such termination."
8. To amend the title of Article 8 as follows:
"Article 8. Conditions for listing securities at Ho Chi Minh City Stock Exchange."
9. To amend Point d, Clause 1, Article 8 as follows:
"d) Having at least 20% of its voting stocks held by at least 100 shareholders other than professional securities investors and major shareholders, except state enterprises transformed into joint-stock companies under the Prime Minister's regulations."
10. To add the following Point g to Clause 1, Article 8:
"g) The Ministry of Finance shall specify conditions for listing stocks of joint-stock companies formed from the consolidation or merger of enterprises;"
11. To add the following Point e to Clause 2, Article 8:
"e) The Ministry of Finance shall specify conditions for listing bonds of joint-stock companies formed from the consolidation or merger of enterprises: “
12. To annul Clause 4, Article 8.
13. To add the following Clause 5 to Article 8:
"5. The Ministry of Finance shall specify conditions for listing securities of other types and for each transaction list table at Ho Chi Minh City Stock Exchange."
14. To amend the title of Article 9 as follows:
"Article 9. Conditions for listing securities at Hanoi Stock Exchange."
15. To amend Point b, Clause 1, Article 9 as follows:
"b) Having made profit in the year preceding the time of registration for listing: having no payable debts overdue for more than one year, having fulfilled all financial obligations towards the State, and having a healthy financial status by the time of registration for listing;"
16. To add the following Point g to Clause 1, Article 9:
"g) Conditions for listing stocks of a joint-stock company formed from the consolidation or merger of enterprises comply with the Finance Ministry's regulations;"
17. To amend Clauses 3 and 6, Article 9 as follows:
"3. Government bonds, government-guaranteed bonds and bonds of local administrations may be listed at Hanoi Stock Exchange at the request of bond issuers.
6. The Ministry of Finance shall specify conditions for listing securities of other types and for each transaction list table at Hanoi Stock Exchange."'
18. To annul Clauses 4 and 5, Article 9.
19. To add the following Article 9a to Article 9:
"Article 9a. Listing of securities of credit institutions being joint-stock companies
In addition to the conditions specified in Articles 8 and 9 of this Decree, registration for listing securities of credit institutions being joint-stock companies is subject to approval of the State Bank of Vietnam."
20. To remove the phrase "securities trading centers" in Articles 10 thru 14, 16 and 26 of Decree No. 14/2007/ND-CP.
21. To amend Point e, Clause 1, Article 14 as follows:
“e) It has suffered production or business losses for three consecutive years or the total accumulated loss exceeds the owner equity indicated in the financial statement of the year preceding the time of consideration."
22. To amend Clause 3, Article 15 as follows:
"3. Satisfying the conditions for listing at a stock exchange of the country whose securities market management body or stock exchange has reached a cooperation agreement with the State Securities Commission or a stock exchange of Vietnam."
23. To add the following Section 3 consisting b of Articles 17a and 17b to Chapter III:
"Section 3. OFFERING AND LISTING OF SECURITIES IN VIETNAM BY FOREIGN ISSUING ORGANIZATIONS
Article 17a. Conditions for a foreign issuing organization to offer and list securities in Vietnam
An enterprise established and operating under foreign laws may offer securities to the public and list securities at a stock exchange in Vietnam when it satisfies the following conditions:
1. Conditions for a foreign issuing organization to offer securities to the public in Vietnam:
a) Having an investment project in Vietnam already approved by a competent authority; having a plan on issue of securities and use of the proceeds from public offering of securities for investment in the project in Vietnam;
b) Committing to implementing a project in Vietnam;
c) Committing to neither transferring raised capital abroad nor withdrawing its own capital within the term of a licensed project;
d) Committing to fulfilling all the obligations of an issuing organization under Vietnamese law;
e) Its issue of securities is underwritten by at least one securities company established and operating in Vietnam;
f) Observing regulations on foreign exchange management regarding the issue of securities in Vietnam.
2. Conditions for a foreign issuing organization to list securities at a stock exchange in Vietnam;
a) Its securities are those issued in Vietnam under Clause I of this Article:
b) The quantity of securities registered for listing is equivalent to the quantity of securities permitted for offering in Vietnam:
c) It commits to fulfilling all the obligations of a listing organization under Vietnamese law;
d) It receives consultancy on securities listing from one (1) securities company established and operating in Vietnam.
Article 17b. Dossiers, order and procedures for approving offering registration and listing or delisting securities of foreign issuing organizations in Vietnam
The dossiers, order and procedures for approving offering registration and listing or delisting securities of foreign issuing organizations in Vietnam comply with the Finance Ministry's guidance."
24. To amend Clause 3, Article 18 as follows:
"3. The legal capital of a fund management company, foreign-invested fund management company or Vietnam-based branch of a foreign fund management company is VND twenty-five (25) billion"
25. To add the following Article 20a to Article 20:
"Article 20a. Financial consultancy services and other financial services of securities companies
The Ministry of Finance shall guide financial consultancy services and other financial services specified in Clause 3, Article 60 of the Law on Securities and specify conditions for a securities company to provide and receive these services."
26. To amend Clause 4, Article 21 as follows:
"4. Management of investment capital of securities investment companies:
a) Securities investment companies that privately issue securities may themselves manage investment capital or entrust fund management companies to do so:
b) Public securities investment companies may not themselves manage investment capital but shall entrust fund management companies to do so:
c) When a securities investment company entrusts a fund management company to manage investment capital, the director or director general, deputy director or deputy director general (if any), the chairman of the Board of Directors and at least two-thirds (2/3) of the Board of Directors' members of the securities investment company must be independent from those of the fund management company."
27. To annul Clause 5, Article 21.
28. To consolidate Articles 22 and 23 into Article 22 amended as follows:
"Article 22. Dossiers and procedures for registration for public offering of stocks by and procedures for the grant of establishment and operation licenses to public securities investment companies
The public offering of shares by and grant of establishment and operation licenses to public securities investment companies comply with the Finance Ministry's regulations."
29. To amend Point g, Clause 1, Article 24 as follows:
"g) Other documents specified in Article 22 of this Decree."
30. To annul Article 28.
31. To annul Clause 1, Article 29.
Article 2. Implementation provisions
This Decree takes effect on September 20, 2010.
Article 3. Organization of implementation
The Ministry of Finance shall guide the implementation of this Decree.
Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People's Committees shall implement this Decree.