Circular No. 06/2015/TT-NHNN dated June 01, 2015 of the State Bank of Vietnam regulating on time limit, orders, procedures on forwarding for cases of owning shares exceeding the rate as regulated under Article 55 of the Law on credit institutions

CIRCULAR

Providing the time limit, order and procedures for transition applicable to cases of holding shares in excess of the holding limit prescribed in Article 55 of
the Law on Credit Institutions[1]

Pursuant to June 16, 2010 Law No. 46/2010/QH12 on the State Bank of Vietnam;

Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions;

Pursuant to the Government’s Decree No. 156/2013/ND-CP of November 11, 2013, defining the functions, duties, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Chief Bank Inspector-Supervisor,

The Governor of the State Bank of Vietnam (below referred to as the State Bank) provides for the time limit, order and procedures for transition applicable to cases of holding shares in excess of the holding limit prescribed in Article 55 of the Law on Credit Institutions.

Article 1. Scope of regulation and subjects of application

1. This Circular provides for the time limit, order and procedures for transition applicable to shareholders or shareholders and their affiliated persons holding shares of a credit institution in excess of the holding limit specified in Article 55 of the Law on Credit Institutions before the effective date of this Law (below referred to as “excessive shareholding”).

2. This Circular applies to:

a/ Shareholders, shareholders and their affiliated persons (below referred to as “groups of affiliated shareholders”) with excessive shareholding;

b/ Credit institutions having shareholders or a group of affiliated shareholders with excessive shareholding (below referred to as “credit institutions”).

Article 2. Time limit, order and procedures for transition applicable to cases of excessive shareholding

1. Credit institutions shall coordinate with shareholders or groups of affiliated shareholders with excessive shareholding in working out a plan to address the excessive shareholding (below referred to as “addressing plan”), ensuring that the shareholding of such shareholders or groups of affiliated shareholders in such credit institutions will comply with the Law on Credit Institutions by December 31, 2015, except the cases of excessive shareholding permitted by the Prime Minister or already handled under the restructuring plan approval by the State Bank. An addressing plan must have at least the following contents:

a/ The list of shareholders or groups of affiliated shareholders (specifying the relevant affiliation) with excessive shareholding, including:

- Full names, identity card or passport numbers, permanent residence addresses (for individual shareholders); names, addresses of head offices, business lines, enterprise registration certificate numbers, tax identification numbers (for institutional shareholders);

- The number of shares and share holding rate on the charter capital of the credit institution (specifying the number and share holding rate on the charter capital entrusted to other individuals or organizations; information of the entrusted organizations or individuals and relation between the entrusted organizations or individuals and the shareholders (if any));

- The number of shares and share holding rate on the charter capital entrusted by other organizations or individuals; information of the entrusting organizations or individuals and relation between the entrusting organizations or individuals and the shareholders (if any));

- Information on contributed capital representatives, affiliated persons of shareholders, and shareholders in each affiliated shareholder group;

b/ Measures and schedule for addressing the excessive shareholding;

c/ Commitment of the credit institution to coordinating with and urging shareholders and groups of affiliated shareholders with excessive shareholding to address it according to the said schedule.

2. Within the time limit for implementation of the addressing plan mentioned in Clause 1 of this Article or the time limit stated in the restructuring plan approved by the State Bank, shareholders or groups of affiliated shareholders with excessive shareholding may not increase the number of shares they hold in the credit institution in any forms, except the following cases:

a/ They receive bonus stocks or dividends being stocks;

b/ They purchase additionally issued stocks when the credit institution increases its charter capital through public offering of stocks but ensure that their share holding rates after purchase still comply with Article 55 of the Law on Credit Institutions.

3. From the effective date of this Circular, credit institutions may not extend credit facilities or extend new credit facilities (in case some credit facilitates have been extended) to shareholders and shareholders in groups of affiliated shareholders with excessive shareholding or affiliated persons of such shareholders.

4. Individual shareholders and institutional shareholders with their contributed capital representatives being members of the Board of Directors or Control Board or Directors General (Directors) of credit institutions in which they are holding excessive shares may transfer their excessive shares.

Article 3. Handling after the transition time limit

After the time limit for handling mentioned in Clause 1, Article 2 of this Circular or the time limit mentioned in the restructuring plan approved by the State Bank, if shareholders or groups of affiliated shareholders fail to comply with the shareholding limit prescribed in the Law on Credit Institution, the State Bank shall apply the following measures:

1. Not approving candidates for the election of members of the Board of Directors or Control Board and Director General (Director) of the credit institution in case they are:

a/ Shareholders or shareholders in a group of affiliated shareholders with excessive shareholding in the credit institution;

b/ Contributed capital representatives or affiliated persons of those mentioned at Point a of this Clause.

2. Not considering the nomination of candidates for the Board of Directors and Control Board of the credit institution from among shareholders or groups of affiliated shareholders with excessive shareholding in the credit institution.

3. Shareholders or groups of affiliated shareholders with excessive shareholding may not increase the number of shares they are holding in credit institutions in any form, except the cases specified in Clause 2, Article 2 of this Circular; and are not yet allowed to receive dividends in cash (if any) for their excessive shares until they comply with the prescribed shareholding limit.

4. Applying other necessary addressing measures provided by law, including the measure of restructuring of the credit institution in which shareholders or groups of  affiliated shareholders hold excessive shares at the State Bank’s request.

Article 4. Responsibilities of credit institutions

1. To review the list of shareholders and groups of affiliated shareholders holding shares in excess of the limit prescribed in the Law on Credit Institutions and coordinate with these shareholders in elaborating addressing plans under Clause 1, Article 2 of this Circular, and send such plans to the State Bank (via the Banking Inspection and Supervision Agency or the State Bank branches in provinces or centrally run cities in which the Banking Inspection and Supervision Agency does not have offices and credit institutions are headquartered) within 30 days from the effective date of this Circular.

2. To supervise and urge shareholders with excessive shareholding to implement addressing plans mentioned in Clause 1, Article 2 of this Circular. To periodically make monthly reports (before the 10^th of the month following the reporting month) to the State Bank (via the Banking Inspection and Supervision Agency or the State Bank branches in provinces or centrally run cities in which the Banking Inspection and Supervision Agency does not have offices and credit institutions are headquartered) on implementation results of addressing plans of credit institutions, clearly stating:

- The state of shareholders or groups of affiliated shareholders with excessive shareholding, with adequate information prescribed at Point a, Clause 1, Article 2 of this Circular;

- Results of addressing the excessive shareholding; in case of failure to implement the schedule stated in the addressing plan, clearly reporting the reasons, difficulties and problems (if any) and proposing handling measures.

3. To report on the issue of shareholders and shares at the request of the State Bank for each period (if any).

4. To add addressing plans mentioned in Clause 1, Article 2 of this Circular (including measures and schedule) in plans on restructuring of organization and operation of credit institutions for synchronous implementation at the request of the State Bank (in case approved restructuring plans do not include this content).

Article 5. Responsibilities of shareholders and groups of affiliated shareholders with excessive shareholding

1. To cooperate with credit institutions in elaborating addressing plans and apply addressing measures in order to comply with the regulation on shareholding limits and other relevant regulations.

2. To observe regulations relevant to the rights and obligations of shareholders and transfer of shareholders’ shares in credit institutions.

3. To be held responsible before law for the accuracy and adequacy of information provided to credit institutions.

Article 6. Responsibilities of the State Bank’s branches in provinces or centrally run cities where credit institutions base their head office (except localities in which the Banking Inspection and Supervision Agency has offices)

1. To receive credit institution’s reports on plans to address excessive shareholding under this Circular; to direct credit institutions to finalize addressing plans (when necessary); to report to the State Bank (via the Banking Inspection and Supervision Agency) on addressing plans of credit institutions.

2. To monitor and supervise credit institutions in implementing their addressing plans; to send quarterly reports (before the 20^th of the month following the reporting quarter) to the State Bank (via the Banking Inspection and Supervision Agency) on results of implementation of addressing plans of credit institutions with respect to the contents specified in Clause 2, Article 4 of this Circular, proposing measures to handle difficulties and problems of credit institutions (if any).

Article 7. Responsibilities of the Banking Inspection and Supervision Agency and other departments of the State Bank

1. The Banking Inspection and Supervision Agency:

a/ To receive reports of credit institutions headquartered in Hanoi and Ho Chi Minh City on their plans to address excessive shareholding under this Circular; to direct credit institutions to finalize addressing plans (when necessary); to monitor and supervise shareholders and credit institutions in implementing addressing plans reported to the State Bank;

b/ To receive and summarize reports of credit institutions headquartered in Hanoi and Ho Chi Minh City mentioned in Clause 2, Article 4, and of the State Bank’s branches in provinces or centrally run cities mentioned in Clause 2, Article 6 of this Circular;

c/ To advise the Governor of the State Bank on settling proposals of the State Bank’s branches in provinces or centrally run cities and arising difficulties and problems relating to the addressing of excessive shareholding in credit institutions.

2. Other departments:

To coordinate with the Banking Inspection and Supervision Agency in settling proposals of the State Bank’s branches in provinces or centrally run cities and credit institutions and related difficulties and problem at the latter’s request.

Article 8. Effect

This Circular takes effect on July 15, 2015.

Article 9. Organization of implementation

The Director of the Office, Chief Banking Inspector-Supervisor, heads of the units of the State Bank, directors of the State Bank’s branches in provinces or centrally run cities, chairpersons and members of the Board of Directors, and Directors General (Directors) of credit institutions shall implement this Circular.-

For the Governor of the State Bank
Deputy Governor
NGUYEN PHUOC THANH