THE STATE BANK OF VIETNAM No. 10/2016/TT-NHNN | THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness Hanoi, June 29, 2016 |
CIRCULAR
Guiding a number of provisions of the Government’s Decree No. 135/2015/ND-CP of December 31, 2015, on offshore indirect investment[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 November 26, 2014 Law No. 67/2014/QH13 on Investment;
Pursuant to December 13, 2005 Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange, and March 18, 2013 Ordinance No. 06/2013/PL-UBTVQH13 Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange;
Pursuant to the Government’s Decree No. 135/2015/ND-CP of December 31, 2015, on offshore indirect investment;
Pursuant to the Government’s Decree No.156/2013/ND-CP of November 11, 2013, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
At the proposal of the Director of the Foreign Exchange Management Department;
The Governor of the State Bank of Vietnam promulgates the Circular guiding a number of provisions of the Government’s Decree No. 135/2015/ND-CP of December 31, 2015, on offshore indirect investment.
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Circular guides a number of provisions of the Government’s Decree No. 135/2015/ND-CP of December 31, 2015, on offshore indirect investment (below referred to as Decree No. 135/2015/ND-CP).
Article 2. Subjects of application
1. Investors defined in Clause 1, Article 2 of Decree No. 135/2015/ND-CP.
2. Other institutions and individuals involved in offshore indirect investment activities.
Article 3. Interpretation of terms
In this Circular, the terms below shall be construed as follows:
1. Licensed credit institution means a commercial bank or foreign bank branch licensed to provide foreign exchange services in Vietnam in accordance with law.
2. Foreign institution having a program on bonus provision of overseas issued stocks means an institution established under a foreign law with a presence in Vietnam (below referred to as foreign institution).
3. Institution implementing programs on bonus provision of overseas issued stocks means the presence of a foreign institution in Vietnam, including a foreign-invested economic institution, or a branch, a representative office or an executive office of the foreign party to a business cooperation contract (below referred to as institution implementing programs on bonus provision of stocks).
4. Foreign-currency dealing capital account for offshore indirect investment means a foreign-currency payment account of an institutional dealer opened at a licensed credit institution in order to conduct permitted collection and payment transactions related to offshore indirect investment dealing activities (below referred to as dealing account).
5. Foreign-currency account for entrusted offshore indirect investment capital means a foreign-currency payment account of an institutional trustee opened at a licensed credit institution in order to conduct permitted collection and payment transactions related to the offshore indirect investment entrustment undertaking (below referred to as entrustment undertaking account).
6. Account for implementation of program on bonus provision of overseas issued stocks means a foreign-currency payment account of an institution implementing a program on bonus provision of stocks opened at a licensed credit institution in order to conduct permitted collection and payment transactions related to the implementation of the program on bonus provision of overseas issued stocks (below referred to as program implementation account).
7. Annual total dealing limit means the annual maximum total foreign currency amount which an institutional dealer may use for conducting offshore indirect investment dealing activities.
8. Annual total entrustment undertaking limit means the annual maximum total foreign-currency amount which an entrustment undertaking institutions may undertake through entrustment for conducting offshore indirect investment entrustment undertaking activities.
Article 4. Investment instruments eligible for offshore indirect investment
1. Institutional dealers and trustees may make offshore indirect investment with the following investment instruments:
a/ Stocks listed on foreign stock exchanges;
b/ Securities investment fund certificates;
c/ Bonds, treasury bills and promissory notes of the Government and issuing organizations rated by international credit rating agencies such as Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.
2. Deposit certificate purchase and sale by institutional dealers being commercial banks and general financial companies must comply with the Law on Credit Institutions and guiding documents of the State Bank of Vietnam (below referred to as the State Bank).
Article 5. Safe investment ratio of institutional dealers being commercial banks, general financial companies
1. The safe investment ratio of an institutional dealer being a commercial bank or general financial company shall be 7 percent of the institutional dealer’s own capital, excluding investment and business activities of its overseas branches.
2. Offshore indirect investment activities of commercial banks and general financial companies shall be conducted within the safe investment ratio prescribed in Clause 1 of this Article and concurrently comply with current provisions on limits and prudential ratios in activities of commercial banks and general financial companies.
3. In case the reduction of its own capital causes the safe investment ratio to be exceeded, a commercial bank or general financial company shall:
a/ Report to the State Bank on the status of offshore indirect investment exceeding the safe investment ratio due to the reduction of its own capital;
b/ Adopt necessary measures to increase its own capital, handle offshore investment amounts and remit offshore invested amounts to Vietnam in order to ensure the safe investment ratio prescribed in Clause 1 of this Article within 3 months from the first month the safe investment ratio is exceeded;
c/ Terminate the transfer of investment capital overseas within the registered limit of the year certified by the State Bank.
Article 6. Dossier, order and procedures for proposing the Prime Minister to permit offshore indirect investment in other cases of investment
1. A dossier of proposing the Prime Minister to permit offshore indirect investment in other cases of investment as prescribed in Article 9 of Decree No. 135/2015/ND-CP:
a/ An application for permission to conduct offshore indirect investment (made according to the form provided in Appendix 1 to this Circular);
b/ A duplicate of the original book or an authenticated copy or a copy enclosed with the original for comparison of the business registration certificate or establishment decision or papers of equal legal validity. In case of submitting a copy together with the original for comparison, a person making comparison shall certify the authenticity of the copy to the original.
c/ The text of the offshore indirect investment decision approved by the economic institution’s competent authority enclosed with the offshore indirect investment plan (which clearly states total investment capital, purposes and forms of investment, investment instruments, capital sources for conducting investment, investment duration and the credit institution where a foreign-currency payment account is expected to be opened for conducting offshore indirect investment).
2. Order and procedures for proposing the Prime Minister to consider other cases of investment prescribed in Article 9 of Decree No. 135/2015/ND-CP:
a/ The investor shall send directly or by post 6 (six) sets of dossier of application for offshore indirect investment permission in Vietnamese to the State Bank. In case a dossier is incomplete and invalid, within 5 (five) working days after receiving a dossier, the State Bank shall request in writing the investor to revise or supplement the dossier;
b/ Within 5 (five) working days after receiving a complete and valid dossier, the State Bank shall collect opinions of the Ministry of Planning and Investment, the Ministry of Finance and related line ministries;
c/ Within 35 (thirty five) days after receiving a complete and valid dossier, the State Bank shall summarize opinions of the agencies mentioned at Point b of this Clause and submit them to the Prime Minister for consideration and decision;
d/ Within 5 (five) working days after receiving the Prime Minister’s direction, the State Bank shall issue a written notice to the investor for the latter to conduct offshore indirect investment activities.
3. Offshore transfer of capital and remittance of capital and lawful earnings to Vietnam by an investor in other cases of investment permitted by the Prime Minister shall be conducted via 1 (one) foreign-currency payment account opened by the investor at one licensed credit institution under the Prime Minister-approved offshore indirect investment plan.
Chapter II
PROGRAMS ON BONUS PROVISION OF OVERSEAS ISSUED STOCKS
Article 7. Subjects making offshore indirect investment in the form of participating in programs on bonus provision of overseas issued stocks
Employees who have the Vietnamese citizenship and work for Vietnam-based foreign institutions may make offshore indirect investment in the form of participating in a program on bonus provision of overseas issued stocks.
Article 8. Principles of implementing programs on bonus provision of overseas issued stocks
The implementation of programs on bonus provision of overseas issued stocks must adhere to the following principles:
1. Programs on bonus provision of overseas issued stocks with participants being employees who have the Vietnamese citizenship may only be carried out by institutions implementing programs on bonus provision of stocks and after their registrations are certified by the State Bank.
2. Foreign-currency proceeds from the sale of overseas issued stocks and stock warrants of employees who have the Vietnamese citizenship, dividends and other lawful earnings shall be transferred to such employees via the program implementation account prescribed in Article 12 of this Circular.
3. The regulations on foreign exchange management, income tax payment obligation and other relevant regulations must be complied with.
Article 9. Forms of bonus
1. Direct provision of bonus stocks.
2. Bonus provision of stock warrants with preferential treatment.
Article 10. Rights of employees having the Vietnamese citizenship
1. To receive and own bonus stocks; sell bonus stocks overseas; receive dividends and other lawful earnings through institutions implementing programs on bonus provision of stocks.
2. To receive bonus stock warrants; exercise the right to purchase overseas bonus stocks and own bonus stocks, receive dividends and other lawful earnings, sell bonus stock warrants overseas via institutions implementing programs on bonus provision of stocks.
3. To use the core foreign-currency balance of the account; deduct salary and bonus or use other lawful earnings to purchase foreign-currency amounts for payment for bonus stocks purchased from licensed credit institutions via institutions implementing programs on bonus provision of stocks.
4. To receive foreign-currency proceeds from the sale of bonus stocks and bonus stock warrants overseas via institutions implementing programs on bonus provision of stocks.
Article 11. Order and procedures for registration of implementation of programs on bonus provision of overseas issued stocks
1. An institution implementing a program on bonus provision of stocks shall send directly or by post 1 (one) set of dossier for registration of implementation of programs on bonus provision of overseas issued stocks in Vietnamese to the State Bank. Such dossier must comprise:
a/ A written registration for implementation of a program on bonus provision of overseas issued stocks (made according to the form provided in Appendix 2 to this Circular);
b/ Document evidencing the legal entity status of the foreign institution;
c/ A copy of the investment registration certificate or certificate of registration for operation of the executive office or certificate of registration for establishment of the Vietnam-based branch/representative office of the foreign institution or other papers of equivalent legal validity;
d/ The document on detailed contents of the program on bonus provision of overseas issued stocks;
dd/ A list of employees who have the Vietnamese citizenship eligible for participating in the program on bonus provision of overseas issued stocks.
2. In case a dossier is incomplete and invalid, within 5 (five) working days after receiving the dossier, the State Bank shall issue a written request for revision or supplementation of the dossier.
3. Within 15 (fifteen) working days after receiving a complete and valid dossier, the State Bank shall certify the registration of implementation of the program on bonus provision of overseas issued stocks with participants being employees who have the Vietnamese citizenship.
4. In case an institution implementing a program on bonus provision of stocks terminates its operation in Vietnam, before the operation termination, such institution shall sell bonus stocks and bonus stock warrants and transfer the proceeds to employees who have the Vietnamese citizenship participating in such programs.
Article 12. Opening and use of program implementation accounts
1. After the State Bank certifies the registration of implementation of a program on bonus provision of overseas issued stocks, the institution implementing the program shall open a program implementation account in order to conduct collection and payment transactions under Clauses 2 and 3 of this Article.
2. Collection transactions:
a/ Foreign-currency collection from the sale of stocks overseas;
b/ Foreign-currency collection from the sale of stock warrants overseas;
c/ Collection of dividends and other lawful earnings related to the program on bonus provision of overseas collected stocks;
d/ Collection from the foreign-currency accounts of employees who have the Vietnamese citizenship participating in the program on bonus provision of overseas issued stocks;
dd/ Collection of foreign-currency amounts purchased from licensed credit institutions where employees having the Vietnamese citizenship participate in the program on bonus provision of overseas issued stocks.
3. Payment transactions:
a/ Payment for overseas purchase of stocks;
b/ Payment for sale of foreign-currency amounts to licensed credit institutions for transfer into Vietnam-dong payment accounts of employees who have the Vietnamese citizenship participating in the program on bonus provision of overseas collected stocks;
c/ Payment for transfer into foreign-currency accounts of employees who have the Vietnamese citizenship participating in the program on bonus provision of overseas issued stocks;
d/ Other payments such as charge and fee payment (if any).
Chapter III
DOSSIERS, ORDER AND PROCEDURES FOR GRANT AND REVOCATION OF OFFSHORE INDIRECT INVESTMENT REGISTRATION CERTIFICATES TO/OF COMMERCIAL BANKS, GENERAL FINANCIAL COMPANIES, OFFSHORE INDIRECT INVESTMENT ENTRUSTMENT UNDERTAKING REGISTRATION CERTIFICATES TO/OF COMMERCIAL BANKS
Article 13. Dossier, order and procedures for grant of offshore indirect investment registration certificates
1. A dossier of application for an offshore indirect investment registration certificate must be made in Vietnamese. Such a dossier must comprise:
a/ An application for an offshore indirect investment registration certificate (made according to the form provided in Appendix 3 to this Circular);
b/ A copy of financial statements that have been audited for 5 (five) consecutive years preceding the year of dossier submission;
c/ A copy of the tax finalization document or a written certification by the tax agency proving the fulfillment of the financial obligations toward the Vietnamese State and owing of no tax debts to the state budget;
d/ A report on the compliance with regulations on limits and prudential ratios in banking operations of the year prior to the year of dossier submission;
dd/ Internal regulations on management of offshore indirect investment dealing activities, including those on internal control and audit mechanisms, and a mechanism for identification and management of risks related to such activities;
e/ A written explanation on physical and technical foundation and personnel for offshore indirect investment dealing activities;
g/ A report on the compliance with the regulations on management and use of state capital (for commercial banks and general financial companies owning state capital) in the year prior to the year of dossier submission.
2. Order and procedures for grant of an offshore indirect investment registration certificate:
a/ A commercial bank or general financial company that wishes to conduct offshore indirect investment dealing activities shall send 5 (five) sets of dossier as prescribed in Clause 1 of this Article directly or by post to the State Bank. In case the dossier is incomplete and invalid, within 5 (five) working days after receiving a dossier, the State Bank shall issue a written request for revision or supplementation of the dossier to the commercial bank or general financial company;
b/ Within 35 (thirty five) days after receiving a complete and valid dossier as prescribed in this Circular, the State Bank shall grant or refuse to grant an offshore indirect investment registration certificate to the commercial bank or general financial company. In case of refusal, the State Bank shall reply in writing, clearly stating the reason.
Article 14. Dossier, order and procedures for revocation of offshore indirect investment registration certificates
1. In case of voluntarily requesting for revocation of an offshore indirect investment registration certificate:
a/ A commercial bank or general financial company shall send one set of dossier of request for revocation of its offshore indirect investment registration certificate in Vietnamese directly or by post to the State Bank. Such a dossier must comprise:
i/A written request for revocation of the offshore indirect investment registration certificate (made according to the form provided in Appendix 4 to this Circular);
ii/ A written permission of the competent authority to terminate offshore indirect investment activities according to the charter of the commercial bank or general financial company enclosed with a report on results of settlement of offshore indirect investment amounts being carried out;
b/ In case the dossier is incomplete and invalid, within 5 (five) working days after receiving the dossier, the State Bank shall issue a written request for revision or supplementation of the dossier to the commercial bank or general financial company;
c/ Within 7 (seven) working days after receiving the complete and valid dossier as prescribed at Point a of this Clause, the State Bank shall issue a decision to revoke the offshore indirect investment registration certificate of the commercial bank or general financial company.
2. In case of forcible revocation of an offshore indirect investment registration certificate:
a/ A commercial bank or general financial company shall be forced to have its offshore indirect investment registration certificate revoked in case of fraud or forgery of information related to the dossier of application for the offshore indirect investment registration certificate;
b/ After receiving written opinions of the competent agency on fraud or forgery of information related to the dossier of application for the offshore indirect investment registration certificate committed by the commercial bank or general financial company, the State Bank shall issue a decision to revoke such certificate.
3. After receiving a decision to revoke its offshore indirect investment registration certificate, a commercial bank or general financial company shall:
a/ Within 5 (five) working days, return the original offshore indirect investment registration certificate to the State Bank;
b/ Within 24 (twenty four) hours, make public the decision to revoke the offshore indirect investment registration certificate on its e-portal;
c/ Terminate the transfer of money overseas under the registered limit certified by the State Bank; cease making offshore indirect investments; refrain from extend the duration of investments already made;
d/ Settle offshore indirect investments under the competent body-approved plan and report on settlement results to the State Bank within 60 (sixty) days from the effective date of the State Bank’s decision to revoke the offshore indirect investment registration certificate (except the case of voluntary request for revocation).
Article 15. Dossier, order and procedures for grant of offshore indirect investment entrustment undertaking registration certificates
1. A dossier of application for an offshore indirect investment entrustment undertaking registration certificate must be made in Vietnamese. Such a dossier must comprise:
a/ An application for an offshore indirect investment entrustment undertaking registration certificate (made according to the form provided in Appendix 5 to this Circular);
b/ Copies of financial statements that have been audited for 5 (five) consecutive years preceding the year of dossier submission;
c/ A copy of the tax finalization document or a written certification by the tax agency proving the fulfillment of the financial obligation toward the Vietnamese state and owing of no tax debts to the state budget;
d/ Internal regulations on management of offshore indirect investment entrustment undertaking activities, including those on identification and management of risks related to such activities;
dd/ A report on the compliance with regulations on limits and prudential ratios in entrustment undertaking activities of the commercial bank in the year prior to the year of dossier submission;
e/ A written explanation of physical and technical foundation and personnel for offshore indirect investment entrustment undertaking activities.
2. Order and procedures for grant of an offshore indirect investment entrustment undertaking registration certificate:
a/ A commercial bank that wishes to conduct offshore indirect investment entrustment undertaking activities shall send directly or by post 5 (five) sets of dossier as prescribed in Clause 1 of this Article to the State Bank. In case the dossier is incomplete and invalid, within 5 (five) working days after receiving the dossier, the State Bank shall issue a written request for revision or supplementation of the dossier to the commercial bank;
b/ Within 35 (thirty five) days after receiving a complete and valid dossier, the State Bank shall grant or refuse to grant an offshore indirect investment entrustment undertaking registration certificate to the commercial bank. In case of refusal, the State Bank shall reply in writing, clearly stating the reason.
Article 16. Dossier, order and procedures for revocation of offshore indirect investment entrustment undertaking registration certificates
1. In case of voluntarily requesting revocation of an offshore indirect investment entrustment undertaking registration certificate:
a/ A commercial bank shall send one set of dossier of request for revocation of its offshore indirect investment entrustment undertaking registration certificate in Vietnamese directly or by post to the State Bank. Such a dossier must comprise:
i/ A written request for revocation of an offshore indirect investment entrustment undertaking registration certificate (made according to the form provided in Appendix 6 to this Circular);
ii/ A written permission of a competent authority for termination of offshore indirect investment entrustment undertaking activities according to the charter of the commercial bank enclosed with a report on results of settling offshore indirect investments that are being carried out;
b/ In case the dossier is incomplete and invalid, within 5 (five) working days after receiving the dossier, the State Bank shall issue a written request for revision or supplementation of the dossier to the commercial bank;
c/ Within 7 (seven) working days after receiving a complete and valid dossier as prescribed at Point a of this Clause, the State Bank shall issue a decision to revoke the offshore indirect investment entrustment undertaking registration certificate of the commercial bank.
2. In case of forcible revocation of an offshore indirect investment entrustment undertaking registration certificate:
a/ A commercial bank shall be forced to have its offshore indirect investment entrustment undertaking registration certificate revoked in case of fraud or forgery of information related to the dossier of application for such certificate;
b/ After receiving written opinions of the competent agency on fraud or forgery of information related to a dossier of application for an offshore indirect investment entrustment undertaking registration certificate committed by a commercial bank, the State Bank shall issue a decision to revoke the offshore indirect investment entrustment undertaking registration certificate.
3. After receiving a decision to revoke its offshore indirect investment entrustment undertaking registration certificate, a commercial bank shall:
a/ Within 5 (five) working days, return the original offshore indirect investment entrustment undertaking registration certificate to the State Bank;
b/ Within 24 (twenty four) hours, make public the decision to revoke the offshore indirect investment entrustment undertaking registration certificate on its e-portal;
c/ Refrain from entering into or extending offshore indirect investment entrustment contracts;
d/ Terminate the remittance overseas under the registered entrustment undertaking limit certified by the State Bank; refrain from continuing to implement offshore indirect investments or extending implemented investments;
dd/ Liquidate its investment entrustment contract, close its entrustment undertaking account, transfer the whole balance and investment instruments to the entrusting party under his/her/its instruction;
e/ Report on results of settlement of assets invested in by the entrusting party overseas within 60 (sixty) days from the State Bank’s issuance of the decision to revoke the offshore indirect investment entrustment undertaking registration certificate (except the case of voluntary request for revocation).
Chapter IV
OPENING AND USE OF DEALING AND ENTRUSTMENT UNDERTAKING ACCOUNTS
Article 17. Opening of dealing accounts
1. After being granted an offshore indirect investment registration certificate, an institutional dealer shall open a dealing account to carry out collection and payment transactions under Article 18 of this Circular.
2. In case an institutional dealer being a securities investment fund or securities investment company makes offshore indirect investment via a fund management company, the fund management company shall open 1 (one) dealing account to carry out collection and payment transactions related to offshore indirect investment dealing activities of the securities investment fund or securities investment company. In case the fund management company manages many securities investment funds or securities investment companies, the fund management company shall open one dealing account for each securities investment fund or securities investment company.
3. In case an institutional dealer is a commercial bank, it may open one dealing account at its own bank or another licensed credit institution to conduct collection and payment transactions under Article 18 of this Circular.
4. In case of change of the credit institution licensed to open dealing accounts, an institutional dealer may open 1 (one) dealing account at another licensed credit institution, transfer the whole balance on such account to a new account and close the old account. The procedures for opening and closing dealing accounts comply with the State Bank’s regulations on opening and use of payment accounts at licensed credit institutions. Institutional dealers may only conduct collection and payment transactions on newly opened accounts under Article 18 of this Circular only after closing previously opened dealing accounts.
Article 18. Use of dealing accounts
An institutional dealer may use its dealing account to conduct collection and payment transactions, including:
1. Collection transactions:
a/ Foreign-currency collection from institutional dealers’ foreign-currency payment accounts;
b/ Collection of foreign-currency purchase from licensed credit institutions to conduct offshore indirect investment dealing;
c/ Collection of foreign currencies from the overseas sale of investment instruments for remittance home;
d/ Collection of dividends and other lawful earnings related to offshore indirect investment dealing activities.
2. Payment transactions:
a/ Transfer of foreign currencies abroad to purchase investment instruments licensed for offshore indirect investment;
b/ Payment of expenses incurred overseas related to offshore indirect investment dealing activities;
c/ Sale of foreign currencies to licensed credit institutions;
d/ Transfer of money into foreign-currency payment account of the institutional dealer;
dd/ Other lawful payments related to offshore indirect investment dealing activities.
Article 19. Opening of entrustment undertaking accounts
1. After being granted an offshore indirect investment entrustment undertaking registration certificate, an entrustment-undertaking institution shall open an entrustment undertaking account to conduct collection and payment transactions under Article 20 of this Circular.
2. In case an entrustment-undertaking institution is a commercial bank, it may open an entrustment undertaking account at its own bank or at another licensed credit institution to conduct collection and payment transactions under Article 20 of this Circular.
3. In case of change of the credit institution licensed to open entrustment undertaking accounts, an entrustment-undertaking institution may open an entrustment undertaking account at another licensed credit institution, transfer the whole balance of such account to a new account and close the previously opened account. The procedures for opening and closing entrustment undertaking accounts comply with the State Bank’s regulations on opening and use of payment accounts at licensed credit institutions. Entrustment-undertaking institutions may conduct collection and payment transactions on newly opened accounts under Article 20 of this Circular only after closing previously opened ones.
4. When undertaking offshore indirect investment entrustment, a commercial bank may enter into contracts with foreign depository organizations to deposit the list of assets of entrusting customers overseas.
Article 20. Use of entrustment undertaking accounts
An entrustment-undertaking institution may use its entrustment undertaking account to conduct collection and payment transactions, including:
1. Collection transactions:
a/ Foreign-currency collection from the foreign-currency payment account of the entrustment undertaking institutions;
b/ Collection of foreign currencies from the overseas sale of investment instruments for remittance home;
c/ Collection of dividends and other lawful earnings related to offshore indirect investment entrustment activities of the entrustment undertaking institutions.
2. Payment transactions:
a/ Transfer abroad to purchase investment instruments licensed for offshore indirect investment;
b/ Payment of expenses incurred overseas related to offshore indirect investment entrustment undertaking activities of entrustment undertaking institutions;
c/ Sale of foreign currencies to licensed credit institutions;
d/ Transfer of money into foreign-currency payment accounts of entrustment undertaking institutions;
dd/ Other lawful payments related to offshore indirect investment entrustment undertaking activities of entrustment undertaking institutions.
Chapter V
DETERMINATION OF OFFSHORE INDIRECT INVESTMENT DEALING LIMITS AND ENTRUSTMENT UNDERTAKING LIMITS; DOSSIERS, ORDER AND PROCEDURES FOR REGISTRATION AND CERTIFICATION OF REGISTRATION OF OFFSHORE INDIRECT INVESTMENT DEALING LIMITS, TEMPORARY DEALING LIMITS, ENTRUSTMENT UNDERTAKING LIMITS AND TEMPORARY ENTRUSTMENT UNDERTAKING LIMITS
Article 21. Determination of offshore indirect investment dealing limits and entrustment undertaking limits
1. Annual total offshore indirect investment limits include total dealing limit, total entrustment undertaking limit and annual total offshore indirect investment limit for other cases of investment permitted by the Prime Minister as prescribed in Article 9 of Decree No. 135/2015/ND-CP.
2. Based on annual total dealing limit and grounds for certification of dealing limit registration of institutional dealers prescribed in Clause 1, Article 27 of Decree No. 135/2015/ND-CP, the State Bank shall certify dealing limit registration for each institutional dealer.
3. Based on annual total entrustment undertaking limit and grounds for certification of entrustment undertaking limit registration of entrustment-undertaking institutions prescribed in Clause 1, Article 28 of Decree No. 135/2015/ND-CP, the State Bank shall certify entrustment undertaking limit registration for each entrustment-undertaking institution.
4. Capital amounts and assets for determination of dealing limits:
a/ For an institutional dealer being a commercial bank or general financial company, the capital amount for determination of a dealing limit shall be own capital of the institutional dealer;
b/ For an institutional dealer being a securities company or fund management company, the capital amount for determination of a dealing limit shall be equity capital of such dealer;
c/ For an institutional dealer being a securities investment fund or securities investment company, the determination of a dealing limit shall be based on assets (net asset value) of such fund or company;
d/ For an institutional dealer being an insurance business, the capital amount for determination of a dealing limit shall be the permitted offshore indirect investment capital in accordance with the law on insurance business;
dd/ For the State Capital Investment Corporation, the capital amount for determination of a dealing limit shall be the permitted offshore indirect investment capital approved by the competent authority in accordance with law.
5. Capital amounts and assets for determination of entrustment undertaking limits:
a/ For an entrustment-undertaking institution being a commercial bank, the capital amount for determination of an entrustment-undertaking limit shall be capital of such trustee;
b/ For an entrustment-undertaking institution being a fund management company, entrusted assets for determination of an entrustment undertaking limit shall be the listed assets including money, securities and other assets entrusted by customers to the fund management company in accordance with the law on securities and other relevant laws.
6. The annual maximum foreign-currency amount which an institutional dealer or entrustment-undertaking institution may use for offshore indirect investment or may receive as offshore indirect investment entrustment shall be the net foreign-currency amount transferred abroad (the amount transferred abroad minus the amount remitted home) but not exceed the registered dealing limit or entrustment undertaking limit certified by the State Bank.
7. While the Prime Minister has not approved the total offshore indirect investment limit of the year, an institutional dealer or entrustment-undertaking institution that wishes to make offshore indirect investment may have its temporary dealing limit or temporary entrustment undertaking limit registration considered and certified by the State Bank according to the dossier, order and procedures prescribed in Articles 23 and 25 of this Circular.
Article 22. Dossier, order and procedures for registration and certification of dealing limit registration
1. A dossier for dealing limit registration must be made in Vietnamese. Such a dossier must comprise:
a/ An application for dealing limit registration (made according to the form provided in Appendix 7 to this Circular);
b/ A financial statement that has been independently audited of the year preceding the year of dealing limit registration;
c/ The competent authority’s written approval of the offshore indirect investment dealing plan of the year of dealing limit registration according to the charter of the institutional dealer;
d/ A report on collections and payments on the dealing account certified by the licensed credit institution where the institutional dealer opens its dealing account; the implementation of the investment dealing limit in the preceding year and temporary dealing limit of the year of implementation (this provision is not applicable to institutional dealers’ initial dealing limit registration).
2. Order and procedures for certification of dealing limit registration:
a/ By April 15 every year at the latest, an institutional dealer shall send one set of dossier for dealing limit registration by post or directly to the State Bank;
b/ The State Bank shall certify in writing or refuse to certify the dealing limit registration by May 15 every year at the latest. In case of refusal to certify the dealing limit registration, the State Bank shall reply in writing, clearly stating the reason.
Article 23. Dossier and order for registration and certification of temporary dealing limit registration
1. While the Prime Minister has not approved the total offshore indirect investment limit of the year, before March 31 every year, an institutional dealer that wishes to continue to carry out offshore indirect investment shall send an application for registration of a temporary dealing limit (made according to the form provided in Appendix 8 to this Circular) by post or directly to the State Bank for registration of such limit.
2. Within 5 (five) working days after receiving an application for registration of a temporary dealing limit, based on the practical offshore indirect investment in the preceding year and the safe investment ratio of the institutional dealer, the State Bank shall issue a written certification or refuse to certify the dealing limit registration for such dealer. In case of refusal to certify the registration, the State Bank shall reply in writing, clearly stating the reason.
Article 24. Dossier, order and procedures for registration and certification of entrustment undertaking limit registration
1. A dossier for entrustment undertaking limit registration must be made in Vietnamese. Such a dossier must comprise:
a/ An application for registration of an entrustment undertaking limit (made according to the form provided in Appendix 9 to this Circular);
b/ A financial statement that has been independently audited of the year preceding the year of entrustment undertaking limit registration;
c/ A report on collections and payments on the entrustment undertaking account certified by the licensed credit institution where the account is opened; the implementation of the entrustment undertaking limit of the preceding year and temporary entrustment undertaking limit of the year of implementation (this provision is not applicable to entrustment-undertaking institutions’ initial entrustment undertaking limit registration).
2. Order and procedures for offshore investment entrustment undertaking limit registration:
a/ An entrustment undertaking institution shall send 1 (one) set of dossier for investment entrustment undertaking limit registration by post or directly to the State Bank by April 15 every year;
b/ By May 15 every year at the latest, the State Bank shall certify in writing or refuse to certify registration. In case of refusal to certify the entrustment undertaking limit registration, the State Bank shall reply in writing, clearly stating the reason.
Article 25. Dossier and order for registration and certification of temporary entrustment undertaking limit registration
1. While the Prime Minister has not approved the total offshore indirect investment limit of the year, before March 31 every year, an entrustment undertaking institution that wishes to undertake offshore indirect investment entrustment shall send an application for registration of a temporary entrustment undertaking limit (made according to the form provided in Appendix 10 to this Circular) by post or directly to the State Bank to register such limit.
2. Within 5 (five) working days after receiving an application for registration of a temporary investment entrustment undertaking limit, based on practical undertaking of offshore indirect investment entrustment of the preceding year of the entrustment undertaking institution, the State Bank shall certify in writing or refuse to certify the temporary entrustment undertaking limit registration. In case of refusal, the State Bank shall reply in writing, clearly stating the reason.
Chapter VI
RESPONSIBILITIES OF LICENSED CREDIT INSTITUTIONS, INVESTORS
Article 26. Responsibilities of licensed credit institutions
1. To request their customers to supply relevant documents when opening and using dealing accounts, entrustment undertaking accounts, accounts for program implementation.
2. To examine and preserve documents related to collection and payment transactions conducted on dealing accounts, entrustment undertaking accounts, accounts for program implementation produced by customers in order to ensure that foreign exchange services are provided for proper purposes and in accordance with law.
3. To comply with the provisions on reporting regime in Article 36 of this Circular.
Article 27. Responsibilities of investors
1. To comply with this Circular and other relevant Vietnamese regulations when carrying out offshore indirect investment.
2. When conducting collection and payment transactions on dealing accounts or entrustment undertaking accounts, an institutional dealer or entrustment undertaking institution shall:
a/ Declare contents of collection and payment transactions related to offshore indirect investment dealing or offshore indirect investment entrustment undertaking activities as requested and guided by licensed credit institutions;
b/ Produce and add dossiers and documents as requested by licensed credit institutions.
3. To comply with the provisions on the reporting regime in Articles 32, 33 and 34 of this Circular.
Article 28. Responsibilities of institutions implementing programs on bonus provision of stocks
1. Institutions implementing programs on bonus provision of stocks, employees who have the Vietnamese citizenship participating in programs on bonus provision of overseas issued stocks shall comply with this Circular and other relevant Vietnamese regulations.
2. When conducting collection and payment transactions on the program implementation accounts, an institution implementing a program on bonus provision of stocks shall:
a/ Declare contents of collection and payment transactions related to the implementation of the program on bonus provision of overseas issued stocks as requested and guided by the licensed credit institution;
b/ Produce and add dossiers and documents as requested by the licensed credit institution.
3. To comply with the provisions on reporting regime in Article 35 of this Circular.
Chapter VII
RESPONSIBILITIES OF RELATED UNITS OF THE STATE BANK
Article 29. Responsibilities of the Foreign Exchange Management Department
1. To assume the prime responsibility for, and coordinate with the Banking Inspection and Supervision Agency and Monetary Policy Department, and related units of the State Bank in:
a/ Studying and reporting to the Governor of the State Bank on submitting to the Prime Minister for consideration and decision cases of offshore indirect investment specified in Article 9 of Decree No. 135/2015/ND-CP and in this Circular;
b/ Formulating annual total offshore indirect investment limits and reporting them to the Governor of the State Bank for submission to the Prime Minister for approval under Article 26 of Decree No. 135/2015/ND-CP.
2. To process dossiers for registration of temporary dealing limits and dealing limits of institutional dealers; and of temporary trust undertaking limits and trust undertaking limits of entrustment-undertaking institutions.
3. To summarize reports of units under this Circular, submit them to the Governor for coordination with the Finance Ministry in summarizing offshore indirect investment figures and evaluating offshore indirect investment activities of investors, then annually report to the Prime Minister under Decree No. 135/2015/ND-CP.
4. To coordinate and exchange opinions to the Banking Inspection and Supervision Agency on grant and revocation of offshore indirect investment registration certificates to/of institutional dealers being commercial banks or general financial companies; grant and revocation of offshore indirect investment entrustment undertaking registration certificates to/of entrustment-undertaking institutions being commercial banks.
Article 30. Responsibilities of the Banking Inspection and Supervision Agency
1. To assume the prime responsibility for, and coordinate with the Foreign Exchange Management Department and related units of the State Bank in, submitting to the Governor for consideration:
a/ Grant and revocation of offshore indirect investment registration certificates to/of institutional dealers being commercial banks or general financial companies;
b/ Grant and revocation of offshore indirect investment entrustment undertaking registration certificates to/of entrustment-undertaking institutions being commercial banks.
2. To inspect and supervise offshore indirect investment activities in accordance with law and inspect the implementation of this Circular according to its competence.
3. To handle and propose the handling of violations in accordance with law.
4. To coordinate with the Foreign Exchange Management Department in:
a/ Studying and reporting to the Governor of the State Bank for subsequent submission to the Prime Minister for consideration and decision cases of offshore indirect investment specified in Article 9 of Decree No. 135/2015/ND-CP;
b/ Formulating annual total offshore indirect investment limits.
Article 31. Responsibilities of the units of the State Bank
The units of the State Bank shall, within the ambit of their functions and assigned tasks, coordinate with the Foreign Exchange Management Department and the Banking Inspection and Supervision Agency in implementing the provisions in Articles 29 and 30 of this Circular.
Chapter VIII
REPORTING REGIME
Article 32. Reporting by institutional dealers
1. By the 20th day of the first month of the quarter following every reporting quarter at the latest, institutional dealers shall send to the State Bank their reports on offshore indirect investment dealing made according to the form provided in Appendix 11 to this Circular.
2. By January 30 of the year following every reporting year at the latest, institutional dealers shall send to the State Bank their reports on offshore indirect investment dealing in the reporting year and estimated investment demand made according to the form provided in Appendix 12 to this Circular.
Article 33. Reporting by entrustment undertaking institutions
1. By the 20th day of the first month of the quarter following every reporting quarter at the latest, entrustment undertaking institutions shall send to the State Bank their reports on offshore indirect investment trust undertaking made according to the form provided in Appendix 13 to this Circular.
2. By January 30 of the year following every reporting year at the latest, entrustment undertaking institutions shall send to the State Bank their reports on offshore indirect investment entrustment undertaking in the reporting year and estimated investment entrustment undertaking demand made according to the form provided in Appendix 14 to this Circular.
Article 34. Reporting on offshore indirect investment cases prescribed in Article 9 of Decree No. 135/2015/ND-CP
1. By the 20th day of the first month of the quarter following every reporting quarter at the latest, investors shall send to the State Bank their reports on offshore indirect investment made according to the form provided in Appendix 15 to this Circular.
2. By January 30 of the year following every reporting year at the latest, investors shall send to the State Bank their reports on offshore indirect investment in the reporting year made according to the form provided in Appendix 15 to this Circular.
Article 35. Reporting by institutions implementing programs on bonus provision of stocks
By the 20th day of the first month of the quarter following every reporting quarter at the latest, institutions implementing programs on bonus provision of overseas issued stocks shall send to the State Bank their reports on the implementation of such programs for employees who have the Vietnamese citizenship made according to the form provided in Appendix 16 to this Circular.
Article 36. Reporting by credit institutions
Licensed credit institutions where institutional dealers open dealing accounts or entrustment undertaking institutions open entrustment undertaking accounts and institutions implementing programs on bonus provision of stocks open program implementation accounts shall send reports on collections and payment transactions on their dealing accounts, entrustment undertaking accounts and program implementation accounts under the State Bank’s current regulations on reporting and statistics applicable to credit institutions and foreign bank branches.
Chapter IX
IMPLEMENTATION PROVISIONS
Article 37. Effect
1. This Circular takes effect on August 13, 2016.
2. Credit institutions licensed by the State Bank to conduct investment in overseas investment instruments before the effective date of this Circular may continue to implement their State Bank-approved investment plans.
Article 38. Organization of implementation
The Director of the Office, the Director of the Foreign Exchange Management Department and heads of related units of the State Bank, directors of the State Bank’s provincial-level branches, chairpersons of Boards of Directors and Members’ Councils and directors general (directors) of credit institutions and foreign bank branches shall implement this Circular.-
For the Governor of the State Bank
Deputy Governor
NGUYEN THI HONG
Vietnamese
Circular 10/2016/TT-NHNN DOC (Word)
Circular 10/2016/TT-NHNN PDF (Original)
Circular 10/2016/TT-NHNN ZIP (Word)
