Circular No. 16/2016/TT-NHNN dated June 30, 2016 of the State Bank of Vietnam amending certain articles of the Circular No. 34/2013/TT-NHNN dated December 31, 2013 by the Governor of the State Bank on the issuance of promissory notes, bills, certificates of deposit, domestic bonds by credit institutions and foreign banks branches

THESTATE BANKOF VIETNAM

Circular No. 16/2016/TT-NHNN dated June 30, 2016 of the State Bank of Vietnam amending certain articles of the Circular No. 34/2013/TT-NHNN dated December 31, 2013 by the Governor of the State Bank on the issuance of promissory notes, bills, certificates of deposit, domestic bonds by credit institutions and foreign banks branches

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

Pursuant to the Law of Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Law of Securities No. 70/2006/QH11 dated June 29, 2006 and the Law No. 62/2010/QH12 dated November 24, 2010 on amendments to the Law of Securities (hereinafter referred to as the Law of Securities);

Pursuant to the Enterprises Law No. 68/2014/QH13 dated November 26, 2014;

Pursuant to the Government’s Decree No. 90/2011/ND-CP dated October 14, 2011 on the issuance of corporate bonds;

Pursuant to the Government’s Decree No. 58/2012/ND-CP dated July 20, 2012 on details and guidelines for the implementation of certain articles of the Law of Securities and the Law on amendments to the Law of Securities (as amended via the Government’s Decree No. 60/2015/ND-CP dated June 26, 2015) (hereinafter referred to as the Decree No. 58/2012/ND-CP);

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

At the requests of the Head of the Monetary Policy Bureau;

Governor of the State Bank promulgates the Circular amendingcertain articles of the Circular No. 34/2013/TT-NHNN dated December 31, 2013 by the Governor of the State Bank on the issuance of promissory notes, bills, certificates of deposit or domestic bonds by credit institutions and foreign banks’ branches (hereinafter referred to as the Circular No. 34/2013/TT-NHNN).

Article 1. The articles of the Circular No. 34/2013/TT-NHNN are amended as follows:

1.Section 5 of Article 16 is amended as follows:

“5. Credit institutions and foreign banks’ branches shall only buy back the bonds that they have issued upon competent authorities approval of their repurchase plans. For bonds offered publicly by credit institutions or foreign banks branches or placed privately by credit institutions in which governmental entities own more than 50% of the charter capital, the State Bank shall verify the repurchase plan in its written decision to approve the fiscal year’s bond issuance plan.”

2.Article 20 is amended as follows:

“Article 20. Principles of bond issuance

1.The issuance of bonds by credit institutions and foreign banks’ branches shall abide by this Circular and relevant documents.

2.The public offering of bonds by credit institutions and foreign banks branches shall conform to Section 2, Article 12 of the Law of Securities, Article 15, Article 16, Article 17 and Article 18 of the Decree No. 58/2012/ND-CP.

3.The private placement of bonds by credit institutions and foreign banks’ branches shall conform to Article 13 of the Government’s Decree No. 90/2011/ND-CP dated October 14, 2011 on the issuance of corporate bonds. Credit institutions and foreign banks’ branches shall comply with requirements of capital adequacy ratio and other operation safety limits as defined in Section 1, Article 130 of the Law of credit institutions and the State Bank’s guidelines.

4.Plans for private placement of bonds by credit institutions in which governmental entities own more than 50% of the charter capital and public offering of bonds by credit institutions and foreign banks’ branches shall be subjected to approval of the State Bank.

State Bank shall verify bond issuance plans as stated in this section once every fiscal year.”.

3.Section 2 of Article 21 is amended as follows:

“2. The authority to validate bond issuance plans of a credit institution or foreign bank’s branch:

a) General shareholders’ meeting or Board of Directors or Members’ Council of the credit institution shall validate its plan of bond issuance according to the organizational model of the credit institution as defined in its charter. General Director or Director shall validate the bond issuance plan of a foreign bank s branch;

b) The plan of a credit institution operating as a joint-stock company for its issuance of convertible bonds or warrant-linked bonds shall be subject to validation by its General shareholders’ meeting.”

4.Article 22 is amended as follows:

“Article 22. The application to State Bank for approval of the plan for private placement of bonds by credit institutions in which government entities own more than 50% of the charter capital or for public offering of bonds by credit institutions and foreign banks branches in a fiscal year

1.The written request bearing the signature of the legal representative of the credit institution or foreign bank s branch for the approval of the plan for issuance of bonds in the fiscal year.

2.The plan for issuance of bonds in the fiscal year, which has been validated by the competent authority according to Article 21 of this Circular.

3.The certified copies or the copies endorsed by the credit institution or foreign bank s branch of its audited financial statement of the year immediately preceding the year of issuance and of the financial report of the nearest quarter. The auditor’s opinions on the audited financial statement must be totally agreement. If bonds are issued before April 01 every year but the audited financial statement of the year preceding the year of issuance is not available, replacement documents shall include:

a) The audited financial statement of the profitable year that came before the year immediately preceding the year of issuance;

b) The audited financial report of the nearest profitable quarter (if available);

c) The financial statement of the profitable year immediately preceding the planned year of issuance, which has been endorsed by the Board of Director or Members’ Council of the credit institution, or by the General Director or Director of the foreign bank’s branch.

4.The plan of financing and use of finances in the fiscal year.

5.The report on losses accumulated until the year that issuance is registered and on accounts payable more than one year overdue (if any) if the credit institution or foreign bank’s branch offers bonds to the public.

6.The certified copy or the copy endorsed by the credit institution of its Charter and the copy of the license of the credit institution that carries out the initial offering of bonds; the copy of the license of establishment of the foreign bank’s branch that carries out the initial offering of bonds.

7.The plan for charter capital increase via the issuance of convertible bonds or warrant-linked bonds, which has been validated by the General shareholders meeting and whose content conforms to the State Bank s regulations on credit institutions changes in charter capital (applicable to issuers of convertible bonds or warrant-linked bonds).

8.Other documents related to the conditions of bond issuance (if available).”.

5.Article 23 is amended as follows:

“Article 23. Procedure for approval of the plan for issuance of bonds in a fiscal year

1.A credit institution in which government entities own more than 50% of the charter capital shall lodge 01 application by hand or by post to the State Bank for the latter’s approval of the former’s plan for issuance of bonds in a fiscal year as per Article 22 of this Circular. Likewise, a credit institution or foreign bank s branch offering bonds to the public shall submit 01 application to the State Bank.

2.In 30 working days upon receiving the complete valid application for approval of the bond issuance plan in the fiscal year (except convertible or warrant-linked bonds), the State Bank shall respond in writing with its approval or rejection of such plan of the credit institution or foreign bank s branch.

3.In 45 working days upon receiving the complete valid application for approval of the plan for issuance of convertible or warrant-linked bonds in the fiscal year, the State Bank shall respond in writing with its approval or rejection of such plan of the credit institution.”.

6.Article 24 is amended as follows:

“Article 24. Constraints on credit institutions offering convertible or warrant-linked bonds and buyers thereof

1.If a credit institution offering convertible bonds undertakes to the buyers the conversion of bonds into stocks at a certain time:

a) Buyers must conform to current laws on constraints of capital investment and share acquisition upon the offering;

b) The credit institution offering bonds to foreign investors must conform to current regulations on the sale of shares to foreign investors upon the offering.

2.Upon stock conversion or stock purchase, the buyers of convertible or warrant-linked bonds must maintain the ratio of their holdings according to the Law of Credit institutions and relevant legislative documents.".

7.Section 2 of Article 25 is amended as follows:

“2. Credit institutions and foreign banks’ branches shall organize the offering of bonds according to the bond issuance plan approved and abide by the Law of Securities, Decrees on issuance of corporate bonds and guiding documents of the Law of Securities.".

8.Section 3 of Article 26 is amended as follows:

“3. Be held responsible for the accuracy and integrity of documents and papers in the application to the State Bank for approval of the plan for issuance of bonds in the fiscal year.”.

9.Point a and c, Section 1 of Article 27 are amended as follows:

“ a) Lead and cooperate with relevant organizations to verify the application for approval of the private placement of bonds of credit institutions in which government entities own more than 50% of the charter capital or for approval of the public offering of bonds of credit institutions and foreign banks branches in the fiscal year before presenting such application to the Governor of the State Bank for final decision.”.

“c) Receive reports of credit institutions and foreign banks branches on their issuance of financial instruments.".

10.Point a and c, Section 2 of Article 27 are amended as follows:

“a) Provide the following information upon request by the Monetary Police Bureau:

-The income statement from the audited financial statement of the credit institution or financial bank’s branch of the year immediately preceding the year that bonds are issued, and the income statement thereof of the nearest quarter.

-The assessment of the compliance of the credit institution or foreign bank’s branch with safety ratios as defined in Section 1, Article 130 of the Law of Credit institutions and the State Bank’s guidelines.

-The conformity of the public offering of bonds of the credit institution or foreign bank’s branch to Point a and b, Section 2, Article 12 of the Law of Securities.

-The assessment of the activities of the credit institution or foreign bank’s branch through inspection and supervision.”.

“c) Cooperate with the Monetary Policy Bureau to view and remark the approval or rejection of the plan for private placement of bonds of credit institutions in which government entities own 50% of the charter capital or for public offering of bonds of credit institutions or foreign banks’ branches in the fiscal year.”.

11.Section 3 of Article 27 is amended as follows:

“3) Cooperate with the Monetary Policy Bureau to view and remark the approval or rejection of the plan for private placement of bonds of credit institutions in which government entities own 50% of the charter capital or for public offering of bonds of credit institutions or foreign banks’ branches in the fiscal year.”.

Article 2. Effect

1.This Circular takes effect on July 01, 2016.

2.Article 15 of the Circular No. 29/2015/TT-NHNN dated December 22, 2015 by the Governor of the State Bank amending certain legislative documents of the State Bank with regard to documents requiring certified copies is abrogated.

Article 3. Implementation provisions

Office Managers, Head of the Monetary Policy Bureau, Heads of units of the State Bank of Vietnam, Directors of the State Bank’s provincial branches, Chairpersons of Boards of Directors, Chairpersons of Member Councils, General Directors (Directors) of credit institutions and foreign banks’ branches shall be responsible for implementing this Circular./.

For the Governor

The Deputy Governor

Nguyen Thi Hong