Decision No. 787/2004/QD-NHNN dated June 24, 2004 of the State Bank of Vietnam promulgating the provisional regulation on the registration of listing and issuance of stocks to the public by joint-stock commercial banks

DECISION

PROMULGATING THE PROVISIONAL REGULATION ON THE REGISTRATION OF LISTING AND ISSUANCE OF STOCKS TO THE PUBLIC BY JOINT-STOCK COMMERCIAL BANKS

THE STATE BANK GOVERNOR

Pursuant to December 12, 1997 Law No. 01/1997/QH10 on Vietnam State Bank and Law No. 02/1997/QH10 on Credit Institutions; and June 17, 2003 Law No. 10/2003/QH11 Amending and Supplementing a Number of Articles of the Law on Vietnam State Bank;

Pursuant to the Government's Decree No. 86/2002/ND-CP of November 5, 2002 defining the functions, tasks, powers and organizational structures of the ministries and ministerial-level agencies;

Pursuant to the Government's Decree No. 144/2003/ND-CP of November 28, 2003 on securities and securities market;

Pursuant to the Government's Decree No. 49/2000/ND-CP of September 12, 2000 on the organization and operation of commercial banks;

Pursuant to the Prime Minister's Decision No. 172/1999/QD-TTg of August 19, 1999, permitting credit institutions to set up securities companies and participate in stock listing;

At the proposal of the Director of the Department for Banks and Non-Bank Credit Institutions,

DECIDES:

Article 1.- To promulgate together with this Decision the "Provisional Regulation on the registration of listing and issuance of stocks to the public by joint-stock commercial banks".

Article 2.- This Decision takes implemen-tation effect 15 days after its publication in the Official Gazette.

Article 3.- The director of the Office; the director of the Department for Banks and Non-Bank Credit Institutions; the heads of the concerned units of Vietnam State Bank; the directors of the State Bank's provincial/municipal branches and joint-stock commercial banks shall have to implement this Decision.

PROVISIONAL REGULATION

ON THE REGISTRATION OF LISTING AND ISSUANCE OF STOCKS TO THE PUBLIC BY JOINT-STOCK COMMERCIAL BANKS

(Promulgated together with the State Bank Governor's Decision No. 787/2004/QD-NHNN of June 24, 2004)

Chapter I

GENERAL PROVISIONS

Article 1.- This Regulation applies to joint-stock commercial banks which register the listing and issuance of stocks to the public at the Securities Trading Center or the Stock Exchange.

Article 2.- Joint-stock commercial banks must obtain the State Bank's written approval before submitting their dossiers of application to the State Securities Commission for listing and issuance of stocks to the public at the Securities Trading Center or the Stock Exchange. Joint-stock commercial banks may list and issue stocks to the public at the Securities Trading Center or the Stock Exchange only after they obtain the State Securities Commission's permission.

Chapter II

SPECIFIC PROVISIONS

Section 1. REGISTRATION OF STOCK LISTING

Article 3.- Conditions for a joint-stock commercial bank to register the listing of stocks:

1. The actual charter capital (including the actually contributed charter capital minus the accumulated amount and risks not yet covered by the risk reserve fund) must be at least equal to the prescribed legal capital in each period.

2. Having operated for at least 5 years and earning profits for 2 latest consecutive years, counting from the time of application for stock listing.

3. The percentage of bad debts (including overdue debts, pending-settlement debts, frozen loan debts which are reflected in monthly balance sheets, debts transferred to debt-managing and asset-exploiting companies for capital recovery for joint-stock credit institutions) on the total loan debt balance for 2 latest consecutive years is under 3 percent.

4. Not violating the regulations on safety in banking activities and other law provisions, not being sanctioned for administrative violations in the field of monetary and banking activities with a fine of over VND 1,000,000 (one million) for at least one year, counting up to the time of application for stock-listing registration.

5. Observing the stock-holding limit prescribed by the State Bank Governor.

6. Having been ranked grade A by the State Bank, according to the State Bank Governor's regulations on ranking of joint-stock commercial banks, for 2 latest consecutive years, counting from the time of application for stock listing registration.

7. Having full dossiers prescribed in Article 4 of this Regulation.

Article 4.- A joint-stock commercial bank's dossier of application for the State Bank's approval of stock listing registration comprises:

1. The Managing Board Chairman's application sent to the State Bank for stock listing registration, which explains and commits to meet all the conditions prescribed in Article 3 of this Regulation, enclosed with relevant proving documents.

2. The Shareholders General Assembly's resolution approving the contents in the Managing Board Chairman's application stated in Clause 1 of this Article.

3. The list of shareholders holding 5% or more of the bank's charter capital, the list of registered shareholders (including shareholders and number of shares and stocks of the subjects as prescribed in Article 6 of this Regulation), counting up to the time of application for stock listing registration.

4. Commitment to observe the current law provisions, made by the subjects stated in Article 6 of this Regulation.

5. A scheme on stock listing, identifying advantages and difficulties, especially the bank's handling and management solutions to prevent changes that can adversely affect banking activities; timely handling of banned acts prescribed from Articles 103 thru 108, Chapter XI of the Government's Decree No. 144/2003/ND-CP of November 28, 2003 on securities and securities market.

Article 5.-

1. Joint-stock commercial banks shall each send 2 sets of complete principal dossiers prescribed in Article 4 of this Regulation to the State Bank's provincial/municipal branches (in the localities where the joint-stock commercial banks are headquartered) for consideration and settlement.

2. Within 10 working days after receiving the complete dossiers as prescribed, the State Bank's provincial/municipal branches (in the localities where the joint-stock commercial banks are headquartered) shall have to evaluate the dossiers as well as financial situation and operation of the joint-stock commercial banks, and on that basis, to send reports (enclosed with 1 set of dossiers of the joint-stock commercial banks) to the State Bank Governor, requesting consi-deration and approval, or reply in writing and guide the joint-stock commercial banks to supplement their dossiers according to the current regulations.

3. Within 20 working days after receiving the reports from the State Banks' provincial/municipal branches, enclosed with full dossiers as prescribed, Vietnam State Bank shall consider and approve in writing, or request in writing the State Bank's provincial/municipal branches to direct the units to supplement and explain the dossiers strictly according to regulations.

Article 6.- The transfer of stocks by members of the Managing Board, members of the Control Board or the general director (during their tenures or during the time the material consequences are addressed under the Shareholders General Assembly's resolu-tion), stocks of foreign shareholders and share-holders holding more than 10% of the charter capital or holding more than 10% of the voting-right share capital, shall comply with Article 14 "Regulations on shareholders, shares, stocks and charter capital of the State-run and people's joint-stock commercial banks", promulgated together with the State Bank Governor's Decision No. 1122/2001/QD-NHNN of September 4, 2001.

Section 2. ISSUANCE OF STOCKS TO THE PUBLIC

Article 7.-

1. Joint-stock commercial banks which have already listed their stocks must obtain the State Bank's written approval of the increase of their charter capital by issuing stocks to the public before proposing the State Securities Commission to grant certificates of stock issuance registration.

2. A dossier of application for such approval comprises:

a/ The Managing Board Chairman's application (clearly stating the reasons and necessity);

b/ The Shareholders General Assembly's resolution on the increase of the charter capital;

c/ A scheme on issuance of stocks to the public, approved by the General Assembly of Shareholders. The scheme's contents must mention the number of issued stocks, estimated prices, time and schedule for each drive of issuance in the general issuance plan;

d/ Other relevant documents as prescribed by law.

Article 8.- Joint-stock commercial banks must make dossiers as prescribed in Clause 2 of Article 7 (2 principal sets) and send them to the State Bank's provincial/municipal branches of the localities where the banks are headquartered. Within 15 working days after receiving the complete dossiers, the State Bank's provincial/municipal branches shall examine them and approve in writing the units' increase of the charter capital. In cases where they deem that the dossiers fail to comply with the regulations or the change is unnecessary and incompliant with law provisions, the State Bank's provincial/municipal branches shall request in writing the supplements or clearly state the reasons for their disapproval and send them to the joint-stock commercial banks for implementation.

Section 3. INFORMATION AND REPORTING REGIME

Article 9.-

1. Within 10 working days after being licensed for stock listing by the State Securities Commission, the Managing Board of the joint-stock commercial bank must send the copies of such certificate to Vietnam State Bank (the Department for Banks and Non-Bank Credit Institutions) and its provincial/municipal branch in the locality where the bank is headquartered.

2. Within 15 working days after the end of the time limit for issuance of stocks to the public, the Managing Board of the joint-stock commercial bank must send a written report on implementation results, enclosed with the copy of the State Securities Commission's written certification of the number and the total value of the issued stocks, to Vietnam State Bank (the Department for Banks and Non-Bank Credit Institutions) and its provincial/municipal branch in the locality where the joint-stock commercial bank is headquartered.

Article 10.- By the 15^th day of the first month of each quarter at the latest, the joint-stock commercial banks must send reports on changes in the shareholders holding 5% or more of the charter capital (the list of shareholders, the value of shares purchased and sold by each shareholder and the percentage of shares they hold) in the previous quarter to Vietnam State Bank (the Department for Banks and Non-Bank Credit Institutions) and its provincial/municipal branches in the localities where the joint-stock commercial banks are headquartered.

Article 11.- In case of deeming that the trading of stocks by joint-stock commercial banks at the Securities Trading Center or the Stock Exchange leads to changes, which adversely affect the financial situation and threaten the banks' solvency, the joint-stock commercial banks must send written reports on their financial situation, the remedial measures already applied or to be applied to Vietnam State Bank and the State Securities Commission for consideration and settlement according to law provisions and their respective State management functions and tasks.

Section 4. RESPONSIBILITIES OF THE UNITS UNDER THE STATE BANK

Article 12.- The State Bank's provincial/municipal branches in the localities where joint-stock commercial banks are headquartered shall have to:

1. Receive and evaluate dossiers and submit them to the State Bank Governor so that he/she permits the joint-stock commercial banks which fully meet the conditions prescribed in this Regulation to register their stock listing at the State Securities Commission.

2. Receive and evaluate dossiers and approve or disapprove in writing the joint-stock commercial banks' charter capital increase by issuing stocks to the public.

Article 13.- The Department for Banks and Non-Bank Credit Institutions shall have to receive and evaluate dossiers and submit them to the State Bank Governor for approval or disapproval of joint-stock commercial banks' stock listing registration at the State Securities Commission.

Article 14.- The State Bank's Inspectorate shall have the responsibilities:

1. Within 5 working days after receiving the proposal of the Department for Banks and Non-Bank Credit Institutions, enclosed with relevant dossiers, the State Bank's Inspectorate shall have to evaluate them, give their written opinions on the satisfaction of the conditions prescribed in Clauses 1, 2, 3, 4, 5 and 6, Article 3 of this Regulation by the joint-stock commercial banks which apply for stock listing, and send them to the Department for Banks and Non-Bank Credit Institutions for synthesis and submission to the State Bank Governor for decision.

2. To base itself on the results of inspection and supervision of the joint-stock commercial banks' operation and observance of the State Bank's regulations to propose handling measures strictly according to law provisions.

Chapter III

IMPLEMENTATION PROVISIONS

Article 15.-

1. In the course of implementation, if meeting with any problems, the units should report them in writing to Vietnam State Bank (the Department for Banks and Non-Bank Credit Institutions) for synthesis and timely submission to the State Bank Governor for decision.

2. The amendment or supplementation of the provisions of this Regulation shall be decided by the State Bank Governor.