Decree No. 58/2012/ND-CP dated July 20, 2012 of the Government stipulating in detail and guiding the implementation of a number of articles of the securities Law and the law amending and supplementing a number of articles of securities Law

THE GOVERNMENT

Decree No. 58/2012/ND-CP of July 20, 2012, detailing and guiding the implementation of a number of articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 29, 2005 Law on Enterprises;

Pursuant to the June 29, 2006 Law on Securities; and the November 24, 2010 Law Amending and Supplementing a Number of Articles of the Law on Securities;

At the proposal of the Minister of Finance,

The Government issues this Decree to detail and guide the implementation of a number of articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree details a number of articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities regarding securities offering, listing, trading, business and investment, and securities and securities market services.

For enterprises engaged in conditional business lines or trades which are governed by specialized laws, those laws also apply. In case the provisions of this Decree are different from those of specialized laws, enterprises shall comply with those specialized laws.

Article 2. Interpretation of terms

In this Decree, the terms and phrases below are construed as follows:

1. Treasury stocks are stocks which have been issued by joint-stock companies and subsequently redeemed by those issuing companies.

2. Issuance of stocks for swap is an additional issuance of stocks for exchange for stocks of other joint-stock companies.

3. Investment management contract is a contract signed between a securities investment company or an institutional or individual investor and a fund management company to entrust the latter to manage and invest assets.

4. Depositary receipt is a security issued outside Vietnam in accordance with regulations of the host country on the basis of securities issued by an enterprise lawfully established and operating in Vietnam.

5. Issued share is a share which has been fully paid by an investor, with information on its holder accurately and fully recorded in the shareholder register.

6. Net asset value of a fund is the total value of assets of the fund minus the total value of liabilities of such fund.

7. Target company is a public company having stocks targeted by public bids.

8. Target investment fund is a securities investment fund having fund certificates targeted by public bids.

9. Issuance underwriting means that an issuance-underwriting institution makes a commitment with an issuing institution to carry out procedures before securities offering, or undertakes to purchase part or all of securities of the issuing institution for resale or to purchase its undistributed securities or to assist it in distributing its securities to the public. Issuance underwriting may be provided by the following modes:

- Firm commitment, which is a mode whereby the issuance-underwriting institution undertakes to purchase all securities of the issuing institution for resale or to purchase the latter’s undistributed securities;

- Best effort (underwriting), which is a mode whereby the issuance-underwriting institution assists the issuing institution in carrying out procedures before offering securities to the public and in distributing securities to the public.

- Other modes as contracted between the issuing institution and issuance-underwriting institution.

10. Bondholder representative is a member of the securities depository center that is designated by an issuing institution to represent interests of a bondholder.

11. Securities investment company is a securities investment fund which is organized as a joint-stock company. A securities investment company may take either of the following forms:

a/ Private securities investment company, which is a securities investment company having a maximum of 99 shareholders in which the value of investment capital contributions of institutional shareholders is at least VND 3 billion and that of individual shareholders is at least VND 1 billion;

b/ Public securities investment company, which is a securities investment company conducting the public offering of stocks.

12. Public bid means that an institution or individual publicly purchases part of or the whole amount of voting stocks of a public company or fund certificates of a closed fund in order to take over the control of such company or fund in accordance with law, in order to guarantee equity for shareholders of the target company.

13. Maximum foreign holding rate is the maximum percentage of securities foreign individuals and institutions may hold in an enterprise as prescribed by Vietnamese law.

14. Licensed credit institution is a credit institution licensed to make revenues and expenses in foreign currencies related to the issuance of securities in accordance with the law on foreign exchange management.

15. First date of offering:

a/ First date of public offering of securities is the date on which an issuing institution announces the offering and discloses its prospectus in the mass media.

b/ First date of private offering of securities is the date indicated by an issuing institution in its private offering dossier, which is approved by a competent agency.

16. Completion date of offering:

a/ Completion date of public offering is the date on which the collection of money for purchase of offered securities from investors is completed;

b/ Completion date of private offering is the date on which the collection of money for the purchase of offered securities from investors is completed, unless otherwise stipulated by the issuing institution.

17. Host country is a country or territory where a Vietnamese issuing institution registers to offer and list its securities.

18. Supervisory bank is a commercial bank which satisfies the conditions specified in Clause 1, Article 98 of the Law on Securities.

19. Public bidding agent is a securities company which is designated by an institution or individual that makes a public bid to act as its agent to carry out procedures for public bidding under a contract between the institution or individual making a public bid and the designated securities company.

Chapter II

OFFERING OF SECURITIES

Section 1

PRIVATE OFFERING OF STOCKS

Article 3. Subjects eligible for private offering of stocks

1. Joint-stock companies which are established and operate in accordance with the Law on Enterprises and relevant legal documents.

2. Limited liability companies which privately offer their stocks for transformation into joint-stock companies.

Article 4. Conditions on private offering of stocks

1. Conditions on private offering of stocks of a non-public joint-stock company:

a/ There is a decision of the Shareholders’ General Meeting adopting the  plan on private offering of stocks and a plan on use of proceeds from the offering;

b/ Satisfying other conditions specified by specialized laws in case the issuing institution is a business engaged in conditional business lines or trades.

2. Conditions on private offering of stocks for transformation of a limited liability company into a joint-stock company:

a/ There is a decision of the owner or the Members’ Council adopting the scheme on private offering of stocks for transformation;

b/ Satisfying other conditions specified by specialized laws in case the issuing institution is an enterprise engaged in conditional business lines or trades.

3. Conditions on private offering of stocks of a public company:

a/ There is a decision of the Shareholders’ General Meeting adopting the plan on offering of stocks and use of proceeds from the offering, clearly identifying investors and their number;

b/ Satisfying other conditions specified in Clause 6, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities;

c/ Satisfying other conditions specified by specialized laws in case the issuing institution is an enterprise engaged in conditional business lines or trades.

Article 5. Dossiers of private offering of stocks

1. A dossier of private offering of stocks of a non-public joint-stock company comprises:

a/ The written registration for private offering of stocks, made according to form No. 01 provided in the Appendix to this Decree;

b/ The decision of the Shareholders’ General Meeting adopting the plan on offering and the plan on use of proceeds from the offering;

c/ The decision of the Board of Directors approving criteria for selection and the list of selected subjects to be offered, in case the Board of Directors is authorized by the Shareholders’ General Meeting;

d/ Documents providing information on the offering to investors (if any);

e/ Documents evidencing the satisfaction of the condition on the holding rate of foreign investors and compliance with the regulation on investment form in case stocks are offered to foreign investors.

2. A dossier of private offering of stocks of a public company comprises:

a/ The documents specified in Clause 1 of this Article;

b/ A competent state agency’s written approval, for enterprises engaged in conditional business lines or trades (if any).

3. Dossiers and procedures for registration for private offering of stocks for transformation of limited liability companies into joint-stock companies comply with the law on transformation of enterprises.

Article 6. Procedures for registering private offering of stocks

1. The issuing institution shall file its dossier for registering private offering of stocks with a competent state agency defined in Article 8 of this Decree.

2. For an incomplete and invalid dossier for registering private offering of stocks, within 10 day after receiving it, a competent state agency shall notify in writing its opinions requiring the issuing institution to supplement and modify the dossier. The time limit after the receipt of a complete and valid dossier is counted from the time the issuing institution completes the supplementation and modification of its dossier.

3.  Within 15 days after receiving a complete and valid registration dossier, a competent state agency shall notify such to the registering institution and announce on its website the private offering of stocks of the registering institution.

4. Within 10 days after completing an offering, an issuing institution shall send a report on the offering result, made according to the form provided in Appendix 2 to this Decree, to the competent state agency.

Article 7. Obligations of institutions privately issuing stocks

1. Issuing institutions and other related institutions and individuals may not advertise the offering in the mass media. Information to be disclosed must neither contain advertising contents nor solicit purchase of privately offered stocks.

2. To modify, supplement or explain their dossiers at the request of competent state agencies.

3. To organize the offering according to registered plans.

4. Within 10 days after obtaining a decision of the Board of Directors authorized by the Shareholders’ General Meeting on change of the plan on use of proceeds from the private offering of stocks, an issuing institution shall send to the competent state agency a report, made according to Form No. 03 provided in the Appendix to this Decree. Any change of the plan on use of proceeds from the private offering of stocks must be reported to the upcoming Shareholders’ General Meeting. In case the institution privately issuing stocks is a public company, it shall concurrently disclose the offering result and decision on the change of the plan on use of proceeds on its website and fulfill the obligation of information disclosure in accordance with the law on securities and securities market applicable to public companies.

Article 8. State agencies competent to manage private offerings of stocks

1. State agencies competent to manage private offerings of stocks (below collectively referred to as competent state agencies) include:

a/ The Ministry of Finance, for insurance businesses other than public companies;

b/ The State Bank of Vietnam, for credit institutions other than public companies;

c/ The State Securities Commission, for issuing institutions being securities companies, fund management companies or public companies;

d/ Provincial-level Planning and Investment Departments; management boards of industrial parks, export processing zones, hi-tech parks or economic zones in case issuing institutions are non-public joint-stock companies other than those specified at Points a, b and c of this Clause.

2. Responsibilities of competent state agencies:

a/ To receive and process dossiers for registration for private offering of stocks in accordance with this Decree and relevant laws;

b/ To supervise activities of private offering of stocks and handle according to their competence violations of this Decree’s provisions on private offering of stocks.

Section 2

PUBLIC OFFERING OF SECURITIES

Article 9. General provisions on public offering of securities

1. Institutions and individuals may not conduct public offering of securities if they:

a/ are enterprises which fail to fully satisfy the conditions for public offering of securities specified in Article 12 of the Law on Securities and Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities;

b/ conduct public offering of securities to establish businesses, except the cases specified in Articles 12, 13 and 14 of this Decree.

2. The registration for public offering of securities must be made by issuing institutions, unless:

a/ State owners (including state groups and corporations) sell state-held capital portions to the public;

b/ Major shareholders offer for sale their holdings in public companies to the public.

3. Proceeds from the offering must be transferred into a frozen account in accordance with Clause 3, Article 21 of the Law on Securities. In case the issuing institution is a commercial bank, it shall choose another commercial bank for freezing the proceeds from the offering.

4. Within 10 days after completing the offering, the issuing institution shall report to the State Securities Commission on the offering result enclosed with the certification by the commercial bank where the frozen account is opened of proceeds from the offering. After reporting the offering result to the State Securities Commission, the issuing institution may have the proceeds from the offering released.

5. Reports on capital use

a/ In case the Board of Directors issues a decision to change the capital use purpose as authorized by the Shareholders’ General Meeting, within 10 days after such decision is issued, the issuing institution shall send to the State Securities Commission a report, made according to Form No. 04 provided in the Appendix to this Decree, and disclose information on the reason for the change and the decision of the Board of Directors on the change or the approval of the agency competent to grant investment certificates for foreign issuing institutions. The change of the capital use purpose must be reported to the upcoming Shareholders’ General Meeting;

b/ In case of mobilizing capital for implementation of an investment project, once every six months from the completion of the offering until the completion of the project, the issuing institution shall send to the State Securities Commission a report, made according to Form No. 05 provided in the Appendix to this Decree, and disclose information on the progress of use of the proceeds from the offering.

Article 10. Forms of public offering of securities

1. Initial public offerings of securities include:

a/ Initial public offering of stocks to mobilize capital for issuing institutions;

b/ Initial public offering of fund certificates to set up securities investment funds;

c/ Initial public offering of stocks so that issuing institutions can become public companies through restructuring their ownership without increasing their charter capital;

d/ Initial public offering of stocks to establish enterprises in the field of infrastructure or high technology or establish joint-stock credit institutions;

e/ Public offering of investment capital contribution contracts.

2. Additional public offerings of securities include:

a/ Additional public offering of stocks or issuance of stock warrants by public companies to existing shareholders to increase their charter capital;

b/ Additional public offering of fund certificates by fund management companies to increase the charter capital of investment funds.

3. Sale of major shareholders’ holdings in public companies to the public; public offering of bonds and other securities by public companies to the public.

Article 11. Conditions for public offering of securities

Issuing institutions that conduct public offering of securities must satisfy the conditions specified in Article 12 of the Law on Securities and Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities. In special cases, the specific conditions specified in Articles 12 thru 21, and Article 23 of this Decree apply.

Article 12. Conditions for public offering of stocks of a newly established business in the infrastructure field

1. Being an investor to construct infrastructure facilities under the socio-economic development scheme of a ministry, sector, province or centrally run city.

2. Having an investment project approved by a competent authority.

3. Having obtained the commitment of the Board of Directors or founding shareholders to bear joint responsibility for the issuance plan and the plan on use of the proceeds from the offering.

4. Having obtained a firm commitment of a securities company licensed for securities issuance underwriting to underwrite its issuance.

5. Having a supervisory bank to supervise the use of the proceeds from the offering.

6. Having obtained the commitment of the Board of Directors or founding shareholders to put its stocks in trading on the centralized securities market within 1 year after the business officially commences its operation.

Article 13. Conditions for public offering of stocks to establish a new enterprise in the high technology sector

1. Being an enterprise in the high technology sector in which investment in encouraged in accordance with law.

2. Satisfying the conditions specified in Clauses 2, 3, 4, 5 and 6, Article 12 of this Decree.

Article 14. Conditions for public offering of stocks to establish a joint-stock credit institution

1. Having obtained the State Bank of Vietnam’s on-principle approval of the licensing of establishment and operation.

2. Having obtained the commitment of founding shareholders to bear responsibility for the issuance plan and plan on use of proceeds from the offering.

3. Having obtained the commitment of founding shareholders to put stocks of the credit institution in trading on the centralized securities market within 1 year after the operation inauguration.

4. Other conditions specified by the State Bank of Vietnam.

Article 15. Conditions for offering of convertible bonds and warrant-linked bonds

1. Issuing institutions are enterprises operating as joint-stock companies.

2. Issuing institutions have an offering plan and plan on use of proceeds from the offering approved by the Shareholders’ General Meeting.

3. Issuing institutions satisfy the conditions specified at Points a, b and d, Clause 2, Article 12 of the Law on Securities, and Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities.

Article 16. Conditions for offering of secured bonds

1. Satisfying the conditions specified in Clause 2, Article 12 of the Law on Securities, and Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities.

2. Having obtained a commitment on payment underwriting enclosed with documents evidencing the financial capability of the underwriting institution, in case of security with payment underwriting, or having sufficient assets for bond payment, in case of security with assets. The value of assets used as security must be at least equal to the total value of bonds registered for offering. The valuation of assets used as security must be conducted by a competent valuation agency or institution and its result will be valid for no more than 12 months from the date of valuation. Assets used as security must be registered and handled in accordance with the law on registration of secured transactions. This provision is not applicable to cases in which the payment underwriting institution is the Government or the Ministry of Finance on behalf of the Government according to its competence.

3. The issuing institution shall designate a bondholder representative to supervise the realization of its commitments. The following entities may not act as bondholder representatives:

a/ The institution underwriting the debt payment of the issuing institution;

b/ The major shareholder of the issuing institution;

c/ The institution whose major shareholder is the issuing institution;

d/ Institutions having the same major shareholder with the issuing institution;

e/ Institutions having the same executive officers with the issuing institution or all are under the control of the issuing institution.

Article 17. Conditions for registering public offering of securities in several drives

1. An issuing institution wishing to conduct public offering of stocks or bonds in several drives must satisfy the following conditions:

a/ Satisfying the conditions specified in Clause 1 or 2, Article 12 of the Law on Securities, and Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities;

b/ Having a need to mobilize capital in several drives suitable to its investment project or production and business plan approved by a competent authority;

c/ Having an offering plan clearly stating the volume of stocks or bonds to be offered and expected offering time for each drive.

2. Credit institutions that satisfy the conditions specified at Points a and c, Clause 1 of this Article may register for public offering of inconvertible bonds in several drives within 12 months.

Article 18. Conditions for public offering of securities of joint-stock companies formed after business consolidation or merger

1. Satisfying the conditions specified at Points a and c, Clause 1, Article 12 of the Law on Securities, for offering of stocks, or the conditions specified at Points a and c, Clause 2, Article 12 of the Law on Securities, for offering of bonds.

2. Having operated for at least one year since the consolidation or merger and having profitable business results up to the time of offering registration.

3. Having no debts which are overdue for more than one year, for public offering of bonds.

4. Having obtained a commitment of the Shareholders’ General Meeting (for stocks and convertible bonds) or the Board of Directors (for bonds) to putting securities in trading on the centralized market within one year after the completion of the offering.

Article 19. Conditions for public offering of securities in Vietnam by a foreign institution

1. Conducting profitable production or business operations according to international accounting standards in the year preceding the year of offering registration.

2. Having an investment project in Vietnam approved by a competent Vietnamese authority; having a plan on issuance and use of proceeds from the public offering of securities for investment in the project in Vietnam.

3. Total proceeds from the offering in Vietnam not exceeding 30% of the total investment capital of the project.

4. Having obtained firm commitment(s) for issuance underwriting of at least one securities company licensed for securities issuance underwriting in Vietnam.

5. Having a supervisory bank to supervise the use of proceeds from the offering.

6. The foreign issuing institution shall undertake neither to transfer the mobilized capital abroad nor withdraw its contributed own capital during the period of its licensed project; and shall fulfill the obligations of issuing institutions specified by Vietnamese law and comply with the law on foreign exchange management of securities issuance in Vietnam.

7. Having obtained a commitment of the Shareholders’ General Meeting, for offering of stocks and convertible bonds, or of the Board of Directors or Members’ Council, for offering of bonds, to putting securities in trading on the centralized market within one year after the completion of the offering.

Article 20. Conditions for offering of bonds in Vietnam dong by an international financial institution

1. The issuing institution is an international financial institution to which Vietnam is a member.

2. Bonds to be offered are those of a term of at least 10 years.

3. The issuing institution has a plan to use the whole proceeds from the public offering of bonds for its projects in Vietnam approved by competent authorities in accordance with law.

4. Total proceeds from the offering in Vietnam do not exceed 30% of the total investment capital of the project. In case it is necessary to mobilize a capital amount exceeding 30% of the total investment capital of the project, the Prime Minister’s decision is quired at the proposal of the Ministry of Finance and the State Bank of Vietnam.

5. Having committed to fulfilling the obligations of issuing institutions toward investors regarding the conditions for issuance, payment, assurance of rights and legitimate interests of investors and other conditions.

6. Having committed to disclosing information in accordance with Vietnamese law.

7. Having committed to putting bonds in trading on the centralized market within one year after the completion of the offering.

Article 21. Conditions for public offering of stocks by major shareholders in public companies

1. Stocks to be offered are stocks of an enterprise which satisfies the conditions specified at Points a and b, Clause 1, Article 12 of the Law on Securities.

2. Hiring a securities company to provide consultancy on preparing stock offering dossiers.

Article 22. Offering of securities of state enterprises transformed into joint-stock companies combined with public offering of stocks

The offering of securities of state enterprises transformed into joint-stock companies combined with public offering of stocks complies with the law on transformation of state enterprises into joint-stock companies.

Article 23. Conditions for additional issuance of stocks for swap

A joint-stock company wishing to issue stocks for swap of stocks or capital contribution portions in the company must satisfy the following conditions:

1. In case of swap of stocks with one or several identified shareholders of another public company in order to increase the holding of the issuing institution in such company:

a/ Having an issuance and swap plan approved by the Shareholders’ General Meeting;

b/ Having obtained written on-principle consents of subjects eligible for swap;

c/ Having obtained an approval of the Shareholders’ General Meeting of the public company having stocks swapped in case the holding of the issuing institution in such public company exceeds the level subject to public bidding in accordance with Article 32 of the Law on Securities;

d/ Complying with regulations on capital contribution portions and investment forms in case stockholders in the public company having stocks swapped are foreign investors.

2. In case of swap of part or the whole of stocks for unidentified shareholders or with all shareholders of another public company in order to increase the holding of the issuing institution in the public company:

a/ Satisfying the conditions specified at Points a and d, Clause 1 of this Article;

b/ Complying with the conditions and relevant regulations on public bidding order and procedures.

3. In case of swap of all outstanding stocks in another public company under a consolidation or merger contract between the issuing institution and another public company:

a/ Having a consolidation or merger plan, a stock swap plan and a plan on business operation after the consolidation or merger, which are approved by the Shareholders General Meeting of companies involved in the consolidation or merger;

b/ Having a consolidation or merger contract signed between the parties involved in the consolidation or merger in accordance with the Law on Enterprises;

c/ Having the draft charter of the company after the consolidation or merger adopted by the Board of Directors of the parties involved in the consolidation or merger;

d/ Having obtained the competition management agency’s written approval of the consolidation or merger or commitments of the Board of Directors of the parties involved in the consolidation or merger to complying with the Law on Competition;

e/ Complying with regulations on capital contribution portions and investment forms in case stockholders in the public company having stocks swapped are foreign investors.

4. In case a public company issues new stocks to be swapped with stocks or capital contribution portions of a non-public company:

a/ Satisfying the conditions specified at Point a, Clause 1 of this Article;

b/ Complying with regulations on capital contribution portions and investment forms in case stockholders in the non-public company having stocks or capital contribution portions swapped are foreign investors.

Article 24. Conditions for issuance of stocks to pay dividends

1. Having a decision of the Shareholders’ General Meeting adopting a plan on issuance of stocks to pay dividends.

2. Having sufficient capital for issuance from undistributed profits of the parent company as certified by audit. In case a public company being a parent company issues stocks for payment of dividends, undistributed profits are those under the use right of shareholders of the parent company stated on the consolidated financial statement.

Article 25. Conditions for issuance of stocks to increase equity capital from own capital

1. Having a decision of the Shareholders’ General Meeting adopting a plan on issuance of stocks to increase equity capital from own capital.

2. Having sufficient capital for issuance from the following sources: equity capital surplus; development investment fund; undistributed profits; and other funds (if any), which are used for supplementing the charter capital in accordance with law.

In case the public company is a parent company issuing stocks to increase its equity capital from own capital, the capital source used for increasing equity capital is that under the ownership and use right of the parent company. The Ministry of Finance shall specifically guide the issuance of stocks for increasing equity capital from own capital.

Article 26. Securities used by Vietnam-based foreign institutions as bonuses for their Vietnamese employees

Securities issued overseas and used by foreign institutions as bonuses for their employees in Vietnam must satisfy the following conditions:

1. The exercise of the rights associated with bonus securities complies with Vietnam’s regulations on foreign exchange management.

2. Securities used as bonuses for employees in Vietnam may not be traded on Vietnam’s securities market.

Section 3

OVERSEAS OFFERING OF SECURITIES OF VIETNAMESE ENTERPRISES

Article 27. Overseas offering of bonds

The overseas offering of bonds of Vietnamese enterprises complies with relevant laws.

Article 28. Conditions for overseas offering of stocks of a joint-stock company

1. Not being engaged in business lines banned by Vietnamese law from foreign participation and ensuring that its foreign holding is below the cap prescribed by law.

2. Having a decision of the Shareholders’ General Meeting approving the overseas offering of stocks and a plan on use of proceeds from the offering.

3. Complying with the law on foreign exchange management.

4. Satisfying requirements of the law of the host country.

5. Obtaining approval of a competent state agency, which is the State Bank of Vietnam, for credit institutions; the Ministry of Finance, for insurance businesses; or the State Securities Commission, for securities companies, fund management companies and securities investment companies.

Article 29. Conditions for issuance of securities to serve as a basis for overseas offering of depositary receipts

1. An institution issuing new securities to serve as a basis for overseas issuance of depositary receipts must satisfy the following conditions:

a/ Satisfying the conditions for public offering of securities specified in the Law on Securities;

b/ Not being engaged in business lines banned by law from foreign participation;

c/ Having a decision of the Shareholders’ General Meeting or Board of Directors, as required by the Law on Enterprises, approving the raising of capital through issuance of securities to serve as a basis for overseas offering of depositary receipts and the plan on use of capital raised through the issuance;

d/ Ensuring that the foreign holding in the total volume of issued stocks to serve as a basis for offering depositary receipts and the volume of stocks held by foreign individuals and institutions in Vietnam is below the prescribed rate;

e/ Having a scheme on overseas issuance of depositary receipts on the basis of newly issued stocks which satisfies the conditions specified at Points b, c, d and e, Clause 1 of this Article.

3. Institutions that issue new securities to serve as a basis for overseas offering of depositary receipts or support the overseas issuance of depositary receipts on the basis of issued stocks shall comply with this Decree and register with the State Securities Commission for approval.

4. The Ministry of Finance shall specify the order and procedures for issuance of new stocks to serve as a basis for overseas offering of depositary receipts and support the overseas issuance of depositary receipts on the basis of issued stocks, destruction of depositary receipts, and trading and listing of stocks used as a basis for overseas issuance of depositary receipts.

Article 30. Registration of overseas offering of securities

1. An issuing institution shall send to the State Securities Commission documents for registering overseas offering of securities before filing a dossier for official registration of securities offering with a foreign authority. Such a dossier comprises:

a/ A decision of the Shareholders’ General Meeting, owner or Members’ Council approving the plan on overseas offering of securities and plan on use of capital raised through the overseas offering of securities;

b/ A financial statement made according to international accounting standards, if required by the law of the host country;

c/ A licensed credit institution’s written certification of the foreign-currency capital account for securities issuance;

d/ Written approval of the overseas issuance of securities of a competent state agency, which is the State Bank of Vietnam, for credit institutions; the Ministry of Finance, for insurance businesses; the State Securities Commission, for securities companies, fund management companies and securities investment companies.

e/ Dossiers for offering registration with a competent authority of the country where the issuing institution registers the offering.

2. Within 10 days after receiving a complete dossier for offering registration, the State Securities Commission shall notify in writing the issuing institution of its approval or disapproval of such dossier, clearly stating the reason.

Article 31. Reports on offering results

1. Within 10 days after completing an offering of securities, an issuing institution shall report on the offering result to the State Securities Commission and concurrently disclose information on the offering result in the mass media in accordance with regulations.

2. The report on the offering result sent to the State Securities Commission must also be sent to the Vietnam Securities Depository Center for adjustment of shareholding rate of foreign institutions and investors permitted for trading in Vietnam’s securities market, and to the domestic stock exchange(s) where the issuing institution currently has its stocks listed and to other agencies in accordance with specialized laws.

3. The Ministry of Finance shall set the report form and specify information contents to be disclosed.

Article 32. Reports on the use of capital

In the course of use of capital raised through an overseas offering, once every 6 months after the completion of the offering, an issuing institution shall report to the State Securities Commission on the use of capital raised through the offering. In case of change of the capital use purpose, the issuing institution shall report to the State Securities Commission and disclose information on the reason for change. Reports on the use of capital and reports on change of capital use purpose must be made according to forms No. 6 and 7 provided in the Appendix to this Decree.

Chapter III

PUBLIC COMPANIES

Section 1

REGISTRATION AND DEREGISTRATION OF PUBLIC COMPANIES

Article 33. Dossiers of public companies

The dossier of a public company comprises:

1. Its charter (articles of incorporation) as prescribed by the law on enterprises.

2. A certified copy of its business registration certificate.

3. A brief report providing information on its business organization model, management apparatus and shareholder structure, made according to form No. 8 provided in the Appendix to this Decree.

4. The latest annual financial statement audited by an independent audit firm.

Article 34. Registration of public companies

1. Except the cases specified at Points a and b, Clause 1, Article 25 of the Law on Securities, within 90 days after becoming a public company, a public company shall file a registration dossier with the State Securities Commission.

2. Within 7 days after receiving a valid dossier, the State Securities Commission shall disclose the name, business lines and other information related to the public company in its media.

3. The date of becoming a public company is the date of completion of capital contribution, provided the number of investors recorded as shareholders in the shareholder register is 100 or more.

Article 35. Disclosure of information on registration of public companies

1. Within 7 days after the State Securities Commission discloses the name of a public company in accordance with Clause 2, Article 34 of this Decree, the public company shall disclose its information on one (1) central newspaper or one (1) local newspaper of the locality where it has registered its head office.

2. Its brief report providing information on its business organization model, management apparatus and shareholder structure must be made according to Form No. 8 provided in the Appendix to this Decree; and its charter and financial statements must be posted on its website.

Article 36. Deregistration of public companies

1. Within 15 days after failing to satisfy the conditions of public companies specified in Article 25 of the Law on Securities, a public company shall notify such to the State Securities Commission.

The date on which the public company fails to satisfy the conditions of public companies is the date on which its contributed charter capital is lower than VND 10 billion as accounted in the latest audited annual financial statement or the number of shareholders is fewer than 100 as certified by the Vietnam Securities Depository or as recorded in the shareholder register or when both events occur.

2. Unless the company fails to satisfy the conditions of public companies due to consolidation, merger, bankruptcy, dissolution or transformation or transfer to the ownership of another institution or individual, one year after the date on which the company no longer satisfies the conditions of public companies, the State Securities Commission shall consider deregistration of such public company.

3. The company shall fully comply with regulations applicable to public companies until the State Securities Commission notifies its deregistration.

4. After receiving the State Securities Commission’s notice of deregistration, the company shall announce its deregistration on one (1) central newspaper and one (1) local newspaper of the locality where it has registered its head office and on its website.

Section 2

REDEMPTION OF STOCKS AND SALE OF TREASURY STOCKS OF PUBLIC COMPANIES

Article 37. Conditions for redemption of stocks

1. A public company wishing to redeem its own stocks for use as treasury stocks must satisfy the following conditions:

a/ Having a decision of the Shareholders’ General Meeting approving the redemption of over 10% of total common shares or over 10% of total issued stocks with preferred dividends or a decision of the Board of Directors approving the redemption of no more than 10% of total common shares once every 12 months or no more than 10% of total issued stocks with preferred dividends once every 12 months;

b/ Having a sufficient capital amount for stock redemption from the following sources: equity capital surplus or development investment fund or undistributed after-tax profits or another own capital source allowed to be used for stock redemption in accordance with law;

c/ Having a stock redemption plan adopted by the Board of Directors, clearly indicating the redemption time and price assessment principles;

d/ Having a securities company designated to conduct the transaction;

e/ Conducting a public bidding, for a public company that redeems its common stocks, in order to raise the percentage of its treasury stocks to 25% or more of its total outstanding stocks of the same type;

f/ Satisfying the conditions specified by a specialized law, if the public company is engaged in a conditional business line or sector.

2. Redemption of shares is not subject to the provisions of Clause 1 of this Article in the following cases:

a/ Redemption of stocks at the request of shareholders in accordance with Article 90 of the Law on Enterprises;

b/ The redemption of odd shares under a plan on issuance of stocks for payment of dividends or issuance of stocks from own capital in accordance with this Decree’s guidance;

c/ The securities company redeems its own stocks for correction of trading errors in accordance with regulations of the State Securities Commission.

Article 38. Prohibited cases of redemption of stocks for use as treasury stocks

1. A company may not redeem its stocks for use as treasury stocks in the following cases:

a/ It currently has overdue debts according to the latest audited annual financial statement. In case the expected time of stock redemption is after June 30 every year, the identification of overdue debts is based on the latest audited or examined biannual financial statement;

b/ It is currently offering stocks for raising additional capital;

c/ Its stocks are subject to public bids;

d/ It has redeemed its stocks within 6 months, except the following cases: Redemption of stocks in accordance with Article 90 of the Law on Enterprises, redemption of odd shares under plans on issuance of stocks for payment of dividends, issuance of stocks from own capital in accordance with this Decree, and redemption by a securities company of its own shares for correction of trading errors in accordance with regulations of the State Securities Commission;

e/ It redeems and sells treasury stocks at the same time.

2. Unless a company conducts the redemption in proportion to the holding rate of each shareholder or publicly offers its issued stocks, such company may not purchase shares from the following persons for use as treasury stocks:

a/ Its manager(s) and affiliated persons as defined by the Law on Securities;

b/ Holders of shares subject to transfer limitation as prescribed by law and the company charter;

c/ Major shareholders as defined by the Law on Securities.

Article 39. Conditions for sale of treasury stocks

1. A public company may only sell treasury stocks 6 months after the completion of the latest redemption, unless treasury stocks are sold or used as bonus stocks for its employees or a securities company redeems its own shares for correction of trading errors.

2. There is a decision of the Board of Directors adopting the specific sale plan, clearly indicating the sale time and price assessment principles.

3. There is a securities company designated to conduct the transaction.

4. In case of sale of treasury stocks in the form of public offering of securities, the public company shall comply with regulations on public offering of securities.

Chapter IV

PUBLIC BIDDING

Article 40. Principles of public bidding

The public bidding of stocks of a public company or certificates of a closed fund must adhere to the following principles:

1. The public bidding conditions are applicable equally to all shareholders of the target company or investors of the target investment fund.

2. Parties participating in the public bidding are provided with adequate information in order to approach stock or closed fund certificate bids.

3. The discretion of shareholders of target companies or investors of target investment funds is respected.

4. The law on securities and securities market and relevant laws are complied with;

5. Public bidders shall designate a securities company to act as a bidding agent.

Article 41. Cases of public bidding

1. The cases of public bidding are specified in Clause 11, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities.

2. In addition to the cases specified in Clause 11, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities, institutions and individuals that wish to make public bids for stocks of public companies or closed fund certificates shall fully comply with this Decree.

Article 42. Public bidding registration dossiers

A public bidding registration dossier comprises:

1. A public bidding registration, made according to the form set by the Ministry of Finance.

2. The decision of the Shareholders’ General Meeting or Board of Directors (for joint-stock companies), the Members’ Council or owner of the company (for limited liability companies), or the Investors’ General Meeting (for member funds) approving the public bidding.

3. The decision of the Shareholders’ General Meeting, in case the public company redeems its own stocks for reduction of its charter capital.

4. The audited financial statement of the last year and documents verifying the financial capability as specified by a specialized law or certifying the financial capability of individuals and institutions making public bids.

5. Documents evidencing the company’s satisfaction of the conditions for stock redemption, in case the public company redeems its own stocks in the form of public bidding.

6. A prospectus disclosing public bidding information, made according to the form set by the Ministry of Finance.

7. A certificate of freezing of capital at a supervisory bank, for public bidding for close fund certificates.

Article 43. Bidding registration

1. Institutions and individuals that make public bids for stocks of public companies or closed fund certificates shall send their bidding registration documents to the State Securities Commission and concurrently to the target companies or fund management companies. Within 3 days after receiving bidding registration documents, a target company or target fund management company shall disclose information on the receipt of bids in its media and the media of the Stock Exchange where it is listed.

2. Within 15 days after receiving bidding registration documents, the State Securities Commission shall reply in writing. In case the registration documents are incomplete or unclear, the institution or individual that registers the bidding shall supplement or modify them at the request of the State Securities Commission.

3. Within 15 days after the State Securities Commission requests in writing the bidding institution or individual to modify or supplement registration documents, the latter shall complete the documents as requested and send them to the State Securities Commission. Past that time limit, if the institution or individual fails to modify or supplement the bidding registration documents as requested, the State Securities Commission shall stop examining such documents.

Article 44. Responsibilities of the Board of Directors of a target company or the Representative Board of a target investment fund

1. Within 10 days after receiving bidding registration documents, the Board of Directors of a target company or target investment fund management company shall send them to the State Securities Commission and notify its opinions or its Representative Board’s opinions on public bids to its shareholders or investors. Documents to be sent to the State Securities Commission must be presented in written and electronic forms in accordance with regulations of the State Securities Commission.

2. Opinions of the Board of Directors of the target company or the Representative Board of the target investment fund must be presented in writing with the signatures of a majority of members of the Board of Directors or Representative Board of the fund and clearly state the evaluations of the Board of Directors or Representative Board of the fund regarding the bidding for stocks or closed fund certificates. In case opinions of members of the Board of Directors or Representative Board of the fund are different from the evaluations of the Board of Directors or Representative Board of the fund, involved parties shall disclose these opinions.

Article 45. Responsibilities of persons who know public bidding information

Members of the Board of Directors, the director (director general), deputy directors (deputy directors general), chief accountant, major shareholders and affiliated persons of a public bidding institution, target company or target investment fund management company, members of the Representative Board of a target investment fund, employees of a securities company and other persons who know public bidding information may not take advantage of such information for purchasing or selling securities for themselves, and may not provide information to, incite or drag other persons into purchasing or selling securities before the official time of public bidding.

Article 46. Prohibited acts of bidders

1. From the time of sending public bidding registration documents to the State Securities Commission to the time of completion of the bidding, a bidder is prohibited from taking the following acts:

a/ Directly or indirectly purchasing or committing to purchasing stocks or share and convertible bond warrants of the target company or fund certificates or fund certificate warrants of the target investment fund outside the drive of public bidding;

b/ Selling or committing to selling stocks or closed fund certificates it is currently bidding for;

c/ Unequally treating holders of the same type of stocks, share and convertible bond warrants or closed fund certificates currently subject to bids;

d/ Privately providing information to shareholders or investors at different levels or different times;

e/ Refusing to purchase stocks from shareholders of the target company or fund certificates from investors of the target investment fund in the course of bidding;

f/ Purchasing stocks of the target company or fund certificates of the target investment fund in contravention of the terms disclosed in the public bidding registration.

2. Foreign investors may not make public bids toward public companies or closed fund certificates in order to hold shares or closed fund certificates in excess of the foreign holding limit prescribed by law.

Article 47. Obligations of securities companies acting as public bidding agents

1. To guide bidding institutions and individuals in making bids in strict accordance with this Decree and bear joint responsibility in case these institutions and individuals violate this Decree and relevant laws, unless public bidders intentionally conceal information or forge dossiers and documents or commit violations beyond the control of the bidding agents.

2. To act as agents to receive sale orders for stocks or closed fund certificates and transfer stocks or closed fund certificates to bidders within the time limit specified in public bidding registrations.

3. To ensure bidding institutions and individuals have enough money for making bids at the time of official bidding as registered.

Article 48. Principles of identification of public bidding prices

1. Public bidding prices of stocks of a public company or certificates of a closed fund are determined on the following principles:

a/ In case the target company is an institution listed or registered for trading, the bidding price must not be lower than the average reference price of stocks of the target company as announced by the Stock Exchange within 60 consecutive days before the bidding registration is sent and than the highest purchase price of bidding institutions and individuals that make bids for stocks of the target company during this period;

b/ In case the target company is not an institution listed or registered for trading, the bidding price must not be lower than the average price of stocks of the target company which is constantly quoted by at least two (2) securities companies within 60 consecutive days before the bidding registration is sent or the stock offering price in the latest issuance of the target company and than the highest purchase price of bidding institutions and individuals that make bids for stocks of the target company during this period;

c/ The bidding price of fund certificates must not be lower than the average reference price of such fund certificates as announced by the Stock Exchange within 60 consecutive days before the bidding registration is sent and than the highest purchase price of bidding institutions and individuals that make bids for fund certificates of the target investment fund during this period.

2. In the course of public bidding, a bidder may only increase bidding prices. The price increase can be made on the condition that the bidder discloses the price increase at least 7 days before the completion of the bidding and ensures that the increased price is applicable to all shareholders of the target company or investors of the target investment fund, including those who have agreed to sell stocks or fund certificates to the bidder.

Article 49. Withdrawal of public bids

1. After disclosing the public bidding, a bidder may only withdraw its bid in the case stated in the public bidding registration, when:

a/ The volume of stocks or closed fund certificates registered for sale does not reach the minimum percentage disclosed by the bidder in the public bidding registration;

b/ The target company increases or reduces the volume of voting stocks through split-up or split-down of stocks or conversion of preferred shares;

c/ The target company reduces its equity capital;

d/ The target company issues additional securities or the target investment fund issues fund certificates to increase its charter capital;

e/ The target company sells the whole or part of its assets or one of its operating section.

2. A bidder shall report to the State Securities Commission on the withdrawal of its bid toward a target company or investment fund and publicly disclose the withdrawal of its bid on one (1) online newspaper or printed newspaper for three (3) consecutive issues after obtaining approval of the State Securities Commission.

Article 50. Public bidding transactions

1. Within 7 days after receiving opinions of the State Securities Commission, a bidder shall publicly disclose the bidding on one (1) online newspaper or printed newspaper for three (3) consecutive issues. The public bidding may only be conducted after the State Securities Commission approves in writing the bidding registration and it is disclosed by the bidder by the above mode.

In case the target company is an institution listed or registered for trading on the centralized securities market or the target investment fund, the bidder shall disclose the bidding concurrently in the media of the Stock Exchange where stocks of the target company are listed or registered for trading or where fund certificates of the target investment fund are listed.

2. The bidder shall designate a securities company to act as an agent to conduct the bidding. The State Securities Commission shall guide the procedures for securities companies to perform operations of the bidding agency.

3. The duration of a public bidding must not be shorter than 30 days and longer than 60 days after the official bidding date indicated in the public bidding registration sent to the State Securities Commission.

4. Shareholders of the target company or investors of the target investment fund who have accepted bids may withdraw their acceptance of bids within the public bidding duration when the bidding conditions are changed or there are other institutions and individuals make competitive bids for stocks of the target company or fund certificates of the target investment fund.

5. In case the volume of stocks or closed fund certificates which are bid for is smaller than that registered for sale, the volume of stocks or closed fund certificates may be purchased in proportion to the volume of stocks registered by each shareholder of the target company or the volume of closed fund certificates registered by investors and at a price fair to all shareholders or investors.

Article 51. Continuation of public bidding

Unless the bidding has been made for all outstanding voting stocks or closed fund certificates, after making public bids, a bidder that holds 80% or more of outstanding voting stocks of a public company or outstanding certificates of a closed fund shall continue purchasing the remaining stocks or closed fund certificates within 30 days in accordance with Clause 11, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities on price and payment method conditions similar to those of the public bidding.

Public bidders shall notify the State Securities Commission of the continuation of public bidding within 5 working days after the completion of the public bidding, and concurrently disclose information on their continuation of public bidding in accordance with the Law on Securities.

Article 52. Reporting and disclosure of information on public bidding results

Within 5 days after the completion of a public bidding, a public bidder shall send to the State Securities Commission a report on the public bidding result, and concurrently disclose information on the public bidding result in the mass media, including the website of the stock exchange in case publicly bid stocks or closed fund certificates are listed on the stock exchange. Reports on the public bidding result shall be made according to a form set by the Ministry of Finance.

Chapter V

LISTING, TRADING REGISTRATION AND PROHIBITED TRANSACTIONS

Section 1

LISTING OF SECURITIES OF DOMESTIC ISSUING INSTITUTIONS ON STOCK EXCHANGES IN VIETNAM

Article 53. Conditions for securities listing on Ho Chi Minh City Stock Exchange

1. Conditions for stock listing:

a/ Being a joint-stock company with contributed charter capital at the time of listing registration of VND 120 billion or more in book value;

b/ Having operated for at least 2 years as a joint-stock company by the time of listing registration (except state enterprises equitized in association with listing); having an after-tax profit rate of return on equity (ROE) of the latest year equal to at least 5% and business activities of the two consecutive years preceding the year of listing registration being profitable; having no debt overdue for more than 1 year; having no accumulated loss as of the year of listing registration; and complying with the law on accounting and financial reporting;

c/ Publicizing all debts to the company of the members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors), chief accountant, major shareholders and affiliated persons;

d/ At least 20% of voting stocks of the company are held by at least three hundred (300) shareholders who are not major shareholders, except for state enterprises transformed into joint-stock companies under the Prime Minister’s regulations;

e/ Individual and institutional shareholders whose ownership representatives are members of the Board of Directors, Control Board, director (general director), deputy director (deputy general director) and chief accountant; major shareholders who are affiliated persons of the members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) and chief accountant of the company commit to holding 100% of the stocks owned by them for 6 months after the date of listing and 50% of these stocks within the subsequent 6 months, excluding the stocks under state ownership owned by the above individuals representing to hold;

f/ Having filed a valid dossier of stock listing registration as prescribed.

2. Conditions for corporate bond listing:

a/ Being a joint-stock company or limited liability company with contributed charter capital at the time of listing registration of VND 120 billion or more in book value;

b/ Having profitable business activities of 2 consecutive years preceding the year of listing registration, having no debt overdue for over 1 year and having fulfilled all financial obligations to the State;

c/ Having at least one hundred (100) persons who own bonds of the same issuance drive;

d/ The bonds of an issuance drive have the same maturity date;

e/ Having filed a valid dossier of bond listing registration as prescribed.

3. Conditions for listing of public fund certificates or stocks of a public securities investment company:

a/ Being a closed-end fund that has total value of issued fund certificates (by par value) of VND 50 billion or more or a securities investment company with contributed charter capital at the time of listing registration of VND 50 billion or more in book value;

b/ The members of the Representative Board of the securities investment fund or the members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors), chief accountant, major shareholders who are affiliated persons of the members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) or chief accountant (if any) of the public securities investment company commit to holding 100% of the fund certificates or stocks owned by them for 6 months after the date of listing and 50% of these fund certificates or stocks for the subsequent 6 months;

c/ Having at least 100 persons who own fund certificates of the public fund or at least 100 shareholders holding stocks of the public securities investment company, excluding professional investors;

d/ Having filed a valid dossier of registration for listing of public fund certificates or stocks of the public securities investment company as prescribed.

4. In case of registration for securities listing of a credit institution that is a joint-stock company, in addition to the conditions specified in Clauses 1 and 2 of this Article, approval by the State Bank of Vietnam is required.

Article 54. Conditions for securities listing on Hanoi Stock Exchange

1. Conditions for stock listing:

a/ Being a joint-stock company with contributed charter capital at the time of registration for listing of VND 30 billion or more in book value;

b/ Having operated for at least 1 year as a joint-stock company by the time of listing registration (except state enterprises equitized in association with listing); having an after-tax profit rate of return on equity (ROE) of the latest year equal to at least 5%; having no debt overdue for over 1 year; having no accumulated loss as of the year of listing registration; and complying with the law on accounting and financial reporting;

c/ At least 15% of the voting stocks of the company held by at least 100 shareholders who are not major shareholders, except state enterprises transformed into joint-stock companies under the Prime Minister’s regulations;

d/ Individual and institutional shareholders whose ownership representatives are members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) and chief accountant, major shareholders who are affiliated persons of the members of the Board of Directors, Control Board, director (general director), deputy director (deputy general director) and chief accountant of the company commit to holding 100% of the stocks owned by them for 6 months after the date of listing and 50% of these stocks within the subsequent 6 months, excluding the stocks under state ownership owned by the above individuals representing to hold;

d/ Having filed a valid dossier of stock listing registration as prescribed.

2. Conditions for corporate bond listing:

a/ Being a joint-stock company or limited liability company with contributed charter capital at the time of listing registration of VND 10 billion or more in book value;

b/ Having profitable business activities of the year preceding the year of listing registration;

c/ The bonds of an issuance drive have the same maturity date;

d/ Having filed a valid dossier of bond listing registration as prescribed.

3. Government bonds, government-guaranteed bonds and municipal bonds must be listed on a stock exchange according to the Ministry of Finance’s regulations.

4. For registration of securities listing by a credit institution that is a joint-stock company, in addition to the conditions specified in Clauses 1 and 2 of this Article, approval by the State Bank of Vietnam is required.

Article 55. Listing of securities of joint-stock companies formed after consolidation or merger of enterprises and in the case of re-organization of stock exchanges

1. The Ministry of Finance shall guide the securities listing on a stock exchange by joint-stock companies formed after consolidation or merger of enterprises.

2. In case of re-organization of stock exchanges, the Prime Minister shall define classification criteria of listing areas on the basis of the conditions for listing on the stock exchanges.

Article 56. Registration of trading of unlisted public companies (Upcom)

1. Public companies referred to in Article 25 of the Law on Securities having securities already registered for deposit at the Vietnam Securities Depository and not yet listed on a stock exchange may register trading on the market of unlisted public companies.

2. A public company making public offering of securities when it is unlisted or does not meet all the listing conditions shall register for securities trading on the market of unlisted public companies under Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities.

3. The Ministry of Finance shall specify the dossier and procedures for trading registration of unlisted public companies.

Article 57. Dossier of securities listing registration on a stock exchange

1. An institution registering for securities listing shall submit a dossier of listing registration to the stock exchange.

2. A dossier of stock listing registration comprises:

a/ The stock listing registration;

b/ The decision of the Shareholders’ General Meeting at the latest session adopting the stock listing;

c/ The register of shareholders of the listing registration institution made within 1 month before the time of submission of the listing registration dossier;

d/ The prospectus, made according to a form set by the Ministry of Finance;

e/ The commitments of the shareholders being members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) and chief accountant and commitments of major shareholders who are affiliated persons of the members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) and chief accountant of the company to holding 100% of the stocks owned by them for 6 months after the date of listing and 50% of these stocks for the subsequent 6 months;

f/ The listing consultancy contract (if any);

g/ A written undertaking to limit the rate of participation of foreign parties in accordance with the law applicable to a specific business area (if any);

h/ The list of affiliated persons of the members of the Board of Directors, Control Board and the chief accountant;

i/ The certificate of the Vietnam Securities Depository that the stocks of that institution have been registered and concentratedly deposited;

j/ The written approval of the State Bank, for joint-stock credit institutions.

3. A dossier of bond listing registration comprises:

a/ The bond listing registration;

b/ The decision to approve the bond listing of the Board of Directors or the convertible-bond listing of the Shareholders’ General Meeting (for joint-stock companies), the bond listing of the Members’ Council (for limited liability companies with two or more members) or the company owner (for single-member limited liability companies);

c/ The register of bond holders of the listing registration institution;

d/ The prospectus, made according to a form set by the Ministry of Finance;

e/ The commitment to fulfill the obligations of the listing registration institution toward investors, including the payment conditions, the debt ratio on equity, conversion conditions (in case of listing of convertible bonds) and other conditions;

f/ The payment guarantee commitment or written record of security asset valuation, together with valid documents proving the lawful ownership and insurance contract (if any) for these assets in case of listing secured bonds. The assets used as security must be registered with a competent agency;

g/ The contract between the issuing institution and the representative of bond holders;

h/ The certificate of the Vietnam Securities Depository that the institution’s bonds have been registered and concentratedly deposited;

i/ The written approval of the State Bank, for joint-stock credit institutions.

4. A dossier of listing registration of public fund certificates or stocks of a public securities investment company comprises:

a/ The listing registration for public fund certificates or stocks of the public securities investment company;

b/ The register of investors holding public fund certificates or register of shareholders of the public securities investment company;

c/ The charter of the public fund or public securities investment company according to a form set by the Ministry of Finance and the supervision contract approved by the Investors’ General Meeting or the Shareholders’ General Meeting;

d/ The prospectus, made according to a form set by the Ministry of Finance;

e/ The list and résumes of the members of the Representative Board of the fund and the written commitments of the independent members of the Representative Board of the fund to their independence from the fund management company and supervisory bank;

f/ The commitments of the members of the Representative Board of the securities investment fund or of the shareholders who are members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) and chief accountant and major shareholders who are affiliated persons of the members of the Board of Directors, Control Board, director (general director), deputy directors (deputy general directors) and chief accountant (if any) of the public securities investment company to hold 100% of the fund certificates or stocks owned by them for 6 months after the date of listing and 50% of these fund certificates or stocks for the subsequent 6 months;

g/ The report on investment results of the fund or the public securities investment company as of the time of listing registration, with the certification of the supervisory bank;

h/ The certificate of the Vietnam Securities Depository that the fund certificates of the public fund or stocks of the public securities investment company have been registered and concentratedly deposited.

5. The stock exchange, after approving the listing registration by an institution, shall submit to the State Securities Commission a copy of the listing registration dossier.

Article 58. Listing registration procedures

1. Within 30 days after receiving a complete and valid dossier, the stock exchange shall accept or refuse the listing registration. In case of refusal of the listing registration, the stock exchange shall issue a written reply clearly stating the reason.

2. The stock exchange shall guide in detail the process of securities listing registration in the Regulation on securities listing on the stock exchange.

Article 59. Change of listing registration

1. A listing institution shall carry out procedures for change of listing registration in the following cases:

a/ It splits up or splits down its stocks, issues additional stocks to pay dividends or bonus stocks or offers share warrants to the existing shareholders in order to increase its charter capital. In case of issuing additional stocks, the listing institution shall make additional listing within 30 days after completing the offering;

b/ It is split or accepted to be merged;

c/ Other cases of change of the number of the listed stocks on the stock exchange.

2. A dossier of change of listing registration to be submitted to the stock exchange comprises:

a/ The written request for change of listing registration, clearly stating the reason for the change of listing, and relevant documents;

b/ The decision approving the change of stock listing of the Shareholders’ General Meeting, change of the bond listing of the Board of Directors or change of the convertible-bond listing of the Shareholders’ General Meeting (for joint-stock companies); change of the bond listing of the Members’ Council (for limited liability companies with two or more members) or the company owner (for single-member limited liability companies); change of the listing of securities investment fund certificates of the Investors’ General Meeting or change of the stock listing of the Shareholders’ General Meeting of the public securities investment company.

3. Procedures for change of listing registration comply with the listing regulation of the stock exchange.

Article 60. Delisting

1. Securities must be delisted upon occurrence of any of the following cases:

a/ The securities listing institution on the stock exchange fails to meet for 1 year the listing conditions prescribed in this Decree at Points a and d, Clause 1, Article 53 or Points a and c, Clause 1, Article 54, for stocks; at Points a and c, Clause 2, Article 53; at Point a, Clause 2, Article 54, for corporate bonds; or at Points a and c, Clause 3, Article 53, for fund certificates;

b/ The listing institution suspends or is suspended from main production and business activities for 1 year or longer;

c/ The listing institution has its business registration certificate or license for operation in a specialized area revoked;

d/ The stocks are not traded on the stock exchange for 12 months;

e/ Production and business activities suffer loss for 3 consecutive years or the total accumulated loss exceeds the actually contributed capital in the audited financial statement of the latest year prior to the time of consideration;

f/ The listing institution terminates its existence due to merger, consolidation, division, separation, dissolution or bankruptcy; the securities investment fund terminates its operation;

g/ The bonds become mature or the whole of listed bonds are redeemed by the issuing institution prior to maturity;

h/ The audit institution refuses to audit or has opinions not to accept or refuses to give opinions on the latest annual financial statement of the listing institution;

i/ The institution which has been approved for listing fails to carry out the listing procedures at the stock exchange within 3 months from the date of listing approval;

j/ The listing institution submits late annual financial statements in 3 consecutive years;

k/ The State Securities Commission and the stock exchange discover that the listing institution has falsified the listing dossier or that the listing dossier contains seriously misleading information affecting investors’ decision;

l/ The listing institution seriously violates the obligation to disclose information and falls into a case in which the State Securities Commission or the stock exchange finds the delisting necessary in order to protect investors’ interests.

2. Securities are delisted when the listing institution asks for delisting.

a/ Conditions for delisting:

- A listing institution may delist its securities only when the delisting decision of the Shareholders’ General Meeting is voted for by over 50% of shareholders who are not major shareholders;

- A listing institution may not ask for delisting within 2 years from the date of listing stocks under Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities.

b/ A dossier of request for delisting comprises:

- The written request for delisting;

- The decision approving the delisting of stocks of the Shareholders’ General Meeting, delisting of bonds of the Board of Directors or delisting of convertible bonds of the Shareholders’ General Meeting  (for joint-stock companies); delisting of bonds of the Members’ Council (for limited liability company with two or more members) or the company owner (for single-member limited liability companies), delisting of fund certificates of the securities investment fund of the Investors’ General Meeting or delisting of stocks of the Shareholders’ General Meeting of the public securities investment company.

3. An institution whose securities are delisted may only register relisting after 12 months from the time of delisting if meeting the conditions specified in Article 53 or 54 of this Decree. A dossier and procedures for listing comply with Articles 57 and 58 of this Decree.

4. The delisting procedures comply with the listing regulation of the stock exchange.

Section 2

SECURITIES LISTING OF FOREIGN ISSUING INSTITUTIONS ON A STOCK EXCHANGE IN VIETNAM

Article 61. Conditions for securities listing of foreign issuing institutions on a stock exchange in Vietnam

1. Being securities of the foreign issuing institution which have been offered to the public in Vietnam under Vietnamese law on securities.

2. The number of securities registered for listing corresponds to the number of securities permitted for offering in Vietnam.

3. Meeting the listing conditions prescribed in Article 53 or 54 of this Decree.

4. Committing to fulfilling the obligations of a listing institution in accordance with Vietnamese law.

5. Being consulted on securities listing by a securities company established and operating in Vietnam.

6. Complying with Vietnamese law on foreign exchange management.

Article 62. Dossier and procedures for listing registration

1. Dossier of listing registration

A foreign issuing institution registering listing on a stock exchange in Vietnam shall file a dossier of listing registration as provided in Article 57 of this Decree and other documents as follows:

a/ The foreign institution’s commitment to carry out a project in Vietnam;

b/ The commitment not to transfer capital abroad and withdraw its contributed equity during the period of the licensed project;

c/ The listing institution’s commitment to fulfill the obligations in accordance with Vietnamese law;

d/ The listing consultancy contract.

2. Procedures for listing registration

a/ Within 30 days after receiving a complete and valid dossier, the State Securities Commission shall approve or refuse to permit the foreign issuing institution to carry out procedures for registration of listing on a stock exchange in Vietnam. In case of refusal, the State Securities Commission shall issue a written reply clearly stating the reason;

b/ The stock exchange shall guide in detail securities trading in Vietnam after obtaining the approval of the State Securities Commission.

Article 63. Delisting

Securities of a foreign issuing institution in Vietnam are delisted upon the occurrence of any of the cases specified in Article 60 of this Decree or in case the investment project of the foreign institution in Vietnam is suspended from main business and production activities for 1 year or longer, or has its investment license revoked.

Section 3

SECURITIES LISTING OF VIETNAMESE ISSUING INSTITUTIONS ON A FOREIGN STOCK EXCHANGE

Article 64. Conditions for listing on a foreign stock exchange

1. Not being on the list of business lines in which participation of foreign parties is prohibited by law and ensuring foreign ownership ratio in accordance with law.

2. The issuing institution’s listing of underlying securities on a foreign stock exchange must be associated with the overseas offering of securities.

3. Having a decision approving the listing on a foreign stock exchange of the Shareholders’ General Meeting (for joint-stock companies), of the Members’ Council (for limited liability companies with two or more members) or of the company owner (for single-member limited liability companies).

4. Meeting the listing conditions of the stock exchange of the country in which the securities market management agency or the stock exchange has agreed to cooperate with the Vietnamese State Securities Commission or stock exchange.

5. Complying with Vietnamese regulations on foreign exchange management.

6. The issuing institution engaged in a conditional business line shall obtain approval of the relevant specialized state management agency.

7. Having the dossier of registration approved by the State Securities Commission.

Article 65. Dossiers of registration, approval procedures of the State Securities Commission

1. A dossier of registration to be submitted to the State Securities Commission comprises:

a/ A copy of the dossier of listing registration at the foreign stock exchange;

b/ The decision on the listing of securities on a foreign stock exchange of the Shareholders’ General Meeting (for joint-stock companies), of the Board of Members (for limited liability companies with two or more members) or of the company owner (for a single-member limited liability companies).

2. The approval procedures of the State Securities Commission

Within 30 days after receiving a complete and valid dossier, the State Securities Commission shall reply on acceptance or refusal of the registration of overseas listing of the Vietnamese issuing institution. In case of refusal, the State Securities Commission shall issue a written reply clearly stating the reason.

Article 66. Obligations of enterprises with securities listed on a foreign stock exchange

1. To disclose information about the listing on the foreign stock exchange:

a/ Within 24 hours after sending the official dossier of securities listing registration to the foreign stock exchange, the issuing institution shall disclose information to the public on the sending of the dossier of listing registration to a competent authority of the host country;

b/ Within 72 hours after receiving the decision of a competent authority or the stock exchange of the host country on approval or disapproval of the securities listing, the issuing institution shall report it to the State Securities Commission and simultaneously announce this decision in the mass media;

c/ Within 72 hours after delisting on the foreign stock exchange, the enterprise shall send to the State Securities Commission the delisting decision and announce information in the mass media.

2. To regularly disclose information:

a/ Disclosing information in accordance with foreign and Vietnamese laws. Any differences between foreign and Vietnamese laws on information disclosure must be reported to the State Securities Commission.

Information disclosed to investors and holders of securities in foreign securities markets must be simultaneously disclosed in Vietnamese in Vietnam in the mass media and reported to the Vietnamese State Securities Commission and the stock exchange on which the issuing institution lists its securities and vice versa;

b/ An institution that is simultaneously listed in both domestic and foreign securities markets shall make periodic financial statements according to international accounting standards; in case there is a request of the Shareholders’ General Meeting, an additional financial statement must be made according to Vietnamese accounting standards together with an explanatory document on the differences between the accounting standards.

3. To assure the participation rate of foreign investors in accordance with law.

4. To comply with Vietnamese regulations on foreign exchange management with regard to foreign-currency transactions related to the listing of securities on the foreign stock exchange.

Article 67. Delisting on a foreign stock exchange in order to list on a domestic stock exchange

1. The listing institution on a foreign stock exchange, if being delisted due to failure to meet the listing requirements of the host country, may register additional listing on a domestic stock exchange.

2. The listing institution may delist the entire offering and listing of securities on a foreign stock exchange to carry out the procedures for additional listing registration on a domestic stock exchange.

3. The listing registration on a domestic stock exchange after delisting on a foreign stock exchange complies with Vietnamese law on securities and securities market.

Article 68. Reporting and disclosure of information on listing of depository receipts on a foreign stock exchange

1. The issuing institution of underlying securities for issuing depository receipts on a foreign stock exchange shall report to the State Securities Commission before registering the listing of depository receipts on such foreign stock exchange. The reporting documents include:

a/ The decision of the Shareholders’ General Meeting approving the issuance and listing of depository receipts on a foreign stock exchange;

b/ The documents related to the offering of underlying securities or the number of outstanding underlying securities in order to issue depository receipts;

c/ The information disclosure paper according to Form No. 09 provided in the Appendix to this Decree;

d/ A copy of the dossier of issuance and listing of depository receipts on the foreign stock exchange.

2. The issuing institution shall send an official dossier of listing registration of depository receipts to the foreign stock exchange and, upon receiving the decision of a competent authority or the stock exchange of the host country concerning the approval or disapproval of the listing of securities, report and disclose information under Clauses 1 and 2, Article 66 of this Decree.

Article 69. Obligations of issuing institutions of underlying securities

1. An institution holding underlying securities for issuing depository receipts shall disclose information on its held underlying securities and perform the obligations related to depository receipt holders.

2. The issuing institution of underlying securities for issuing depository receipts shall perform the obligations provided in Article 66 of this Decree.

Section 4

PROHIBITED TRANSACTIONS

Article 70. Prohibited transactions

1. Inside trading, including the following acts:

a/ Using inside information to buy or sell securities for themselves or for others;

b/ Unintentionally or intentionally revealing and providing inside information or advising others to buy or sell securities based on inside information.

2. Transactions manipulating the securities market, including the following:

a/ Using one or more of their trading accounts or of others or colluding with each other to buy and sell back and forth securities in order to create sham supply and demand;

b/ A person or group of people who collude(s) with each other to place sale and purchase orders for the same securities on the same trading day or collude(s) with each other to trade securities without actual transfer of ownership or switch the ownership between team members to create false securities prices or sham supply and demand;

c/ Continuously buying or selling securities with a dominant volume at the time of opening or closing the market in order to create a new opening or closing price for that type of securities on the market;

d/ Trading of securities in the form of colluding with and inducing others to continuously place securities sale or purchase orders, greatly influencing supply and demand and securities prices and manipulating securities prices;

e/ Giving opinions directly or indirectly through the mass media on a type of securities or securities-issuing institution in order to influence the price of such securities after conducting the trading and holding a position for such type of securities;

f/ Using methods or performing other trading acts to create sham supply and demand and manipulate securities price.

3. Other prohibited transactions:

a/ Institutions and individuals directly or indirectly committing frauds or deceits, creating false information or omitting or failing to disclose necessary information on a type of securities, causing serious misunderstanding, and then purchasing or selling such securities to get profits;

b/ A securities company changes the priority order for orders placed by customers; taking advantage of access to information about customers’ orders when they have not been entered into the trading system in order to place for itself or other individuals and institutions on the basis of information anticipation in customers’ trading orders likely to significantly impact the securities price in order to get profits (earning profits or avoiding or reducing losses) directly or indirectly from the change of securities prices;

c/ A securities owner makes one or several transactions to conceal the real ownership over a type of securities to shrik the obligation to disclose information in accordance with law;

d/ A fund management company colludes with a securities company to carry out excessive trading for the securities in the portfolio of a fund managed by the fund management company, helping the securities company get profits from brokerage charges while the investors of the fund have to suffer damage;

e/ Transactions related to individuals and institutions on the list of individuals and institutions involved in criminal activities provided by the Ministry of Public Security or a competent state agency.

Chapter VI

SECURITIES BUSINESS INSTITUTIONS

Article 71. Provisions on capital and shareholders, capital contribution members of securities business institutions

1. The legal capital for business operations of a securities company in Vietnam is:

a/ For securities brokerage: VND 25 billion;

b/ For securities dealing: VND 100 billion;

c/ For securities issuance underwriting: VND 165 billion;

d/ For securities investment consultancy: VND 10 billion.

2. In case an institution applies for a license for more than one business operation, the legal capital is the total legal capital corresponding to each operation proposed for licensing.

3. The legal capital of a fund management company in Vietnam or a branch of a foreign fund management company in Vietnam is VND 25 billion.

4. The capital contributed for the establishment of a foreign securities business institution and a branch of a foreign fund management company in Vietnam must be in Vietnam dong.

5. Requirements on an individual contributing capital to establish a securities business institution:

a/ Being an individual not falling in the cases not entitled to establish and manage enterprises in Vietnam in accordance with the law on enterprises, and having adequate financial capacity to contribute capital for the establishment of securities business institutions;

b/ Only using his/her own capital and proving adequate financial capacity under the guidance of the Ministry of Finance.

6. Requirements on an institution contributing capital to establish a securities business institution:

a/ Possessing the legal person status and not being in a state of consolidation, merger, division, separation, dissolution or bankruptcy and not falling in the cases not entitled to establish and manage enterprises in accordance with the law on enterprises;

b/ Running profitable business operations in 2 preceding years and having no accumulated loss. In addition:

If being a commercial bank, an insurer or a securities business institution, not being in a state of operational control, special control or other warning states and, at the same time, meeting all the conditions for capital contribution and investment under relevant specialized laws.

If being another economic institution:

- Having operated for at least 5 consecutive years preceding the year of contributing capital for the establishment of a securities business institution;

- After subtracting long-term assets, the remainder of its equity must be at least equal to the projected contribution capital;

- The working capital must be at least equal to the projected contribution capital.

c/ Only using the equity and other lawful capital sources under relevant  specialized laws, the latest annual financial statement has been audited without exception.

7. The structure of shareholders and capital contribution members in a securities company:

a/ There are at least two (2) founding shareholders and institutional founding members that comply with the provisions of Clause 6 of this Article. In case the securities company is organized in the form of single-member limited liability company, the owner must be an insurer or a commercial bank;

b/ The percentage of share ownership or capital contribution of the founding shareholders and institutional founding members is at least 65% of charter capital, in which the institutions being insurers and commercial banks  own at least 30% of charter capital;

c/ The shareholders and capital contribution members own 10% or more of the charter capital of a securities company while the affiliated persons (if any) of these shareholders and capital contribution members may not own more than 5% of charter capital at another securities company;

d/ A securities company operating in Vietnam may not contribute capital for the establishment of, purchase shares from or contribute capital to, another securities company in Vietnam, except the following cases:

- The operation of consolidation or merger; or

- Purchase to own or together with the affiliated persons (if any) own not more than 5% of the outstanding stocks of the securities company that has registered trading and listed on a stock exchange.

8. Structure of shareholders and capital contribution members at a fund management company:

a/ There are at least two (2) founding shareholders and institutional founding members that comply with the provisions of Clause 6 of this Article. If the fund management company is organized in the form of single-member limited liability company, the owner must be an insurer, a commercial bank or a securities company.

b/ The percentage of share ownership or capital contribution of the founding shareholders or the institutional founding members is at least 65% of charter capital, in which the institutions being insurers, commercial banks and securities companies own at least 30% of charter capital;

c/ The shareholders and capital contribution members own 10% or more of the charter capital of the fund management company while the affiliated persons (if any) of the shareholders and capital contribution members may not own more than 5% of charter capital at another fund management company;

d/ A fund management company operating in Vietnam may not contribute capital for the establishment of, purchase shares from or contribute capital to, fund management and securities companies in Vietnam, except the following cases:

- The operation of consolidation or merger; or

- Purchase to own or together with the affiliated persons (if any) own not more than 5% of the outstanding stocks of the fund management or securities company that has registered trading and listed on a stock exchange.

9. Foreign investors may purchase shares or contributed capital to own up to 49% of charter capital of an operating securities business institution. Foreign institutions, upon meeting the conditions specified at Points a, b and d, Clause 10 of this Article, may purchase to own 100% of the charter capital of an operating securities business institution. Foreign institutions that meet the conditions specified in Clause 10 of this Article may establish a new securities business institution with 100% foreign capital to operate in Vietnam.

The purchase of shares or contributed capital or participation in capital contribution to establish securities business institutions by foreign investors comply with the guidance of the Ministry of Finance.

10. Conditions for foreign institutions to contribute capital to establish and purchase to own 100% capital of a securities business institution:

a/ Being an institution having operated in the banking, securities or insurance field for at least 2 years preceding the year of capital contribution for establishment or purchase of shares or contributed capital;

b/ Being subject to regular and continuous supervision by a specialized management and supervision agency in the foreign country in the field of banking, securities or insurance and being approved by this agency of the capital contribution to establish a securities business institution in Vietnam;

c/ The specialized management and supervision agency in the foreign country in the field of banking, securities or insurance and the State Securities Commission have signed a bilateral or multilateral cooperation agreement on information exchange, management cooperation, inspection and supervision of securities activities and securities market;

d/ Complying with relevant provisions of Clause 6 of this Article.

Article 72. Order, procedures and dossier of application for licenses to establish and operate securities business institutions

1. A dossier of application for a license to establish and operate a securities business institution comprises:

a/ Documents as prescribed in Article 63 of the Law on Securities;

b/ The meeting minutes enclosed with the resolution of shareholders and members expected to contribute capital or the owner’s decision on the establishment of the securities business institution;

c/ The principle contract of head office lease or the decision of space and head office handover of the owner together with the document certifying the lessor’s or owner’s ownership or use rights of the head office;

d/ Documents proving financial capacity:

- For individuals: Certification of a bank of the balance of Vietnam dong and/or a freely convertible foreign currency, certification of the Vietnam Securities Depository of the number of stocks on the depository account;

- For institutions: The latest annual audited financial statement and the financial statement of the latest quarter. For a capital contribution institution being the parent company, the consolidated financial statement of the latest year already audited in accordance with the law on accounting and auditing is also required. For an institution operating in the financial, banking, insurance or securities field, it shall add monthly reports on the financial safety and capital adequacy norms of the latest two years as prescribed by the specialized law.

e/ List of expected members of the Board of Directors or Members’ Council and Control Board (if any), the internal audit division, the director (general director), deputy directors (deputy general directors) and at least five (5) operational employees, for the dossier of fund management company establishment, or three (3) operational employees for each business operation proposed for licensing, for the dossier of securities company establishment, enclosed with copies of their identity cards or valid passports, judicial records, resumes and relevant practice certificates;

f/ List of shareholders and capital contribution members, enclosed with the following documents:

- For individuals: A copy of the identity card or valid passport and resume. If the individual is expected to own over 10% of charter capital, he/she shall also submit his/her judicial record.

- For institutions: A copy of the establishment and operation license (if any), business registration certificate or another equivalent document, company charter, meeting minutes and decision of the Shareholders’ General Meeting , the Board of Directors or the Members’ Council or the meeting minutes and decision of the chairperson of the Board of Directors or the Members’ Council or the owner’s decision on the capital contribution to establish the securities business institution, a copy of the identity card or valid passport and resume of the authorized representative together with a written authorization. In case the institution is expected to own over 10% of charter capital, it shall supplement the judicial records of the authorized and at-law representatives.

g/ Written approval of the permitted capital contribution for the establishment, granted by a competent state management agency, which is the State Bank for commercial banks or the Ministry of Finance for insurers;

h/ Other relevant documents evidencing that the individuals and institutions have met the conditions specified in Article 71 of this Decree.

2. In case the shareholder or capital contribution member is a foreign institution, the documents issued by a competent foreign authority must be consularly legalized within 6 months before the date of dossier submission and must be translated into Vietnamese and certified by an institution with translation function lawfully operating in Vietnam.

3. The dossier specified in Clause 1 or 2 of this Article shall be made in one (1) original set together with its electronic information file. The original set of dossier may be sent directly or by mail to the one-stop-shop division of the State Securities Commission.

4. A dossier may be modified and supplemented when the shareholders and capital contribution members find it necessary. The modified and supplemented documents must be signed by those who have signed the dossier sent to the State Securities Commission. When it is necessary to clarify issues related to the dossier, the State Securities Commission may request the representative of the shareholders or founding members or the person expected to act as the director (general director) to explain in person or in writing.

5. Within 30 days after the State Securities Commission makes a written request, the shareholders and founding members that establish a securities business institution shall complete the dossier of application for an establishment and operation license. After this time limit, if the dossier is not fully supplemented and completed, the State Securities Commission may refuse to grant an establishment and operation license.

6. Within 20 days after receiving a complete and valid dossier as prescribed in Clauses 1, 2, 3 and 5 of this Article, the State Securities Commission shall make a written request for completion of the conditions of physical foundations and contributed capital blockade. The shareholders and capital contribution members may deduct the contributed capital to invest in physical foundations. The remaining contributed capital must be blockaded on an account of a commercial bank designated by the State Securities Commission and shall be released and transferred to the account of the company immediately after the company is granted an establishment and operation license.

7. Three months after receiving the notice of the State Securities Commission as prescribed in Clause 6 of this Article, if the shareholders and capital contribution members fail to improve physical foundations and blockade sufficient charter capital and complement personnel in full, the State Securities Commission may refuse to grant a license.

8. Within 7 days after receiving the certificate of capital blockade and the written record of physical foundation inspection and other valid documents, the State Securities Commission shall grant an establishment and operation license. In case of refusal, the State Securities Commission shall issue a written reply clearly stating the reason.

Article 73. Offshore investment operations of Vietnamese securities business institutions

1. Upon establishing a branch or representative office abroad and making offshore investment, a securities business institution shall obtain approval of the State Securities Commission according to the Ministry of Finance’ regulations.

2. After obtaining the written approval of the State Securities Commission, the securities business institution shall establish a branch or representative office abroad and make offshore investment in accordance with the laws on investment and foreign exchange management.

Article 74. Conditions for establishment of a branch or representative office of a foreign securities business institution in Vietnam

1. A foreign securities business institution providing fund management services may establish a representative office of a fund management company in Vietnam if meeting the following conditions:

a/ Being operating lawfully and regularly supervised by the specialized management and supervision agency in the finance, banking or securities field in the country where such institution is established and operating;

b/ Being operating lawfully in the country of which the specialized management and supervision agency has signed a bilateral or multilateral agreement with the State Securities Commission on information exchange, management cooperation, inspection and supervision of securities activities and securities market or being managing funds investing in Vietnam. The remaining duration of operation (if any) is at least 1 year.

2. A foreign securities business institution performing securities brokerage or insurance underwriting operations may establish a representative office of a securities company in Vietnam if meeting the conditions stipulated at Points a and b, Clause 1 of this Article.

3. A foreign securities business institution providing fund management services may establish a branch in Vietnam if complying with the provisions of Article 77 of the Law on Securities and meeting the following conditions:

a/ Being operating lawfully and licensed to manage public funds in accordance with regulations of the country of origin and permitted in writing by the specialized management and supervision agency in the country of origin to establish a branch in Vietnam (if so required by foreign law);

b/ Not being a shareholder or capital contribution member owning more than 5% of charter capital of a fund management company in Vietnam;

c/ A branch of a foreign fund management company may only provide management services for assets mobilized abroad;

d/ Complying with the provisions of Point b, Clause 10, Article 71 of this Decree or having had a representative office in Vietnam and complying with the provisions of Point b, Clause 1 of this Article;

e/ The order, procedures and dossier of application for an establishment and operation license of a branch of a foreign fund management company and the operation of such branch in Vietnam comply with the Ministry of Finance’s regulations.

Article 75. Order, procedures and dossier of operation registration of a representative office of a foreign securities business institution in Vietnam

1. The dossier of operation registration of a representative office of a foreign securities business institution (below referred to as parent company) in Vietnam comprises:

a/ The documents specified in Clause 2, Article 78 of the Law on Securities;

b/ The documents certifying that the parent company meets the conditions specified in Clauses 1 and 2, Article 74 of this Decree, the document of a competent authority in the foreign country permitting the establishment of a representative office in Vietnam (if so required by foreign law); the audited financial statement of the latest fiscal year or the written certification of the performance of tax or financial obligations in the latest fiscal year issued by a competent authority of the country where the parent company is established;

c/ The meeting minutes and decision of the Board of Directors or Members’ Council or of the director (general director) on the establishment of a representative office in Vietnam, the decision to appoint a chief representative in Vietnam, and certified copies of the valid passports or identity cards, and resumes of the chief representative and staff working at the representative office in Vietnam;

d/ The principle contract of the representative office lease together with a written confirmation of ownership or authority to lease of the office lessor.

In case of establishment of a representative office of a fund management company, the following documents related to the fund currently investing in Vietnam (if any) must be supplemented:

- A certified and consularly legalized copy of the fund establishment registration certificate (if any) or the document certifying that the fund has completed the establishment registration abroad, the fund’s prospectus or an equivalent document issued by the management agency (if any), the fund charter, trust contract or memorandum of capital contribution or other equivalent documents;

- The depository bank’ written certification of the size of the fund’s capital in Vietnam;

- A certified copy of the certificate of account registration of indirect investment capital or of the certificate of registration of the securities trading code of such fund.

2. The dossier specified in Clause 1 of this Article must be made in two (2) sets, one in Vietnamese and the other in the language of the country of origin together with an electronic data file. The original set of dossier may be sent directly or by mail to the one-stop-shop division of the State Securities Commission. The documents issued by a competent state management agency must be consularly legalized within 6 months before the date of dossier submission.

3. A dossier may be modified and supplemented when the foreign securities business institution finds it necessary or the State Securities Commission so requests. The modified and supplemented documents must be signed by those who have signed the dossier sent to the State Securities Commission or who have the same title with the persons mentioned above.

4. Within 7 days after receiving a complete and valid dossier, the State Securities Commission shall grant a certificate of representative office operation registration of the foreign securities business institution in Vietnam. In case of refusal, the State Securities Commission shall issue a written reply clearly stating the reason.

Article 76. Rights and obligations of a representative office, the chief representative and staff at a representative office of a foreign securities business institution in Vietnam

1. Rights and obligations of a representative office of a foreign securities business institution:

a/ To open an account for expenditure in foreign currencies or Vietnam dong of foreign currency origin at a commercial bank licensed to conduct foreign exchange business in Vietnam and only use this account in the operation of the representative office. The opening, use and closure of the representative office’s account must comply with the relevant provisions of law;

b/ To recruit foreign employees to work in the representative office in accordance with Vietnamese law. Within 15 days after the recruitment of a foreign employee to work in the representative office in Vietnam, the parent company shall report to the State Securities Commission on the recruitment of foreigners together with documents certifying the approval of competent state management agencies;

c/ To have its own seal in accordance with Vietnamese law and only use this seal in transaction documents within the powers and functions of the representative office;

d/ To perform only activities according to the content and within the operation duration specified in the certificate of operation registration of the representative office; not to perform business activities in Vietnam; not to perform asset management and investment capital management for investors, including investment capital of its parent company in Vietnam and other securities business activities in Vietnam;

e/ Other rights and obligations as prescribed by law.

2. The chief representative and staff at the representative office may not hold the following positions simultaneously:

a/ Head of the parent company’s branch, chief representative and staff of a representative office or branch of another foreign institution in Vietnam;

b/ At-law representative, director (general director), deputy director (deputy general director) or employee working for an enterprise established under Vietnamese law;

c/ At-law representative, member of the Board of Directors, Members’ Council, director (general director), deputy director (deputy general director) of the parent company or another person working for the parent company who has the right on behalf of the parent company to sign economic contracts and property transactions without a written authorization of the parent company.

3. The chief representative may only represent the parent company to sign contracts related to business and investment activities of the parent company with other economic institutions in Vietnam when having a legal written authorization by a competent person of the parent company. The power of attorney must be made separately for each signing (one-time authorization) and one valid copy of it must be sent to the State Securities Commission within 10 days from its effective date.

Chapter VII

SECURITIES INVESTMENT COMPANIES

Article 77. General provisions on securities investment companies

1. Securities investment companies may issue only one type of stocks and are not obliged to redeem their issued stocks unless in case of consolidation or merger of enterprises. Rights, obligations and benefits of shareholders and matters related to the Shareholders’ General Meeting comply with the law on enterprises.

2. A public securities investment company shall entrust a fund management company to manage its capital. A private securities investment company may manage its investment capital by itself or entrust a fund management company to do so. If a securities investment company entrusts a fund management company to manage its investment capital, at least two-thirds (2/3) of members of the Board of Directors of the securities investment company must be independent members under Clause 1, Article 80 of this Decree.

3. Public offering of stocks by public securities investment companies complies with Article 90 of the Securities Law and the Ministry of Finance’s regulations.

4. Private securities investment companies with over 49% of their charter capital owned by foreign investors shall comply with regulations applicable to foreign investors.

5. Determination of the net asset value and reporting and information disclosure regulations of securities investment companies comply with the Ministry of Finance’s regulations.

Section 1

PUBLIC SECURITIES INVESTMENT COMPANIES

Article 78. Dossiers, order and procedures for registration of public offering of stocks by public securities investment companies

1. A dossier for registration of public offering of stocks by a public securities investment company comprises:

a/ A written registration of public offering of stocks for establishment of a public securities investment company made by a fund management company;

b/ The charter of the securities investment company made under the Ministry of Finance’s guidance;

c/ The prospectus made under Article 15 of the Law on Securities and the Ministry of Finance’s regulations on dossiers for registration of public offering of securities;

d/ The principle contract on investment supervision and management and stock distribution, issuance underwriting commitment (if any);

e/ A list of expected members of the Board of Directors, at-law representative of the public securities investment company and founding shareholders, enclosed with the following documents:

- For individuals: Copy of the identity card or valid passport, judicial record and resume;

- For institutions: Copy of the establishment and operation license, the business registration certificate (if any), copy of the identity card or valid passport, judicial record and resume of the authorized representative together with the power of attorney;

f/ The commitment of founding shareholders to purchase at least 20% of stocks registered for public offering and to hold these stocks for 3 years after the grant of the establishment and operation license and commitment on independence from the fund management company and supervisory bank of independent members of the Board of Directors;

g/ A list of the director (general director), deputy director (deputy general director) and fund manager (if any) enclosed with copies of their identity cards or valid passports, judicial records, resumes and copies of their professional fund management certificates.

2. The dossier provided in Clause 1 of this Article shall be made in one (1) original set and sent to the State Securities Commission. Documents of foreign founding shareholders comply with Clause 2, Article 72 of this Decree.

3. Within 30 days after receiving a complete and valid dossier, the State Securities Commission shall grant a public offering certificate. In case of refusal, it shall reply in writing, clearly stating the reason.

Article 79. Conditions, dossiers, order and procedures for licensing the establishment and operation of public securities investment companies

1. Conditions for obtaining an establishment and operation license for a public securities investment company:

a/ Having an actually contributed capital of at least VND 50 billion;

b/ Having at least one hundred (100) shareholders, excluding shareholders being professional securities investors;

c/ Being managed by a fund management company;

d/ Depositing assets at the supervisory bank;

e/ At least two-thirds (2/3) of members of the Board of Directors being independent from the fund management company and supervisory bank under Clause 1, Article 80 of this Decree.

2. Within 10 days after completing a public offering of stocks, the fund management company shall report on the offering result and submit a dossier of application for an establishment and operation license for a public securities investment company, which comprises:

a/ An application for an establishment and operation license for a public securities investment company;

b/ A brief report on the offering result enclosed with the supervisory bank’s certification of the proceeds from the offering and the volume of sold stocks;

c/ A list of shareholders, clearly indicating their full names, numbers of identity cards or valid passports, contact addresses (for individuals), full names and abbreviated names, numbers of business registration certificates and head office addresses (for institutions), types of shareholders, numbers of securities depository accounts (if any), volumes of purchased stocks, rate of ownership and date of purchase;

d/ A general report on shareholders’ opinions about members of the Board of Directors and other related matters (if any).

3. Within 10 days after receiving a complete and valid dossier, the State Securities Commission shall grant an establishment and operation license for a public securities investment company, which is concurrently the business registration certificate. In case of refusal, it shall reply in writing, clearly stating the reason.

4. Within 30 days after the effective date of an establishment and operation license for a public securities investment company, the fund management company shall complete the dossier and list stocks of the public securities investment company on a stock exchange.

Article 80. Board of Directors of a public securities investment company

1. A Board of Directors has between three (3) and eleven (11) members, at least two-thirds (2/3) of whom are independent members. An independent member of the Board of Directors must satisfy the following conditions:

a/ Not being the director (general director), deputy director (deputy general director) or official staff of the fund management company or supervisory bank, or the parent company, associated or subsidiary company of the fund management company or supervisory bank;

b/ Not being the natural parent, adoptive parent, spouse, child, adopted child or natural sibling of the persons specified at Point a of this Clause;

c/ Meeting the conditions on a member of the Board of Directors under the law on enterprises.

2. The rights, obligations, appointment, relief of duty, removal from office and replacement of members of the Board of Directors comply with the company’s charter and the laws on enterprises and securities.

Article 81. Operation limitations for public securities investment companies

1. Not being permitted for business, production and service provision.

2. Not being permitted to issue securities to the public unless in case of initial public offering of stocks for company establishment or issuance of stocks to existing shareholders for charter capital increase or issuance of stocks for transformation in case of consolidation or merger.

3. Complying with regulations on investment limitations under Clause 2, Article 97 of the Securities Law. Capital of public securities investment companies being managed by fund management companies and subject to supervision by supervisory banks under the Securities Law and the Ministry of Finance’s guidance.

Article 82. Increase and decrease of charter capital of public securities investment companies

1. A public securities investment company may increase or decrease its charter capital under the plan adopted by the latest Shareholders’ General Meeting.

a/ In case of charter capital decrease, the securities investment company must assure that the net asset value after capital decrease satisfies the capital requirement under Point a, Clause 1, Article 79 of this Decree;

b/ In case of charter capital increase through issuance of bonus stocks or payment of dividends in stocks, the company must have sufficient financial resources from capital surplus and after-tax profits.

2. A dossier of request for charter capital increase or decrease comprises:

a/ A written request for increase or decrease of the securities investment company’s charter capital;

b/ The minutes and decision of the Shareholders’ General Meeting or meeting minutes and decision of the Board of Directors on the charter capital increase or decrease enclosed with an implementation plan;

c/ The audited financial statement up to the latest quarter;

d/ The draft announcement of issuance enclosed with a list of distributing agents;

e/ The prospectus and company charter (if changed).

3. Within 7 days after receiving a complete and valid dossier under Clause 2 of this Article, the State Securities Commission shall consider and approve the increase or decrease of charter capital of a public securities investment company. In case of refusal, it shall reply in writing, clearly stating the reason.

4. Within 7 days after completing its charter capital increase or decrease, a public securities investment company shall report such to the State Securities Commission, covering:

a/ A brief report on the charter capital increase or decrease enclosed with a list of new investors (if any) under Point c, Clause 2, Article 79 of this Decree;

b/ The written certification of the increased capital being deposited at a frozen account at the supervisory bank (for capital increase) or the supervisory bank’s written certification of the company’s completion of payment to shareholders (for capital decrease), number of shareholders and volume of outstanding stocks (after capital adjustment). This document is not required in case of increasing charter capital from post-tax profits.

5. Within 7 days after receiving a report provided in Clause 4 of this Article, the State Securities Commission shall modify the establishment and operation license of a public securities investment company.

Article 83. Consolidation and merger of public securities investment companies

1. A public securities investment company may be consolidated or merged with another public securities investment company on the following principles:

a/ The consolidation or merger plan and contract must be approved by the Shareholders’ General Meeting of the involved companies. The consolidation or merger plan must clearly specify the reason for and form of consolidation or merger, expected impacts on shareholders, method of determining the net asset value, rates of conversion and cash payment (if any), and the principles of asset transfer between the public securities investment companies;

b/ Expenses for legal consultancy services, administrative expenses and other service expenses related to the consolidation or merger may not be accounted as operational expenses of the public securities investment company or as other expenses incurred by shareholders unless otherwise decided by the Shareholders’ General Meeting;

c/ In case of swap of stocks combined with cash payment, shareholders of the company subject to consolidation or merger may receive an additional amount not exceeding 10% of the net asset value per stock on the date of consolidation or merger;

d/ Shareholders of the public securities investment company that oppose the consolidation or merger may request the public securities investment company subject to consolidation or merger to buy their shares.

2. A dossier of request for the State Securities Commission’s grant or modification of an establishment and operation license for a consolidated or merged securities investment company comprises:

a/ A written request for grant of an establishment and operation license for a consolidated public securities investment company or modification of the establishment and operation license for a merged company;

b/ The original establishment and operation license of the public securities investment company subject to consolidation or merger;

c/ The decision of the Shareholders’ General Meeting on consolidation or merger together with the meeting minutes, consolidation or merger plan, draft contract on consolidation or merger and an analysis report on such consolidation or merger;

d/ The assessment reports of the supervisory banks on the principles of determination of the net asset value, rate of stock swap, rate of cash payment (if any) and other related matters;

e/ A list of shareholders under Point c, Clause 2, Article 79, and other related documents under Points c, d, e, f and g, Clause 1, Article 78 of this Decree.

3. Within 15 days after receiving a complete and valid dossier under Clause 2 of this Article, the State Securities Commission shall grant an establishment and operation license for a consolidated public securities investment company or modify the establishment and operation license of a merged public securities investment company. The date of consolidation or merger is the effective date of the license. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

4. Within 30 days after its consolidation or merger, a consolidated or merged public securities investment company shall report on its consolidation or merger to the State Securities Commission through the fund management company, covering:

a/ The supervisory bank’s certification of the total asset value, total debt value and net asset value on the date of consolidation or merger, the realized stock swap rate, the rate of cash payment (if any) per stock, volume and value of stocks bought from shareholders opposing the consolidation or merger;

b/ A competent state agency’s written certification of the involved public securities investment companies’ return of their seals, seal specimen registration certificates and tax identification number certificates.

Article 84. Dissolution of public securities investment companies

1. A public securities investment company is dissolved when:

a/ The investment management contract is terminated or the fund management company is dissolved, goes bankrupt or has its establishment and operation license revoked while the Board of Directors fails to find a replacing fund management company within 60 days after the event occurs;

b/ The supervision contract is terminated or the supervisory bank is dissolved, goes bankrupt or has its securities depository operation certificate revoked while the Board of Directors and the fund management company fails to find a replacing supervisory bank within 60 days after the event occurs;

c/ The operation term indicated in the establishment and operation license of the public securities investment company terminates without being extended;

d/ Its dissolution is decided by the Shareholders’ General Meeting.

2. Within 30 days after a public securities investment company is dissolved under Point a or b, Clause 1 of this Article, the Board of Directors of the public securities investment company shall convene the Shareholders’ General Meeting to adopt the company dissolution decision.

3. The Shareholders’ General Meeting of the public securities investment company may appoint an audit institution to re-value assets and supervise the liquidation of assets and dissolution of the company.

4. Within 7 days after the Shareholders’ General Meeting issues the company dissolution decision, a public securities investment company shall submit to the State Securities Commission a dossier of request for approval of the opening of dissolution procedures, comprising:

a/ A written request for dissolution of a public securities investment company;

b/ The minutes and decision of the Shareholders’ General Meeting on the company dissolution;

c/ A plan to handle debt obligations and assets together with a list of creditors, specifying their names and addresses, type of debts, debt amount of each creditor, the company’s asset structure and roadmap for asset liquidation sale.

5. Within 15 days after receiving a complete and valid dossier under Clause 4 of this Article, the State Securities Commission shall issue a written approval of the opening of liquidation and dissolution procedures for a public securities investment company. In case of refusal, it shall reply in writing, clearly stating the reason.

6. The order and procedures for dissolution of public securities investment companies comply with the Ministry of Finance’s guidance.

Article 85. Revocation of establishment and operation licenses of public securities investment companies

1. A public securities investment company may have its establishment and operation license revoked when:

a/ The dossier of application for its establishment and operation license contains incorrect and false information on the company’s establishment conditions under Article 79 of this Decree;

b/ It fails to commence securities investment activities within 12 months after obtaining the establishment and operation license;

c/ It is dissolved or consolidated or merged into another public securities investment company.

2. The State Securities Commission shall notify the revocation of establishment and operation licenses of public securities investment companies on its website.

3. Right after the State Securities Commission’s issuance of a decision to revoke its establishment and operation license, the Board of Directors of the public securities investment company, fund management company and supervisory bank shall carry out liquidation and dissolution procedures under law.

Article 86. Changes subject to approval

1. Change of name, the fund management company or supervisory bank of a public securities investment company must be approved by the State Securities Commission.

2. A dossier of request for a change provided in Clause 1 of this Article comprises:

a/ A written request for approval of change;

b/ The minutes and decision of the Shareholders’ General Meeting to approve a change provided in Clause 1 of this Article;

c/ Relevant documents under Clause 1 of this Article. In case of change of the fund management company or supervisory bank, the public securities investment company shall supplement the written commitment made by that company or bank to transfer its rights and obligations to the replacing fund management company or supervisory bank.

3. Within 15 days after receiving a complete and valid dossier under Clause 2 of this Article, the State Securities Commission shall issue a written approval of a change of a public securities investment company. In case of refusal, it shall reply in writing, clearly stating the reason.

Section 2

PRIVATE SECURITIES INVESTMENT COMPANIES

Article 87. Conditions for establishing private securities investment companies

1. Conditions for obtaining an establishment and operation license for a private securities investment company that entrusts its capital management:

a/ Meeting the conditions specified at Points a, c, d and e, Clause 1, Article 79 of this Decree;

b/ Having maximum ninety nine (99) shareholders, excluding investors being professional securities investors, with each institutional shareholder contributing at least VND 3 billion and each individual shareholder contributing at least VND 1 billion.

2. Conditions for obtaining an establishment and operation license for a private securities investment company that manages capital by itself:

a/ Meeting the conditions specified at Point a, Clause 1 of Article 79, and Point b, Clause 1 of this Article;

b/ Its assets being deposited at the depository bank;

c/ Its domestic shareholders being credit institutions, securities trading organizations or insurers firms or members of the Board of Directors, director (general director), or deputy director (deputy general director) of the company to be established;

d/ Its director (general director), deputy director (deputy general director) and staff engaged in professional operations having at least 5 years of experience in asset management and investment analysis and possessing a professional fund management certificate or other international certificates under the Ministry of Finance’s regulations.

Article 88. Dossiers, order and procedures for licensing private securities investment companies

1. A dossier of application for an establishment and operation license for a private securities investment company comprises:

a/ An application for an establishment and operation license, enclosed with a written authorization of the fund management company or shareholder representative to complete legal procedures for establishing a private securities investment company;

b/ A bank’s certification of the contributed capital amount deposited at a frozen account opened at that bank;

c/ A meeting minutes together with the shareholders’ resolution on establishment of a private securities investment company;

d/ A draft depository contract, a draft investment management contract (if any);

e/ Charter of the private securities investment company and prospectus;

f/ A list of the shareholders under Point c, Clause 2, Article 79 of this Decree, enclosed with copies of their identity cards or valid passports and resumes, authorized representatives of institutional shareholders, members of the Board of Directors, director (general director), and deputy director (deputy general director) and the following documents:

For an institutional shareholder: Valid copies of the establishment and operation license, business registration certificate (if any) or equivalent document, meeting minutes and decisions of the Shareholders’ General Meeting, Board of Directors or Members’ Council or the company owner on capital contribution for establishing a private securities investment company and designation of the authorized representative of the contributed capital enclosed with the written authorization.

For a foreign shareholder: A document verifying that the foreign shareholder has opened an investment capital account at a Vietnam-based commercial bank and registered a securities trading code.

For an independent member of the Board of Directors: A written commitment on his/her independence under Clause 1, Article 80 of this Decree.

g/ For a company managing capital by itself, copies of the professional fund management certificates or international certificates of the director (general director), deputy director (deputy general director) and staff engaged in professional operations, principle contract on head office lease or the owner’s decision to handover the office space or office enclosed with documents certifying the lessor’s or owner’s right to use or own the office (if having an office).

2. Documents issued by competent foreign state management agencies comply with Clause 2, Article 72 of this Decree.

3. A dossier for registration of establishment of a private securities investment company provided in Clauses 1 and 2 of this Article shall be made in one (1) original set and submitted to the State Securities Commission.

4. Within 30 days after receiving a complete and valid dossier under Clause 1 of this Article, the State Securities Commission shall grant an establishment and operation license for a private securities investment company. In case of refusal, it shall reply in writing, clearly stating the reason.

5. The fund management company and representatives of institutional shareholders shall take responsibility for the completeness, accuracy and validity of the dossier. Within 3 days after detecting an error or arising an event that affects the submitted dossier’s contents, the fund management company or shareholder representative shall report such to the State Securities Commission. The modified and supplemented document must be signed by those who have signed in the dossier or those who have the same titles with the former.

6. Right after obtaining an establishment and operation license from the State Securities Commission, a private securities investment company may be released the whole capital amount contributed by its shareholders deposited at the depository bank for transfer to the fund management company for management under the investment management contract. Concurrently, shareholders contributing capital in assets shall transfer the right to own these assets to the company under the law on enterprises and the Ministry of Finance’s guidance.

7. Within 10 days after obtaining an establishment and operation license from the State Securities Commission, a private securities investment company shall complete the making of the shareholder register and certification of shareholders’ share ownership.

Article 89. Operations of private securities investment companies

1. Operations of a private securities investment company:

a/ Must comply with Clauses 1 and 2, Article 81 of this Decree;

b/ Must not include the elaboration, implementation and development of real estate projects;

c/ May include unlimited investment in different types of securities and real estate and other property eligible for trading under relevant laws.

2. The Ministry of Finance shall guide the dissolution, consolidation, merger, change of names, change of depository banks, fund management companies or managerial staff, modification of company charters, reporting regime and detailed investment activities of private securities investment companies.

Chapter VIII

REAL ESTATE INVESTMENT FUNDS

Article 90. General provisions

1. A real estate investment fund shall be organized and operate as a public securities investment fund or public securities investment company (below referred to as real estate securities investment company).

2. A real estate investment fund must be managed by a fund management company. Management of capital and assets of a real estate investment fund must be supervised by a supervisory bank.

3. Assets of a real estate investment fund must be deposited at the supervisory bank.

4. Certificates of a real estate investment fund must be listed on a stock exchange.

5. Fund raising or public offering of fund certificates by a real estate investment fund must be conducted by a fund management company under Article 90 of the Securities Law, and Articles 78 and 79 of this Decree, and be registered with the State Securities Commission.

6. The Ministry of Finance shall guide the registration of establishment and operations of real estate investment funds.

Article 91. Investment operations of real estate investment funds

1. A real estate investment fund must ensure that:

a/ At least 65% of its net asset value be invested in real estate under Clause 2 of this Article. Its invested real estate must be located in Vietnam for lease or earning stable revenues;

b/ Its real estate be held for at least 2 years after being purchased, unless in cases subject to sale under law or under a decision of the Investor’s General Meeting or the Fund Representative Board according to its competence vested under the fund charter;

c/ The type of invested real estate be conformable with the investment policy and objectives provided in the fund charter and prospectus;

d/ It does not formulate, implement and develop real estate projects;

e/ At most 35% of its net asset value be invested in money and money equivalent instruments, valuable papers and negotiable instruments under the banking law, listed securities, securities registered for trading, government bonds or government-guaranteed bonds. Investment in these assets is subject to the following limits:

- To invest no more than 5% of the fund’s total asset value in securities issued by a single institution;

- To invest no more than 10% of the fund’s total asset value in issued securities of a group of companies being parent and subsidiary companies and affiliate companies;

- To invest no more than 10% of outstanding securities of a single issuing institution.

f/ It does not provide or guarantee any loans and its total loans do not exceed 5% of its net asset value at the time of borrowing.

2. A real estate investment fund may invest in real estate which is:

a/ A property permitted for trading under the law on real estate business;

b/ A completely built house or construction work under the construction law. For a real estate under construction, a real estate investment fund may make investment only when:

- It has had trading contracts with potential customers to ensure that the real estate can be sold, used or leased right after construction;

- The construction project is implemented on schedule at the time the fund makes capital contribution;

- The total value of real estate projects under construction invested by the fund does not exceed 10% of the fund’s total asset value; and

- The real estate is other than land without construction works under the law on real estate business and the Land Law.

3. The investment rate of a real estate investment fund may be deviatory from the investment limits provided at Points a, e and f, Clause 1 of this Article as a result of:

a/ Market price fluctuations of assets on the fund’s investment portfolio;

b/ Making lawful payments of the fund;

c/ Consolidation or merger of issuing institutions;

d/ The fund’s new establishment or splitting, consolidation or merger with its operation duration of under 6 months counting from the date of obtaining a fund establishment registration certificate.

4. The fund management company shall disclose information on such a deviation and concurrently report it to the State Securities Commission under the Ministry of Finance’s guidance and modify the investment portfolio of the real estate investment fund in compliance with Clause 1 of this Article within 1 year after the time of arising the deviation.

Chapter IX

IMPLEMENTATION PROVISIONS

Article 92. Application of the Decree to institutions registering listing on a stock exchange and securities trading institutions established before and after the effective date of this Decree

1. An institution registering its listing on a stock exchange before the effective date of this Decree which fails to satisfy the listing conditions under this Decree may still be listed and is not obliged to change the stock exchange under the new listing conditions.

2. An institution registering listing on a stock exchange or a securities trading institution established after the effective date of this Decree shall comply with this Decree.

3. A securities business established before the effective date of this Decree is not obliged to comply with Point b, Clause 7, and Point b, Clause 8, Article 71 of this Decree.

Article 93. Effect

This Decree takes effect on September 15, 2012, and replaces the Government’s Decrees No. 14/2007/ND-CP of January 19, 2007, detailing a number of articles of the Securities Law, No. 84/2010/ND-CP of August 2, 2010, amending and supplementing a number of articles of Decree No. 14/2007/ND-CP of January 19, 2007, detailing a number of articles of the Securities Law, and No. 01/2010/ND-CP of January 4, 2010, on private placement of shares. Previous provisions which are contrary to this Decree are all annulled.

Article 94. Organization of implementation

1. The Ministry of Finance shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People’s Committees shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG