Decree No. 81/2020/ND-CP amending the Decree No. 163/2018/ND-CP

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 163/2018/ND-CP of December 4, 2018, on the issuance of corporate bonds^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the November 26, 2014 Law on Enterprises;

Pursuant to the June 29, 2006 Securities Law;

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

Pursuant to the June 16, 2010 Law on Credit Institutions;

Pursuant to the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

At the proposal of the Minister of Finance;

The Government promulgates the Decree amending and supplementing a number of articles of Decree No. 163/2018/ND-CP of December 4, 2018, on the issuance of corporate bonds (below referred to as Decree No. 163/2018/ND-CP).

Article 1.To amend and supplementing a number of articles of Decree No. 163/2018/ND-CP as follows:

1. To add the following Clause 4 to Article 3:

“4. Acts of violation concerning the private placement of corporate bonds committed by related organizations and individuals shall be handled under the regulations on sanctioning of administrative violations in the fields of securities and securities market and relevant regulations.”

2. To amend Clause 8, Article 6 as follows:

“8. Bond trading: Corporate bonds issued in the domestic market may only be traded among less than 100 investors, excluding professional securities investors, within one year from the date a bond issuance is completed, unless otherwise specified by a court ruling or except the case of inheritance in accordance with law. After this time limit, corporate bonds may be traded without restriction on the number of investors, unless otherwise decided by the bond-issuing corporation. The trading in corporate bonds issued to the international market must comply with the regulations applicable at the market where they are issued.”

3. To amend and supplement Clause 1, Article 10 as follows:

“1. Conditions for a corporation to issue inconvertible bonds or bonds unaccompanied with warrants:

a/ Being a joint stock company or limited liability company established and operating under Vietnam’s law.

b/ Having operated for at least 1 year from the date of initial grant of the enterprise registration certificate or business registration certificate or license of equivalent validity as prescribed by law. For a reorganized or transformed enterprise, its operation period is the operation period of the dividing enterprise (in case of division of enterprises), the operation period of the separating enterprise (in case of separation of enterprises), the longest operation period among those of the consolidating enterprises (in case of consolidation of enterprises), the operation period of the merged enterprise (in case of merger of enterprises), or the operation period of the enterprise before and after transformation (in case of transformation of enterprises).

c/ Having its financial statement of the year preceding the year of bond issuance audited by a qualified audit firm as prescribed in Clause 7, Article 4 of this Decree.

d/ Signing a counseling contract with an organization providing counseling on bond issuance dossiers as prescribed in Clause 3, Article 15 of this Decree, unless the bond-issuing corporation is allowed to provide services on counseling on bond issuance dossiers in accordance with law.

dd/ Satisfying the requirement on restriction on the number of investors for bond issuance and trading as prescribed in Clause 2, Article 4, or Clause 8, Article 6, of this Decree.

e/ Having a bond issuance plan approved by a competent authority under Article 14 of this Decree.

g/ Having fully paid both principals and interests (if any) of bonds issued during 3 consecutive years before the bond issuance.

h/ Satisfying the requirements on financial safety ratio and prudential ratio in its operations under relevant specialized laws.

i/ Ensuring that the outstanding balance of privately placed corporate bonds at the time of placement (including also the volume of bonds planned to be placed) does not exceed 5 times the equity stated in the latest quarterly financial statement as of the time of placement approved by a competent authority.

k/ Each bond issuance shall be completed within 90 days after the date of information disclosure prior to the issuance; the interval between two consecutive bond issuances must be at least 6 months, and bonds issued each time must have the same conditions and terms.

l/ Credit institutions that wish to issue bonds are not required to comply with Points i and k of this Clause.”

4. To amend Point b, Clause 2, Article 10 as follows:

“b/ Satisfying the bond issuance conditions prescribed at Points b, c, d, dd, e, g, h, i, k, and l, Clause 1 of this Article;”

5. To amend and supplement Clauses 1 and 3, Article 13 as follows:

“1. A bond issuance dossier of a bond-issuing corporation must comprise:

a/ A bond issuance plan prescribed in Clause 1, Article 14 of this Decree;

b/ A statement disclosing information about the bond issuance, made according to the form provided in Appendix I to this Decree;

c/ Contracts signed between the bond-issuing corporation and providers of services related to the bond issuance;

d/ The corporation’s audited financial statement of the year preceding the year of bond issuance;

dd/ Results of credit rating (if any) given by a credit rating agency regarding the bond-issuing corporation and type of bonds to be issued;

e/ A bond purchase contract, including the investor’s commitment on its/his/her full access to the disclosed information before the bond issuance, and clear understanding of risks of bond purchase.”

“3. A financial statement of the year preceding the year of bond issuance in the bond issuance dossier specified at Point d, Clause 1 of this Article shall be audited by a qualified audit firm prescribed in Clause 7, Article 4 of this Decree. The audit opinion about a financial statement is the unqualified opinion. In case the audit opinion is the qualified opinion, such opinion does not affect the bond issuance conditions; the bond-issuing corporation shall produce a plausible explanation about such qualified opinion and acquire the audit firm’s certification of the effects of the qualified opinion.

a/ In case a corporation issues bonds within 90 days from the last day of a fiscal year without an audited financial statement of the year preceding the year of bond issuance or without an audited consolidated financial statement of the year preceding the year of bond issuance, it may use its biannual financial statement or 9-month financial statement of the preceding fiscal year, which has been reviewed or audited by the State Audit Office of Vietnam or a qualified audit firm prescribed in Clause 7, Article 4 of this Decree. Within 20 days after obtaining results of audit of its annual financial statement, the corporation shall disclose them to bondholding investors.

b/ In case the bond-issuing corporation is a parent company, audited financial statements include the audited consolidated financial statement of the year preceding the year of bond issuance and the audited financial statement of the parent company of the year preceding the year of bond issuance.”

6. To amend Point b, Clause 1, Article 14 as follows:

“b/ Bond issuance purpose, specifying information about investment programs and projects; production and business activities in need of additional funds; and debts (name, value and term) structured with funds from the bond issuance. For credit institutions, it is required to specify the purposes of issuing bonds to increase tier-2 capital and/or use them for lending, investment or other purposes.”

7. To amend Clause 3, Article 15 as follows:

“3. Organizations providing counseling on bond issuance dossiers include securities companies, credit institutions and other financial institutions licensed to provide services on counseling on bond issuance dossiers in accordance with law. When providing services, these organizations shall check to see whether bond-issuing corporations fully satisfy the bond issuance conditions and requirements on bond issuance dossiers as prescribed in Articles 10, 11 and 13 of this Decree and the securities law.”

8. To add the following Clause 5 to Article 21:

“5. The Ministry of Finance shall guide in detail the information disclosure regime applicable to bond-issuing corporations.”

9. To amend Clauses 1 and 2, Article 22 as follows:

“1. At least 3 working days before the expected date of bond issuance, a bond-issuing corporation shall carry out the information disclosure to investors that have registered to purchase bonds, and send the disclosed information to the concerned Stock Exchange.

a/ Information contents to be disclosed prior to the bond issuance shall be prepared according to the form provided in Appendix I to this Decree;

b/ Particularly for the issuance of green bonds, in addition to the information contents to be disclosed as mentioned at Point a of this Clause, the bond-issuing corporation shall disclose information about the processes for management and disbursement of funds raised from the bond issuance under Clause 4, Article 5 of this Decree;

c/ The bond-issuing corporation shall send written or electronic information to be disclosed prior to the bond issuance to investors that have registered to purchase bonds and the concerned Stock Exchange.

2. For a corporation carrying out multiple issuances of bonds:

a/ For the initial issuance, the information disclosure prior to the bond issuance shall be carried out under Clause 1 of this Article.

b/ For subsequent bond issuances, at least 3 working days before each issuance, the corporation shall additionally send the documents specified in Clause 2, Article 13 of this Decree to investors that have registered to purchase bonds and concurrently to the concerned Stock Exchange.”

10. To amend Point b, Clause 2, Article 24 as follows:

“b/ For the issuance of green bonds, in addition to the provisions at Point a of this Clause, a report on the use of funds raised from the bond issuance with review opinions of an audit firm and a report on environmental impact assessment are required.”

11. To amend Clause 1, Article 29 as follows:

“1. As assigned by the Ministry of Finance, the concerned Stock Exchange shall summarize information on corporate bonds and develop and operate a specialized webiste on corporate bonds serving information disclosure under Articles 21 thru 28 of this Decree and the Ministry of Finance’s guidance.”

12. To amend and supplement Article 30 as follows:

“Article 30. Reports of Stock Exchanges, depository institutions and bond issuance counseling institutions on issuance of corporate bonds

1. Stock Exchanges shall make monthly, quarterly and annual reports on issuance and trading of corporate bonds, including bonds issued in the domestic market and to the international market under the Ministry of Finance’s guidance. Such a report must have the following contents:

a/ Number of bond-issuing corporations classified by their type, including public companies, non-public joint-stock companies and limited liability companies; number of bond issuances (including issuance of convertible bonds, issuance of secured bonds, issuance of bonds accompanied with warrants and issuance of green bonds);

b/ Main terms and conditions of bonds expected to be issued and issuance results;

c/ Average issuance interest rate for each term of bonds;

d/ Markets and locations for bond issuance;

dd/ Registration, depository and trading of corporate bonds, covering:

- Number of bond registration and depository corporations and volume of bonds registered and deposited in the period; volume of bonds traded in the period.

- Payment of bond principals and interests;

- Number of bondholding investors for each registered bond code.

2. Depository institutions shall provide information to Stock Exchanges within 1 working day after completing bond transactions. Depository institutions shall provide information on bond registration and depository on a monthly, quarterly and yearly basis to Stock Exchanges for summarization and reporting to the Ministry of Finance under Clause 1 of this Article.

3. Bond issuance counseling institutions shall send make biannual and annual reports on counseling on issuance of corporate bonds to the Ministry of Finance.

4. The Ministry of Finance shall guide the reporting regime applicable to Stock Exchanges, depository institutions and bond issuance counseling institutions in accordance with Clauses 1, 2 and 3 of this Article.”

13. To amend Clauses 1 and 2, Article 36 as follows:

“1. To provide bond issuance counseling services, organize bidding, and act as bond issuance agents or underwriters for bond-issuing corporations under signed service provision contracts in accordance with this Decree and the securities law.

2. To review the compliance with the provisions on restriction on the number of investors of Clause 2, Article 4, and Clause 8, Article 6, of this Decree, and the provisions on bond issuance conditions and dossiers of Articles 10, 11 and 13 of this Decree.”

14. To amend Clause 2, Article 37 as follows:

“2. To periodically provide Stock Exchanges with information about bond depository and trading and corporate bond holding by investors in accordance with Article 30 of this Decree.”

Article 2.Implementation provisions

1. This Decree takes effect on September 1, 2020.

2. Corporate bonds issued before the effective date of this Decree must continue to follow the conditions and terms of bond issuance plans notified to investors; it is required to implement the provisions on depository, reporting and periodical disclosure of information and the responsibilities of bond-issuing corporations of this Decree and the Ministry of Finance’s guidance.

3. Ministers, heads of ministerial agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees; and Boards of Directors or Members’ Councils and General Directors (Directors) of bond-issuing corporations shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC