Decree No. 95/2018/ND-CP dated June 30, 2018 of the Government on providing the issuance, registration, depositing, listing and trading of government debt instruments on securities market

THE GOVERNMENT

Decree No.  95/2018/ND-CP dated June 30, 2018 of the Government on providing the issuance, registration, depositing, listing and trading of government debt instruments on securities market

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

Pursuant to the Law on state budget dated June 25, 2015;

Pursuant to the Law on public debt management dated November 23, 2017;

Pursuant to the Law on securities dated June 29, 2006 and the Law dated November 24, 2010 on amendments to the Law on securities;

At the request of the Minister of Finance;

The Government promulgates a Decree providing for issuance, registration, listing and trading of government debt instruments on securities market.

Chapter I

GENERAL PROVISIONS

Article 1. Scopeof adjustment

This Decree deals with the issuance, registration, depositing, listing and trading of government debt instruments on securities market; powers and responsibility of organizations and individuals involved in issuing and trading government debt instruments.

Article 2.Subject of application

1. The Ministry of Finance, the State Bank of Vietnam (SBV), the State Treasury, the Vietnam Securities Depository (VSD), Stock Exchanges and market makers as defined in this Decree.

2. Organizations and individuals involved in issuing, registering, depositing, listing and trading government debt instruments on securities market.

Article 3. Interpretation of terms

In addition to terms defined in the Law on public debt management and the Law on securities, for the purpose of this Decree, these terms are construed as follows:

1. “market maker” refers to an organization appointed by the Ministry of Finance to exercise and perform its rights and duties in the issuance and trading of government debt instruments in domestic market in accordance with regulations herein.

2. “fixed-rate tender” refers to the method of determining bidding result whereby the interest rate of debt instruments issued is the highest bid-winning interest rate and commonly applied to all successful bidders.

3. “variable-rate tender” refers to the method of determining bidding result whereby the interest rate of debt instruments issued applied to each successful bidder is equal to the interest rate offered by such bidder.

4. “standard debt instruments” refer to standard bond codes selected and announced by issuers in order for market makers to perform offering obligations under a firm commitment.

5. “international bonds” refers to government bonds which are issued on international capital markets in accordance with regulations herein.

6. “credit rating agency” refers to an agency that evaluates, assesses and assigns credit ratings to sovereign entities and enterprises.

Article 4. Issuer

1. Issuer of government debt instruments is the Ministry of Finance.

2. With regard to government debt instruments issued in domestic market, the Ministry of Finance shall directly organize the issuance or authorize the State Treasury to organize the issuance and fulfill the issuer’s obligations as prescribed in this Decree.

Article 5. Purposes

1. Government debt instruments are issued in the domestic market to serve the purposes specified in Clause 1, Clause 2 and Clause 3 Article 25 of the Law on public debt management.

2. The purposes of international bonds are set forth in Clause 1 Article 28 of the Law on public debt management.

Article 6. Buyers

1. The followings are entitled to buy government debt instruments issued in the domestic market:

a) Domestic and foreign organizations and individuals are allowed to purchase government debt instruments with unlimited quantity, unless otherwise prescribed by law;

b) Securities investment funds and voluntary pension funds are allowed to entrust the purchase of government debt instruments to fund management companies;

c) Off-budget financial funds are allowed to purchase government debt instruments in accordance with applicable relevant laws.

2. Buyers of government debt instruments issued on the international market are organizations and individuals authorized by laws applicable in the issuing market.

Article 7. Rights and obligations of holders of government debt instruments

1. A holder of government debt instruments is entitled to:

a) receive full payment of principal and interest on debt instruments upon their maturity date.

b) transfer, give, donate, discount or pledge debt instruments, leave them as inheritance or use them to conduct other transactions in accordance with applicable laws.

2. A holder of government debt instruments is obliged to pay tax on his/her income derived from such government debt instruments in accordance with applicable laws on taxation.

Article 8. Payment of principal and interest

1. The Government shall provide funds for paying principal and interest on government debt instruments when they are due in accordance with regulations of the Law on state budget and the Law on public debt management.

2. The Ministry of Finance shall take charge of paying principal and interest on government debt instruments issued in the domestic market to holders when they are due.

3. The Ministry of Finance shall transfer money to accounts of authorized settlement agencies to pay principal and interest on international bonds to holders upon their maturity date.

Article 9. Using funds from issuance of government debt instruments

1. Total proceeds from each issue of government debt instruments in the domestic market shall be transferred to the central-government budget in accordance with regulations of the Law on state budget, the Law on public debt management and relevant laws.

2. Total proceeds from each issue of international bonds shall be used for the purposes defined in Clause 1 Article 28 of the Law on public debt management and the purposes of issued international bonds as approved by the Government under regulations of Clause 1 Article 31 herein.

Article 10. Expenses associated with issuance, registration, depositing, payment, repurchase and swap of government debt instruments

1. Expenses incurred during the issuance, registration, depositing, payment, repurchase and swap of government debt instruments, and relevant expenses shall be covered by the central-government budget.

2. Payments to organizations conducting bidding, underwriting, private placement, registration, depositing, settlement, repurchase or swap of government debt instruments in the domestic market shall be made according to guidance of the Minister of Finance.

3. Expenses associated with the issuance and trading of international bonds shall be covered by the central-government budget under specific agreement or contracts signed with partners involved in the bond issuance, and according to notifications of relevant service providers.

Chapter II

ISSUANCE AND TRADING OF GOVERNMENT DEBT INSTRUMENTS IN DOMESTIC MARKET

Section 1. ISSUANCE AND TRADING OF TREASURY BILLS

Article 11. Terms and conditions of treasury bills

1. Term:

a) Standard terms of treasury bills are 13 weeks, 26 weeks or 52 weeks;

b) Other terms of treasury bills shall be subject to the Minister of Finance’s decisions made according to the needs for funds and market developments provided that a term shall not exceed 52 weeks.

2. Face value: The face value of a treasury bill is VND 100,000 or its multiple.

3. Currency used in issuance and payment for treasury bills is VND.

4. Forms:

a) Treasury bills are issued in the forms of book entries or electronic data depending on each method of issuance;

b) The issuer shall decide the form of treasury bills in each issue.

5. Interest rate:

a) Interest rate of treasury bills issued through bidding shall be decided by the State Treasury within the interest rate bracket announced by the Ministry of Finance.

b) Interest rate of treasury bills issued directly to the SBV shall be discussed and agreed upon between the Ministry of Finance and the SBV in accordance with regulations of Clause 3 Article 12 herein.

6. Issuance methods:

a) Bidding for issuance of treasury bills according to regulations of Clause 1, Clause 2, Clause 3, Clause 4, Clause 5 Article 15 herein.

The issuer shall directly organize bidding for issuance of treasury bills or organize bidding via the Operations Center of the SBV in accordance with regulations of the Ministry of Finance.

b) Issuance of treasury bills directly to the SBV in accordance with regulations in Article 12 herein.

7. Method for payment of treasury bills: The sum of principal and interest of treasury bills shall be paid in a lump sum at their maturity date.

Article 12. Issuing treasury bills directly to the State Bank of Vietnam

1. In case the central-government budget is in temporary deficit, the Ministry of Finance shall take charge and cooperate with the SBV in formulating the scheme for issuance of treasury bills directly to the SBV, and then submit it to the Prime Minister for decision. The Scheme for issuance of treasury bills includes the following contents: purposes, quantity, term, form, face value, interest rate, planned date of issuance of treasury bills; payment and funds for payment of treasury bills upon their maturity date; registration, depositing, listing and trading of treasury bills (if any).

2. Pursuant to the Decision of the Prime Minister, the Ministry of Finance shall reach an agreement with the SBV on the quantity, interest rate and term of each issue of treasury bills. If the issuance date and the maturity date of treasury bills are not in the same budget year, regulations on advance from the SBV in Clause 1 Article 58 of the Law on state budget and Article 26 of the Law on State Bank of Vietnam shall apply.

3. Interest rate of treasury bills issued directly to the SBV shall be discussed and agreed upon between the Ministry of Finance and the SBV by reference to the interest rate of treasury bills issued through bidding or the interest rate of treasury bills issued by the SBV or the interest rate of government bonds whose remaining effective period at the nearest date is equivalent to the term of treasury bills.

4. Based on the agreed quantity, interest rate, term and date of issuance, the State Treasury shall conclude a contract for selling treasury bills directly to the SBV, which must specify terms and conditions of each issue, including: quantity, term, interest rate, issuance date, selling price, settlement date, maturity date, account receiving buying amounts, registration, depositing, listing and trading of treasury bills (if any).

5. The State Treasury shall record the amounts paid by the SBV for purchasing treasury bills into state budget and make payment of treasury bills when they are due.

Article 13. Registration, depositing, listing and trading of treasury bills

1. Treasury bills issued through bidding shall be registered, deposited, listed and traded in accordance with regulations on registration, depositing, listing and trading of government bonds.

2. Treasury bills issued directly to the SBV shall be registered and deposited at the VSD, and listed at the Stock Exchange at the request of the SBV and the State Treasury.

Section 2. ISSUANCE AND TRADING OF GOVERNMENT BONDS

Article 14. Terms and conditions of government bonds

1. Term:

a) Standard terms of government bonds are 3 years, 5 years, 7 years, 10 years, 15 years, 20 years, 30 years and 50 years.

b) Other terms of government bonds shall be subject to the Minister of Finance’s decision made in each period.

2. Face value: The face value of government bonds shall be VND 100,000 or its multiple.

3. Currency used in issuance and payment for government bonds is VND. In case government bonds are issued in the domestic market in foreign currencies, the currency used in issuance and payment of government bonds must be freely convertible currencies as regulated in Article 22 herein.

4. Forms:

a) Government bonds are issued in the forms of certificates, book entries or electronic data depending on each method of issuance.

b) The issuer shall decide the form of government bonds in each issue.

5. Interest rate:

a) Interest rate of government bonds shall be fixed interest rate, floating interest rate or discount rate as announced by the State Treasury.

b) The State Treasury shall decide the interest rate of government bonds within the interest rate bracket announced by the Ministry of Finance.

6. Methods for payment of government bonds:

a) Interest shall be paid for every 06 months or 12 months or in a lump sum on the maturity date in which the principal payment is also made. The issuer shall notify the method for payment of bond interest for each issue.

b) The bond principal shall be paid in a lump sum on or before the maturity date according to the issuer’s notification in each issue.

7. Issuance methods: Government bonds are issued through bidding, underwriting and private placement as prescribed in Article 15, Article 16 and Article 17 herein.

Article 15. Issuance of government bonds through bidding

1. Bidding is a method of offering government bonds whereby potential investors bid on the government bonds by offering their interest rates.

2. Bidding principles:

a) A bidder’s bid information must be kept secret.

b) Bidders shall have their rights and obligations ensured openly and impartially.

3. Bidders: Market makers as defined in Section 4 Chapter II herein. Other entities that are defined in Clause 1 Article 6 herein and purchase government debt instruments through bidding via market makers.

4. Bidding forms:

Bidding for government bonds is conducted in either of the following forms:

a) Competitive bid; or

b) Combination of competitive bid and non-competitive bid. If a bid session is conducted in this form, total amount of bonds offered to non-competitive bidders shall not exceed 30% of total amount of bonds offered in that bid session.

5. Bidding results shall be determined by adopting either the fixed-rate tender method or the variable-rate tender method. Based on the market developments, the Ministry of Finance shall decide adoption of the fixed-rate tender method or the variable-rate tender method in each period.

6. The issuer shall directly organize bidding for government bonds or organize bidding via the Stock Exchange in accordance with regulations of the Ministry of Finance.

Article 16. Issuance of government bonds through underwriting

1. Underwriting is a method of offering government bonds through an underwriter syndicate, which is comprised of:

a) A lead underwriter and/or co-lead underwriters; and

b) Syndicate participant(s).

2. Eligibility requirements to be satisfied by a lead underwriter:

a) It must be a financial institution that is duly established and operating in Vietnam, and licensed to provide securities underwriting as regulated by laws.

b) It must have experience in providing securities underwriting;

c) It must have a feasible underwriting plan which meets the needs of the issuer in each issue.

3. Process of issuing bonds through underwriting:

a) Based on underwriting requirements for each bond issue and requirements applicable to lead underwriters set forth in Clause 2 of this Article, the State Treasury shall select qualified organization(s) to act as the lead underwriter or co-lead underwriters for a bond issue. The lead underwriter (or co-lead underwriters) shall select qualified entities to participate in the underwriting syndicate, and submit the list of selected syndicate participants to the State Treasury for consideration.

b) The State Treasury shall provide necessary information concerning the bond issue for the lead underwriter (or co-lead underwriters) and the syndicate participants who will take charge of seeking potential investors. Information to be provided includes: planned quantity and term of bonds to be issued, interest rate for each bond term, and issuance date.

c) The lead underwriter (or co-lead underwriters) and the syndicate participants shall prepare a consolidated report on the needs of investors, including the planned quantity of bonds to be purchased, the quantity of bonds firmly purchased and expected interest rate for each bond term, and then submit it to the State Treasury.

d) The State Treasury shall carry out a negotiation with the lead underwriter (or co-lead underwriters) on the quantity, terms and conditions of bonds (including bond term, interest rate, date of issuance, date of bond settlement, and bond prices), underwriting fee and relevant contents.

dd) Based on results of the negotiation with the lead underwriter (or co-lead underwriters), the State Treasury shall enter into an underwriting agreement with the lead underwriter (or co-lead underwriters) for offering of bonds. The signed underwriting agreement shall be the legal ground for determining rights and obligations of the lead underwriter (or co-lead underwriters) and those of the State Treasury.

e) The lead underwriter (or co-lead underwriters) and syndicate participants shall sell bonds as committed in the signed underwriting agreement. In case of failure to sell all of bonds of an issue, the lead underwriter (or co-lead underwriters) and syndicate participants shall purchase the remaining quantity of bonds.

g) Upon the end of an underwritten bond issue, the State Treasury shall offer government bonds to investors whose names appear in the list of bond buyers submitted by the lead underwriter (or co-lead underwriters).

Article 17. Private placement of government bonds

1. Private placement is a method of offering of government bonds directly to each buyer.

2. The State Treasury shall formulate the plan for private placement of government bonds, and submit it to the Ministry of Finance for approval. The plan for private placement of government bonds includes the following contents:

a) Bond buyers;

b) Planned quantity of bonds to be issued;

c) Bond term;

d) Planned interest rate;

dd) Planned issuance date.

3. Based on the plan for private placement given approved by the Ministry of Finance, the State Treasury shall issue a decision on issuance of bonds, and directly organize the issuance and make payment of bond principal and interest in each issue.

Article 18. Registration, depositing and listing of government bonds

1. Registration and depositing of government bonds:

a) Government bonds shall be registered and deposited at the VSD at the request of the State Treasury.

b) Based on the State Treasury’s notification of results of a bond issue, the VSD shall carry out procedures for registration of government bonds.

c) Based on the State Treasury’s confirmation of completion of bond settlement, the VSD shall carry out procedures for depositing of government bonds in accordance with the Law on securities.

2. Listing of government bonds:

a) Government bonds shall be registered and deposited at the VSD, listed and traded at the Stock Exchange, except foreign currency bonds.

b) Based on the VSD’s notification of bond registration and the State Treasury’s request, the Stock Exchange shall carry out procedures for listing of government bonds in accordance with the Law on securities.

Article 19. Trading of government bonds

1. Government bonds shall be traded on the securities market by order-matching method and/or put-through (negotiated trading) method in accordance with the Law on securities and the Stock Exchange’s regulations approved by a competent authority.

2. Government bonds shall be traded on the securities market in the following forms:

a) Outright;

b) Repo and sell/buy back;

c) Other trading forms as prescribed by the Law on securities.

3. Repo and sell/buy back transactions of government bonds set forth in Point b Clause 2 of this Article are conducted by applying the following principles:

a) Term of a repo or sell/buy back transaction shall not exceed 01 year;

b) The buyer and seller shall themselves carry out a negotiation and enter into a repurchase agreement or sell and buy back agreement, which includes the following contents: quantity; interest rate (or bond price); term; collateral; hedge ratio; rights and obligations of contractual parties; disposal of collateral in case of either party’s failure to make the previously agreed settlement.

4. The SBV shall provide guidance on classification of debts and credit risk provisions for credit institutions that enter into repos and sell/buy back transactions of government bonds on the securities market.

5. The Minister of Finance shall provide guidance on trading of government bonds on securities market in accordance with regulations herein and the Law on securities.

Article 20. Issuing government bonds to ensure market liquidity

1. Requirements:

a) Government bonds are issued to ensure the market liquidity when a market maker gives a firm quotation under regulations in Point c Clause 2 Article 27 herein but fails to provide enough government bonds for trading.

b) The quantity of government bonds issued for ensuring the market liquidity at all times must not exceed the annual limit on government bonds approved by a competent authority.

c) The market maker is required to provide a minimum margin to the State Treasury as prescribed in Clause 2 of this Article.

2. Process of issuing government bonds for ensuring the market liquidity:

a) Where there is a need for government bonds for fulfilling obligations as set forth in a firm quotation, the market maker shall request the State Treasury to issue bonds for ensuring the market liquidation. Such request should set forth code and quantity of government bonds needed for facilitating the market liquidity, and liquidity facilitating period.

b) Based on the market maker’s request, the State Treasury shall request the market maker to enter into a liquidity facility contract and provide a margin in cash for the State Treasury. The margin must be in proportion to the value of issued bonds determined according to the mark-to-market method plus the hedge ratio determined according to the value of bonds issued.

c) After receiving the full payment of margin, the State Treasury shall issue government bonds to the market maker. The term of bonds issued for ensuring the market liquidity must not exceed 28 days from the issuance date, including extension (if any).

d) When the liquidity facility contract becomes mature, the market maker is required to refund government bonds to the State Treasury that will refund the received margin to the market maker after deducting contract performance fees. Contract performance fees paid by the market maker to the State Treasury shall be recorded as state budget revenues.

dd) If the market maker fails to refund government bonds when the liquidity facility contract expires (including extension, if any), the State Treasury shall carry out procedures for terminating the contract and transfer the received margin to state budget and record it as proceeds from issuance of government bonds.

e) The Minister of Finance shall provide specific guidance on bond prices, hedge ratio, contract performance fees and limit on government bonds issued by the State Treasury for facilitating the market liquidity, main contents of a liquidity facility contract and steps for issuance of government bonds for ensuring the market liquidity as regulated herein.

Article 21. Green bonds

1. Green bonds are government bonds issued for raising funds for environmental projects as defined in the Law on environmental protection (also called as green projects) and included in the list of projects to which public investment funds are allocated in accordance with the Law on public investment and the Law on state budget.

2. The Ministry of Finance shall cooperate with the Ministry of Planning and Investment, and the Ministry of Natural Resources and Environment in formulating the Scheme for issuance of green bonds, and submit it to the Prime Minister for approval. The Scheme for issuance of green bonds includes:

a) Purposes;

b) Quantity of green bonds to be issued;

c) Terms and conditions of green bonds;

d) Bond buyers;

dd) Issuance methods;

e) Registration, depositing, listing and trading of bonds;

g) List of investment projects using funds from issuance of green bonds.

3. Terms, conditions, issuance, registration, depositing, listing and trading of green bonds shall comply with regulations in Article 14, Article 15, Article 16, Article 17, Article 18 and Article 19 herein.

Article 22. Foreign currency bonds

1. Foreign currency bonds are government bonds issued in the domestic market in freely convertible currencies according to the Scheme approved by the Prime Minister.

2. Based on the needs for funds of state budget, the Ministry of Finance shall take charge and cooperate with the SBV in formulating the Scheme for issuance of government bonds in the domestic market in a freely convertible currency, and then submit it to the Prime Minister for consideration. The Scheme includes the following contents:

a) Purposes;

b) Quantity of bonds to be issued;

c) Terms and conditions of bonds: Term, face value; currency of bonds issued and currency used for payment of bonds; interest rate;

d) Bond buyers;

dd) Registration, depositing and trading of bonds;

3. Based on the Scheme for issuance of foreign currency bonds approved by the Prime Minister, the Ministry of Finance shall organize the issuance of bonds in foreign currency by adopting private placement method.

4. Foreign currency bonds shall be registered and deposited at the VSD in accordance with regulations herein, and traded in accordance with applicable regulations of the Law on foreign exchanges.

Article 23. National development bonds

1. National development bonds are government debt instruments whose terms and conditions are the same as those of government bonds set forth in Article 14 herein.

2. Based on the needs for funds of state budget, the Ministry of Finance shall formulate the plan for issuance of national development bonds, and submit it to the Standing Committee of the National Assembly for consideration. The plan for issuance of national development bonds includes the following contents:

a) Purposes;

b) Terms and conditions;

c) Planned issuance date;

d) Method for payment of bond principal and interest;

dd) Planned quantity of bonds to be issued;

e) Buyers and organization of issuance.

3. Based on the plan approved by the Standing Committee of the National Assembly, the Ministry of Finance shall organize the issuance of national development bonds.

4. Issuance, registration, depositing, listing and trading of national development bonds shall comply with regulations in Article 15, Article 16, Article 17, Article 18 and Article 19 herein.

Section 3. REPURCHASE AND SWAP OF GOVERNMENT DEBT INSTRUMENTS

Article 24. Repurchase of government debt instruments

1. The Ministry of Finance shall formulate the Scheme for repurchase of government debt instruments before their maturity date, and submit it to the Prime Minister for approval. The Scheme includes the following contents:

a) Purposes;

b) Quantity and terms and conditions of debt instruments to be repurchased;

c) Funds for repurchase of debt instruments;

d) Repurchase method;

dd) Planned date of repurchase and relevant costs.

2. Repurchase of government debt instruments must be openly and transparently made according to market rules.

3. Government debt instruments may be repurchased by either negotiation or bidding. Process of repurchase of government debt instruments in the domestic market shall follow the Minister of Finance’s guidance.

Article 25. Swap of government debt instruments

1. The Ministry of Finance shall formulate the Scheme for swap of debt instruments before their maturity date and submit it to the Prime Minister for approval. The Scheme includes the following contents:

a) Purposes;

b) Quantity and terms and conditions of debt instruments to be swapped;

c) Swapping method;

d) Planned date of swap and relevant costs.

2. The swap of government debt instruments must be openly and transparently conducted according to market rules.

3. The quantity of government debt instruments issued for swap must not exceed the limit thereof set forth in the borrowing and repayment plan approved by the Prime Minister.

4. Government debt instruments may be swapped by either negotiation or bidding. Process of swap of government debt instruments in the domestic market shall follow the Minister of Finance’s guidance.

Section 4. MARKET MAKERS

Article 26. Market makers

1. Eligibility requirements to be satisfied when applying for registration as a market maker:

a) The applicant must be a commercial bank or a securities company which is duly established and operates under the law of Vietnam;

b) Its owner’s equity reported on duly audited financial statements of 03 years preceding the year in which application for registration as a market maker is submitted must be not lower than the minimum charter capital prescribed by relevant laws;

c) It has operated for at least 03 years. If it is an acquiring enterprise or an enterprise formed from full or partial division or consolidation, its operating period shall include the operating period before the acquisition, full or partial division or consolidation.

d) It has purchased and traded government debt instruments on the primary and secondary market with the quantity prescribed by Ministry of Finance in each period.

2. Application for registration as a market maker:

a) The application form for registration as a market maker using the Form No. 01 stated in the Appendix enclosed herewith.

b) The copy of business registration certificate.

c) Financial statements, which have been duly audited by an independent audit firm operating under the law of Vietnam, of 03 years preceding the year in which application for registration as a market maker.

d) The report on transactions conducted on primary and secondary market made according to the Form No. 02 stated in the Appendix enclosed herewith.

3. Procedures for accreditation of a market maker:

a) Within the period from November 01 to November 10 every year, any institution that satisfies eligibility requirements for registration as a market maker and wishes to become a market maker shall submit an application, which includes the documents prescribed in Clause 2 of this Article, to the Ministry of Finance.

b) Within 05 working days from the receipt of the application, the Ministry of Finance shall consider and verify the adequacy and legality of the received application, and request the application in writing to supplement the application (if any).

c) Upon the receipt of a satisfactory application and based on the applicant’s satisfaction of the requirements specified in Clause 1 of this Article, the Ministry of Finance shall select and announce the list of qualified market makers by December 31 every year. If an application is refused, the Ministry of Finance shall send a written notification, which indicates reasons for refusal, to the applicant.

4. Requirements to be satisfied for maintaining a market maker status:

a) The market maker must maintain its satisfaction of the requirements specified in Clause 1 of this Article.

b) It must fulfill obligations of a market maker specified in Clause 2 Article 27 herein.

5. Process of evaluating the maintenance of eligibility by a market maker:

a) Within the period from November 01 to November 10 every year, the market maker shall submit a report, which is made according to the Form No. 03 stated in the Appendix enclosed herewith, on its operating results on the market for the reporting period from November 01 of the previous year to October 31 of the current year, to the Ministry of Finance.

b) Based on the market maker’s report and the Ministry of Finance’s database, the Ministry of Finance shall evaluate the maintenance of eligibility by the market maker and announce evaluation results by December 31 every year. If a market maker fails to satisfy eligibility requirements, the Ministry of Finance shall send a written notification, which indicates reasons for refusal, to that market maker.

6. Ranking of market makers:

a) Based on a market maker’s operating results on the primary and secondary market, and the proportion of each evaluation criterion in each period, the Ministry of Finance shall annually evaluate and announce that market maker’s rank.

b) Based on the market developments, the Ministry of Finance shall use the ranking results to allow a market maker to maintain its status.

Article 27. Rights and duties of a market maker

1. A market maker shall have the following rights:

a) Being the sole entity entitled to participate in issues, repurchases or swaps of government debt instruments by bidding;

b) Being given priority in application for registration as a lead underwriter in each issue of government bonds or national development bonds through underwriting;

c) Attending periodic exchanges about bond issuance and orientations for bond market development policies with the Ministry of Finance;

d) Request the State Treasury to issue government bonds for ensuring the market liquidity as prescribed in Article 20 herein;

dd) Being given priority in negotiation on repurchase or swap of government debt instruments according to the Ministry of Finance’s notification.

2. A market maker must discharge the following duties:

a) Bid at bidding sessions for government debt instruments according to the Ministry of Finance s notification in each period;

b) Annually purchase (including for customers) and trade in government debt instruments on the primary and secondary market with the quantity prescribed by Ministry of Finance in each period;

c) Fulfill duties according to firm commitments to offer daily bid and ask prices of standard debt instruments according to the Ministry of Finance’s notification in each period.

d) Make full payment for government debt instruments purchased on the agreed schedule;

dd) Submit annual reports and 6-month reports, made according to the Form No. 03 and Form No. 04 stated in the Appendix enclosed herewith.

Article 28. Terminating eligibility of a market maker

1. The eligibility of a market maker shall be taken into consideration for termination in the following cases:

a) The market maker has its business license revoked or withdrawn;

b) Its business is suspended or it is dissolved or declared bankrupt;

c) Its business is put under a special control by a competent authority;

d) It submits an application for voluntary termination of its eligibility;

dd) It fails to satisfy the eligibility requirements as specified in Clause 4 Article 26 herein.

2. The Ministry of Finance shall inform the market maker in writing of its eligibility termination, and publish information concerning such eligibility termination on its website.

3. A market maker whose eligibility is terminated as prescribed in Point d or Point dd Clause 1 of this Article shall not apply for registration as a market maker within 02 years from the date of eligibility termination.

Article 29. Changes compulsorily reported to Ministry of Finance

Within 10 working days from the occurrence of any of the following changes, the market maker must inform the Ministry of Finance in writing:

1. The market maker has its business license revoked or withdrawn.

2. It is fully or partially divided, consolidated or merged, has its business type changed or its business suspended, is dissolved or declared bankrupt.

3. It fails to achieve prudential indicators as regulated by relevant laws.

4. Its business is put under a special control by a competent authority in accordance with applicable laws.

Chapter III

ISSUANCE AND TRADING OF GOVERNMENT BONDS ON INTERNATIONAL CAPITAL MARKETS

Article 30. Scheme for issuance of international bonds

1. Based on the 05-year borrowing and repayment plan, the 03-year public debt management program, the annual budget estimate, the annual borrowing and repayment plan and the international financial market developments, the Ministry of Finance shall formulate the scheme for issuance of international bonds, and submit it to the Government for approval.

2. A scheme for issuance of international bonds is formulated in accordance with regulations in Clause 3 Article 28 of the Law on public debt management and includes the following contents:

a) The method for selection of an organization or a syndicate to take charge of managing the bond issuance, legal advisors and relevant agencies, and the plan for issuance of international bonds;

b) Estimated costs associated with the issue of international bonds.

Article 31. Approval for a scheme for issuance of international bonds

1. Based on the scheme for issuance of international bonds, the Government shall promulgate a resolution on approval for the policy for issuance of international bonds with the following contents:

a) Purposes;

b) Quantity, currency and term of international bonds to be issued;

c) The market where bonds are issued;

d) Policy on tax on bondholders income from bond principal and interest;

dd) Estimated costs associated with the issue of international bonds.

e) The method for selection of an organization or a syndicate to take charge of managing the bond issuance, legal advisors and relevant agencies;

g) Responsibility of the Ministry of Finance and relevant organizations and individuals.

2. Pursuant to the policy for issuance of international bonds approved by the Government, the Prime Minister shall make decision on each issue of international bonds with the following contents:

a) Quantity and term of bonds to be issued, and issuance method;

b) Planned interest rate;

c) Planned registration, depositing, listing and trading of bonds;

d) Issuance date.

Article 32. Documentation of issuance of international bonds

1. A documentation of issuance of international bonds includes legal documents prepared by the Ministry of Finance in cooperation with domestic and foreign legal advisors and relevant agencies in accordance with the law of Vietnam and the law of issuing market.

2. A documentation of issuance of international bonds includes:

a) The prospectus;

b) Underwriting agreement;

c) Consultant agreements;

d) International bond purchase agreements;

dd) Agency agreements, including:

- Printing agency: the organization authorized to print bonds, prospectuses and relevant documents;

- Listing agency: the organization authorized to carry out procedures for listing of bonds of the issuer on appropriate stock markets in conformity with regulations applicable at the place where bonds are listed;

- Financial and settlement agency: the organization authorized to make payment of bond principal and interest on behalf of the issuer to investors, and manage the list of bond buyers in each issue;

- Transfer agency: the organization authorized to prepare reports on bondholders, cancel and issue certificates, and take actions against issues relating lost, damaged or stolen certificates;

- Trust agency: the organization appointed by bondholders to exercise their rights and comply with bond terms and conditions;

- Depository: the organization accepting depositing of international bonds, managing deposited bonds, and confirming the transfer and assignment of bonds on the market.

e) Written legal opinions;

g) Relevant documents.

Article 33. Organizing issuance of international bonds

1. The Ministry of Finance shall take charge and cooperate with relevant ministries, authorities and organizations to issue bonds according to the Government s policy and the Prime Minister’s decision made on each bond issue.

2. Based on the reality and pursuant to relevant laws, the Ministry of Finance organizes the issuance of international bonds according to the following steps:

a) Select organizations or syndicates that are experienced international financial organizations or investment banks to manage the bond issue;

b) Select experienced domestic and foreign legal advisors to provide legal advice for the Ministry of Finance and the organization(s) or syndicate(s) in charge of managing the bond issue;

c) Prepare bond issuance documentation: The Ministry of Finance shall take charge and cooperate with domestic and foreign legal advisors and relevant agencies to prepare the bond issuance documentation in accordance with the law of Vietnam, international laws and international practices applicable at the issuing market;

d) Sovereign credit rating: The Ministry of Finance shall take charge and cooperate with relevant ministries and authorities in contacting the credit rating agency to certify the sovereign credit rating and credit rating for bonds to be issued;

dd) Promotion: The promotion of international bonds is made to meet requirements of each issuance method. The Ministry of Finance shall cooperate with the organization or syndicate in charge of managing the bond issuance to organize promotion programs so as to bring information concerning international bonds to international investors before the official announcement of the issuance of international bonds;

e) Issuance of international bonds: The Ministry of Finance shall decide terms and conditions of international bonds by consulting the organization or syndicate in charge of managing the bond issuance in conformity with market situation and principles specified in the scheme for issuance of international bonds approved by the Government or the Prime Minister. The Ministry of Finance shall decide the interest rate on international bonds of each issue according to the interest rate bracket announced by the Prime Minister under regulations in Point b Clause 2 Article 31 herein.

g) Receiving funds: The Ministry of Finance shall receive funds from issued international bonds according to the signed agreements;

h) Completion of bond issue: Upon the receipt of payments for international bonds, the Ministry of Finance shall complete the bond issue and enter into legal documents to validate transactions in accordance with laws applicable at the issuing market; report the bond issue results to the Prime Minister.

Article 34. Registration, depositing and listing of international bonds

1. The Ministry of Finance shall select qualified organizations to provide international bond registration and depositing services.

2. International bonds shall be listed according to the Prime Minister’s decision.

Article 35. Updating information

The Ministry of Finance shall monitor the trading of international bonds and cooperate with relevant entities to provide updated information concerning the Vietnam s economic developments for foreign investors in accordance with international practices after each bond issue.

Chapter IV

RESPONSIBILITIES AND RIGHTS OF REGULATORY AUTHORITIES

Article 36. The Ministry of Finance

1. Provide guidance on issuance, trading, repurchase, swap and payment of government debt instruments, and relevant costs; and guidelines for issuance of government bonds for ensuring the market liquidity as requested by market makers in accordance with regulations herein.

2. Take charge of formulating schemes for issuance of national development bonds, schemes for issuance of green bonds, and schemes for issuance of international bonds, and submit them to competent authorities for approval.

3. Decide the bracket of interest rates on government debt instruments issued in the domestic market.

4. Organize the issuance of government debt instruments and international bonds in accordance with regulations herein.

5. Select and announce the list of qualified market makers in accordance with regulations herein.

6. Restructure the list of government debt instruments by means of repurchase or swap of government debt instruments.

7. Take charge and cooperate with relevant authorities in collecting and providing necessary information and documents for consulting organizations and credit rating agencies to evaluate and grant the sovereign credit rating and credit rating for international bonds to be issued.

8. Consolidate, manage and comply with policies on information publishing and reporting on issuance of government debt instruments.

Article 37. The State Bank of Vietnam

1. Cooperate with the Ministry of Finance in organizing the issuance of treasury bills in accordance with regulations herein.

2. Provide guidance on classification of debts and credit risk provisions for credit institutions that enter into repos and sell/buy back transactions of government bonds on the securities market in accordance with regulations herein.

3. Cooperate with the Ministry of Finance in formulating and implementing schemes for issuance of international bonds.

4. Provide managed data and documents concerning the management of foreign exchanges, balance of international payments , policies on currency, credit and interest rates to serve the evaluation of sovereign credit rating and issuance of international bonds.

Article 38. The Ministry of Justice

Provide legal advices on each issue of international bonds in accordance with applicable laws.

Article 39. The Ministry of Planning and Investment

1. Cooperate with the Ministry of Finance in formulating and implementing schemes for issuance of international bonds.

2. Provide managed data and documents concerning macroeconomic management at the request of the Ministry of Finance and cooperate it in contacting credit rating agencies to obtain a certification of the sovereign credit rating and prepare the issuance of international bonds.

3. Cooperate with the Ministry of Finance in formulating schemes for issuance of green bonds and select investment projects using funds from green bonds from the approved list of projects eligible for public investment funds.

Article 40. The relevant ministries

Provide managed data and documents at the request of the Ministry of Finance and cooperate it in contacting credit rating agencies to obtain a certification of the sovereign credit rating and prepare the issuance of international bonds in accordance with regulations of Chapter III herein.

Article 41. The State Treasury

1. Organize the issuance and payment of principals and interests of government debt instruments issued in the domestic market in accordance with regulations herein.

2. Do accounting works regarding the issuance and payment of principals and interests of government debt instruments, and conduct operations for assisting market makers in the domestic market in accordance with regulations herein.

3. Organize the repurchase and swap of government debt instruments in the domestic market in accordance with regulations herein.

Chapter V

IMPLEMENTATION PROVISIONS

Article 42.Effect

1. This Decree takes effect on July 01, 2018.

2. Provisions on rights and duties of market makers prescribed herein shall be applied as of 2019.

3. Regulations in Section 1 Chapter II, Section 1 Chapter III and other regulations on government bonds of the Government’s Decree No. 01/2011/ND-CP dated January 05, 2011 are abrogated.

Article 43. Implementation organization

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

2. Ministers, heads of ministerial agencies, heads of the Government’s affiliates and Chairpersons of People’s Committees of provinces and central-affiliated cities shall implement this Decree.

For the Government

The Prime Minister

Nguyen Xuan Phuc