Circular 33/2019/TT-NHNN issuance of exchange bill, treasury bills, deposit certificates and domestic bonds

CIRCULAR

Amending and supplementing a number of Articles of the Circular No. 34/2013/TT-NHNN dated December 31, 2013 of the Governor of the State Bank of Vietnam on issuance of exchange bill, treasury bills, deposit certificates and domestic bonds of credit institutions and foreign bank branches

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Pursuant to the Law on State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law on amending and supplementing a number of Articles of the Law on Credit Institutions dated November 20, 2017 (hereinafter referred to as Law on Credit Institutions);

Pursuant to the Law on Securities dated June 29, 2006 and the Law on amendment of, supplement to several Articles of the Law on Securities dated November 24, 2010 (hereinafter referred to as Law on Securities);

Pursuant to the Government’s Decree No. 163/2018/ND-CP dated December 04, 2018, prescribing the issuance of corporate bonds (herein after referred to as Decree No. 163/2018/ND-CP);

Pursuant to the Decree No. 16/2017/ND-CP dated February 17, 2017 of the Government providing for the functions, duties, authorities and organizational structure of the State Bank of Vietnam (hereinafter shortly referred to as the State Bank);

At the proposal of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam hereby promulgates the Circular on amending and supplementing a number of Articles of the Circular No. 34/2013/TT-NHNN dated December 31, 2013 of the Governor of the State Bank of Vietnam on issuance of exchange bill, treasury bills, deposit certificates and domestic bonds of credit institutions and foreign bank branches (hereinafter referred to as Circular No. 34/2013/TT-NHNN).

Article 1. To amend and supplement a number of Articles of the Circular No. 34/2013/TT-NHNN as follows:

1. To amend and supplement Article 11 as follow:

“Article 11. Interest rate

1. Interest rate of valuable papers shall be decided by the issuing credit institutions, foreign bank branches in correspondence with current regulations on interest rate of the State Bank from time to time. Interest rate of bonds shall be in accordance with regulations of the Law on Securities, Decree No. 163/2018/ND-CP and guiding documents of the Law on Securities.

2. Methods of interest calculation of valuable papers shall comply with regulations of the State Bank.”.

2. To amend and supplement Article 16 as follow:

“Article 16. Payment of valuable papers

1. Payment methods of the principle, interest of valuable papers shall be decided by the credit institutions and foreign bank branches in accordance with relevant regulations, and shall be published for the valuable papers buyer before issuing valuable papers.

2. The payment of valuable papers before their maturity shall be subject to the discretion of the credit institutions, foreign bank branches themselves on the basis of the request by the valuable papers buyer to ensure the operation prudence of the credit institutions, foreign bank branches. Interest rate applied with the payment of valuable papers before their maturity shall be in accordance with the State Bank’s regulations.”.

3. To amend and supplement Clause 1, Article 17 as follows:

“1. Ownership to valuable papers may be transferred in the forms of buying, selling, offering, giving, exchanging and inheriting in accordance with provisions of relevant laws.”.

4. To amend and supplement Article 18 as follow:

“Article 18. Repurchase of bonds before their maturity, bonds swapping

Credit institutions are allowed to repurchase bonds before their maturity, swap bonds according to regulations of the Law on Securities, Decree No. 163/2018/ND-CP and other relevant regulations.”.

5. To amend and supplement Article 20 as follow:

“Article 20. Principle of issuing bonds

1. Credit institutions offering bonds privately shall be entitled to provisions specified in the Decree No. 163/2018/ND-CP, this Circular and other relevant regulations. Regarding to the conditions as prescribed in Point g Clause 1 Article 10 of the Decree No. 163/2018/ND-CP, credit institutions comply with regulations specified in Clause 1 Article 130 of the Law on Credit Institutions and the State Bank’s guidelines.

2. Credit institutions offering bonds to public shall be entitled to provisions specified in the Law on Securities, this Circular and other relevant regulations.”.

6. To amend and supplement Article 21 as follow:

“Article 21. Approval, acceptance of bond issuance plan

1. Private bond offering plans must be approved by competent authorities according to the Decree No. 163/2018/ND-CP.

2. Plan on issuance of the bond to public must be approved by competent authorities according to the Law on Securities and be accepted by the State Bank.”.

7. To amend and supplement Article 22 as follow:

“Article 22. Requesting application for State Bank’s approval on the issuance of bonds to public

1. Proposal for approval of the plan to issue bonds to the public by a credit institution signed by the legal representative of the credit institution, which evaluates the content of meeting the conditions for issuance of bonds successfully, at least including: Result of business operation (profit after tax) of the year consecutively preceding the year of issuance; charter capital contributed at the time of issuance; interest or accumulated losses as of the issuing year, overdue liabilities of more than one year at the latest; funding plan and capital utilization of the issuing year.

2. Plan on bond issuance to public is approved by the competent level of credit institution shall include at least the following contents:

a) Total issued face value;

b) Name of bond, term bond, interest rate and bond buying subjects;

c) Location of issuance, form of issuance, method of issuance;

d) Plan on bond issuance for the case of issuing convertible bonds, warrant-linked bonds shall have contents as prescribed in Clause 1 Article 24 of this Circular.

3. Plan on using and repayment of capital collected from issuing bonds to public shall be approved by the competent level of credit institution. Competent level of credit institution that approve the plan on using and repayment of capital collected from issuing bonds to public concurrently is the one that approve the plan on bond issuance to public.

4. A commitment to perform the obligations of a credit institution towards bond buyers in terms of issuance, and payment conditions, assurance of legitimate rights and benefits of bond buyers and other conditions.

5. Decision of competent level of credit institution on approval of Plan on bond issuance to public, Plan on using and repayment of capital collected from issuing bonds to public.”.

8. To amend and supplement Article 23 as follow:

“Article 23. Procedures for approving Plan on bond issuance to public of credit institution

1. Credit institution shall send the State Bank (the Monetary Policy Department) an application for approval of Plan on bond issuance to public in accordance with Article 22 of this Circular. If the application is incomplete and valid, within 07 working days from the date of receiving dossier, the State Bank shall send a written request to credit institution for supplementation and completion of dossier.

2. Within 30 working days from the date of receiving complete and valid application, the State Bank shall send a written reply on approving or not approving the Plan on bond issuance to public.”.

9. To amend and supplement Article 24 as follow:

“Article 24. Requirement for issuance of convertible bonds, warrant-linked bonds

1. In case credit institution issues convertible bonds, warrant-linked bonds, in the bond issuance Plan, there must be a content on the conversion of bonds into stocks, exercise of the right to purchase stocks with warrant-linked bonds as follows:

a) Bond buyer shall meet conditions of current regulations of law on limitation of capital contribution, share purchase at the time of converting bonds into stocks, exercise of the right to purchase stocks with warrant-linked bonds;

\b) The conversion of bonds into stocks, exercise of the right to purchase stocks with warrant-linked bonds shall only be performed after the State Bank approves to raise charter capital according to its regulations on dossier, order and procedure for approval of raising charter capital of credit institution.

2. When converting bonds into stocks, exercising the right to purchase stocks with warrant-linked bonds, credit institution and buyers must comply with the State Bank’s regulations on dossier, order and procedure for approval of raising charter capital of credit institution.”.

10. To amend and supplement Article 25 as follow:

“Article 25. Organizing the issuance of valuable papers

1. Credit institutions, foreign bank branches shall take the initiative of organizing the issuance of exchange bill, treasury bills, deposit certificates in accordance with provisions in Article 19 of this Circular.

2. Credit institution shall issue bond separately according to bond issuance Plan approved by the competent authorities and the Decision No. 163/2018/ND-CP.

3. Credit institution shall issue bond to public according to approved Plan on bond issuance and regulation of the Law on Securities.”.

11. To amend and supplement Clause 3, Article 26 as follows:

“3. To take responsibility for the accuracy, honesty and fulfill of documents in the requesting application for the State Bank’s approval on the issuance of bonds to public of the credit institution.”.

12. To amend and supplement Article 27 as follow:

“Article 27. Units of the State Bank

1. Monetary Policy Department

To preside over and coordinate with related units in considering to approve the Plan on bond issuance to public of credit institution and submit the Governor of the State Bank for decision.

2. Banking Supervision Agency

a) To provide information at the request of the Monetary Policy Department on the issuance of bond to public of the credit institution in accordance with the Law on Securities;

b) To cooperate with the Monetary Policy Department in examining and to provide specific opinion on approving or disapproving the Plan on issuance of bond to public credit institution;

c) To inspect, supervise and handle within the scope of authority or recommend the Governor of the State Bank to handle any act of violating provisions of this Circular.

3. Finance – Accounting Department

To submit the Governor guidance on the fields of finance, accountant of valuable papers issuance operations of credit institutions and foreign bank branches.”.

Article 2. Implementation provisions

1. This Circular takes effect on February 19, 2020.

2. This Circular repeals:

a) Clauses 5 and 6 Article 2; Appendices 01 and 02 of the Circular No. 34/2013/TT-NHNN;

b) Circular No. 16/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank on amending and supplementing a number of Articles of the Circular No. 34/2013/TT-NHNN.

3. For the Plan on bond issuance which is approved by the competent level of the credit institution or accepted before the effective date of this Circular by the State Bank, credit institution is allowed to continue implementing according to approved, accepted bond issuance Plan, except for the cases where credit institution repurchases bonds before maturity date, regulations of the Law on Securities, Decree No. 163/2018/ND-CP and other relevant laws shall be applied.

Article 3. Organization of implementation

The Chief of Office, Director of the Department of Monetary Policies, Heads of Divisions/Department of the State Bank, Director of centrally run provincial and city State Bank branches, Chairperson of the Board of Management, Chairperson of the Members’ Council, General Directors (Directors) of credit institutions, foreign bank branches are responsible for implementing this Circular.