Nghị định 14/2007/NĐ-CP hướng dẫn Luật chứng khoán

DECREE

DETAILING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAW ON SECURITIES

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 29, 2006 Law on Securities;
At the proposal of the Finance Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope

This Decree details the implementation of a number of articles of the Law on Securities regarding public offering of securities, securities listing, securities companies, fund management companies and securities investment companies.

Article 2.- Interpretation of terms

1. Bond owner's representative means a member of the securities depositary center authorized to hold bonds and represent benefits of a bond owner.

2. Country of origin means a country or a territory where a foreign legal entity is established.

3. Value of a fund's net asset means the total value of a fund's assets minus the total value of its payable debts.

4. Investment management contract means a contract concluded between a securities investment company or an organization or individual at home or abroad and a fund management company, entrusting the latter to manage the investment of his/her/its assets.

Chapter II

PUBLIC OFFERING OF SECURITIES

Article 3.- Forms of public offering of securities

1. Initial public offering of stocks or fund certificates covers:

a/ Initial public offering of stocks or fund certificates to mobilize capital for an issuing organization;

b/ Initial public offering of stocks by an issuing organization to become a public company through changes in its ownership structure without increasing the charter capital of such issuing organization.

2. Additional public offering of stocks or fund certificates covers:

a/ Additional public offering of stocks or offering of rights to purchase shares by a public company to its present shareholders in order to increase its charter capital;

b/ Subsequent public offering of stocks by a public company to change its ownership structure without increasing its charter capital;

c/ Additional public offering of fund certificates by a fund management company; additional public offering of stocks by a securities investment company.

3. Public offering of bonds.

Article 4.- Conditions for initial public offering of stocks by some types of enterprise

1. For enterprises with 100% state capital, which are transformed into joint-stock companies in combination with public offering of stocks, the provisions of law on transformation of state companies into joint-stock companies shall be complied with.

2. For foreign-invested enterprises transformed into joint-stock companies in combination with public offering of stocks:

a/ Satisfying the conditions specified at Points a and b, Clause 1, Article 12 of the Law on Securities;

b/ Having an issuance plan and a plan on the use of capital mobilized from the offering, approved by the owner of the enterprise with 100% foreign capital or the board of directors of the joint-venture enterprise;

c/ Being advised by a securities company on the compilation of stock offering dossier.

3. For foreign-invested enterprises already transformed into joint-stock companies, the following conditions must be satisfied:

a/ Satisfying the conditions specified in Clause 1, Article 12 of the Law on Securities;

b/ Satisfying the conditions specified at Point c, Clause 2 of this Article.

4. For enterprises newly established in the domain of infrastructure:

a/ Being investors in the construction of infrastructure facilities under socio-economic development schemes of ministries, branches, provinces or centrally run cities;

b/ Having investment projects approved by competent authorities;

c/ Having commitments made by their boards of directors or founding shareholders to bear joint responsibility for their issuance plans and plans on the use of capital mobilized from the offering;

d/ Having issuance underwriting organizations;

e/ Having banks to supervise the use of capital mobilized from the offering.

5. For enterprises newly established in the hi-tech domain:

a/ Operating in the hi-tech domain eligible for investment promotion according to the provisions of law;

b/ Satisfying the conditions specified at Points b, c, d and e, Clause 4 of this Article.

6. Securities investment companies that offer securities to the public shall comply with the provisions of Chapter V of this Decree.

Article 5.- Conditions for offering of other types of securities

1. A joint-stock company that offers convertible bonds, bonds with warrants or warrant with preferred stocks to the public shall satisfy the following conditions:

a/ The conditions specified at Points a, b and d, Clause 2, Article 12 of the Law on Securities;

b/ Having an issuance plan, a plan on the use of capital mobilized from the offering, or a plan on the issuance of stocks in a quantity necessary for its transformation approved by the shareholders' general meeting. The transformation plan specifies the transformation conditions and duration, transformation percentage, calculation method and other conditions determined in the issuance plan.

2. An issuing organization that offers secured bonds to the public by the method of security with payment guarantee or the method of security with assets shall satisfy the following conditions:

a/ The conditions specified in Clause 2, Article 12 of the Law on Securities;

b/ Having a commitment on payment guarantee enclosed with documents evidencing the financial capability of the guaranteeing organization in case of security with payment guarantee, or having assets valued enough to pay for bonds 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 organization and shall be valid for no more than 12 months after the date of valuation. Assets used as security must be registered with the competent agency according to the provisions of law on security transactions.

This regulation does not apply to cases where the payment-guaranteeing organization is the Government or where the payment guarantee is provided by the Finance Ministry on the Government's behalf.

c/ Designating a bond owner's representative to supervise the realization of its commitment. The following entities are not allowed to act as the bond owner representative:

- An organization guaranteeing the debt payment by the issuing organization;

- A major shareholder of the issuing organization;

- An organization whose major shareholder is the issuing organization;

- An organization sharing the same major shareholder with the issuing organization;

- An organization sharing the same executive officer with the issuing organization, or an organization that is, together with the issuing organization, controlled by the same organization.

3. An issuing organization that conducts multiple public offering of bonds or stocks shall satisfy the following conditions:

a/ The conditions specified in Clause 1 or 2, Article 12 of the Law on Securities;

b/ Wishing to mobilize capital through various offerings suitable to its investment projects or production or business plans approved by the competent authority;

c/ Having the offering plan clearly stating target subjects, planned quantity and duration of each offering.

4. Credit institutions that satisfy the conditions specified at Points a and c, Clause 3 of this Article may make the common registration of public offering of bonds for many offerings in 12 months.

5. The Finance Ministry sets the conditions for public offering for other specific cases based on the development of the market.

Article 6.- Overseas offering of securities

1. An issuing organization that conducts overseas offering of securities shall satisfy the following conditions:

a/ Being not on the list of business lines in which the participation of foreign parties is banned, and ensuring participation ratios of foreign parties as specified by law;

b/ Having the overseas offering of securities and the plan on the use of mobilized capital approved under a decision of its board of directors or shareholders' general meeting (for joint-stock companies), its members' council (for limited liability companies with two or more members), or its owner (for one-member limited liability companies) or the representative of the capital owner (for state companies);

c/ Satisfying the offering conditions specified by a competent authority of the country where it registers the offering.

2. At least 10 days before sending its dossier for registration of overseas offering of securities, the issuing organization shall send to the State Securities Commission the following documents:

a/ A copy of the dossier for offering registration with the competent authority of the country where the issuing organization registers the offering;

b/ Documents evidencing the satisfaction of the conditions specified in Clause 1 of this Article.

3. Within 10 days after its dossier for registration of overseas offering of securities takes effect, the issuing organization shall send to the State Securities Commission a copy of that dossier which has been approved overseas and disclose information on the offering to the public.

4. An issuing organization that conducts overseas offering of securities has the following obligations:

a/ To disclose information according to the provisions of foreign and Vietnamese laws;

b/ If it offers securities both at home and overseas simultaneously, its periodical financial statement must be made according to the international accounting standards or according to international and Vietnamese accounting standards, enclosed with a written explanation of differences between those accounting standards.

5. Within 15 days after the end of the offering, the issuing organization shall send to the State Securities Commission a report on the offering results.

6. Procedures for transferring money amounts related to overseas offerings of securities shall comply with the provisions of law on foreign exchange management.

Article 7.- Offering of bonds in Vietnam dong by international financial institutions

1. Conditions for offering of bonds in Vietnam dong by an international financial institution:

a/ Being an international financial institution to which Vietnam is a member;

b/ Having an issuance plan and a plan on the use of proceeds from the public offering of bonds for its investment projects in Vietnam, approved by the Finance Ministry;

c/ Committing to fulfill its obligations toward investors concerning issuance conditions, payment, assurance of legitimate rights and benefits of investors and other conditions;

d/ Committing to disclose information according to the provisions of Vietnamese law.

2. A dossier for registration of public offering of bonds in Vietnam dong of an international financial institution comprises:

a/ A written registration of bond offering;

b/ An investment project, including an issuance plan and a plan on the use of proceeds from the offering;

c/ Commitment to fulfill the obligations of the issuing organization;

d/ Other documents requested by the Finance Ministry.

Chapter III

LISTING OF SECURITIES

Section 1. LISTING OF SECURITIES AT STOCK EXCHANGES OR SECURITIES TRADING CENTERS

Article 8.- Conditions for listing securities at stock exchanges

1. Conditions for a company to list its stocks:

a/ Being a joint-stock company with a booked paid-up charter capital of VND 80 billion or more at the time of listing registration. Depending on the market development, that capital level may be increased or reduced by 30% at most by the Finance Ministry after obtaining the consent of the Prime Minister;

b/ Having conducted profitable business operation for two consecutive years preceding the year of listing registration and suffering no accumulative loss by the year of listing registration;

c/ Having no overdue debt not yet backed by a provision according to the provisions of law; making public all debts owed to the company by members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors, the chief accountant, the major shareholders and affiliated persons;

d/ Having at least 20% of its voting stocks held by at least 100 shareholders;

e/ Its shareholders being members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors and the chief accountant commit to hold 100% of stocks they own for 6 months after the listing date and 50% of those stocks for 6 subsequent months, excluding stocks under the state ownership held by these individuals as representatives;

f/ Having a valid dossier for stock listing registration according to the provisions of Clause 2, Article 10 of this Decree.

2. Conditions for a company to list its bonds:

a/ Being a joint-stock company, a limited liability company or a state enterprise with a booked paid-up charter capital of VND 80 billion or more at the time of listing registration;

b/ Having conducted profitable business operation for two consecutive years preceding the year of listing registration, having no debt overdue for more than one year and fulfilling its financial obligations toward the State;

c/ Having its bonds of the same issue owned by at least 100 people;

d/ Having a valid dossier for bond listing registration according to the provisions of Clause 3, Article 10 of this Decree.

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

a/ Being a closed-end fund that has a total value of its issued fund certificates (by their par value) of VND 50 billion or more or a securities investment company that has a booked paid-up charter capital of VND 50 billion or more at the time of listing registration;

b/ Its founding members and members of the representative committee of the securities investment fund or members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors and the chief accountant of the securities investment company commit to hold 100% of fund certificates or stocks they own for 6 months after the listing date and 50% of those fund certificates or stocks for 6 subsequent months;

c/ There are at least 100 people owning fund certificates of the public fund or at least 100 shareholders holding stocks of the public securities investment company;

d/ Having a valid dossier for listing registration of certificates of the public fund or stocks of the public securities investment company according to the provisions of Clause 4, Article 10 of this Decree.

4. During the transformation of a securities trading center into a stock exchange according to the provisions of Clause 5, Article 134 of the Law on Securities, organizations that have recently registered for listing of securities at Ho Chi Minh City Securities Trading Center must satisfy the conditions specified in Clauses 1, 2 and 3 of this Article.

Article 9.- Conditions for listing securities at securities trading centers

1. Conditions for a company to list its stocks:

a/ Being a joint-stock company with a booked paid-up charter capital of VND 10 billion or more at the time of listing registration;

b/ Having conducted profitable business operation for one year preceding the year of listing registration, having no payable debt overdue for more than one year and fulfilling its financial obligations toward the State;

c/ Having at least 20% of its voting stocks held by at least 100 shareholders;

d/ Its shareholders being members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors and the chief accountant commit to hold 100% of stocks they own for 6 months after the listing date and 50% of those stocks for 6 subsequent months, excluding state-owned stocks held by these individuals as representatives;

e/ Having a valid dossier for stock listing registration according to the provisions of Clause 2, Article 10 of this Decree;

f/ The listing of stocks of enterprises newly established in the domain of infrastructure or high technologies, enterprises with 100% state capital transformed into joint-stock companies is not required to satisfy the conditions specified at Point b, Clause 1 of this Article.

2. Conditions for a company to list corporate bonds:

a/ Being a joint-stock company, a limited liability company or a state enterprise with a booked paid-up charter capital of VND 10 billion or more at the time of listing registration;

b/ Bonds of the same issue have the same maturity date;

c/ Having a valid dossier for bond listing registration according to the provisions of Clause 3, Article 10 of this Article.

3. Government bonds, government-guaranteed bonds and local administration bonds may be listed at securities trading centers at the request of bond-issuing organizations.

4. Securities qualified for listing but not yet listed at securities trading centers may be traded at securities companies and the trading results must be transferred through securities trading centers for payment through the securities depositary center.

5. The segmentation of areas for listing and trading at securities trading centers shall comply with the listing regulations of securities trading centers approved by the State Securities Commission.

6. The Finance Ministry specifies conditions for listing other types of securities at securities trading centers.

Article 10.- Dossier for registration of securities listing at stock exchanges or securities trading centers

1. An organization registering the securities listing shall submit a dossier for listing registration to stock exchanges or securities trading centers.

2. A dossier for registration of stock listing comprises:

a/ A written registration of stock listing;

b/ A decision of the shareholders' general meeting approving the stock listing;

c/ A register of the listing-registering organization's shareholders made within one month before the time of submission of the listing registration dossier;

d/ A prospectus as specified in Article 15 of the Law on Securities;

e/ Commitments of shareholders being members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors and the chief accountant to hold 100% of stock they own for 6 months after the listing date and 50% of those stocks for 6 subsequent months;

f/ A listing consultancy contract (if any);

g/ The securities depositary center's written certification that the stocks of that organization have been registered for concentrated depository.

3. A dossier for registration of bond listing comprises:

a/ A written registration of bond listing;

b/ A decision of the board of directors approving the bond listing or of the shareholders' general meeting approving the convertible stock listing (for joint-stock companies) or of the members' council approving the bond listing (for limited liability companies with two or more members) or of the company owner (for one-member limited liability companies) or of the competent authority (for state enterprises);

c/ A register of the listing-registering organization's bond owners;

d/ A prospectus as specified in Article 15 of the Law on Securities;

e/ The listing-registering organization's commitment to fulfill its obligations toward investors, including payment terms, debit ratio on the own capital, conditions for conversion (in case of listing of convertible bonds) and other conditions;

f/ A commitment to guarantee payment or a written record of valuation of security assets, enclosed with valid documents evidencing the lawful ownership and the insurance policy (if any) for those assets in case of listing of secured bonds. Assets used as security must be registered with a competent agency;

g/ A contract between the issuing organization and the representative of bond owners;

h/ The securities depositary center's written certification that the bonds of that organization have been registered for concentrated depository.

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

a/ A written registration of listing of public fund certificates or stocks of the public securities investment company;

b/ A decision of the investors' congress on the listing of public fund certificates or a decision of the shareholders' general meeting approving the listing of public securities investment company stocks;

c/ A register of investors holding public fund certificates or a register of shareholders of the public securities investment company;

d/ The charter of the public fund or the public securities investment company, made according to the form set by the Finance Ministry, and a supervision contract approved by the investors' congress or the shareholders' general meeting;

e/ A prospectus as specified in Article 15 of the Law on Securities;

f/ A list and resumes of members of the fund's board of representatives; written commitments of independent members in the fund's board of representatives on their independence from the fund management company and the supervisory bank;

g/ Commitments of founding members and members of the securities investment fund's board of representatives or shareholders being members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors and the chief accountant of the securities investment company to hold 100% of fund certificates or stocks they own for 6 months after the listing date and 50% of those fund certificates or stocks for subsequent 6 months;

h/ A report on investment results of the fund or the securities investment company, accounted up to the time of listing registration, with the supervisory bank's certification;

i/ The securities depositary center's written certification that the fund certificates of the public fund or the stocks of the public securities investment company have been registered for concentrated depository.

5. After obtaining the listing approval of the stock exchange or the securities trading center, the listing-registering organization shall submit to the State Securities Commission a copy of the listing registration dossier.

6. The Finance Ministry specifies the listing registration dossiers for other types of securities.

Article 11.- Responsibilities of listing-registering organizations and concerned organizations

1. A listing-registering organization shall bear legal liability for the accuracy, truthfulness and completeness of its listing registration dossier. The listing consultancy organization, the accredited audit organization and the persons signing the audit report and the financial statement of the listing-registering organization and any organization or individual certifying the listing dossier shall bear responsibility within a scope related to the listing registration dossier.

2. In the course of examining the dossier, the stock exchange or the securities trading center may request the listing-registering organization to amend or supplement the listing registration dossier in order to ensure that information is disclosed in an accurate, truthful and complete manner, thus protecting the legitimate rights and benefits of investors.

3. In the course of examining the listing registration dossier by the stock exchange or the securities trading center, members of the board of directors, the control board, the director or the general director, the deputy directors or the deputy general directors, the chief accountant and major shareholders of the listing-registering organization may not transfer stocks they hold.

4. If the dossier submitted to the stock exchange or the securities trading center is detected to be incomplete or contain untruthful information or upon the occurrence of new events affecting the content of the submitted dossier, the listing-registering organization shall report such to the stock exchange or the securities trading center for timely amendment or supplementation of the listing registration dossier.

Article 12.- Procedures for listing registration

1. Within 30 days after receiving the complete and valid dossier, the stock exchange or the securities trading center shall approve or reject the listing registration. In case of rejection of listing registration, the stock exchange or the securities trading center shall notify in writing, clearly stating the reason(s) therefor.

2. The stock exchange or the securities trading center guides in detail the procedures for registration of securities listing in its regulation on securities listing.

Article 13.- Change of listing registration

1. A listing organization shall carry out procedures for changing its listing registration in the following cases:

a/ It conducts a stock split or reverse split, additionally issues stocks to pay dividends, issues bonus stocks or offers share purchase rights to present shareholders to increase its charter capital;

b/ It is divided or merged;

c/ Other cases of change in the volume of securities listed at the stock exchange or the securities trading center.

2. A dossier for change of listing registration to be submitted to the stock exchange or the securities trading center comprises:

a/ A written request for change of listing registration, clearly stating the reason(s) for the listing change, and relevant documents.

b/ A decision of the shareholders' general meeting approving the change of stock listing, of the board of directors approving the change of bond listing, or of the shareholders' general meeting approving the change of convertible bond listing (for joint-stock companies); of the members' council approving the change of bond listing (for limited liability companies with two or more members) or the company's owner (for one-member limited liability companies) or the representative of the capital owner (for state enterprises); of the investors' congress approving the change of securities investment fund certificate listing or of the shareholders' general meeting of the securities investment company approving the change of its stock listing.

3. Procedures for effecting the change of listing registration shall comply with the provisions of the listing regulation of the stock exchange or the securities trading center.

Article 14.- Delisting

1. Securities are delisted upon the occurrence of one of the following circumstances:

a/ The organization listing securities at the stock exchange or the securities trading center no longer satisfies the listing conditions specified at Points a and d, Clause 1, Points a and c, Clause 2, Points a and c, Clause 3, Article 8; Points a and c, Clause 1; Point a, Clause 2, Article 9, of this Decree for one year;

b/ The listing organization stops or is ordered to stop its main production or business activities for one year or more;

c/ The listing organization has its business registration certificate or license for operation in a specialized domain withdrawn;

d/ Its stocks have been left untraded at the stock exchange or the securities trading center for 12 months;

e/ It has suffered production or business losses for three consecutive years and the total of its accumulative losses exceeds its own capital stated in the latest financial statement;

f/ The listing organization ceases to exist due to a merger, consolidation, division, dissolution or bankruptcy, or the securities investment fund terminates its operation;

g/ Bonds come mature or listed bonds are wholly redeemed by the issuing organization before their mature;

h/ The audit organization disapproves or refuses to give its opinions on the listing organization's latest annual financial statement;

i/ The organization of which the listing is approved fails to carry out the procedures for listing at the stock exchange or the securities trading center within three months after the date of listing approval;

j/ The listing organization requests the delisting.

2. If the listing organization requests the delisting, the delisting dossier comprises:

a/ A written request for delisting;

b/ A decision of the shareholders' general meeting approving the stock delisting, of the board of directors approving the bond delisting, or of the shareholders' general meeting approving the convertible bond delisting (for joint-stock companies); of the members' council approving the bond delisting (for limited liability companies with two or more members) or the company's owner (for one-member limited liability companies) or the representative of the capital owner (for state enterprises); of the investors' congress approving the securities investment fund certificate delisting or of the shareholders' general meeting of the securities investment company approving the stock delisting.

3. Organizations whose securities are delisted may register for relisting at least 12 months after the delisting only if they satisfy the conditions specified in Article 8 and Clause 1, Article 9 of this Decree. Dossiers and procedures for relisting shall comply with the provisions of Article 10 of this Decree.

4. Delisting procedures shall comply with the provisions of the listing regulation of the stock exchange or the securities trading center.

Section 2. LISTING OF SECURITIES AT FOREIGN STOCK EXCHANGES

Article 15.- Conditions for securities to be listed at a foreign stock exchange

1. Satisfying the conditions specified at Point a, Clause 1, Article 6 of this Decree.

2. Having a decision approving the listing at the foreign stock exchange of the board of directors or the shareholders' general meeting (for joint-stock companies), of the members' council (for limited liability companies with two or more members), of the company's owner (for one-member limited liability companies), or of the representative of the capital owner (for state enterprises).

3. Satisfying the conditions for listing at the stock exchange of a country of which the securities market management authority or the stock exchange has reached a cooperation agreement with the State Securities Commission of Vietnam.

Article 16.- Report on listing of securities at a foreign stock exchange

1. When submitting a dossier for listing at a foreign stock exchange, an enterprise shall concurrently submit to the State Securities Commission a copy of that dossier. If it is currently listed at a domestic stock exchange or securities trading center, the enterprise shall also send a copy of that dossier to the stock exchange or securities trading center where its securities are listed.

2. Within 15 days after its listing or delisting at a foreign stock exchange is approved, the enterprise shall send to the State Securities Commission a copy of the listing approval or the delisting decision and disclose information on listing or delisting of securities at the foreign stock exchange in the State Securities Commission's publications and website.

Article 17.- Obligations of enterprises whose securities are listed at foreign stock exchanges

1. To disclose information according to the provisions of foreign and Vietnamese laws.

2. To ensure the participation ratio of foreign investors according to the provisions of law.

3. To make periodical financial statements according to the international accounting standards or both international and Vietnamese accounting standards, enclosed with a written explanation of differences between those accounting standards, if they list at both domestic and foreign stock markets.

4. To comply with Vietnam's regulations on foreign exchange management applicable to foreign-currency transactions related to the listing of securities at foreign stock exchanges.

Chapter IV

SECURITIES COMPANIES, FUND MANAGEMENT COMPANIES

Article 18.- Regulations on capital of securities companies and fund management companies

1. Legal capital for business operations of securities companies, foreign-invested securities companies and Vietnam-based foreign securities companies shall be as follows:

a/ Securities brokerage: VND 25 billion;

b/ Securities dealing: VND 100 billion;

c/ Securities issuance underwriting: VND 165 billion;

d/ Securities investment consultancy: VND 10 billion.

2. When an organization applies for license for many business operations, its legal capital shall be the total of the legal capital amounts required for the to be-licensed operations.

3. The legal capital of a fund management company, a foreign-invested fund management company or a Vietnam-based branch of a foreign fund management company must be at least VND 25 billion. The Finance Ministry shall specify the legal capital of a fund management company on the basis of the capital amount entrusted to it for management.

4. Capital contributions for establishment of a securities company, a fund management company, a Vietnam-based branch of a foreign securities company or a foreign fund management company must be in Vietnam dong or a freely convertible foreign currency.

Organizations and individuals that make capital contributions shall prove that their capital sources are lawful and have them certified by independent audit organizations.

5. Ownership percentage of foreign parties in securities companies or foreign-invested fund management companies in Vietnam shall comply with the provisions of law.

6. An organization or individual that owns 10% or more of the equity capital or voting contributed capital of a securities company and its/his/her affiliated persons may not own more than 5% of stocks or voting contributed capital of another securities company.

7. An organization or individual that owns 10% or more of the equity capital or voting contributed capital of a fund management company and its/his/her affiliated persons may not own more than 5% of stocks or voting contributed capital of another fund management company.

Article 19.- Dossiers and procedures for granting establishment and operation licenses to foreign-invested securities companies or fund management companies in Vietnam

1. A dossier comprises:

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

b/ The joint-venture contract, for case of establishment of a joint-venture securities company or a joint-venture fund management company, or the capital contribution commitment, for case of establishment of a securities company or a fund management company to which a foreign party contributes capital;

c/ If the foreign party is a legal entity, the dossier also contains the following documents: valid copies of the charter, the establishment and operation license or the business registration certificate or a document of equivalent legal validity of that legal entity granted by the country of origin; the decision on establishment or capital contribution for establishment of the securities company or the securities investment fund management company in Vietnam issued by foreign competent authority.

2. The dossiers specified in Clauses 4, 5, 6 and 7, Article 63 of the Law on Securities in case the director or the general director, the founding shareholders or founding members are foreign organizations or individuals and specified at Point b or c, Clause 1 of this Article must be made in two copies, one in English and another in Vietnamese. The dossier set in English must be consularly legalized. Copies in Vietnamese and translations from English into Vietnamese must be certified by a Vietnamese notary public or a law firm having the translation function and lawfully operating in Vietnam.

3. The time limit for granting the establishment and operation license is specified in Article 65 of the Law on Securities.

Article 20.- Dossiers and procedures for grant of establishment and operation licenses for Vietnam-based branches of foreign securities companies or fund management companies

1. A dossier comprises:

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

b/ Copies of the charter, the establishment and operation license or the business registration certificate of the foreign securities business organization granted by the country of origin; the decision on setting up of Vietnam-based branch and the capital allocation decision of the competent authority of the foreign securities trading organization.

2. A dossier specified in Clause 1 of this Article must be made in two copies, one in English and another in Vietnamese. The dossier set in English must be consularly legalized. Copies in Vietnamese and translations from English into Vietnamese must be certified by a Vietnamese notary public or a law firm having the translation function and lawfully operating in Vietnam.

3. The time limit for granting the establishment and operation license is specified in Article 65 of the Law on Securities.

Chapter V

SECURITIES INVESTMENT COMPANIES

Article 21.- Organization and operation of securities investment companies

1. A securities investment company is organized in the form of a joint-stock company of either of the following types:

a/ Public securities investment company that offers stocks to the public;

b/ Securities investment company that makes separate issues.

2. Stocks of a public securities investment company are listed and traded at the stock exchange. That securities investment company is not obliged to redeem its issued stocks.

3. A securities investment company that makes separate issues is entitled to offer its stocks to no more than 99 investors, of whom each institutional investor must invest at least VND 3 billion and each individual must invest at least VND 1 billion.

Securities investment companies that make separate issues are not required to comply with the regulations on investment restrictions applicable to public securities investment companies defined in Article 92 of the Law on Securities.

4. A securities investment company shall manage investment capital by itself or entrust a fund management company to manage it or hire a fund management company to provide investment consultancy and conduct transactions by itself. If a securities investment company hires a fund management company to manage its investment capital, the director or the general director, the deputy directors or the deputy general directors (if any), the chairman of the board of directors and at least two-thirds of members of the board of directors of the securities investment company must be independent from the fund management company.

5. A foreign securities investment company or fund being a legal entity that wishes to invest in Vietnam shall entrust a domestic fund management company or set up a Vietnam-based branch to manage its investment capital.

6. The Finance Ministry specifies the organization and operation of securities investment companies.

Article 22.- Dossiers and procedures for registration of public offering of stocks of public securities investment companies

1. The registration of public offering of stocks of public securities investment companies shall be made by their founding shareholders or fund management companies.

2. A dossier for registration of public offering of stocks comprises:

a/ A written registration of public offering of stocks made by founding shareholders or a fund management company;

b/ The draft charter of the securities investment company;

c/ The prospectus specified in Article 15 of the Law on Securities;

d/ The draft contract on supervision;

e/ The draft contract on investment management (in case of a fund management company that manages investment capital);

f/ A tentative list of the director or the general director and staffs engaged in securities business operations of the securities investment company, enclosed with copies of their securities practice certificates or dossiers of application for securities practice certificates (if the company manages its investment capital by itself);

g/ A written explanation of the material and technical foundations for investment activities (if the company manages its investment capital by itself);

h/ The list of founding shareholders enclosed with copies of their identity cards or passports, for individuals, or business registration certificates, for legal entities;

i/ The commitment of the founding shareholders to purchase at least 20% of stocks registered for public offering and to hold these stocks for 3 years after the establishment and operation license is granted.

3. The dossier specified in Clause 2 of this Article shall be made in 2 copies and sent to the State Securities Commission.

4. Within 30 days after receiving a complete and valid dossier, the State Securities Commission shall grant the public offering certificate. In case of refusal to grant the certificate, the State Securities Commission shall reply in writing, clearly stating the reason(s) therefor.

Article 23.- Public offering of stocks of public securities investment companies

1. The public offering of stocks of public securities investment companies shall comply with the provisions of Article 90 of the Law on Securities.

2. After the completion of a public offer of stocks, the founding shareholders or the fund management company shall report to the State Securities Commission on the result of the issue. At the same time, the founding shareholders shall finalize and submit to the State Securities Commission the dossier of application for establishment license of the securities investment company.

3. Within 30 days after receiving the report on capital mobilization result of the securities investment company and its valid dossier, the State Securities Commission shall grant the establishment and operation license to the public securities investment company. In case of refusal to grant the license, the State Securities Commission shall reply in writing, clearly stating the reason(s) therefor.

Article 24.- Dossiers and procedures for grant of establishment and operation licenses for securities investment companies that make separate issues

1. A dossier of application for the establishment and operation license comprises:

a/ A written application for the establishment and operation license, made by the founding shareholders;

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

c/ A written record of capital contribution by the founding shareholders;

d/ The draft supervision contract;

e/ The list of the founding shareholders enclosed with copies of their identity cards or passports and judicial records, for individuals; business registration certificates and financial statements, for legal entities;

f/ The commitment of the founding shareholders to hold their shares for 3 years after the establishment and operation license is granted;

g/ The documents specified at Points b, e, f and g, Clause 2, Article 22 of this Decree.

2. If a founding shareholder that contributes capital is a foreign legal entity, the dossier must also contain the following documents: a valid copy of the charter or the equivalent document, the establishment and operation license or the business registration certificate of that legal entity granted by the country of origin or the document certifying that it is permitted to conduct securities business in the country of origin; a competent authority's decision on capital contribution to establish the securities investment company in Vietnam.

3. The dossier specified in Clause 1 of this Article shall be made in 2 copies. If a founding shareholder that contributes capital is a foreign legal entity, the dossier shall consist of one English version and one Vietnamese version. The dossier set in English must be consularly legalized. Copies in Vietnamese and translations from English into Vietnamese must be certified by a Vietnamese notary public or a law firm having the translation function and lawfully operating in Vietnam.

4. Within 30 days after receiving the complete and valid dossier, the State Securities Commission shall grant the establishment and operation license to the securities investment company. In case of refusal to grant the license, the State Securities Commission shall reply in writing, clearly stating the reason(s) therefor.

Article 25.- Increase or decrease of charter capital of securities investment companies

The conditions, dossiers and procedures for increase or decrease of charter capital of securities investment companies shall comply with regulations of the Finance Ministry.

Article 26.- Reporting and information disclosure by securities investment companies

1. Securities investment companies shall observe the reporting regime according to the Finance Ministry's regulations on reporting regime applicable to securities investment funds.

2. Securities investment companies that make public offering of stocks and have their stocks listed at a stock exchange or a securities trading center shall disclose information according to the provisions of Article 106 of the Law on Securities and the Finance Ministry's guiding documents.

3. Securities investment companies that make separate issues are not required to disclose information by the mode specified in Clause 4, Article 100 of the Law on Securities. In this case, securities investment companies shall notify information to be disclosed to their capital-contributing shareholders by the modes specified in their charters and concurrently report the disclosed information to the State Securities Commission.

Article 27.- Contents of the organization and operation charter of a securities investment company

The organization and operation charter of a securities investment company has the following contents:

1. The name, the address of the head office, summarized information on the securities investment company, the fund management company (if any) and the supervisory bank;

2. The operation objectives; investment domains; operation duration;

3. The charter capital and regulations on increase or decrease of the charter capital;

4. Information on founding shareholders and their shares;

5. Rights and obligations of shareholders;

6. The management organization structure;

7. The representative at law;

8. The procedures of adopting decisions of the company; the principles for settling internal disputes;

9. Regulations on the board of directors and the shareholders' general meeting;

10. Investment restrictions;

11. Regulations on selection of the supervisory bank; selection and change of the independent audit organization;

12. Regulations on transfer, issuance and redemption of shares; regulations on listing of stocks;

13. Costs and revenues; expenditures and bonuses of the managerial apparatus of the securities investment company and the supervisory bank; annual estimated total cost (in case of self-management);

14. Principles for division of after-tax profits and offsetting of business losses;

15. Mode of valuation of net assets and net asset value of each share;

16. Regulations on settlement of interest conflicts likely to arise between the securities investment company, the fund management company, the supervisory bank and concerned organizations or individuals;

17. Regulations on reporting regime;

18. Cases of dissolution, dissolution procedures and procedures for liquidation of the company's assets;

19. Procedures of amending or supplementing the charter of the fund;

20. The full names and signatures of the representative at law, the founding shareholders and their authorized representatives;

21. Other contents agreed upon by shareholders not in contravention of legal provisions.

Article 28.- Re-registration of securities investment enterprises established before the effective date of the Law on Securities

1. Enterprises established before the effective date of the Law on Securities and satisfying the requirements in Clause 1, Article 97 of the Law on Securities are obliged to carry out the procedures for re-registration to operate after the model of securities investment companies within one year after that effective date under the Finance Ministry's guidance.

2. After completing the re-registration procedures mentioned in Clause 1 of this Article, securities investment companies are obliged to comply with the provisions of the Law on Securities, this Decree and relevant legal documents.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 29.- Re-registration of organizations engaged in securities activities before the effective date of this Decree

1. Organizations listed at the Ho Chi Minh City Securities Trading Center before the effective date of this Decree, which fail to fully satisfy the conditions for listing at the Stock Exchange specified in this Decree, shall adjust themselves to fully satisfy the conditions for listing at the Stock Exchange within 2 years after the effective date of this Decree. Past that time limit, if they still fail to fully satisfy the conditions for listing at the Stock Exchange, they shall switch to list at the Securities Trading Center.

2. Securities companies and fund management companies that have been granted securities business licenses but fail to fully satisfy the condition on legal capital specified in this Decree shall carry out the procedures for increase of capital within 2 years after the effective date of this Decree.

3. Fund management companies that wish to perform the operation of portfolio management shall carry out the procedures for renewal of their establishment and operation licenses under the Finance Ministry's guidance within 90 days after the effective date of this Decree.

4. Representative offices of foreign securities companies or fund management companies that have been operating under representative office establishment licenses granted by an agency other than the State Securities Commission before the effective date of this Decree shall carry out the procedures for re-registration with the State Securities Commission within one year after the effective date of this Decree.

5. Securities business practice certificates granted before the effective date of the Law on Securities, which are still valid for more than 6 months, shall be changed to the new certificate form.

Article 30.- Effect of the Decree

This Decree takes effect 15 days after its publication in "CONG BAO." All previous regulations which are contrary to this Decree are annulled.

Article 31.- Organization of implementation

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

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of People's Committees of provinces or centrally run cities shall implement this Decree.

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