Chapter V
STOCK REPURCHASE AND SALE OF TREASURY STOCKS
Article 39. Requirements for repurchase of stocks
A public corporation, when repurchasing stocks issued for its treasury stock inventory, must fulfill these requirements:
1. The requirements as defined in Article 130 of the Companies Law, in Section 1, Article 37 of the Decree No. 58/2012/ND-CP and Point b, Section 1, Article 37 of the Decree No. 58/2012/ND-CP as amended by Section 11, Article 1 of the Decree No. 60/2015/ND-CP;
2. Finances for stock repurchase suffice according to the latest financial report audited as per regulations.
If a public corporation, as a parent company, repurchases stocks with finances from the share capital surplus, development investment fund and other funds, such resources of finances shall be subject to the parent company's financial report.
If a public corporation, as a parent company, repurchases stock with finances from undistributed net profit, the resource of finances shall not exceed the undistributed net profit as shown in the consolidated financial report audited. If the undistributed net profit for stock repurchase is lower than the undistributed net profit as shown in the consolidated financial report but higher than the undistributed net profit in the parent company's financial statement, the parent company shall only spend the undistributed net profit on stock repurchase after transferring profit from child companies to the parent company according to the corporate accounting regulations' guidelines for profit distribution.
Article 40. Ineligibility for stock repurchase
1. A company shall be ineligible for repurchasing stocks in circumstances as defined in Article 38 of the Decree No. 58/2012/ND-CP and Section 12, Article 1 of the Decree No. 60/2015/ND-CP.
2. A company shall be ineligible for repurchasing stocks in other circumstances as defined by specialized laws.
Article 41. Report on stock repurchase
1. The report on a public corporation’s stock repurchase shall include:
a) The report on stock repurchase as per Appendix 23 of this Circular;
b) Decisions by the Board of Directors on the approval of the repurchase of at most ten percent (10%) of total quantity of each type of stocks offered in the last twelve (12) months, or its decisions on other situations;
c) The written confirmation of the appointment of the securities company handling transactions;
d) Decisions by the Board of Directors on the approval of the stock repurchase plan;
dd) The latest financial report audited as per regulations;
e) Written evidences of the completion of the transfer of profit from child companies to the parent company according to corporate accounting regulations’ guidelines for profit distribution if the parent company allocate finances from the undistributed net profit on stock repurchase, and the resource of finances is lower than the undistributed net profit as shown in the consolidated financial report but higher than the undistributed net profit in the parent company's financial statement;
2. The report and notice of stock repurchase by a public corporation entitled to exemptions as per Section 2, Article 37 of the Decree No. 58/2012/ND-CP as amended by Section 11, Article 1 of the Decree No. 60/2015/ND-CP shall include:
a) The report on stock repurchase as per Appendix 23 of this Circular;
d) Decisions by the Board of Directors or General Director or Director on the execution of the stock repurchase plan;
c) In ten (10) working days upon the finalization of the stock repurchase transactions, the public corporation must send the transaction report to the State Securities Commission and publicize information as per Appendix 25 of this Circular.
Article 42. Requirements for sale of treasury stocks
1. A company, when selling treasury stocks, must abide by requirements as stated in Article 39 of the Decree No. 58/2012/ND-CP and Section 13, Article 1 of the Decree No. 60/2015/ND-CP.
2. The use of treasury stocks to give portions to existing shareholders or, as bonus, to employees must first be approved by the General shareholders meeting. Moreover, the company must maintain sufficient equity according to the latest audited financial report. In particular, the resources of finances are:
a) Capital surplus;
b) Development investment fund;
c) Undistributed net profit;
d) Other funds (if available) for increase of charter capital as per the laws.
If a public corporation, as a parent company, uses the share capital surplus, development investment fund or other funds to give portions to existing shareholders or bonus to employees, the resources of finances shall be subject to the parent company’s financial report.
If a public corporation, as a parent company, spends the undistributed net profit on portions given to existing shareholders or bonus to employees, this resource of finances shall not exceed the undistributed net profit as shown in the consolidated financial report audited. If the undistributed net profit spent on portions given to existing shareholders or bonus to employee is lower than the undistributed net profit as shown in the consolidated financial report but higher than the undistributed net profit in the parent company's financial statement, the parent company shall only use the undistributed net profit after transferring profit from child companies to the parent company according to the corporate accounting regulations' guidelines for profit distribution.
Article 43. Report on treasury stock sale
The report on the public corporation’s sale of treasury stocks shall include:
1. The report on treasury stock sale as per Appendix 23 of this Circular;
2. Decisions by the General shareholders meeting or Board of Directors on the approval of the treasury stock sale plan;
3. The written confirmation of the appointment of the securities company handling transactions;
4. The latest financial report audited as per regulations;
5. Written evidences of the completion of the transfer of profit from child companies to the parent company according to corporate accounting regulations’ guidelines for profit distribution if the parent company spends the undistributed net profit on portions given to existing shareholders and bonus to employees, as per Section 2, Article 42 of this Circular, and such resource of finances is lower than the undistributed net profit as shown in the consolidated financial report but higher than the undistributed net profit in the parent company's financial statement upon the public corporation’s use of treasury stocks to give portions to existing shareholders or bonus to employees.
Article 44. Reporting and announcement of stock repurchase and treasury stock sale
1. The public corporation must send its report on stock repurchase, as per Article 41 of this Circular, or on treasury stock sale, as per Article 43 of this Circular, to the State Securities Commission.
2. In seven (07) working days upon the receipt of the report as stated in Section 1 of this Article, the State Securities Commission shall inform the public corporation in writing of the details of essential amendments, if requested. The length of time of the public corporation’s revision of the report shall not add to the time limit for the State Securities Commission’s consideration and settlement.
3. In seven (07) working days upon the receipt of the full and valid report on stock repurchase or treasury stock sale, the State Securities Commission shall notify in writing the public corporation to proceed. State Securities Commission, if rejecting the application, must respond and provide its justifications in writing.
4. In seven (07) working days upon the State Securities Commission’s notice of its receipt of the full report on stock repurchase or treasury stock sale, the public corporation must publicize information on mass media as per Appendix 24 of this Circular. Transactions regarding stock repurchase or treasury stock sale must occur in most seven (07) working days upon the public corporation's announcement of information.
5. In ten (10) working days upon the finalization of transactions for stock repurchase or treasury stock sale, the public corporation must send the transaction report to the State Securities Commission and publicize information as per Appendix 25 of this Circular. If the public corporation does not trade all stocks planned, it must report and announce reasons of failure.
6. A public corporation, whose stock is listed or traded on a Stock Exchange, must publicize information via the Stock Exchange's means of announcement when repurchasing stocks and selling treasury stocks. Section 4 and 5 of this Article stipulate details and time for announcement of information.
Article 45. Process of stock repurchase and treasury stock sale
1. A public corporation, whose stock is listed or traded on a Stock Exchange, must conform to the State Exchange’s regulations on transactions when repurchasing stocks and selling treasury stocks.
2. A public corporation, whose stock is not listed or traded on a Stock Exchange, can only repurchase stocks through a securities company designated.
3. A public corporation must end its stock repurchase and treasury stock sale within the time as announced. However, such time shall not exceed thirty (30) days upon the start of transactions and shall count intervals for alterations to transactions as per Article 45 of this Circular.
Article 46. Alterations to stock repurchase and treasury stock sale
1. The public corporation cannot alter its intention or plans for stock repurchase and treasury stock sale, which have been reported and publicized. In the case of force majeure (natural disasters, fire, war and other circumstances endorsed by the State Securities Commission), the State Securities Commission must be reported.
2. The public corporation must report to the State Securities Commission and announce the former’s decision to adopt changes on mass media in twenty four (24) hours upon the issuance of such decision, as per Appendix 26 of this Circular.
3. State Securities Commission shall respond in three (03) working days upon the receipt of the report on such changes.
4. The public corporation shall only be permitted to alter its stock repurchase and treasury stock sale after obtaining the State Securities Commission’s approval. In twenty four (24) hours upon the State Securities Commission’s approval of changes to stock repurchase and treasury stock sale, the public corporation shall publicize such changes on mass media as per Appendix 27 of this Circular.
5. The public corporation, whose stock is listed or traded on a Stock Exchange, must publicize information via the Stock Exchange's means of announcement when altering stock repurchase and treasury stock sale. Section 2 and 4 of this Article stipulate details and time for announcement of information.
Article 47. Management and recording of treasury stock
1. Treasury stocks are unsold shares according to Section 4, Article 111 of the Companies Law. Treasury stock pays no dividend and generates no voting right or rights arising from the offering or issuance of additional stocks and other prerogatives.
2. The disposal of treasury stocks may occur to reduce the charter capital according to decisions by the General shareholders meeting. The public corporation must report to the State Securities Commission and publicize the disposal of treasury stocks on mass media in twenty four (24) hours upon such disposal.
3. In 10 days upon the General shareholders meeting's authorization of the disposal of treasury stocks for charter capital reduction, the public corporation must go through formalities to reduce the charter capital in proportion to total face value of treasury stocks disposed.
4. The management, recording and disposal of treasury stocks comply with the principles of accounting records.
5. If companies engaging in consolidation or merger cross-hold stocks, which gives rise to treasury stocks after consolidation or merger, such treasury stock must be handled according to the laws.
Article 48. Responsibilities of securities companies and Stock Exchanges
1. The securities company designated to deal with stock repurchase and treasury stock sale shall be responsible for:
a) Providing guidelines to the public corporation for stock repurchase and treasury stock sale according to current regulations and plans announced;
b) Assuring the public corporation’s sufficient finances in transaction accounts to afford the volume reported and publicized;
c) Not exploiting private information related to the designating public corporation's stock repurchase and treasury stock sale to trade its securities and not disclosing such information to a third party.
2. If the public corporation's stock is listed or traded, the Stock Exchange shall be responsible for:
a) Supervising the public corporation’s announcement of information before and after its stock repurchase and treasury stock sale according to current regulations;
b) Supervising the designated securities company’s undertaking of activities for stock repurchase and treasury stock sale as per current regulations.
Tìm kiếm
Thông tư 162/2015/TT-BTC (Bản Word)