Decision No. 07/2008/QD-NHNN Issuing the Regulation on the issuance of negotiable instruments within Vietnam by credit institutions

Pursuant to …;

Issuing the Regulation on the issuance of securities within the country by credit institutions

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GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam 1997, the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Institutions 1997, the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions 2004;

Pursuant to the Enterprise Law 2005;

Pursuant to the Securities Law 2006;

Pursuant to the Foreign Exchange Decree 2005;

Pursuant to Decree No. 52/2003/ND-CP dated May 19, 2003, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 52/2006/NĐ-CP dated May 19, 2006 of the Government on the issuance of corporate bonds;

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

Pursuant to …;:

Article 1. The accompanying this Decision is the Regulation on the issuance of securities within the country by credit institutions.

Article 2. This Decision takes effect 15 days from the date of publication in the Official Gazette and replaces Decision No. 02/2005/QĐ-NHNN dated January 4, 2005 of the Governor of the State Bank of Vietnam on the issuance of securities by credit institutions for domestic capital mobilization.

Article 3. Heads of units under the State Bank of Vietnam; Governors of provincial and centrally-administered city branches of the State Bank of Vietnam; Chairmen of the Board of Directors, General Directors (Directors) of credit institutions and holders of securities shall be responsible for implementing this Decision./.

 

REGULATIONS

Issuance of securities within the country by credit institutions

(Issued together with Decision No. 07/2008/QĐ-NHNN dated March 24, 2008

of the Governor of the State Bank of Vietnam)

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Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Regulation stipulates the issuance of securities by credit institutions to mobilize capital within the territory of Vietnam from organizations and individuals both domestically and abroad.

Article 2. The issuance of securities to the public, listing and trading of securities of credit institutions on the securities market shall be carried out in accordance with the provisions of this Regulation, current laws and regulations on securities and the securities market, and related legal documents.

Article 3. Securities denominated in gold or VND guaranteed by gold prices shall be implemented in accordance with the current regulations of the State Bank of Vietnam on the mobilization and utilization of gold-denominated and VND-denominated funds guaranteed by gold prices.

Article 2. Subjects of issuance of securities

Clause 1. Credit institutions established and operating under the Law on Credit Institutions; the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions and meeting the conditions stipulated in this Regulation include:

- State-owned credit institutions.

- Joint-stock credit institutions.

- Central People's Credit Funds.

- Joint venture credit institutions.

- Foreign credit institutions with 100% foreign capital and foreign bank branches permitted to operate in Vietnam.

Clause 2. For finance companies and financial leasing companies, the types of securities and the term of securities allowed to mobilize shall be implemented in accordance with the current regulations on the organization and operation of finance companies and financial leasing companies.

Article 3. Holders of securities

Clause 1. Holders of securities include:

- Organizations and individuals in Vietnam; Overseas Vietnamese.

- Foreign organizations and individuals engaged in investment activities in accordance with Vietnamese law, including foreign organizations and individuals operating in Vietnam and those not operating in Vietnam.

Clause 2. As for foreign organizations and individuals holding securities, credit institutions may only issue registered securities.

Article 4. Definitions

In this Regulation, the following terms shall be understood as follows:

Point 1. "Securities" are certificates issued by credit institutions to mobilize capital, confirming the obligation to repay a certain amount of money within a specified period, interest payment conditions, and other commitments between the credit institution and the holder.

Point 2. "Short-term securities" are securities with a term of less than one year, including promissory notes, short-term deposit certificates, bills of exchange, and other short-term securities.

Point 3. "Long-term securities" are securities with a term of one year or more, including bonds, long-term deposit certificates, and other long-term securities.

Point 4. "Registered securities" are securities issued in the form of certificates or book entries that record the name of the owner.

Point 5. "Bearer securities" are securities issued in the form of certificates without recording the name of the owner. Bearer securities belong to the person holding them.

Point 6. "Face value" is the principal amount printed or recorded on the security issued in the form of a certificate or recorded on the ownership certificate for securities issued in the form of book entries.

Point 7. "Total face value" is the total of the face values of securities issued by credit institutions in one year or in one issuance round.

Point 8. "Term of securities" is the time period from the issuance date to the maturity date.

Point 9. "Issuance period" is the time period from the date when the credit institution starts issuing securities until the end of the issuance round.

Point 10. "Fixed interest rate" is an interest rate that does not change throughout the term of the security.

Point 11. "Periodically adjustable interest rate" is an interest rate that changes periodically according to the market, agreed upon by the credit institution and the holder at the time of issuance.

Point 12. "Interest paid in advance" means selling securities at a price lower than their face value, with the holder receiving the face value amount at maturity.

Point 13. "One-time interest payment at maturity" means paying interest once along with the principal (face value) at maturity.

Point 14. "Periodic interest payment" means paying interest based on periodic interest payment vouchers every six months or annually for long-term securities.

Point 15. "Convertible bond" is a type of bond that can be converted into common shares of the same credit institution issuing it, according to the terms set forth in the issuance plan.

Point 16. "Conversion ratio of bonds into shares" is the number of common shares received by the bondholder when converting one bond into shares.

Point 17. "Conversion period of bonds" is the time period from when the issuer begins the conversion of bonds until the end of the conversion process.

Point 18. "Warrant" is a type of security issued together with bonds, granting the bondholder the right to purchase a certain quantity of common shares under predetermined conditions.

19. "Direct issuance of securities" means the credit organization organizing and implementing the issuance of securities directly to purchasers of securities.

20. "Agency issuance" means the agency issuer carrying out the sale of securities to purchasers of securities pursuant to the authorization of the issuing credit organization.

21. "Guaranteed issuance" means the guarantor organization committing to the issuing credit organization to undertake procedures prior to the issuance of securities by purchasing a portion or all of the securities issued by the credit organization for resale or purchasing the remaining securities not fully distributed by the issuing credit organization, or supporting the issuing credit organization in the distribution of securities.

22. "Bid for securities" means the selection of organizations and individuals participating in the bidding that meet the requirements of the issuing credit organization.

23. "Quantity-based bidding" means evaluating bids based on the quantity bid by purchasers of securities at the interest rate announced in advance by the issuing credit organization.

24. "Interest-rate bidding" means evaluating bids based on the interest rate bid by purchasers of securities.

25. "Public offering of bonds" means the offering of bonds through one of the following methods:

a) Through mass media, including the Internet.

b) Offering bonds to at least one year's worth of investors, excluding professional investors such as commercial banks, financial companies, financial leasing companies, insurance business organizations, and securities trading organizations.

c) Offering to an unspecified number of investors.

Article 5. Proportion of ownership of securities by foreign organizations and individuals

The proportion of ownership of securities by foreign organizations and individuals not operating in Vietnam in the primary issuance shall comply with the regulations of the State Bank of Vietnam and related legal documents during each period.

Article 6. Public offering of bonds

1. Credit organizations shall implement public offerings of bonds in accordance with current laws and regulations on securities and the securities market and related legal documents.

2. Credit organizations shall register public offerings of bonds in accordance with the guidelines of the Ministry of Finance and the State Bank of Vietnam.

Article 7. Forms of issuance

1. Credit organizations issue securities in the form of registered certificates, bearer certificates, and book-entry records.

2. In cases where securities are issued in the form of book-entry records, the credit organization issuing the securities shall provide the purchaser with a certificate of ownership of the securities.

Article 8. Elements of securities

1. Securities issued in the form of certificates must contain the following elements:

- Name of the issuing credit organization.

- Name of the security (promissory note, bill, short-term deposit certificate, long-term deposit certificate, bond...).

- Face value.

- Remaining prepaid land rent period (**): equals (=) the lease term minus (-) the period of land use up to the time the State recovers the land.

- Issuance date.

- Due date for payment.

- Interest rate: Method of interest payment, Time and place of interest payment.

- Place of principal repayment of the security.

- Clearly stating whether it is a registered or bearer security.

In the case of a registered security, clearly state: Name of the organization, establishment license number or business registration certificate number, address of the organization purchasing the security (if the purchaser is an organization); Name, identification card number or passport number, address of the individual purchasing the security (if the purchaser is an individual).

- For the issuance of convertible bonds, clearly state: Conversion period of the bond, conversion ratio of the bond.

- For the issuance of bonds accompanied by warrant rights, clearly state: Conditions for purchasing common shares of the warrant holder, number of shares purchasable per warrant unit, other rights and responsibilities of the warrant holder.

- Signature of the General Director or authorized representative and other signatures prescribed by the credit organization.

- Issue symbol and serial number.

- Conditions and terms regarding the transfer, discounting, and pledging of securities at the issuing credit organization; Handling of risk cases and non-payment cases.

2. In addition to the elements specified in Clause 1 of this Article, the issuing credit organization may specify additional notes and instructions related to the securities.

3. For securities issued in the form of book-entry records, the elements specified in Clause 1 of this Article must be recorded in the certificate of ownership of the securities.

4. For securities that pay interest periodically, the interest payment voucher accompanying the security must include details related to the security (serial number, face value), interest rate, amount receivable, interest payment period.

5. Securities issued in the form of certificates must be designed and printed to ensure high anti-counterfeiting capabilities.

Article 9. Currency for issuance and payment

1. Securities are issued in Vietnamese dong or foreign currency.

2. The issuance, payment, and transfer of securities in foreign currency must comply with the regulations on foreign exchange management of the Socialist Republic of Vietnam.

Article 10. Issuance Period

The issuance period for each issuance round shall not exceed sixty days, including holidays and public holidays as prescribed by law. Credit organizations may only issue beyond this period with the approval of the Governor of the State Bank of Vietnam.

Article 11. Interest Rates

The interest rate on securities issued by credit organizations shall be set in accordance with market interest rates, ensuring business efficiency and operational safety for the credit organization.

Article 12. Procedures for Issuing and Paying Securities

The procedures for issuing and paying securities shall be established by the organization in accordance with the characteristics and management model of the credit organization to ensure accurate and safe issuance and payment of securities.

Article 13. Principal and Interest Payment

1. Credit organizations shall pay the principal amount to the purchaser of the security when the security reaches its maturity date.

2. Credit organizations shall implement interest payments either in advance, in one lump sum at maturity, or periodically.

3. Credit organizations may agree to pay interest at a fixed rate or a rate subject to periodic adjustment.

4. Early redemption of securities shall be determined by the credit organization in accordance with risk management regulations and operational safety requirements.

5. Financial companies and financial leasing companies may only make early principal payments on securities that have had a minimum actual term equal to the shortest permissible term for fundraising.

Article 14. Transfer of Ownership of Securities, Dispute Resolution, and Handling Other Risk Situations

1. Securities may be transferred through purchase, sale, gift, exchange, or inheritance in accordance with the provisions of the law.

2. Procedures for transferring ownership of securities, handling risk situations (such as damage, tearing, loss of securities, and other risks) shall be established by the credit organization in compliance with the law, consistent with the organization's business characteristics and conditions, and ensuring the legitimate rights of the security holder.

3. Disputes related to securities shall be resolved in accordance with the current laws of the Socialist Republic of Vietnam.

Article 15. Pledging, Discounting, and Re-discounting of Securities

1. Securities may be used as collateral at credit organizations in accordance with current laws on loan guarantees if the relevant organization agrees.

2. Securities may be discounted or re-discounted in accordance with current laws on discounting and re-discounting of securities.

Article 16. Storage, Delivery, and Transportation of Securities

The storage, delivery, and transportation of securities by credit organizations shall comply with current regulations of the Government and the State Bank of Vietnam.

Chapter 2.

SHORT-TERM SECURITIES ISSUANCE

Article 17. Face Value of Short-Term Securities

The face value of short-term securities shall be printed or agreed upon by the issuing credit organization with the purchaser.

Article 18. Conditions for Issuing Short-Term Securities

Credit organizations may issue short-term securities provided they fully comply with restrictions to ensure safety in operations as stipulated by the Law on Credit Organizations, the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations, and guidelines from the State Bank of Vietnam.

Article 19. Issuance of Short-Term Valuable Securities

1. Credit institutions shall proactively organize multiple issuances of short-term valuable securities within a year.

2. At least three working days before each issuance, credit institutions must submit the Issuance Notice for the planned issuance to the State Bank (Department of Monetary Policy).

3. The Issuance Notice shall include the following contents:

- Name of the issuing credit organization.

- Name of the valuable security

- Total face value of the issuance.

- Issuance method

- Issuance form

- Issuance location.

- Validity period of the valuable security

- Issuance period

- Interest rate; Interest payment method, Payment time, Payment location.

- Location for repayment of principal of the valuable security

- Other contents to be announced by the issuing credit institution.

Chapter 3.

ISSUANCE OF LONG-TERM VALUABLE SECURITIES

Article 20. Face Value of Long-Term Valuable Securities

1. The face value of long-term valuable securities denominated in Vietnamese dong issued in the form of certificates shall be a minimum of one hundred thousand Vietnamese dong. Higher face values must be multiples of the minimum face value.

2. The face value of long-term valuable securities denominated in foreign currency issued in the form of certificates shall be a minimum of one hundred US dollars or equivalent foreign currency. Higher face values must be multiples of the minimum face value.

3. The face value of long-term valuable securities in the form of bonds issued in the form of pre-printed certificates shall be printed on the valuable security.

4. The face value of long-term valuable securities in the form of long-term deposit certificates issued in the form of pre-printed certificates or according to the agreement between the issuing credit institution and the buyer.

5. The face value of long-term valuable securities issued in the form of book-entry records shall be agreed upon by the issuing credit institution and the buyer.

Article 21. Issuance Date and Due Date of Long-Term Valuable Securities in the Form of Bonds

Bonds issued in the same batch and with the same term shall have the same issuance date and due date.

Article 22. Conditions for Issuing Long-Term Valuable Securities

Credit institutions may issue long-term valuable securities when they fully meet the following conditions:

1. Compliance with restrictions to ensure safety in operations as stipulated in the Law on Credit Institutions, the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions, and guidelines of the State Bank.

2. Having at least one year of operation from the date the credit institution officially commences operations.

3. The total pre-tax profit to equity ratio of the most recent year prior to issuance must reach 10% or more and must have been profitable up to the latest reporting period.

4. Approval from the Governor of the State Bank regarding the issuance of long-term valuable securities for the financial year of the credit institution.

Article 23. Documents for Requesting Issuance of Long-Term Valuable Securities

The documents for requesting issuance of long-term valuable securities for the financial year include:

1. Request for issuance of long-term valuable securities for the financial year.

2. Plan for issuance of long-term valuable securities for the financial year, specifying the purpose of issuance, plan for using funds raised from the issuance of long-term valuable securities; Total issuance face value, face value, name of the valuable security, denomination, issuance location, issuance method, issuance form, term, interest rate, interest payment method, repayment location of principal and interest, buyer of the valuable security, number and timing of each issuance batch; Conditions and terms regarding rights and obligations of the credit institution and the buyer. The issuance plan for long-term valuable securities must be approved by the Board of Directors.

3. Plan for issuing bonds to supplement the own capital of state-owned credit institutions must be approved by the Ministry of Finance.

4. Financial reports of the two most recent consecutive years audited and up to the date of the issuance request. Credit institutions operating for less than two years shall submit financial reports from their start of operations to the date of the issuance request. The content of the financial reports shall comply with the current regulations of the Governor of the State Bank on reporting systems for credit institutions. In case of submitting issuance documents in the first quarter of each year, credit institutions may submit unaudited financial reports of the previous year and must submit audited financial reports immediately after the audit is completed.

5. Guarantee commitment for issuance (if applicable).

6. Business plan, funding sources and usage plan for the financial year.

7. Charter and Operating Permit (for credit institutions issuing for the first time)

8. Changes in organizational structure and other changes (if applicable).

Article 24. Form and Time Limit for Reviewing Decisions on the Issuance of Long-Term Valuable Securities

1. The Governor of the State Bank of Vietnam shall issue decisions regarding the issuance of long-term valuable securities for the financial year of credit institutions.

2. The time limit for reviewing and issuing decisions on the issuance of long-term valuable securities for the financial year of credit institutions shall not exceed fifteen working days from the date of receiving complete application documents for issuance from credit institutions.

Article 25. Issuing Entities of Long-Term Valuable Securities

1. Credit institutions shall proactively organize issuance sessions of long-term valuable securities within the scope of the approved issuance plan for the financial year.

2. In cases where credit institutions have been approved for the issuance plan of long-term valuable securities for the financial year but do not organize the issuance, they must report to the State Bank of Vietnam (Department of Monetary Policy).

3. At least three working days before the issuance date, credit institutions must submit a Notice of Issuance of Long-Term Valuable Securities for the planned issuance session to the State Bank of Vietnam (Department of Monetary Policy).

4. The Notice of Issuance of Long-Term Valuable Securities shall include the following contents:

- Name of the issuing credit organization.

- Name of the valuable security (bonds, long-term deposit certificates...).

- Total face value of the issuance.

- Issuance method

- Issuance form

- Issuance location.

- Validity period of the valuable security

- Issuance period

- Interest rate, Interest Payment Method, Interest Payment Date and Location.

- Location for repayment of principal of the valuable security

- Other contents to be announced by the issuing credit institution.

5. Credit institutions may only issue beyond the approved plan when they obtain written approval from the Governor of the State Bank of Vietnam. The application documents for reviewing supplementary issuance plans of long-term valuable securities for the financial year shall include: Application for Supplementary Issuance of Long-Term Valuable Securities, Adjusted Issuance Plan of Long-Term Valuable Securities, Adjusted Business Plan for the Financial Year.

Chapter 4.

ISSUANCE OF CONVERTIBLE BONDS AND BONDS ACCOMPANIED BY WARRANTS

Article 26. Issuance Targets for Convertible Bonds and Bonds Accompanied by Warrants

Convertible bonds and bonds accompanied by warrants are issued by joint-stock credit institutions.

Article 27. Limits for Purchasers of Convertible Bonds and Bonds Accompanied by Warrants

1. For foreign organizations or individuals purchasing convertible bonds or bonds accompanied by warrants, at the conversion period to common stock or purchase period of common stock, they must ensure compliance with current regulations of the Government and the State Bank of Vietnam regarding foreign investors' purchase of shares of Vietnamese credit institutions and related legal documents.

2. For credit institutions purchasing convertible bonds or bonds accompanied by warrants, at the conversion period to common stock or purchase period of common stock, they must comply with current regulations of the Law on Credit Institutions and the State Bank of Vietnam regarding capital contribution limits, share purchases, and related legal documents.

Article 28. Conditions for Issuing Convertible Bonds and Bonds Accompanied by Warrants

Credit institutions shall issue convertible bonds and bonds accompanied by warrants when meeting all of the following conditions:

1. Meeting the conditions stipulated in Clause 1 and Clause 2 of Article 22 of this Regulation.

2. The plan to increase the charter capital from the issuance of convertible bonds and bonds accompanied by warrants for the financial year has been approved by the General Shareholders' Meeting and received the consent of the Governor of the State Bank of Vietnam.

3. Being ranked A by the State Bank of Vietnam in the year immediately preceding the issuance year. If the State Bank of Vietnam has not yet made a ranking, it must be proposed by the State Bank of Vietnam branch in the province or centrally-administered city to be ranked A.

4. The average return on equity over the previous three consecutive years must be higher than the expected interest rate for convertible bonds and bonds accompanied by warrants. For credit institutions operating for two to less than three years, the average return on equity over the previous two consecutive years must be higher than the expected interest rate for convertible bonds and bonds accompanied by warrants. For credit institutions operating for less than two years, the return on equity of the previous year must be higher than the expected interest rate for convertible bonds and bonds accompanied by warrants.

5. Receiving the approval of the Governor of the State Bank of Vietnam for the issuance of convertible bonds and bonds accompanied by warrants for the financial year of the credit institution.

Article 29. Documents for Requesting Issuance of Convertible Bonds and Warrant-Attached Bonds

In addition to the provisions stipulated in Clauses 4, 5, 6, 7, and 8 of Article 23 of this Regulation, the documents for requesting issuance of convertible bonds and warrant-attached bonds for the fiscal year shall also include:

1. The request for issuance of convertible bonds and warrant-attached bonds for the fiscal year.

2. The plan to increase the charter capital from the proceeds of issuing convertible bonds and warrant-attached bonds, which has been approved by the General Shareholders' Meeting and consented to by the Governor of the State Bank of Vietnam.

3. The issuance plan for convertible bonds and warrant-attached bonds for the fiscal year, specifying:

- Purpose of issuance, plan for using funds raised from issuing convertible bonds and warrant-attached bonds; total nominal value issued, nominal value, place of issuance, issuance method, form of issuance, term, interest rate, interest payment method, place of principal and interest repayment, bond buyer, quantity and time schedule for each issuance period; Conditions and terms regarding rights and obligations of the credit institution and the buyer. The issuance plan for convertible bonds and warrant-attached bonds must be approved by the Board of Directors.

- For the issuance plan of convertible bonds, it must clearly specify: Conditions and term for converting bonds; Conversion ratio of bonds, calculation method for conversion price; Range of stock price fluctuation at the time of issuance and bond conversion (if applicable).

- For the issuance plan of warrant-attached bonds, it must clearly specify: Conditions for purchasing common shares of the holder of warrants, number of shares that can be purchased per unit of warrant, other rights and responsibilities of the warrant holder.

Article 30. Form and Term for Considering and Deciding on Issuance of Convertible Bonds and Warrant-Attached Bonds

1. The Governor of the State Bank of Vietnam issues a decision on the issuance of convertible bonds and warrant-attached bonds for the fiscal year of credit institutions.

2. The term for considering and issuing a decision on the issuance of convertible bonds and warrant-attached bonds of credit institutions shall not exceed twenty working days from the date of receipt of all issuance request documents from the credit institution.

Article 31. Guarantee for Issuance of Convertible Bonds and Warrant-Attached Bonds

The purchase of convertible bonds and warrant-attached bonds by the issuance guarantor organization must comply with the provisions of Article 27 of this Regulation and relevant laws.

Article 32. Issuer of Convertible Bonds and Warrant-Attached Bonds

1. Credit institutions proactively organize issuance periods of convertible bonds and warrant-attached bonds within the scope of the approved issuance plan for the fiscal year.

2. In case a credit institution has been approved to issue convertible bonds and warrant-attached bonds but does not organize the issuance, it must report to the State Bank of Vietnam (Department of Monetary Policy).

3. At least three working days before the issuance date, the credit institution must send the issuance announcement of convertible bonds and warrant-attached bonds for the planned issuance period to the State Bank of Vietnam (Department of Monetary Policy).

4. The issuance announcement of convertible bonds and warrant-attached bonds shall include the following contents:

- Name of the issuing credit institution.

- Name of the bond.

- Total nominal value of the issuance period.

- Issuance method

- Form of issuance.

- Place of issuance.

- Bond term.

- Issuance period

- Interest rate, interest payment method, interest payment date and place.

- Place of bond principal repayment.

- For issuance of convertible bonds, it must clearly specify: Conditions and term for converting bonds, Conversion ratio of bonds, calculation method for conversion price; Range of stock price fluctuation at the time of issuance and bond conversion (if applicable).

- For issuance of warrant-attached bonds, it must clearly specify: Conditions for purchasing common shares of the holder of warrants, number of shares that can be purchased per unit of warrant, other rights and responsibilities of the warrant holder.

- Other contents of the announcement by the issuing credit institution.

Article 33. Repurchasing convertible bonds and warrant-linked bonds

Credit institutions may repurchase convertible bonds and warrant-linked bonds upon agreement with bondholders and in accordance with relevant legal documents.

Chapter 5.

METHODS OF ISSUING SECURITIES

Article 34. Methods of issuing securities

Credit institutions may issue securities through the following methods:

1. Direct issuance of securities

2. Guarantee issuance

3. Agency issuance

4. Auction of securities.

Article 35. Direct issuance of securities

Credit institutions shall directly organize and implement the issuance of securities in accordance with their characteristics and conditions.

Article 36. Organizing guarantee and agency issuance of securities

1. Organizations involved in guaranteeing and agency issuance of securities include credit institutions, securities companies permitted to operate securities guarantees, and other financial institutions as specified in their operating licenses.

2. Commercial banks conducting public bond issuance guarantees must be approved by the State Securities Commission in accordance with conditions set forth by the Ministry of Finance.

Article 37. Method of guarantee issuance of securities

1. The guarantee issuance of securities can be carried out by one or more organizations simultaneously.

2. In cases where multiple organizations jointly undertake guarantee issuance of securities, they shall conduct joint guarantee issuance.

3. The guarantor organization shall fulfill its guarantee issuance commitment to the credit institution.

4. The guarantee issuance fee shall be agreed upon between the credit institution issuing the securities and the guarantor organization.

Article 38. Method of agency issuance of securities

1. A credit institution issuing securities may entrust one or more organizations to act as agents for the issuance of securities.

2. The agency issuer shall sell the securities to purchasers in accordance with its commitment to the issuing credit institution. If not fully sold, the unsold securities shall be returned to the issuing credit institution.

3. The agency issuance fee shall be agreed upon between the issuing credit institution and the agency issuer.

Article 39. Method of auctioning securities

1. Credit institutions issuing securities may choose from the following auction methods:

a) Direct auction at the issuing credit institution.

b) Auction through intermediary financial organizations.

c) Auction through the Securities Trading Center or Stock Exchange.

2. Credit institutions shall independently decide on the form of auction and establish specific auction procedures that align with their business characteristics and conditions, as well as relevant legal documents.

3. The organization of auctions must ensure confidentiality regarding information of participating organizations and individuals and equality among all participants.

4. The auction fee shall be agreed upon between the issuing credit institution and the organization authorized to organize the auction.

Chapter 6.

RESPONSIBILITIES OF CREDIT ORGANIZATIONS, UNITS UNDER THE STATE BANK OF VIETNAM AND THE STATE BANK OF VIETNAM BRANCHES IN PROVINCES AND CENTRALLY-GOVERNED CITIES

Article 40. Responsibilities of credit organizations

1. Submit applications for issuing long-term securities for the fiscal year; Applications for issuing convertible bonds and warrant-linked bonds; Announce issuance of securities in each series to the State Bank of Vietnam (Department of Monetary Policy).

2. In case of public issuance of bonds, credit organizations must submit registration documents with the Securities Commission under the State according to current laws on securities and the securities market.

3. Publicly disclose information about the issuance of securities at the time of issuance in accordance with the contents prescribed in Clause 3, Article 19, Clause 4, Article 25, and Clause 4, Article 32 of this Regulation.

4. Bear responsibility for the accuracy and truthfulness of the disclosed information.

5. Organize the issuance of securities.

6. Pay principal and interest on time and fully to the purchasers of securities.

7. Report in writing the results of the issuance of securities to the State Bank of Vietnam (Department of Monetary Policy) and the State Bank of Vietnam branch in the centrally-governed city or province where the credit organization's headquarters is located, no later than ten working days after the end of the issuance period, in the format prescribed in the attached appendix to this Regulation.

Article 41. Responsibilities of the State Bank of Vietnam Branches in Provinces and Centrally-Governed Cities

Provide specific opinions on classification and approval or non-approval of applications for issuing convertible bonds and warrant-linked bonds from credit organizations whose headquarters are located within their jurisdiction (if necessary).

Article 42. Responsibilities of Units Under the State Bank of Vietnam

1. Monetary Policy Department

a) Receive applications for issuing long-term securities for the fiscal year; Applications for issuing convertible bonds and warrant-linked bonds; Announcements of issuance of securities in each issuance series, and reports on the results of the issuance of securities by credit organizations.

b) Take the lead and coordinate with relevant units to examine applications for issuing long-term securities for the fiscal year, applications for issuing convertible bonds and warrant-linked bonds, and submit them to the Governor of the State Bank of Vietnam for consideration and approval or non-approval of the credit organization's application.

c) Study the issuance situation of securities by credit organizations and make recommendations to the Governor of the State Bank of Vietnam to amend and supplement regulations on the issuance of securities by credit organizations.

2. Banking Inspection

a) Provide the Department of Monetary Policy with the following information:

- Assessments by the Banking Inspection on the operational and financial situations of credit organizations through on-site inspections and remote monitoring.

- Data on total pre-tax profit compared to equity for the immediately preceding year before issuance and up to the latest date (in the case of handling applications for issuing long-term securities by credit organizations).

- Classification results of credit organizations for the immediately preceding year before issuance and the post-tax profit margin on equity as stipulated in Clause 3, Clause 4, Article 28 of this Regulation (in the case of handling applications for issuing convertible bonds and warrant-linked bonds by credit organizations).

b) Coordinate with the Department of Monetary Policy to review and provide specific opinions on the approval or non-approval of applications for issuing long-term securities, applications for issuing convertible bonds and warrant-linked bonds by credit organizations.

c) Inspect and supervise the issuance of securities by credit organizations; Handle according to their authority and recommend the Governor of the State Bank of Vietnam to handle cases of violation of the provisions of this Regulation.

3. Department of Banks and Non-Bank Credit Organizations

a) Provide the Department of Monetary Policy with the organizational and operational situation of credit organizations.

b) Coordinate with the Department of Monetary Policy to review and provide specific opinions on the approval or non-approval of applications for issuing long-term securities, applications for issuing convertible bonds and warrant-linked bonds by credit organizations.

4. Department of Foreign Exchange Management

Coordinate with the Department of Monetary Policy to review and provide opinions on the handling of applications for issuing annual foreign currency-denominated long-term securities by credit organizations.

5. Department of Accounting and Finance

Guide accounting entries for short-term and long-term security issuance operations and convertible bond and warrant-linked bond issuance operations by credit organizations.

6. Issuance and Treasury Bureau

Advise credit organizations on designing templates and printing securities to ensure high anti-counterfeiting capabilities when requested by credit organizations.

Article 43. Handling of Violations

Organizations and individuals violating the provisions of this Regulation shall be subject to administrative penalties in the field of monetary affairs and banking activities or criminal liability, depending on the nature and severity of the violations./.