Circular No. 118/2020/TT-BTC guiding certain contents regarding the public offering of securities, issuance of shares, tender offers to purchase shares, share repurchase, registration of public companies, and revocation of public company status.

 

CIRCULAR

GUIDELINES ON CERTAIN MATTERS RELATING TO PUBLIC OFFERS OF SECURITIES, ISSUANCE OF SECURITIES, PUBLIC TENDER OFFERS, PURCHASE OF SHARES, REGISTRATION OF JOINT-STOCK COMPANIES AND DE-LISTING OF JOINT-STOCK COMPANIES

Pursuant to the Securities Law dated November 26, 2019;

Pursuant to the Enterprise Law dated June 17, 2020;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 155/2020/NĐ-CP dated December 31, 2020, issued by the Government, detailing the implementation of certain provisions of the Securities Law;

Part I. 

1. Model Prospectus for Public Offering of Securities, Issuance of Shares for Exchange;

Section I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the following contents:

3. Model Report on Results of Offering Period, Issuance Period of Securities, Tender Offer Period;

5. Share Repurchase by Public Companies.

1. Issuer;

4. Template for the announcement of information about joint-stock companies; registration files for joint-stock companies formed through division, split, merger, or acquisition; the process of de-listing joint-stock companies that fail to meet the conditions for being listed due to restructuring, dissolution, or bankruptcy of enterprises;

2. Public Company;

Article 2. Applicability

The objects subject to this Circular include:

3. Shareholder of a Public Company Offering Shares to the Public;

4. Securities Company;

Vietnam Stock Exchange and its subsidiaries (hereinafter referred to as the Vietnam Stock Exchange), Vietnam Securities Depository and Central Counterparty Corporation and its subsidiaries

6. Relevant agencies, organizations, and individuals.

PROSPECTUS FORMS, NOTICE FORMS, REPORTS ON RESULTS OF PUBLIC OFFERING PERIODS, ISSUANCE PERIODS OF SECURITIES, TENDER OFFER PERIODS

PART II

1. When registering a public offering of securities, issuing shares for exchange, or a shareholder of a public company registers a public offering of shares, they shall prepare a prospectus according to the following models:

a) Prospectus for Initial Public Offering of Shares according to Form at Appendix No. 01 attached hereto;

1. When issuing entities register for public offerings of securities, issuance of shares for exchange, or when shareholders of joint-stock companies register for public offerings of shares, they must prepare a Prospectus according to the following template:

a) Prospectus for the initial public offering of shares according to Model 01 issued together with this Circular;

b) Prospectus for additional public offerings of shares by joint-stock companies according to Model 02 issued together with this Circular;

c) Prospectus for public offerings of shares by shareholders of joint-stock companies according to Model 03 issued together with this Circular;

d) Prospectus for the initial public offering of shares to convert a limited liability company into a joint-stock company according to Model 04 issued together with this Circular;

đ) Prospectus for public offerings of corporate bonds according to Model 05 issued together with this Circular;

e) Prospectus for public offerings of convertible corporate bonds and corporate bonds with warrants by joint-stock companies according to Model 06 issued together with this Circular;

g) Prospectus for additional public offerings of shares by joint-stock companies after enterprise restructuring, joint-stock companies formed after mergers not involving enterprise restructuring, and joint-stock companies formed after splitting off from other companies according to Model 07 issued together with this Circular;

h) Prospectus for public offerings of corporate bonds by companies after enterprise restructuring, companies formed after mergers not involving enterprise restructuring, and companies formed after splitting off from other companies according to Model 08 issued together with this Circular;

i) Prospectus for public offerings of convertible corporate bonds and corporate bonds with warrants by joint-stock companies after enterprise restructuring, joint-stock companies formed after mergers not involving enterprise restructuring, and joint-stock companies formed after splitting off from other companies according to Model 09 issued together with this Circular;

k) Prospectus for the issuance of shares by joint-stock companies for tender offers according to Model 10 issued together with this Circular;

l) Prospectus for the issuance of shares for exchange under a merger agreement according to Model 11 issued together with this Circular;

m) Prospectus for the issuance of shares by joint-stock companies for exchange under a consolidation agreement according to Model 12 issued together with this Circular.

b) Information about risk factors;

c) Information about the issuer, public company whose shares are being offered including formation and development process, organizational structure, related companies, business activities;

d) Information about founding shareholders, major shareholders, company owners; Chairman of the company, members of the Board of Directors, members of the Board of Members; Supervisory Board member; General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

đ) Information about business results, financial situation, and projected plans;

d) Information on founding shareholders, major shareholders, and company owners; Chairman of the company, members of the Board of Directors, members of the Board of Members; Supervisors; General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

g) Information about the purpose of the offering, issuance; plan for using funds raised from the offering period, except for the initial public offering of shares to become a public company through ownership restructuring but without increasing the issuer's charter capital, public offering of shares by a shareholder of a public company.

e) Information on the offering and issuance round, including the characteristics of the securities being offered and issued; distribution methods; distribution schedule; cases for canceling the offering round;

g) Information on the purpose of the offer and issuance; plans for using the proceeds from the offer, except in cases where the initial public offering of shares is made to become a joint-stock company through changes in ownership structure without increasing the charter capital of the issuer, or the public offering of shares by shareholders of joint-stock companies;

h) Information about related partners involved in the issuance period, including advisory organizations, underwriting organizations, distribution agents, bondholders' representatives, auditing organizations;

i) Other important information that may affect investors' decisions;

k) Signature of those primarily responsible for the Prospectus as stipulated in Clause 3, Article 19 of the Securities Law;

l) List of attached documents including decisions of the Shareholders' Meeting or the Board of Directors or the Board of Members or the company owner related to the offer and issuance, financial statements as required by Article 20 of the Securities Law, documents related to the project using funds raised from the offer, and other relevant documents (if any);

3. When issuing entities prepare the Prospectus according to the model specified in Clause 1 of this Article, they must ensure the following regulations:

a) Information disclosed in the Prospectus must be clear, accurate, truthful, non-contradictory, and include all contents that may affect investors' decisions. Language in the Prospectus should be simple and easy to understand; in cases where abbreviations or specialized technical terms are used, they must be accompanied by clear explanations;

b) Important information and comparative information in the Prospectus must clearly state the source of the information;

c) The Prospectus must be prepared in a clear format, with font and size presented in a manner that ensures readability;

d) Risk factor analysis must reflect their impact on the business sector, financial situation, and business results of the issuer; the offer and issuance; security prices; projects using funds raised from the offer. Risk factors need to be classified and titled appropriately according to groups, arranged in order of disclosure of negative risk factors from high to low impact;

đ) Information on business activities and financial status must reflect the operating situation of the issuer and joint-stock companies whose shares are offered for public sale in the two most recent fiscal years and up to the end of the latest quarter; in the case of a parent company, the published business results include consolidated and parent company results;

e) Information on major shareholders, company owners, Chairman of the company, members of the Board of Directors, members of the Board of Members, Supervisors, General Director (Director), Deputy General Director (Deputy Director), Chief Accountant must reflect information on interests related to the issuer and shareholders of joint-stock companies offering shares to the public;

g) The purpose of the offer and issuance and the plan for using the proceeds from the offer must be consistent with the plan approved by the Shareholders' Meeting or the Board of Directors or the Board of Members or the company owner;

h) In cases where the issuing entity modifies or supplements the Prospectus, they must clearly state the modified or supplemented contents and the reasons for such modifications or supplements.

Article 4. Model of Issuance Announcement for Securities Offering and Public Tender Offer

1. Notice of public offering of shares according to Model 13 issued together with this Circular;

3. The public share issuance notice of a joint-stock company for a public tender offer according to Form at Appendix No. 15 issued together with this Circular;

4. The share issuance notice for exchange pursuant to a merger or consolidation agreement according to Form at Appendix No. 16 issued together with this Circular;

5. The share issuance notice for dividend payment, and for increasing share capital from retained earnings according to Form at Appendix No. 17 issued together with this Circular;

6. The share issuance notice under an employee stock option plan according to Form at Appendix No. 18 issued together with this Circular;

7. The share issuance notice to exercise warrant rights according to Form at Appendix No. 19 issued together with this Circular;

8. The public tender offer notice according to Form at Appendix No. 20 issued together with this Circular;

Article 5. Model Report on the Results of the Share Offering, Issuance, and Public Tender Offer Periods

1. The report on the results of the public share offering period according to Form at Appendix No. 21 issued together with this Circular;

4. The report on the results of the share issuance period to exchange shares for a specific number of shareholders in another joint-stock company, to exchange shares for shareholders of a non-publicly traded joint-stock company, to exchange equity contributions for members of a limited liability company, and to exchange debts according to Form at Appendix No. 24 issued together with this Circular;

5. The report on the results of the share issuance period of a joint-stock company for a public tender offer according to Form at Appendix No. 25 issued together with this Circular;

6. The report on the results of the share issuance period for exchange pursuant to a merger agreement according to Form at Appendix No. 26 issued together with this Circular;

7. The report on the results of the share issuance period for exchange pursuant to a consolidation agreement according to Form at Appendix No. 27 issued together with this Circular;

8. The report on the results of the share issuance period for dividend payment, and for increasing share capital from retained earnings according to Form at Appendix No. 28 issued together with this Circular;

9. The report on the results of the share issuance period under an employee stock option plan according to Form at Appendix No. 29 issued together with this Circular;

10. The report on the results of the share issuance period to convert bonds according to Form at Appendix No. 30 issued together with this Circular;

11. The report on the results of the share issuance period to exercise warrant rights according to Form at Appendix No. 31 issued together with this Circular;

12. The report on the results of the overseas share offering period, and the new share issuance period to serve as the basis for issuing depositary receipts abroad according to Form at Appendix No. 32 issued together with this Circular;

13. The report on the results of the public tender offer period according to Form at Appendix No. 33 issued together with this Circular.

Section III

REGISTRATION OF PUBLICLY TRADED COMPANIES, CANCELLATION OF PUBLICLY TRADED COMPANY STATUS

Article 6. Form of Public Information Disclosure about Public Companies

The form of public information disclosure about public companies shall be established according to the Model set forth in Appendix No. 34 issued together with this Circular.

Article 7. Documents for Registration of Public Companies Formed through Splitting, Dividing, Merger, or Acquisition of Enterprises

The documents for registration of public companies formed through splitting, dividing, merger, or acquisition of enterprises include:

1. The documents prescribed at points a, b, c, d, and e Clause 1, Article 33 of the Securities Law.

2. The audited annual financial report of the joint-stock company formed through splitting or dividing enterprises, audited by an independent auditing organization. In case the company does not have an audited annual financial report due to insufficient operating time within the fiscal year at the time of submitting the registration documents, the most recent audited financial report will replace the annual financial report in the registration documents.

3. The audited annual financial report of the joint-stock company formed through enterprise acquisition, audited by an independent auditing organization. If the company formed through enterprise acquisition registers its business after the end of the accounting period of the most recent annual financial report, it must supplement the most recent audited financial report.

Article 8. Revocation of Public Company Status in Cases Where Conditions for Being a Public Company Are Not Met Due to Restructuring, Dissolution, or Bankruptcy of Enterprises

1. Revocation of public company status in cases where conditions for being a public company are not met after splitting, being merged, being acquired, dissolution, or bankruptcy of enterprises

a) Public companies shall report and disclose information on restructuring, dissolution, or bankruptcy of enterprises in accordance with the laws on information disclosure in the securities market;

b) After the public company's legal status is updated in the National Enterprise Registration Database or upon receipt of the court's decision declaring enterprise bankruptcy, the State Securities Commission shall examine and announce on its information dissemination means the revocation of public company status.

2. Revocation of public company status in cases where public companies have their Business Registration Certificates revoked

a) Public companies whose Business Registration Certificates are revoked shall report and disclose information in accordance with the laws on information disclosure in the securities market;

b) The State Securities Commission shall consider the revocation of public company status within 180 days from the date of receiving the report on the revocation of the Business Registration Certificate;

c) After the expiration of the period specified in point b of this clause, the State Securities Commission shall announce on its information dissemination means the revocation of public company status.

3. Revocation of public company status in cases where conditions for being a public company are not met after division or acceptance of enterprise acquisition

a) The procedures, formalities, and documents for revoking public company status in cases where conditions are not met after division or acceptance of enterprise acquisition shall be carried out in accordance with Articles 38 and 39 of the Securities Law;

b) The State Securities Commission shall notify the company of the revocation of public company status within 15 days from the date of receiving complete and valid revocation documents, and simultaneously announce on its information dissemination means.

4. Revocation of public company status in cases where conditions for being a public company are not met due to conversion of enterprise type from a joint-stock company to a limited liability company

a) Joint-stock companies that obtain a Business Registration Certificate due to enterprise type conversion must report and disclose information in accordance with the laws on information disclosure in the securities market;

b) After receiving the reports and disclosures as stipulated in point a of this clause, the State Securities Commission shall examine and announce on its information dissemination means the revocation of public company status.

Chapter IV

PURCHASE OF OWN SHARES

Article 9. Documents for Reporting Share Repurchase

1. A public company, as provided for in Clause 1, Article 36 of the Securities Law, before purchasing its own shares must submit a report to the State Securities Commission including:

a) A report on the share repurchase according to Form 35 attached to this Circular;

b) The decision of the General Meeting of Shareholders approving the share repurchase and the repurchase plan;

c) The decision of the Board of Directors approving the implementation plan for the share repurchase;

d) Documentation confirming the designation of a securities company to execute the transaction, except when the securities company is a member of the Stock Exchange and repurchases its own shares;

đ) The most recent audited financial statement as required;

e) Documentation proving that the company has sufficient resources to repurchase shares. In cases where a public company is a parent company using surplus capital, investment development funds, or other funds to repurchase shares, the source of funds is based on the financial statements of the parent company. In cases where a public company is a parent company using undistributed post-tax profits to repurchase shares, the amount of funds used may not exceed the level of undistributed post-tax profits shown in the audited consolidated financial statements. If the undistributed post-tax profits used for share repurchase are lower than those shown in the audited consolidated financial statements but higher than those shown in the parent company's financial statements, the company must supplement with the decision of the competent authority of the subsidiary approving profit distribution, bank statements confirming the transfer of profits from the subsidiary to the parent company;

g) Documentation proving compliance with the conditions for share repurchase as prescribed by law in the case where the publicly traded company operates in a regulated industry or business sector;

2. A public company repurchasing its own shares as provided for in point a, Clause 2, Article 36 of the Securities Law, and repurchasing shares of employees under the employee share issuance regulations of the company as provided for in point b, Clause 2, Article 36 of the Securities Law, must submit a report to the State Securities Commission before repurchasing shares including:

a) Disclosure of information on the share repurchase according to Form 36 attached to this Circular;

b) The decision of the Board of Directors or the General Director (Director) implementing the share repurchase plan.

Article 10. Reporting and Disclosure of Information on Share Repurchase

1. A public company, as provided for in Clause 1, Article 9 of this Circular, shall implement reporting, disclosure of information, execution of share repurchase, and reporting of repurchase results in accordance with Clause 3, 4, 5, and 6 of Article 37 of the Securities Law. The content of the information disclosure is carried out according to Form 36 attached to this Circular. The content of the report on the repurchase results is carried out according to Form 39 attached to this Circular.

2. A public company, as provided for in Clause 2, Article 9 of this Circular, shall execute share repurchase seven working days after submitting a report to the State Securities Commission and disclosing information on the company's website, the information dissemination means of the State Securities Commission, and the stock exchange according to Form 36 attached to this Circular. Within ten days from the end of the share repurchase transaction, the public company must submit a report on the transaction results to the State Securities Commission and disclose information to the public according to Form 39 attached to this Circular.

1. A public company may not change its intention or plan for share repurchase as reported and publicly disclosed, except in cases of force majeure (natural disasters, epidemics, war, and other similar cases), which must be approved by the State Securities Commission.

2. Within twenty-four hours of making a decision to change the share repurchase plan, the public company must report to the State Securities Commission and simultaneously disclose information on the company's website, the information dissemination means of the State Securities Commission, and the stock exchange about the decision to change according to Form 37 attached to this Circular.

3. The State Securities Commission will provide comments on the change in the share repurchase plan within three working days from the date of receipt of the change report.

4. Within twenty-four hours of being approved by the State Securities Commission to change the share repurchase plan, the public company must disclose information on the company's website, the information dissemination means of the State Securities Commission, and the stock exchange about the change in the share repurchase plan according to Form 38 attached to this Circular.

5. A public company may implement changes to the share repurchase after publicly disclosing information as stipulated in Clause 4 of this provision.

Article 12. Share Repurchase through Public Tender Offer

A public company repurchasing its own shares through a public tender offer must comply with the provisions on public tender offers for shares as stipulated in Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing the implementation of certain articles of the Securities Law, wherein the report on share repurchase includes:

1. Documents as prescribed in Clause 1, Article 85 of Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing the implementation of certain articles of the Securities Law;

2. Documents as prescribed in points d, e, and g of Clause 1, Article 9 of this Circular.

A public company repurchasing its own shares in the cases provided for in points b and c, Clause 7, Article 36 of the Securities Law shall sell shares as follows:

1. A public company may sell treasury shares twenty-four hours after submitting the Report on the Results of Share Repurchase Transactions, the Report on the Results of Share Issuance for Dividends, and the Report on Share Issuance for Capital Increase to the State Securities Commission and publicly disclosing such information.

2. A public company must complete the sale of treasury shares within ten working days from the date of reporting to the State Securities Commission and publicly disclosing information on the sale of treasury shares according to Form 36 attached to this Circular.

3. Within ten days from the end of the treasury share sale transaction as stipulated in Clause 1 of this provision, the public company must submit the Report on the Results of Treasury Share Sale Transactions to the State Securities Commission and publicly disclose such information according to Form 39 attached to this Circular.

Article 14. Responsibilities of the securities company designated to execute the buyback of shares

1. Guide the public company to implement the share buyback according to the regulations and the announced plan;

2. Ensure that the public company has sufficient funds in its trading account when placing orders to purchase to execute the transaction volume reported and publicly disclosed;

3. Shall not use information that has not been publicly disclosed regarding the repurchase of shares of a public company to trade securities of a public company or disclose such information to third parties except as provided by law.

Article 15. Responsibilities of the Securities Trading Exchange

1. Supervise the listed companies and trading registration organizations to disclose information before, during, and after the implementation of the share buyback, sale of treasury shares according to the regulations;

2. Supervise the securities company designated to execute the share buyback according to the regulations.

Section V

IMPLEMENTING PROVISIONS

Article 16. Implementation Provisions

1. This Circular takes effect from February 15, 2021, and replaces Circular No. 162/2015/TT-BTC dated October 26, 2015, issued by the Minister of Finance guiding public offering of securities, issuance of shares for exchange, additional issuance of shares, share repurchase, sale of treasury shares, and public tender offer for shares.

2. The State Securities Commission, Stock Exchanges, Vietnam Securities Depository and Central Depository Corporation, issuers, public companies, securities companies, and other related organizations and individuals shall be responsible for implementing this Circular./.