Decree No. 14/2007/NĐ-CP detailing the implementation of certain provisions of the Securities Law

DECREE

Regulations on Detailed Implementation of Certain Provisions of the Securities Law

_____________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Securities Law dated June 29, 2006;

At the request of the Minister of Finance.

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree provides detailed implementation of certain provisions of the Securities Law regarding public offering of securities, listing of securities, securities companies, fund management companies, and investment securities companies.

Article 2. Explanation of terms

1. The representative of bondholders who is a member of the Securities Depository Center is authorized to hold bonds and represent the interests of the bondholders.

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

3. Net asset value of the fund is the total value of the fund's assets minus the total value of the fund's liabilities.

4. Investment management contract is a contract concluded between an investment securities company or domestic or foreign organizations and individuals with a fund management company, entrusting the fund management company to manage their investment assets.

Chapter II

PUBLIC OFFERING OF SECURITIES

Article 3. Forms of Public Offering of Securities

1. Initial public offerings of shares and fund certificates include:

a) Initial public offerings of shares and fund certificates to raise capital for the issuer;

b) Initial public offerings of shares to become a public company through changes in ownership structure without increasing the charter capital of the issuer.

2. Additional public offerings of shares and fund certificates include:

a) A public company offering additional shares to the public or issuing subscription rights to existing shareholders to increase its charter capital;

b) A public company making further public offerings of shares to change its ownership structure without increasing its charter capital;

c) A fund management company offering additional closed-end fund certificates to the public; an investment securities company offering additional shares to the public.

3. Public offering of bonds.

Article 4. Conditions for Initial Public Offerings of Shares by Certain Types of Enterprises

1. For state-owned enterprises with 100% state capital that are converted into joint-stock companies and simultaneously offer shares to the public, they shall comply with the legal regulations on converting state-owned enterprises into joint-stock companies.

2. For foreign-invested enterprises that are converted into joint-stock companies and simultaneously offer shares to the public:

a) Meeting the conditions stipulated in points a and b of Clause 1, Article 12 of the Securities Law;

b) Having an issuance plan and a capital utilization plan from the proceeds of the offering approved by the 100% foreign investor or the Board of Directors of the joint venture enterprise;

c) Having a securities company advise on preparing the public offering documentation.

3. For foreign-invested enterprises that have already been converted into joint-stock companies:

a) Meeting the conditions stipulated in Clause 1, Article 12 of the Securities Law;

b) Meeting the conditions stipulated in point c of Clause 2 of this Article.

4. For newly established enterprises in the infrastructure sector:

a) Being the main investor in infrastructure construction projects under economic and social development programs of ministries, sectors, and centrally-administered cities and provinces;

b) Having an investment project approved by the competent authority;

c) Having a commitment from the Board of Directors or founding shareholders to be jointly liable for the issuance plan and the capital utilization plan from the proceeds of the offering;

d) Having an organization providing issuance guarantee;

đ) Having a bank supervising the use of funds raised from the offering.

5. For newly established enterprises in the high-tech sector:

a) Being an enterprise operating in the high-tech sector encouraged for investment according to the law;

b) Meeting the conditions stipulated in points b, c, d, and đ of Clause 4 of this Article.

6. Investment securities companies offering securities to the public shall comply with the provisions of Chapter V of this Decree.

Article 5. Conditions for Offering Other Types of Securities

1. A joint-stock company offering convertible bonds, bonds accompanied by warrant rights, or warrant rights accompanying preferred shares to the public must meet the following conditions:

a) The conditions stipulated at points a, b, and d, Clause 2, Article 12 of the Securities Law;

b) There must be an issuance plan, a plan for using funds raised from the offering, and a conversion plan for the necessary number of shares for conversion approved by the General Meeting of Shareholders. The conversion plan includes the conditions, time limit, conversion ratio, calculation method, and other conditions determined within the issuance plan.

2. An issuer offering guaranteed bonds to the public through either of the two guarantee methods, namely payment guarantee or asset guarantee, must meet the following conditions:

a) The conditions stipulated at Clause 2, Article 12 of the Securities Law;

b) There must be a payment guarantee commitment accompanied by documentation proving the financial capacity of the guarantor in the case of payment guarantee, or there must be assets sufficient to cover the value of the bonds in the case of asset guarantee. The minimum value of the assets used for guarantee must equal the total value of the bonds registered for offering. The valuation of the assets used for guarantee must be conducted by a qualified appraisal agency and remain valid for no more than 12 months from the date of valuation. The assets used for guarantee must be registered with the competent authority according to the provisions of the law on secured transactions.

This provision does not apply when the payment guarantor is the Government or the Ministry of Finance acting on behalf of the Government to provide payment guarantees within its authority.

c) The issuer must designate a representative of bondholders to oversee the implementation of the issuer's commitments. The following entities may not serve as representatives of bondholders:

- The entity guaranteeing the payment of debt for the issuer;

- Major shareholders of the issuer;

- Entities having major shareholders who are the issuer;

- Entities sharing major shareholders with the issuer;

- Entities sharing management personnel with the issuer or under the control of another entity.

3. An issuer offering stocks or bonds to the public in multiple tranches must meet the following conditions:

a) The conditions stipulated at Clause 1 or Clause 2, Article 12 of the Securities Law;

b) There must be a need to raise capital in multiple tranches consistent with investment projects or business plans approved by the competent authority;

c) There must be an offering plan specifying the target, quantity, and anticipated time frame for each tranche.

4. Credit institutions meeting the conditions stipulated at points a and c, Clause 3 of this Article may register to offer bonds to the public in multiple tranches over a period of 12 months.

5. The Ministry of Finance shall specify the conditions for offering to the public for specific cases based on market development circumstances.

Article 6. Offering Securities Abroad

1. An issuer offering securities abroad must meet the following conditions:

a) It must not belong to the list of industries prohibited for foreign participation and must ensure the participation ratio of foreign parties as prescribed by law;

b) There must be a decision approving the offering of securities abroad and a plan for using the raised funds by the Board of Directors or the General Meeting of Shareholders (for joint-stock companies), the Board of Members (for limited liability companies with two or more members), or the Owner of the Company (for a single-member limited liability company) or the representative of the owner of the capital (for state-owned enterprises);

c) It must meet the offering conditions prescribed by the competent authority of the country where the issuer registers the offering.

2. At least 10 days before submitting the registration application for offering securities abroad, the issuer must submit to the State Securities Commission the following documents:

a) A copy of the registration application submitted to the competent authority of the country where the issuer registers the offering;

b) Documents proving compliance with the conditions stipulated at Clause 1 of this Article.

3. Within 10 days after the registration application for offering securities abroad becomes effective, the issuer must send to the State Securities Commission a copy of the approved registration application for offering securities abroad and must publicly disclose information about the offering.

4. An issuer offering securities abroad has the following obligations:

a) To disclose information in accordance with the laws of the foreign country and Vietnam;

b) In the case where the issuer offers securities both domestically and abroad, periodic financial reports must be prepared in accordance with international accounting standards or both international and Vietnamese accounting standards, accompanied by an explanation of the differences between the accounting standards.

5. Within 15 days after the end of the offering, the issuer must submit to the State Securities Commission a report on the results of the offering.

6. Procedures for transferring amounts related to the offering of securities abroad shall be carried out in accordance with the regulations on foreign exchange management.

Article 7. Issuance of Vietnamese Dong-denominated Bonds by International Financial Organizations

1. Conditions for the issuance of Vietnamese Dong-denominated bonds by international financial organizations:

a) The issuer must be an international financial organization of which Vietnam is a member;

b) There must be a bond issuance plan and a plan for using the proceeds from the public offering of bonds for projects that the organization invests in Vietnam, approved by the Ministry of Finance;

c) There must be a commitment to fulfill the obligations of the issuer towards investors regarding issuance conditions, payment, guaranteeing the legitimate rights and interests of investors, and other conditions;

d) There must be a commitment to disclose information in accordance with Vietnamese law.

2. Documents for registering the public issuance of Vietnamese Dong-denominated bonds by international financial organizations include:

a) Bond issuance registration form;

b) Investment project including the issuance plan and the plan for using the proceeds from the issuance;

c) Commitment to fulfill the issuer's obligations;

d) Other documents as requested by the Ministry of Finance.

Chapter III

LISTED SECURITIES

Section 1

LISTED SECURITIES AT THE STOCK EXCHANGE,
TRADING CENTER

Article 8. Conditions for Listing Securities at the Stock Exchange

1. Conditions for listing shares:

a) It must be a joint-stock company with a subscribed charter capital of at least 80 billion Vietnamese dong at the time of listing registration, based on the value recorded in the accounting books. Based on market development circumstances, this amount may be adjusted up or down by a maximum of 30% after obtaining the Prime Minister's approval;

b) Business operations in the two years immediately preceding the year of listing registration must have been profitable and there must not be any accumulated losses up to the year of listing registration;

c) There must not be overdue debts that have not been provided for according to the law; all debts owed to companies by members of the Board of Directors, Supervisory Board, General Director or Managing Director, Deputy General Director or Deputy Managing Director, Chief Accountant, major shareholders, and related parties must be publicly disclosed;

d) At least 20% of the voting shares of the company must be held by at least 100 shareholders;

đ) Shareholders who are members of the Board of Directors, Supervisory Board, General Director or Managing Director, Deputy General Director or Deputy Managing Director, and Chief Accountant of the company must commit to holding 100% of the shares they own for six months from the date of listing and 50% of these shares for the following six months, excluding shares owned by state representatives among the individuals mentioned;

e) There must be a valid share listing registration form in accordance with Clause 2 of Article 10 of this Decree.

2. Conditions for listing bonds:

a) It must be a joint-stock company, limited liability company, or state-owned enterprise with a subscribed charter capital of at least 80 billion Vietnamese dong at the time of listing registration, based on the value recorded in the accounting books;

b) Business operations in the two years immediately preceding the year of listing registration must have been profitable, there must not be any overdue debts over one year, and all financial obligations to the state must have been fulfilled;

c) There must be at least 100 people holding bonds from the same issuance;

d) There must be a valid bond listing registration form in accordance with Clause 3 of Article 10 of this Decree.

3. Conditions for listing public fund certificates or shares of public securities investment companies:

a) It must be a closed-end fund with a total face value of fund certificates issued of at least 50 billion Vietnamese dong or a securities investment company with a subscribed charter capital of at least 50 billion Vietnamese dong at the time of listing registration, based on the value recorded in the accounting books;

b) Founders and members of the Fund Management Board or members of the Board of Directors, Supervisory Board, General Director or Managing Director, Deputy General Director or Deputy Managing Director, and Chief Accountant of the securities investment company must commit to holding 100% of the fund certificates or shares they own for six months from the date of listing and 50% of these fund certificates or shares for the following six months;

c) There must be at least 100 people holding fund certificates of the public fund or at least 100 shareholders holding shares of the public securities investment company;

d) There must be a valid public fund certificate or share listing registration form of the public securities investment company in accordance with Clause 4 of Article 10 of this Decree.

4. During the period of transitioning from the Trading Center to the Stock Exchange as stipulated in Clause 5 of Article 134 of the Securities Law, new organizations registering to list securities at the Ho Chi Minh City Trading Center must meet the conditions specified in Clauses 1, 2, and 3 of this Article.

Article 9. Conditions for listing securities at the Securities Trading Center

1. Conditions for listing shares:

a) Be a joint-stock company with a registered charter capital of VND 10 billion or more at the time of applying for listing, as recorded in the accounting books;

b) The business operations of the year immediately preceding the year of application for listing must be profitable, without overdue debts exceeding one year, and all financial obligations to the State must be fulfilled;

c) Voting shares of the company must be held by at least 100 shareholders;

d) Shareholders who are members of the Board of Directors, Supervisory Board, General Director or Chairman of the Board, Deputy General Director or Deputy Chairman of the Board, and Chief Accountant of the company must commit to holding 100% of the shares they own for six months from the date of listing and 50% of these shares for the following six months, excluding state-owned shares held by these individuals on behalf of the state;

đ) Have a valid registration application for listing shares in accordance with Clause 2, Article 10 of this Decree;

e) Newly established enterprises in infrastructure or high-tech fields, and state-owned enterprises converted into joint-stock companies are not required to meet the conditions stipulated in Point b, Clause 1 of this Article when listing their shares;

2. Conditions for listing corporate bonds:

a) Be a joint-stock company, limited liability company, or state-owned enterprise with a registered charter capital of VND 10 billion or more at the time of applying for listing, as recorded in the accounting books;

b) All bonds issued in one issuance must have the same maturity date;

c) Have a valid registration application for listing bonds in accordance with Clause 3, Article 10 of this Decree;

3. Government bonds, government-guaranteed bonds, and local government bonds shall be listed on the Securities Trading Center upon request of the bond issuer organization;

4. Securities meeting the listing criteria but not yet listed on the Securities Trading Center may be traded at securities companies and the results of such transactions shall be communicated through the Securities Trading Center for settlement through the Securities Depository Center;

5. The division of listing areas at the Securities Trading Center shall be carried out according to the Listing Regulations of the Securities Trading Center after approval by the State Securities Commission;

6. The Ministry of Finance shall specify the conditions for listing other types of securities on the Securities Trading Center;

Article 10. Documents for registering securities listing at the Stock Exchange, Securities Trading Center

1. An organization applying for listing securities must submit the listing registration documents to the Stock Exchange, Securities Trading Center;

2. The documents for registering share listing include:

a) Share listing registration form;

b) Decision of the Shareholders' Meeting approving the share listing;

c) Shareholder register of the organization applying for listing, established within one month before submitting the listing registration documents;

d) Prospectus as prescribed in Article 15 of the Securities Law;

đ) Commitment of shareholders who are members of the Board of Directors, Supervisory Board, General Director or Chairman of the Board, Deputy General Director or Deputy Chairman of the Board, and Chief Accountant to hold 100% of the shares they own for six months from the date of listing and 50% of these shares for the following six months;

e) Listing advisory contract (if any);

g) Certificate from the Securities Depository Center confirming that the shares of the organization have been centrally registered;

3. The documents for registering bond listing include:

a) Bond listing registration form;

b) Decision of the Board of Directors approving the bond listing or decision of the Shareholders' Meeting approving the convertible bond listing (for joint-stock companies), decision of the Board of Members approving the bond listing (for limited liability companies with two or more members) or decision of the owner of the company (for limited liability companies with one member) or decision of the competent authority (for state-owned enterprises);

c) Register of bond holders of the organization applying for listing;

d) Prospectus as prescribed in Article 15 of the Securities Law;

đ) Commitment to fulfill obligations of the organization applying for listing towards investors, including payment terms, debt-to-equity ratio, conversion conditions (in case of convertible bond listing), and other conditions;

e) Guarantee of payment or minutes determining the value of collateral assets, accompanied by valid documents proving lawful ownership and insurance contracts (if any) for those assets in case of secured bond listing. Collateral assets must be registered with the competent authority;

g) Contract between the issuer and representative of bond holders;

h) Certificate from the Securities Depository Center confirming that the bonds of the organization have been registered centrally;

4. The documents for registering listing of public fund certificates and shares of public securities investment companies include:

a) Public fund certificate listing registration form or public securities investment company share listing registration form;

b) Decision of the Investor Assembly on the listing of public fund certificates or decision of the Shareholders' Meeting approving the listing of public securities investment company shares;

c) Register of investors holding public fund certificates or shareholder register of public securities investment companies;

d) Charter of the public fund, public securities investment company according to the model prescribed by the Ministry of Finance and the supervision contract approved by the Investor Assembly or Shareholders' Meeting;

đ) Prospectus as prescribed in Article 15 of the Securities Law;

e) List and brief resumes of fund management board members; written commitment of independent members of the fund management board regarding their independence from the fund management company and supervising bank.

g) Commitment of the founders and members of the management board of the securities investment fund or shareholders who are members of the board of directors, supervisory board, general director or managing director, deputy general director or deputy managing director, chief accountant of the securities investment company to hold 100% of the fund certificates or shares they own for six months from the date of listing and 50% of these fund certificates or shares for the following six months;

h) Investment results report of the fund and the securities investment company up to the registration listing date, confirmed by the supervising bank;

i) Certificate from the Securities Depository Center confirming that the public securities investment fund certificates or public securities investment company shares have been registered for centralized custody;

5. The organization registering for listing, after being approved for listing by the Stock Exchange or the Securities Trading Center, must submit a copy of the listing registration dossier to the State Securities Commission;

6. The Ministry of Finance shall specify the detailed listing registration dossier for other types of securities;

Article 11. Responsibilities of the organization registering for listing and related organizations

1. The organization registering for listing shall be legally responsible for the accuracy, truthfulness, and completeness of the listing registration dossier. The listed advisory organization, the auditing organization approved, the person signing the financial statement audit report of the organization registering for listing, and any organization or individual confirming the listing dossier shall be responsible within the scope related to the listing registration dossier;

2. During the review period of the dossier, the Stock Exchange or the Securities Trading Center has the right to request the organization registering for listing to amend and supplement the listing registration dossier to ensure accurate, truthful, and complete information disclosure, protecting the rights and legitimate interests of investors;

3. During the time the Stock Exchange or the Securities Trading Center reviews the listing registration dossier, members of the board of directors, supervisory board, general director or managing director, deputy general director or deputy managing director, chief accountant, and major shareholders of the organization registering for listing may not transfer the shares they hold;

4. In case it is found that the dossier submitted to the Stock Exchange or the Securities Trading Center is incomplete, contains inaccurate information, or new events have occurred affecting the content of the submitted dossier, the organization registering for listing must report to the Stock Exchange or the Securities Trading Center to promptly amend and supplement the listing registration dossier;

Article 12. Listing Registration Procedures

1. Within thirty days from the date of receiving a complete dossier, the Stock Exchange or the Securities Trading Center shall be responsible for approving or rejecting the listing registration. In case of rejection, the Stock Exchange or the Securities Trading Center must respond in writing and clearly state the reasons;

2. The Stock Exchange or the Securities Trading Center provides specific guidance on the listing registration procedures for securities in the Listing Regulations of the Stock Exchange or the Securities Trading Center.

Article 13. Change of Listing Registration

1. The listed organization must complete the procedures for changing the listing registration in the following cases:

a) The listed organization carries out stock splits, consolidations, additional issuance of stocks to pay dividends or bonus shares, or rights offerings to existing shareholders to increase the registered capital;

b) The listed organization undergoes a split or receives a merger;

c) Other cases involving changes in the number of securities listed on the Stock Exchange or Securities Trading Center.

2. Documents for changing the listing registration submitted to the Stock Exchange or Securities Trading Center include:

a) A request for change of listing registration, stating the reasons for the change and related documents;

b) The resolution approving the change of stock listing by the Shareholders' Meeting, bond listing change by the Board of Directors or convertible bonds by the Shareholders' Meeting (for joint-stock companies); bond listing change by the Board of Members (for limited liability companies with two or more members) or company owner (for single-member limited liability companies) or representative of state-owned capital (for state-owned enterprises); change of listing of investment fund certificates by the Investor Assembly or change of listing of stocks by the Shareholders' Meeting of the securities investment company.

3. Procedures for implementing changes in listing registration shall be carried out in accordance with the Listing Regulations of the Stock Exchange or Securities Trading Center.

Article 14. Cancellation of Listing

1. Securities will be delisted when one of the following situations occurs:

a) The organization listing securities at the Stock Exchange or Securities Trading Center fails to meet the listing conditions specified in point a, d Clause 1, point a, c Clause 2, point a, c Clause 3 Article 8; point a, c Clause 1; point a Clause 2 Article 9 of this Decree within one year;

b) The listed organization ceases or is forced to cease its main production and business activities for one year or longer;

c) The listed organization has its business registration certificate or license revoked in its specialized field;

d) Stocks have no transactions at the Stock Exchange or Securities Trading Center for a period of 12 months;

đ) Production and business results show losses for three consecutive years and cumulative losses exceed the equity in the most recent financial report;

e) The listed organization ceases to exist due to mergers, consolidations, divisions, liquidations, or bankruptcies, or the investment fund ceases operations;

g) Bonds reach their maturity date or are fully repurchased by the issuer before maturity;

h) The auditing organization issues a non-acceptance or refusal opinion on the most recent annual financial report of the listed organization;

i) An organization approved for listing does not proceed with listing procedures at the Stock Exchange or Securities Trading Center within a maximum period of three months from the date of approval;

k) The listed organization requests cancellation of listing.

2. In the case where the listed organization requests cancellation of listing, the documents include:

a) A request for cancellation of listing;

b) The resolution approving the cancellation of stock listing by the Shareholders' Meeting, bond listing cancellation by the Board of Directors or convertible bonds by the Shareholders' Meeting (for joint-stock companies); bond listing cancellation by the Board of Members (for limited liability companies with two or more members) or company owner (for single-member limited liability companies) or representative of state-owned capital (for state-owned enterprises); cancellation of listing of investment fund certificates by the Investor Assembly or cancellation of listing of stocks by the Shareholders' Meeting of the securities investment company.

3. An organization whose securities have been delisted may reapply for listing at least 12 months after delisting if it meets the conditions stipulated in Article 8 and Clause 1 of Article 9 of this Decree. The documents and procedures for relisting shall be carried out in accordance with Article 10 of this Decree.

4. Procedures for canceling listing shall be carried out in accordance with the Listing Regulations of the Stock Exchange or Securities Trading Center.

Section 2

LISTED SECURITIES

AT FOREIGN STOCK EXCHANGE

Article 15. Conditions for Listing Securities on Foreign Stock Exchanges

1. Satisfying the conditions stipulated in point a, Clause 1, Article 6 of this Decree.

2. Having a decision approving the listing at a foreign stock exchange by the Board of Directors or the Shareholders' Meeting (for joint-stock companies), the Board of Members (for limited liability companies with two or more members), or the Company Owner (for a single-member limited liability company) or the representative of the owner of state capital (for state-owned enterprises).

3. Satisfying the listing conditions at the stock exchange of the country where the securities market management agency or the stock exchange has reached an agreement to cooperate with the State Securities Commission of Vietnam.

Article 16. Reports on Listing Securities on Foreign Stock Exchanges

1. When submitting the listing application at a foreign stock exchange, the enterprise must simultaneously submit a copy of the listing application to the State Securities Commission. In case the securities are already listed on domestic stock exchanges or trading centers, the enterprise must also send a copy of the application to the relevant stock exchange or trading center.

2. Within fifteen days from the date of approval for listing or delisting at a foreign stock exchange, the enterprise must send a copy of the approval certificate for listing or the decision to delist and announce information about the listing or delisting of securities at the foreign stock exchange in the publications and electronic information pages of the State Securities Commission.

Article 17. Obligations of Enterprises Whose Securities Are Listed on Foreign Stock Exchanges

1. Disclosing information in accordance with foreign laws and Vietnamese laws.

2. Ensuring the proportion of foreign investors as prescribed by law.

3. In cases where simultaneous listings occur on domestic and foreign stock markets, periodic financial reports must be prepared according to international accounting standards or both international and Vietnamese accounting standards, accompanied by an explanation of differences between the accounting standards.

4. Adhering to regulations on foreign exchange management of Vietnam concerning foreign currency transactions related to the listing of securities on foreign stock exchanges.

Chapter IV

SECURITIES COMPANIES, FUND MANAGEMENT COMPANIES

Article 18. Capital Requirements for Securities Companies, Fund Management Companies

1. The minimum capital requirement for business operations of securities companies, securities companies with foreign investment, and branches of foreign securities companies in Vietnam is:

a) Securities brokerage: 25 billion Vietnamese dong;

b) Proprietary securities trading: 100 billion Vietnamese dong;

c) Underwriting of securities issuance: 165 billion Vietnamese dong;

d) Securities investment advisory services: 10 billion Vietnamese dong.

2. In cases where an organization applies for licenses for multiple business operations, the minimum capital requirement is the total of the minimum capital requirements corresponding to each licensed operation.

3. The minimum statutory capital of fund management companies, fund management companies with foreign investment, and branches of foreign fund management companies in Vietnam is 25 billion Vietnamese dong. The Ministry of Finance will specify the statutory capital of fund management companies based on the scale of entrusted assets under management.

4. The contributed capital for establishing securities companies, fund management companies, branches of foreign securities companies, and foreign fund management companies in Vietnam must be in Vietnamese dong or freely convertible foreign currencies.

Organizations and individuals participating in capital contributions must prove the legality of their capital and have it confirmed by an independent auditing organization.

5. The foreign ownership ratio in securities companies and fund management companies with foreign investment in Vietnam shall comply with the provisions of the law.

6. An organization or individual holding ten percent or more of the shares or equity with voting rights in a securities company and persons related to such organizations or individuals may not hold more than five percent of the shares or equity with voting rights in another securities company.

7. An organization or individual holding ten percent or more of the shares or equity with voting rights in a fund management company and persons related to such organizations or individuals may not hold more than five percent of the shares or equity with voting rights in another fund management company.

Article 19. Documents and procedures for issuing a License to establish and operate a securities company or a fund management company with foreign investment in Vietnam

1. The dossier shall include:

a) Documents as prescribed in Article 63 of the Securities Law;

b) Joint venture contracts in cases of establishing a joint venture securities company or a joint venture fund management company, or commitment agreements on capital contribution in cases of establishing a securities company or a fund management company with foreign capital contribution;

c) In cases where the foreign party is a legal entity, the documents shall include: A certified copy of the Charter, License to establish and operate, or Business Registration Certificate, or equivalent legal document of such legal entity issued by the home country; Decision on establishment or capital contribution to establish a securities company or a fund management company in Vietnam by the competent authority of the foreign legal entity.

2. The documents as prescribed in Clauses 4, 5, 6, and 7 of Article 63 of the Securities Law, in cases where the Director or General Director, founding shareholder, or founding member is a foreign organization or individual, and points b and c of Clause 1 of this Article must be prepared in two copies, one in English and one in Vietnamese. The English version of the dossier must be legalized by a consular officer. Vietnamese copies and translations from English to Vietnamese must be confirmed by a Vietnamese notary office or a legally operating law firm with translation functions in Vietnam.

3. The time limit for issuing a License to establish and operate is as prescribed in Article 65 of the Securities Law.

Article 20. Documents and procedures for issuing a License to establish and operate a branch of a foreign securities company or a foreign fund management company in Vietnam

1. The dossier shall include:

a) Documents as prescribed in Article 63 of the Securities Law;

b) A certified copy of the Charter, License to establish and operate, or Business Registration Certificate of the foreign securities business organization issued by the home country; Decision to establish a branch in Vietnam and decision on capital allocation by the competent authority of the foreign securities business organization.

2. The documents as prescribed in Clause 1 of this Article must be prepared in two copies, one in English and one in Vietnamese. The English version of the dossier must be legalized by a consular officer. Vietnamese copies and translations from English to Vietnamese must be confirmed by a Vietnamese notary office or a legally operating law firm with translation functions in Vietnam.

3. The time limit for issuing a License to establish and operate is as prescribed in Article 65 of the Securities Law.

Chapter V

SECURITIES INVESTMENT COMPANY

Article 21. Organization and operation of a securities investment company

1. A securities investment company may be organized as a joint stock company, including the following types:

a) A public securities investment company is a securities investment company that offers its shares to the public;

b) A private placement securities investment company.

2. Shares of a public securities investment company are listed and traded at the Stock Exchange. The securities investment company has no obligation to repurchase issued shares.

3. A private placement securities investment company can only offer its shares to a maximum of 99 investors, among which organizational investors must invest a minimum of 3 billion VND and individual investors a minimum of 1 billion VND.

A private placement securities investment company does not have to comply with the investment restrictions applicable to public securities investment companies as stipulated in Article 92 of the Securities Law.

4. A securities investment company manages its own investment funds or entrusts a fund management company to manage them, or hires a fund management company to provide investment advisory services and conducts transactions itself. If a securities investment company entrusts a fund management company to manage its investment funds, the Director or General Director, Deputy Director or Deputy General Director (if any), Chairman of the Board of Directors, and at least 2/3 of the Board of Directors members of the securities investment company must be independent from the fund management company.

5. A foreign securities investment company or a foreign securities investment fund in the form of a legal entity wishing to invest in Vietnam must entrust a domestic fund management company or establish a branch in Vietnam to manage its investment funds.

6. The Ministry of Finance shall specify the organization and operation of a securities investment company.

Article 22. Documents and Procedures for Registering Public Offering of Shares by Public Securities Investment Companies

1. The registration of public offering of shares by public securities investment companies shall be carried out by the founding shareholders or the fund management company.

2. The documents for registering public offering of shares include:

a) A public offering registration form of the founding shareholders or the fund management company;

b) A draft Charter of the securities investment company;

c) A prospectus in accordance with Article 15 of the Securities Law;

d) A draft Supervisory Contract;

đ) A draft Investment Management Contract (in case a fund management company manages the investment capital);

e) A list of anticipated Directors or General Managers and other employees engaged in securities business of the securities investment company accompanied by copies of the Securities Practice Certificate or application for issuance of the Securities Practice Certificate (in case the company manages its own investment capital);

g) An explanation of technical facilities for investment activities (in case the company manages its own investment capital);

h) A list of founding shareholders accompanied by copies of Identity Cards or Passports for individuals and Business Registration Certificates for legal entities;

i) Commitments from founding shareholders to purchase at least 20% of the shares offered to the public and hold these shares for a period of three years from the date of issuance of the license for establishment and operation.

3. The documents under Clause 2 of this Article shall be prepared in two copies and submitted to the State Securities Commission.

4. Within thirty days from the date of receipt of complete and valid documents, the State Securities Commission shall issue a certificate of public offering. In case of refusal, the State Securities Commission shall provide a written response stating the reasons.

Article 23. Public Offering of Shares by Public Securities Investment Companies

1. The public offering of shares by public securities investment companies shall be conducted in accordance with Article 90 of the Securities Law.

2. After the completion of the public offering of shares, the founding shareholders or the fund management company must report to the State Securities Commission on the results of the issuance. At the same time, the founding shareholders must complete the application for establishment license of the securities investment company and submit it to the State Securities Commission.

3. Within thirty days from the date of receipt of the report on the capital raising results of the securities investment company and the valid documents, the State Securities Commission shall issue a license for establishment and operation of the public securities investment company. In case of refusal, the State Securities Commission shall provide a written response stating the reasons.

Article 24. Documents and Procedures for Issuing License for Establishment and Operation for Securities Investment Companies Issuing Shares Individually

1. The application for issuing a license for establishment and operation includes:

a) An application for issuance of a license for establishment and operation of the founding shareholders;

b) Confirmation from the bank regarding the level of capital contribution deposited in a blocked account opened at the bank;

c) Minutes of the capital contributions of the founding shareholders;

d) A draft Supervisory Contract;

đ) A list of founding shareholders accompanied by copies of Identity Cards or Passports and criminal records for individuals; Business Registration Certificates and Financial Reports for legal entities;

e) Commitments from founding shareholders to hold their shares for a period of three years from the date of issuance of the license for establishment and operation;

g) The documents specified in points b, đ, e, and g of Clause 2 of Article 22 of this Decree.

2. In cases where founding shareholders participating in capital contribution are foreign legal entities, the application shall include additional documents: certified copies of the Charter or equivalent documents, licenses for establishment and operation or Business Registration Certificates issued by the home country, or documents proving that the legal entity is allowed to engage in securities business in the home country; Decision of the competent authority regarding the capital contribution for establishing a securities investment company in Vietnam.

3. The documents under Clause 1 of this Article shall be prepared in two copies. In cases where founding shareholders participating in capital contribution are foreign legal entities, the application shall consist of one copy in English and one copy in Vietnamese. The English version of the application must be legalized by consular authentication. The Vietnamese copies and translations from English to Vietnamese must be confirmed by a Vietnamese notary office or a Vietnamese law firm authorized to conduct translation services legally operating in Vietnam.

4. Within thirty days from the date of receipt of complete and valid documents, the State Securities Commission shall issue a license for establishment and operation of the securities investment company. In case of refusal, the State Securities Commission shall provide a written response stating the reasons.

Article 25. Increase and decrease of charter capital of securities investment companies

The conditions, documents, and procedures for increasing or decreasing the charter capital of securities investment companies shall be carried out in accordance with the regulations of the Ministry of Finance.

Article 26. Reporting and information disclosure regime of securities investment companies

1. Securities investment companies shall implement the reporting regime in accordance with the regulations of the Ministry of Finance on the reporting regime for securities investment funds.

2. Securities investment companies that offer shares to the public and have shares listed on the Stock Exchange or Trading Center must disclose information in accordance with Article 106 of the Securities Law and the guiding documents of the Ministry of Finance.

3. Securities investment companies issuing shares privately do not need to disclose information in the manner prescribed in Clause 4, Article 100 of the Securities Law. In this case, the securities investment company shall send the disclosed information content to shareholders who contribute capital in accordance with the company's articles of association and simultaneously report the disclosed information content to the State Securities Commission.

Article 27. Contents of the organizational and operational charter of securities investment companies

The organizational and operational charter of securities investment companies shall include the following contents:

1. Name, main office address, summary information about the securities investment company, fund management company (if any), supervisory bank;

2. Business objectives; investment fields; duration of operation;

3. Charter capital and provisions on increasing and decreasing charter capital;

4. Information about founding shareholders and the number of shares held by founding shareholders;

5. Rights and obligations of shareholders;

6. Management structure;

7. Legal representative;

8. Method of passing decisions of the company; principles for resolving internal disputes;

9. Provisions regarding the Board of Directors; Shareholders' Meeting;

10. Investment restrictions;

11. Provisions on selecting a supervisory bank; selecting and changing independent auditors;

12. Provisions on transferring, issuing, repurchasing shares; provisions on listing shares;

13. Types of expenses and revenues; fee and bonus levels for the management team of the securities investment company, supervisory bank; estimated total expenses per year (in cases where the company manages itself);

14. Principles for distributing post-tax profits and handling losses in business operations;

15. Methods for determining net asset value, net asset value per share;

16. Provisions for resolving conflicts of interest that may arise between the securities investment company, fund management company, supervisory bank, and related organizations and individuals;

17. Provisions on the reporting system;

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

19. Method for amending and supplementing the fund's charter;

20. Full name and signature of the legal representative, founding shareholders, and authorized representatives of founding shareholders;

21. Other contents agreed upon by shareholders that do not contravene the provisions of the law.

Article 28. Re-registration for securities investment enterprises established before the Securities Law took effect

1. Enterprises established before the effective date of the Securities Law which meet the requirements stipulated in Clause 1, Article 97 of the Securities Law shall have the obligation to complete the re-registration procedure according to the securities investment company model within one year from the date the Securities Law comes into force, in accordance with the guidance of the Ministry of Finance.

2. After completing the re-registration procedures as prescribed in Clause 1 of this Article, the securities investment company shall comply with the provisions of the Securities Law, this Decree, and relevant legal documents.

Chapter VI
IMPLEMENTING PROVISIONS

Article 29. Re-registration for organizations engaged in securities activities before this Decree takes effect

1. Organizations that were listed at the Ho Chi Minh City Securities Trading Center prior to the effectiveness of this Decree, if they do not meet the listing conditions at the Stock Exchange as prescribed in this Decree, must adjust within two years from the date this Decree takes effect to meet the listing conditions at the Stock Exchange. If they fail to meet these conditions beyond this period, they must transfer their listing to the Securities Trading Center.

2. Securities companies and fund management companies that have been granted licenses to operate securities business but do not meet the statutory capital requirements as stipulated in this Decree must complete procedures to increase capital within two years from the date this Decree takes effect.

3. Fund management companies wishing to conduct portfolio management operations must complete procedures to change their establishment and operation license according to the guidelines of the Ministry of Finance within ninety days from the date this Decree takes effect.

4. Representative offices of foreign securities companies and fund management companies operating under representative office establishment licenses not issued by the State Securities Commission prior to the effectiveness of the Securities Law must complete re-registration procedures with the State Securities Commission within one year from the date this Decree takes effect.

5. Securities business practice certificates issued before the effectiveness of the Securities Law which remain valid for more than six months must be renewed according to the new certificate format.

Article 30. Effectiveness of the Decree

This Decree shall take effect fifteen days after its publication in the Official Gazette. All previous provisions contrary to this Decree are hereby abolished.

Article 31. Implementation Organization

1. The Ministry of Finance shall be responsible for guiding the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for implementing this Decree./.