Circular No. 15/2018/TT-BTC stipulates on issuance costs, exchange, repurchase, principal and interest payment for Government bonds, Government-guaranteed bonds, and local government bonds.

Circular

Regulations on issuance, exchange, repurchase, principal and interest payment costs for Government bonds, Government-guaranteed bonds, and local government bonds

Regarding Government bonds, Government-guaranteed bonds, and local government bonds

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Pursuant to Decree No. 01/2011/NĐ-CP dated January 5, 2011 of the Government on the issuance of Government bonds, Government-guaranteed bonds, and local government bonds;

Pursuant to Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Prices, and Decree No. 149/2016/NĐ-CP dated November 11, 2016 of the Government amending and supplementing certain provisions of Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Prices;

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;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Institutions,

The Minister of Finance promulgates this Circular regulating issuance, exchange, repurchase, and principal and interest payment costs for Government bonds, Government-guaranteed bonds, and local government bonds.

Article 1. Scope and objects regulated

Article 1. This Circular regulates the costs related to the issuance, exchange, repurchase, and principal and interest payment of Government bonds, Government-guaranteed bonds, and local government bonds in the domestic market as prescribed by law.

2. The regulated subjects include:

a) State Treasury;

b) Issuers of Government-guaranteed bonds as provided for in the Law on Public Debt Management;

c) People's Committees of provinces and cities issuing local government bonds;

d) State Bank of Vietnam Trading Department;

e) Stock Exchanges (hereinafter referred to as "SE"); Vietnam Securities Depository (hereinafter referred to as "VSD");

f) Organizations and individuals involved in the issuance, exchange, repurchase, and principal and interest payment of Government bonds, Government-guaranteed bonds, and local government bonds in the domestic market.

Article 2. Principles for payment and management of issuance, exchange, repurchase, and principal and interest payment costs for Government bonds, Government-guaranteed bonds, and local government bonds

1. The central budget shall pay the costs incurred during the issuance, exchange, repurchase, and principal and interest payment of Government bonds.

2. The central budget shall pay the tender fee for Treasury bills to the State Bank of Vietnam Trading Department. The tender fee for Treasury bills is revenue of the State Bank of Vietnam, managed under the financial mechanism of the State Bank of Vietnam and allocated for the purposes specified in Point a Clause 4 Article 20 of the Joint Circular No. 92/2016/TTLT-BTC-NHNN dated June 27, 2016 of the Ministry of Finance and the State Bank of Vietnam guiding the issuance of Treasury bills through the State Bank of Vietnam.

3. The issuer of Government-guaranteed bonds shall pay the costs incurred during the issuance, exchange, repurchase, and principal and interest payment of Government-guaranteed bonds, which shall be included in the operating expenses of the issuer or included in the value of projects (in cases where Government-guaranteed bonds are issued for investment in projects of the issuer).

4. Local budgets shall pay the costs incurred during the issuance, exchange, repurchase, and principal and interest payment of local government bonds.

5. SE and VSD shall record income from providing tender services and agency services for principal and interest payments of bonds as business operation revenue. SE and VSD shall manage and use this revenue according to the financial mechanism of SE and VSD and the legal provisions on service prices.

6. Guarantee organizations and agency issuers shall record income from providing guarantee issuance services and agency issuance services as revenue in accordance with the law.

Article 3. Costs for issuing, repurchasing, swapping, and principal and interest repayment of Government bonds

The costs arising during the process of issuing, swapping, repurchasing, and principal and interest repayment of Government bonds shall be borne by the State Budget as follows:

1. Costs paid to the State Treasury:

a) Costs paid to the State Treasury related to the issuance, swapping, repurchasing, and principal and interest repayment of Government bonds include: direct costs serving the issuance, swapping, repurchasing, and principal and interest repayment of Government bonds; printing costs of certificates (if applicable) in cases of issuance through agency or retail sales through the State Treasury system; procurement, maintenance, repair, equipment, and technology costs; conference, training, survey, and market development research costs; information dissemination and publicity costs; rewards for organizations and individuals involved in the issuance, swapping, repurchasing, and principal and interest repayment of Government bonds according to regulations issued by the State Treasury; other costs serving the issuance, swapping, repurchasing, and principal and interest repayment of Government bonds.

b) The State Treasury shall prepare a budget estimate for organizing the issuance, swapping, repurchasing, and principal and interest repayment of Government bonds in accordance with this Clause and consolidate it into the annual revenue and expenditure budget of the State Treasury in accordance with the State Budget Law and guiding documents.

2. Tendering costs for issuing and repurchasing Government bonds:

a) Tendering costs for issuing Treasury bills at the State Bank of Vietnam Trading Center shall be paid to the State Bank of Vietnam Trading Center at 0.01% of the nominal value of Treasury bills issued through tendering (not applicable to cases where Treasury bills are directly issued to the State Bank of Vietnam).

b) Tendering costs for issuing Government bonds shall be paid to the Stock Exchange at 0.025% of the nominal value of Government bonds issued through tendering but not exceeding one billion (1,000,000,000) Vietnamese dong/tender session (including additional tender sessions if any).

c) Tendering costs for repurchasing Government bonds shall be paid to the Stock Exchange at 0.0075% of the purchase price of Government bonds repurchased through tendering but not exceeding three hundred million (300,000,000) Vietnamese dong/tender session.

3. Costs for underwriting issuance activities paid to the main underwriter organization shall not exceed 0.1% of the nominal value of Government bonds issued through underwriting. Based on market conditions and the complexity of the underwriting issuance period (volume, term of Government bonds issued), the State Treasury shall negotiate and agree with the main underwriter organization regarding the underwriting issuance fee to be paid to the main underwriter organization and such fees shall be specifically stipulated in the underwriting agreement.

4. Costs for agency issuance activities (if any) paid to the agency service provider organization shall not exceed 0.1% of the nominal value of Government bonds issued through agency. Based on market conditions and the complexity of the issuance period (volume, term of Government bonds issued), the content of work (issuance organization, interest and principal repayment of Government bonds), the State Treasury shall negotiate and agree with the agency issuer regarding the issuance organization fee, interest and principal repayment fee of Government bonds and such fees shall be specifically stipulated in the agency agreement. This fee does not include printing certificate costs (if applicable).

5. Costs for principal and interest repayment of Government bonds paid to the Central Securities Depository:

a) 0.02% of the principal and interest value of Government bonds actually repaid shall be paid to the Central Securities Depository, but not exceeding four hundred million (400,000,000) Vietnamese dong/principal and interest repayment of one bond code.

b) 0.01% of the value of Treasury bills actually repaid shall be paid to the Central Securities Depository, but not exceeding two hundred million (200,000,000) Vietnamese dong/principal and interest repayment of one Treasury bill code.

Article 4. Costs of issuance, repurchase, exchange, and principal and interest repayment of government-guaranteed bonds

1. The costs of issuance, repurchase, and exchange of policy bank bonds guaranteed by the Government include:

a) Fees paid for the auction of government-guaranteed bonds at the Stock Exchange shall be applied as with the fees for the auction of Government bonds as stipulated in Points b and c, Clause 2, Article 3 of this Circular.

b) Fees paid for the agency service of issuing government-guaranteed bonds shall be applied as with the fees for the agency service of issuing Government bonds as stipulated in Clause 4, Article 3 of this Circular.

2. The costs of issuance, repurchase, and exchange of corporate bonds guaranteed by the Government shall be agreed upon between the issuer and the auction organization, guarantor, issuing agent, and retail selling agent of the government-guaranteed bonds. In cases where the auction of government-guaranteed bonds takes place at the Stock Exchange, the payment fee level shall be applied as with the fees for the auction of Government bonds as stipulated in Points b and c, Clause 2, Article 3 of this Circular.

3. Fees paid for the agency service of principal and interest repayment of government-guaranteed bonds registered and deposited at the Central Depository Corporation shall be applied as with the fees for the agency service of principal and interest repayment of Government bonds as stipulated in Point a, Clause 5, Article 3 of this Circular.

Article 5. Costs of issuance, repurchase, exchange, and principal and interest repayment of local government bonds

1. The costs of issuance, repurchase, and exchange of local government bonds include:

a) Fees paid for the auction of local government bonds at the Stock Exchange shall be applied as with the fees for the auction of Government bonds as stipulated in Points b and c, Clause 2, Article 3 of this Circular.

b) Fees paid for the guarantee issuance service and the agency issuance service of local government bonds shall not exceed the corresponding levels of fees for Government bonds as stipulated in Clauses 3 and 4, Article 3 of this Circular.

2. Fees paid for the agency service of principal and interest repayment of local government bonds registered and deposited at the Central Depository Corporation shall be applied as with the fees for the agency service of principal and interest repayment of Government bonds as stipulated in Point a, Clause 5, Article 3 of this Circular.

Article 6. Implementation Provisions

1. This Circular takes effect from April 1, 2018.

2. Abolish the provisions set out in Article 17 of Circular No. 99/2015/TT-BTC dated June 29, 2015, guiding the issuance of government-guaranteed bonds issued by the Ministry of Finance; Article 19 of Circular No. 100/2015/TT-BTC dated June 29, 2015, guiding the issuance of local government bonds in the domestic market issued by the Ministry of Finance; Article 40 of Circular No. 111/2015/TT-BTC dated July 28, 2015, guiding the issuance of Government bonds in the domestic market issued by the Ministry of Finance; Article 12 of Circular No. 150/2011/TT-BTC dated November 9, 2011, guiding the exchange of Government bonds issued by the Ministry of Finance; Clause 2, Clause 3, and Points b and c, Clause 4, Article 20 of Joint Circular No. 92/2016/TTLT-BTC-NHNN dated June 27, 2016, guiding the issuance of Treasury bills through the State Bank of Vietnam issued by the Ministry of Finance and the State Bank of Vietnam.

3. Amend the phrase "issuance fee" to "issuance cost"; the phrase "repayment fee" to "repayment cost" in Circular No. 99/2015/TT-BTC dated June 29, 2015, guiding the issuance of government-guaranteed bonds issued by the Ministry of Finance; Circular No. 100/2015/TT-BTC dated June 29, 2015, guiding the issuance of local government bonds in the domestic market issued by the Ministry of Finance; Circular No. 111/2015/TT-BTC dated July 28, 2015, guiding the issuance of Government bonds in the domestic market issued by the Ministry of Finance; Circular No. 150/2011/TT-BTC dated November 9, 2011, guiding the exchange of Government bonds issued by the Ministry of Finance; and Joint Circular No. 92/2016/TTLT-BTC-NHNN dated June 27, 2016, guiding the issuance of Treasury bills through the State Bank of Vietnam issued by the Ministry of Finance and the State Bank of Vietnam.

Article 7. Implementation Organization

1. The Director of the Office of the Ministry of Finance, the Director of the Department of Financial Management of Banks and Financial Institutions, the Director of the Price Management Department, the General Director of the National Treasury, the General Director of the Stock Exchange, the General Director of the Central Depository Corporation, and the Heads of related units are responsible for implementing this Circular strictly in accordance with its guidance.

2. During the implementation process, if there are difficulties or obstacles, the National Treasury, People's Committees of provinces and centrally-administered cities, issuers of government-guaranteed bonds, and related units shall promptly report to the Ministry of Finance for consideration and specific guidance./.