CIRCULAR

Guidelines for issuing government bonds in the domestic market

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Pursuant to the Public Debt Management Law No. 29/2009/QH12 dated June 17, 2009;

Based on the Securities Law number 70/2006/QH11 dated June 29, 2006, and the Law Amending and Supplementing Certain Provisions of the Securities Law number 62/2010/QH12 dated November 24, 2010;

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002;

Based on the Decree number 118/2008/NĐ-CP dated November 27, 2008 stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Based on the Decree number 01/2011/NĐ-CP dated January 5, 2011 on issuing government bonds, government-guaranteed bonds, and local government bonds;

The Ministry of Finance provides guidelines for issuing government bonds in the domestic market as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Application

Article 1. This Circular provides detailed guidance on the issuance of government bonds (hereinafter referred to as bonds) in the domestic market.

Article 2. The procedures and formalities for organizing the repurchase, exchange, amendment of registration, custody, listing of repurchased and exchanged bonds shall be carried out in accordance with other guiding documents of the Ministry of Finance.

Article 2. Explanation of terms

In addition to the terms defined in the Decree number 01/2011/NĐ-CP, the following terms in this Circular shall be understood as follows:

1. “Primary issued bondsare new types of bonds issued for the first time on the primary market.

2. “Supplementary issued bondsare additional types of bonds issued for existing bonds, having the same nominal interest rate and maturity date as the existing bonds.

3. “Bond issuance dateis the date when the bond becomes effective and serves as the basis for determining the payment dates for principal and interest according to the conditions and terms of the bond.

4. “Bond issuance organization dateis the date of the auction for bonds issued through the auction method; and the date when the State Treasury signs the guarantee contract for bond issuance for bonds issued through the guaranteed issuance method.

5. “Payment date for purchasing bondsis the date when the bond purchaser pays the purchase price to the issuer.

6. “Nominal interest rate of the bondis the annual percentage (%) interest calculated on the face value of the bond that the issuer must pay to the bondholder according to the conditions and terms of the bond.

7. “Issuance interest rate of the bondis the winning bid interest rate, the issuance guarantee interest rate determined by the Ministry of Finance based on the results of the auction and issuance guarantee; or the interest rate announced by the Ministry of Finance in cases of issuance through agents and retail sales through the State Treasury system.

8. “Remaining term of the bondis the actual time remaining from the supplementary issuance date of the bond to its maturity date.

9. “Par value issuancerefers to the issuance of bonds at a price equal to the face value of the bond.

10. “Below par value issuancerefers to the issuance of bonds at a price lower than the face value of the bond.

11. “Above par value issuancerefers to the issuance of bonds at a price higher than the face value of the bond.

12. “Single-price biddingis a method of determining the auction result whereby the issuance interest rate of the bond is the highest winning bid rate applied uniformly to all successful bidders.

13. “Multiple-price biddingis a method of determining the auction result whereby the issuance interest rate of the bond for each successful bidder is exactly equal to their bid rate.

14. “Final registration date of the bondis the date when the Central Depository determines the list of bondholders for interest and principal payments.

15. “Ex-dividend dateare the days within the period from the last interest payment date to the final registration date of the bond.

16. “Non-ex-dividend dateare the days within the period from the final registration date of the bond to the next interest payment date of the bond.

Article 3. Issuing Subjects

1. The issuing subject of government bonds is the Ministry of Finance.

2. The Ministry of Finance authorizes the State Treasury to organize the issuance of government bonds in accordance with this Circular.

Article 4. Terms and Conditions of Bonds

In addition to the terms and conditions of bonds stipulated in Article 6 of Decree No. 01/2011/NĐ-CP, the Ministry of Finance shall provide specific guidance on the terms and conditions of bonds as follows:

1. Tenor

a) Treasury bills have tenors of thirteen (13) weeks, twenty-six (26) weeks, and fifty-two (52) weeks;

b) Government bonds and national construction bonds have tenors of two (2) years, three (3) years, five (5) years, ten (10) years, fifteen (15) years, and thirty (30) years;

c) The Ministry of Finance shall specify other tenors of bonds in certain necessary cases.

2. Face Value

a) Bonds have a face value of one hundred thousand (100,000) Vietnamese dong. Other face values are multiples of one hundred thousand (100,000) Vietnamese dong.

b) The Ministry of Finance shall specifically determine the face value of foreign currency bonds for each issuance of foreign currency bonds according to the approved foreign currency bond issuance project by the Prime Minister.

3. Form

a) Bonds issued through auction and underwriting methods are issued in book-entry form or electronic data form;

b) Bonds issued through agency distribution and retail methods are issued in certificate form, book-entry form, or electronic data form.

4. Issuance Method

a) Bonds issued through auction and underwriting methods can be issued at par, below par, or above par;

b) Bonds issued through agency distribution and retail methods are issued at par.

5. Nominal Interest Rate of Bonds

a) The nominal interest rate of bonds may be a fixed rate or a floating rate as decided by the Ministry of Finance;

b) In the case where the nominal interest rate of bonds is a floating rate, the Ministry of Finance shall specify the reference interest rate and announce it for each issuance.

6. Payment of Interest and Principal of Bonds

a) For bonds issued through auction and underwriting methods, bond interest is paid periodically every six (6) months or twelve (12) months from the date of issuance, and the principal of the bond is paid once on the maturity date of the bond;

b) For bonds issued through agency distribution and retail methods through the State Treasury system, bond interest and principal are paid periodically or in one lump sum upon maturity or early redemption as specified by the Ministry of Finance for each issuance of bonds;

c) The State Treasury shall notify information about the time of interest and principal payment at the time of issuance organization.

7. Supplementary Bond Issuance Period

Bonds may be issued supplementary within two (02) years from the date of issuance of the bond in the case where the bond has a fixed nominal interest rate and remaining tenor of one (01) year or more.

Article 5. Issuance Interest Rate of Bonds

1. The Ministry of Finance shall stipulate the framework of the issuance interest rate of bonds for each period or each issuance session.

2. Based on the framework stipulated in Clause 1 of this Article, the State Treasury shall select and decide the issuance interest rate of bonds for each issuance of bonds.

Chapter II

BOND ISSUANCE PLAN AND ORGANIZATION

Article 6. Construction and announcement of bond issuance plan

1. Annually, based on the capital mobilization targets for the State budget and for development investment approved by the National Assembly, the Ministry of Finance shall construct and announce the bond issuance plan for the entire year and the anticipated capital mobilization plan for each quarter.

2. The annual and quarterly bond issuance plans shall be published on the electronic news website (website) of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange.

Article 7. Issuance Organization of bonds

1. Based on the announced bond issuance plan, the State Treasury shall organize the issuance of bonds according to this Circular and related legal documents.

2. The issuance of Treasury bills through auction via the State Bank's trading system and/or direct sale to the State Bank shall be carried out in accordance with the regulations of the Ministry of Finance in other documents.

3. For the issuance of national construction bonds, the Ministry of Finance shall develop a proposal to be submitted to the Prime Minister for approval before implementation. The issuance proposal includes the following main contents:

a) Purpose of issuing national construction bonds;

b) Expected conditions and terms of national construction bonds: quantity, form, term, currency, interest rate, issuance time, and principal and interest payment methods.

c) Purchasing entities;

d) Issuance organization plan.

4. For bonds issued through retail sales via the State Treasury system or through agents, the State Treasury shall develop an issuance plan, submit it to the Ministry of Finance for approval before organizing its implementation.

Article 8. Bond Issuance Schedule

1. Issuance Date

a) The issuance date for bonds issued through auction and guaranteed issuance is the fifteenth (15th) day and the last day of each month, except for February, which is the fifteenth (15th) and twenty-eighth (28th) days.

b) For bonds issued through retail sales via the State Treasury system or through agents, the Ministry of Finance shall specify the issuance timeframe for each issuance period.

2. Issuance Organization Date

a) The issuance organization date for bonds issued through auction and guaranteed issuance is two (2) working days prior to the issuance date specified in point a, Clause 1 of this Article.

b) In certain cases, the Ministry of Finance may decide on a different issuance organization date from that specified in point a, Clause 2 of this Article.

3. Payment Date for Bond Purchase

a) The payment date for purchasing bonds issued through auction and guaranteed issuance is two (2) working days after the bond issuance organization date.

b) The payment date for purchasing bonds issued through agent issuance and retail sales via the State Treasury system is the date when investors purchase bonds at the agent or the State Treasury.

4. Based on the provisions of Clauses 1, 2, and 3 of this Article, the Ministry of Finance shall publish the bond issuance schedule for auction and guaranteed issuance for the following year on the electronic news website of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange.

5. For bonds issued through agent issuance and retail sales via the State Treasury system, based on the bond issuance plan for each issuance period decided by the Ministry of Finance, the State Treasury shall announce the issuance date and organize its implementation in accordance with this Circular.

Article 9. Tender Participants

1. Based on the criteria and conditions stipulated in this Chapter, the Ministry of Finance selects and announces the list of participants joining the tender issuance of bonds (hereinafter referred to as tender participants) for each period.

2. The Vietnam Social Security is recognized as a tender participant and is only allowed to participate in non-competitive bidding sessions for government bond issuances through tendering methods. The Vietnam Social Security is exempt from complying with the rights and obligations of tender participants as prescribed in Article 10 of this Circular.

Article 10. Rights and Obligations of Tender Participants

1. Tender participants have the following rights:

a) Being the sole entity eligible to participate in government bond issuance sessions and guaranteed bond issuance sessions through tendering methods;

b) Being prioritized by the State Treasury to be selected as the main guarantor organization for bond issuance sessions conducted through guarantee methods if they meet the standards and conditions specified in Article 21 of this Circular;

c) Being prioritized by the State Treasury to be selected as the agency for bond issuance sessions conducted through agency methods;

d) Participating in regular exchanges with the Ministry of Finance regarding bond issuance operations and policy orientations for the development of the bond market;

2. Obligations

a) Must register to purchase government bonds in all issuance sessions at reasonable bid interest rates;

b) Must purchase bonds annually in quantities not less than the minimum amount specified by the Ministry of Finance for each period, in line with different stages of market development;

c) Must pay the full amount for purchased bonds that have been successfully bid or received guarantees within the due date;

d) Must publish reference buying and selling prices on the specialized government bond market according to the regulations of the Hanoi Stock Exchange;

e) Within five (05) working days after the end of each month, report to the Ministry of Finance on the participation of tender participants in the government bond market during the preceding month using the form provided in Appendix 2 of this Circular;

f) Within seven (07) working days after the end of each quarter, report to the Ministry of Finance on the evaluation of the bond market's activities during the preceding quarter and forecast investment demand for bonds, liquidity of the money market, and expectations of interest rate levels for the next quarter;

g) Promptly report to the Ministry of Finance about changes in business licenses (including mergers, divisions, bankruptcies, revocation of business licenses), special supervision situations by state management agencies over business operations (if any), and conclusions by state management agencies regarding violations of laws by entities (if any). The reporting deadline to the Ministry of Finance is within ten (10) working days from the occurrence of such events;

h) Fulfill other obligations as prescribed in this Circular.

Article 11. Conditions for Becoming a Tender Participant

1. Commercial banks, financial companies, securities companies, insurance companies, investment funds, and other financial institutions established and operating legally in Vietnam;

2. Having a minimum subscribed capital equal to the statutory capital requirement as prescribed by relevant laws;

3. Meeting the capital adequacy ratios as prescribed by relevant laws;

4. Having a minimum operational period of three years;

5. Being a member of the specialized government bond market at the Hanoi Stock Exchange.

Article 12. Procedures and formalities for recognizing bidding members

1. The application dossier to become a bidding member includes:

a) An application form to become a bidding member in accordance with the model prescribed in Appendix 1 of this Circular;

b) A notarized copy of the Business License;

c) Financial reports of the last three (03) consecutive years that have been audited;

d) Quarterly financial report up to the nearest date when the application is submitted;

đ) A report on participation in the bond market for at least one (01) year most recently according to the reporting models prescribed in Appendix 2 of this Circular;

e) A notarized copy of the document certifying membership in the Government Bond Market at the Hanoi Stock Exchange;

g) Documents proving compliance with the capital adequacy ratio as stipulated by law.

2. Procedures and formalities for recognizing bidding members.

a) Organizations meeting the conditions prescribed in Article 11 of this Circular wishing to become bidding members shall submit one (01) set of dossier to the Ministry of Finance in accordance with Clause 1 of this Article. The deadline for receiving dossiers annually is from November 1 to November 10 each year.

b) Within five (05) working days from the date of receipt of the dossier, the Ministry of Finance will check the completeness and validity of the dossier and issue a written notice requesting the unit to supplement documents (if necessary).

c) After receiving a complete dossier, the Ministry of Finance will review and evaluate according to the criteria prescribed in Article 11 and Appendix 3 of this Circular. Based on the results of the dossier assessment, the Ministry of Finance will announce the list of organizations selected as bidding members before December 31 each year. For cases that are rejected, the Ministry of Finance will notify in writing and specify the reasons.

d) The list of organizations selected as bidding members is effective from January 1 to December 31 each year and is published on the website of the Ministry of Finance, State Treasury, and Hanoi Stock Exchange.

Article 13. Evaluation of bidding members' activities

1. Annually, the Ministry of Finance evaluates the activities of bidding members to serve as a basis for considering and deciding to maintain their status as bidding members in the following year.

2. Procedures for evaluating bidding members' activities:

a) At the latest by November 10 each year, bidding members must submit to the Ministry of Finance a report on their operational situation over the past twelve months, from November 1 of the previous year to October 31 of the current year (evaluation period), in accordance with the model prescribed in Appendix 2 of this Circular, and information about their financial situation, corporate governance, and future business orientation.

b) Based on the obligations of bidding members stipulated in Clause 2 of Article 10 of this Circular, the reports of the members, and related information, the Ministry of Finance will assess the operational situation of the members during the evaluation period according to the criteria in Appendix 3 and announce the evaluation results before December 31 each year. For bidding members who do not meet the conditions to continue maintaining their status as bidding members, the Ministry of Finance will issue a written notification specifying the reasons.

c) The results of the bidding members' evaluation will be published on the website of the Ministry of Finance and the Hanoi Stock Exchange.

3. To prepare for the annual evaluation of bidding members' activities, before May 15 each year, based on monthly reports from bidding members, the Ministry of Finance will issue a preliminary notice regarding the level of compliance with members' obligations over the six-month period from November 1 of the previous year to April 30 of the current year.

Article 14. Removal of Bidder Member Status

1. The Ministry of Finance shall consider removing the bidder member status of a bidding member in the following cases:

a) Revocation of business license;

b) Merger, division, bankruptcy;

c) Business operations being subject to special supervision by competent state agencies;

d) Engaging in acts of violating laws as concluded by competent state agencies;

đ) Submitting a request not to be a bidding member;

e) Failure to comply with legal provisions on the issuance of government bonds;

g) Not meeting the conditions to continue maintaining bidder member status as notified by the Ministry of Finance under Article 13 of this Circular.

2. The Ministry of Finance shall notify in writing organizations whose bidder member status has been revoked and publish such information on the Ministry of Finance's electronic news website, State Treasury, and the Hanoi Stock Exchange.

3. Bidding members whose bidder member status is revoked according to points e) and g) of Clause 1 of this Article shall not be considered for approval as bidding members for the next two (02) consecutive years.

Chapter III

ISSUANCE METHODS OF BONDS

Section 1

AUCTION ISSUANCE OF BONDS

Article 15. Forms of Auction and Methods of Determining Winning Bid Prices

1. Bond auctions shall be conducted in one (01) of the two (02) forms, including:

a) Competitive interest rate auction;

b) Combined competitive and non-competitive interest rate auction.

2. The results of bond auctions shall be determined in one (01) of the two (02) methods below:

a) Single price auction;

b) Multiple price auction.

3. The State Treasury shall notify specifically about the form of auction and method of determining the auction results for each bond issuance session.

Article 16. Principles of Organizing Auctions

1. Maintain confidentiality of all bidding information of bidding members and information related to auction interest rates.

2. Implement transparency and equality in rights and obligations among bidding members in accordance with the provisions of the law.

3. In the case where the auction session is organized in the form of combined competitive and non-competitive interest rate auction as stipulated in point b Clause 1 of Article 15 of this Circular, the total volume of bonds issued to non-competitive bidding members must ensure that it does not exceed thirty percent (30%) of the total volume of bonds tendered in the issuance session.

Article 17. Procedures and Formalities for Organizing Auctions

1. At least five (05) working days before the organization of bond issuance, based on the proposal of the State Treasury, the Hanoi Stock Exchange sends a bond issuance notice to all bidding members and publishes the information on its electronic news website. The content of the notice includes:

a) The quantity and term of the bonds expected to be issued, specifying whether they are newly issued or supplementary issues. For supplementary issues, the notice must specify the terms and conditions of the currently circulating bonds;

b) The bond code issued by the Securities Depository Center;

c) The date of issuance, issue date, maturity date, and payment date for each type of bond;

d) Method of paying interest and principal of the bonds;

đ) Form of auction;

e) Method of determining the auction results;

g) The account for receiving bond purchase payments of the State Treasury.

2. By no later than 2 p.m. on the day of the issuance, bidding members send the Hanoi Stock Exchange bidding information according to the procedures and bidding registration forms prescribed by the Hanoi Stock Exchange. Each competitive bidding member may submit up to five (05) bids for each type of bond tendered, each bid including the bid interest rate (to two decimal places) and the corresponding quantity of bonds.

3. The Hanoi Stock Exchange opens the bids, compiles the bidding information, and sends it to the State Treasury.

4. Based on the compiled bidding information received from the Hanoi Stock Exchange, the State Treasury determines the issuance interest rate for each type of bond tendered and notifies the Hanoi Stock Exchange to determine the auction results in accordance with Article 18 of this Circular.

5. Upon completion of the bond issuance session, the Hanoi Stock Exchange notifies the State Treasury, the Vietnam Securities Depository Center, and each winning bidder of the auction results as specified in Appendix 4 of this Circular and publishes the bond auction results on the Hanoi Stock Exchange's electronic news website.

Article 18. Determination of Auction Results

1. Basis for determining the issuance interest rate, winning bid volume, and bond selling price:

a) Bid interest rate and bond volume;

b) Called-for-bid bond volume;

c) Issuance interest rate range for bonds as prescribed in Article 5 of this Circular.

2. Method for determining the winning bid interest rate

a) For single-price auction method

The winning bid interest rate is the highest bid interest rate applicable to all bidders and selected in ascending order of bid interest rates, satisfying simultaneously the following two conditions:

- Within the interest rate range specified by the Ministry of Finance;

- The cumulative bond issuance volume up to the winning bid interest rate does not exceed the called-for-bid bond volume.

b) For multiple-price auction method

The winning bid interest rate applied to each successful bidder is their bid interest rate and is selected in ascending order of bid interest rates, satisfying simultaneously the following two conditions:

- The weighted average of winning bid interest rates does not exceed the interest rate range determined by the Ministry of Finance;

- The cumulative bond issuance volume up to the highest winning bid interest rate does not exceed the called-for-bid bond volume.

3. In case at the highest winning bid interest rate, the cumulative bid bond volume exceeds the called-for-bid bond volume, after deducting the bid bond volume at lower interest rates, the remaining called-for-bid bond volume is allocated to bidders at the highest winning bid interest rate in proportion to their bid bond volume. The bond volume allocated to each bidder is rounded down to the nearest whole unit.

4. Determination of winning bid results for non-interest-rate competitive auction bonds:

a) The issuance interest rate for non-interest-rate competitive auction bonds is the highest winning bid interest rate (for single-price auction method) or the weighted average of winning bid interest rates (for multiple-price auction method), rounded up to two decimal places according to the guidelines in Appendix 5 of this Circular.

If all interest-rate competitive bidders do not win, the bonds will not be issued to non-interest-rate competitive bidders.

b) The bond issuance volume for each non-interest-rate competitive bidder is equivalent to their bid bond volume. If the total bid volume exceeds the limit stipulated in Clause 3, Article 16 of this Circular, the bond issuance volume for each non-interest-rate competitive bidder is allocated in proportion to their bid bond volume.

5. Determination of Bond Selling Price

a) For initial bond issuance:

- In case the bond issuance date is a working day (where the payment date for purchasing bonds coincides with the issuance date), the purchase amount of bonds is determined as follows:

Where:

GG = Purchase amount of bonds

N = Number of bonds issued to the successful bidder

MG = Par value of the bond

nh cơ_c= Nominal interest rate of the bond (%/year), which is the weighted average of the issuance interest rates applied to successful bidders and rounded down to one decimal place according to the guidelines in Appendix 5 of this Circular

T = Number of interest payments between the bond issuance date and the bond maturity date

k = Number of interest payments in one year

nh cơ_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.}= Issuance interest rate of the bond for the bondholder (%/year)

- In case the bond issuance date is a holiday or public holiday (where the payment date for purchasing bonds is the next working day after the issuance date), the purchase amount of bonds is determined as follows:

Where:

GG = Purchase amount of bonds

MG = Par value of the bond

N = Number of bonds issued to the bondholder

nh cơ_c= Nominal interest rate of the bond (%/year), which is the weighted average of the issuance interest rates applied to successful bidders and rounded down to one decimal place according to the guidelines in Appendix 5 of this Circular

k = Number of interest payments in one year

d = Actual number of days between the bond issuance date and the investor's payment date for purchasing bonds

E = Actual number of days in the first interest period of the bond

t = Remaining actual number of interest payments between the payment date for purchasing bonds and the bond maturity date

nh cơ_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.}= Issuance interest rate of the bond for the bondholder (%/year)

b) For additional bond issuance:

- In case the payment date for purchasing bonds is the ex-dividend trading day, the purchase amount of bonds is determined as follows:

- In case the payment date for purchasing bonds is the non-ex-dividend trading day, the purchase amount of bonds is determined as follows:

 

Where:

GG = Purchase amount of bonds

MG = Par value of the bond

N = Number of bonds issued to the bondholder

nh cơ_c= Current nominal interest rate of the bond (%/year) in circulation and being additionally issued

K = Number of interest payments in one year

D = Actual number of days between the bond issuance date and the payment date for purchasing bonds when the bond has not yet reached its first interest period; or the actual number of days between the most recent interest payment and the payment date for purchasing bonds

E = Actual number of days in the interest period for the additionally issued bond

T = Number of actual interest payment periods between the bond purchase payment date and the bond maturity date

nh cơ_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.}= Issued bond interest rate (% per annum)

Section 2

GUARANTEE OF BOND ISSUANCE

Article 19. Principles for organizing bond issuance guarantee

1. Bond issuance guarantee is organized in the form of a register with the participation of one or more bond issuance guarantors (guarantor consortium).

2. The State Treasury selects the main guarantor to represent the guarantor consortium in negotiating and agreeing on the volume, term, interest rate, and issuance guarantee fee for each bond issuance period according to this Circular.

3. Types of bonds issued under the issuance guarantee method are bonds with terms of five years or longer as prescribed by the Ministry of Finance.

Article 20. Rights and obligations of the main guarantor

1. Rights

a) Represents the sole legitimate rights and obligations of the guarantor consortium in negotiating and agreeing with the State Treasury regarding the issuance guarantee period.

b) Has the right to distribute the bonds of the issuance guarantee period based on the issuance guarantee contract signed with the State Treasury.

c) Is entitled to receive the issuance guarantee fee based on negotiations and agreements with the State Treasury as stipulated in this Circular.

d) Has the right to select members of the guarantor consortium and determine the issuance guarantee fee paid to these members.

2. Obligations

a) Is responsible for distributing the entire quantity of bonds within the time specified in the issuance guarantee contract signed with the State Treasury. In case the quantity of bonds is not fully distributed to investors, the main guarantor shall be responsible for purchasing the remaining quantity of bonds.

b) Is responsible for receiving the bond purchase money from the guarantor consortium members and making full payment of the bond purchase money according to the contract signed with the State Treasury and as stipulated in this Circular.

c) Shall fulfill all other obligations as prescribed in the principle contract and the issuance guarantee contract signed with the State Treasury.

Article 21. Conditions for becoming the main guarantor

1. Commercial banks and securities companies established and operating legally in Vietnam and permitted to provide securities issuance guarantee services according to relevant laws.

2. Have a minimum subscribed capital equal to the statutory capital requirement as prescribed by relevant laws.

3. Meet the capital safety ratios as prescribed by relevant laws.

4. Have at least three (03) years of operation.

5. Have experience in the field of securities issuance guarantee, including having executed at least one (01) bond issuance guarantee contract.

6. Submit an application to become the main guarantor.

Article 22. Process for selecting the main guarantor and guarantor consortium

1. At least thirty (30) working days before organizing the issuance guarantee session, the State Treasury announces on the electronic news page of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange about the plan to organize the issuance guarantee period and the invitation to register to participate as the main guarantor. The announcement includes:

a) Information on the expected bond issuance:

- Bond conditions and terms (issuance currency, term, issuance organization date, issuance date, bond purchase payment date, bond maturity date, State Treasury's bond purchase payment account, interest and principal repayment methods, bond code issued by the Securities Depository Center);

- Expected quantity of bonds to be issued.

b) Information on the selection of the main guarantor:

- Conditions and criteria for the main guarantor as prescribed in Article 21 of this Circular;

- Deadline, address, format, and method of submitting the application to become the main guarantor.

2. Organizations that meet the conditions and have the desire to become the main guarantor submit registration documents according to the State Treasury's announcement. The registration documents include:

a) Application to become the main guarantor according to the form prescribed by the State Treasury.

b) Proposal for the bond issuance guarantee plan with the following basic contents:

- Information about the organization: business activities, financial situation, capacity and experience in the field of bond issuance guarantee and participation in the bond market;

- Analysis, assessment, and forecast of the bond market situation and the ability to issue bonds through the guarantee method;

- Implementation plan for the expected issuance guarantee period: proposed consortium guarantor members, implementation methods and timeline, expected volume, issuance interest rate, and proposed fee;

- Commitments of the main guarantor.

c) Documents proving eligibility to become the main guarantor, including:

- Notarized copy of the Business Registration Certificate;

- Financial reports of the last three (03) consecutive years audited;

- Documents proving compliance with the capital safety ratio as prescribed by law;

- Documents proving the organization's activities in the field of securities guarantee, including bond issuance guarantee.

3. Within five (05) working days from the end of the receipt of applications to become the main guarantor, the State Treasury organizes an evaluation and selects one main guarantor based on the following criteria:

a) Criteria and conditions for the main guarantor as prescribed in Article 21 of this Circular.

b) Capacity, experience, and ability to assume the role of the main guarantor for the bond issuance period based on the proposal of the organization as stated in point b, Clause 2 of this Article.

4. The result of selecting the main guarantor is announced in writing to the organizations that have registered and published on the electronic news page of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange.

5. The State Treasury and the main guarantor agree on the content and sign the principle contract to implement the bond issuance guarantee period according to the contract model prescribed in Appendix 6 of this Circular.

6. Based on the principle contract signed with the State Treasury, the main guarantor organization selects members of the guarantee consortium. Members of the guarantee consortium are organizations and individuals legally established, operating, or residing in Vietnam and permitted to invest in purchasing government bonds in accordance with the provisions of the law, including the Vietnam Social Security.

Article 23. Negotiation and Organization of Bond Issuance Guarantee

1. Within ten working days from the date of signing the principle contract with the State Treasury, the main guarantor organization sends the State Treasury a notification letter regarding the list of consortium members participating in the bond issuance guarantee session according to the model at Section 1 of Appendix 7 of this Circular and the Consortium Agreement signed by the guarantors according to the model at Section 2 of Appendix 7 of this Circular.

2. On the basis of the notification letter from the main guarantor organization, based on the interest rate and guarantee fee framework prescribed by the Ministry of Finance, the State Treasury and the main guarantor organization conduct negotiations on the volume, terms and conditions of the bonds (tenor, issue interest rate, issue date, payment date for bond purchase price, bond selling price), guarantee fees, and other related matters. The bond selling price is determined according to the principles stipulated in Article 18 of this Circular.

3. Based on the negotiation results, the State Treasury signs a bond issuance guarantee contract with the main guarantor organization according to the contract model specified in Section 3 of Appendix 7 of this Circular. The bond issuance guarantee contract serves as the legal basis confirming the rights and obligations of the main guarantor organization; and the rights and obligations of the State Treasury as prescribed in this Circular.

4. At the latest on the working day immediately following the signing of the bond issuance guarantee contract, the State Treasury notifies the results of the guarantee to the Securities Depository Center and the Hanoi Stock Exchange to proceed with registration, custody, and listing procedures for the bonds; simultaneously announcing the results of the guarantee on the electronic information website of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange.

Section 3

BOND ISSUE AGENT

Article 24. Principles of Bond Issuance through Agency Method

1. The State Treasury selects organizations meeting the conditions stipulated in this Circular to act as bond issue agents and interest and principal repayment agents for bonds.

2. The State Treasury develops a plan for issuing bonds through the agency method, reports it to the Ministry of Finance for approval before organizing its implementation.

Article 25. Conditions for Acting as a Bond Issue Agent

1. They are commercial banks and securities companies legally established and operating in Vietnam;

2. Having a minimum subscribed capital equal to the statutory capital requirement as prescribed by relevant laws;

3. Have a minimum operational period of three years;

4. Meet the capital adequacy ratios prescribed by law;

5. Possess a network ensuring bond issuance as required by the State Treasury for each issuance round;

6. Submit an application to act as a bond issue agent.

Article 26. Process for Selecting and Signing Agency Contracts for Bond Issuance

1. At least thirty working days prior to organizing a bond issuance round through the agency method, the State Treasury announces on the electronic information websites of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange the plans for organizing the bond issuance and invites applications to participate as agents. The announcement includes:

a) Information on the expected bond issuance:

- Terms and conditions of the bonds (currency of issuance, tenor, time of issuance organization, form of issuance, method of interest and principal repayment);

- Expected quantity of bonds to be issued.

b) Information on selecting the issuing agent:

- Form of agency: issuing agent or both issuing and repayment agent;

- Conditions and standards for agents as prescribed in Article 25 of this Circular;

- Model, deadline, location, and form of receipt for applications to participate as issuing agents.

2. Organizations meeting the conditions stipulated in Article 25 of this Circular and wishing to act as agents submit their registration files to the State Treasury in accordance with the notice provided in Clause 1 of this Article. The registration file includes:

a) An application for registration as an agent according to the model specified in Section 1 of Appendix 8 of this Circular.

b) Proposals for organizing the bond issuance with the following basic contents:

- Information about the organization: business activities, financial situation, capabilities and experience in the securities distribution sector and participation in the bond market;

- Analysis, assessment, and forecast of the bond market situation and the ability to issue bonds through the agency method;

- Implementation plan for the bond issuance round through the agency method;

- Proposal for the agency issuance fee and repayment fee.

b) Documents proving eligibility to become a bond issuance agent, including:

- Notarized copy of the Business Registration Certificate;

- Financial reports of the last three (03) consecutive years audited;

- Documents proving compliance with the capital safety ratio as prescribed by law;

3. Within five working days from the end of the receipt of applications to act as agents, the State Treasury examines, evaluates, and selects one or more agents based on the following criteria:

a) Standards and conditions for bond issuance agents as prescribed in Article 25 of this Circular;

b) Capabilities and ability to perform the role of an issuance agent of the registering organization;

c) Proposed agency fee level.

4. The State Treasury notifies the result of the selection of issuance agents to the registering organizations in writing, and simultaneously publishes the information on the electronic information websites of the Ministry of Finance, the State Treasury, and the Hanoi Stock Exchange.

5. The State Treasury organizes negotiations and signs agency contracts with bond issuance agents according to the agency contract model specified in Section 2 of Appendix 8 of this Circular.

Article 27. Issuance of Bonds

1. The agent shall issue bonds according to the conditions and terms stipulated in the agency contract signed with the State Treasury.

2. Within thirty working days from the end date of the bond issuance period through the agency method, the State Treasury shall report to the Ministry of Finance on the results of the issuance period.

Section 4

RETAIL ISSUANCE OF BONDS THROUGH THE STATE TREASURY SYSTEM

Article 28. Principles for Bond Issuance

1. Retail issuance methods may be used to directly issue bonds to domestic and foreign organizations and individuals, including the Vietnam Social Security.

2. The State Treasury shall organize the issuance and payment of interest and principal of bonds through its branch network nationwide.

3. The State Treasury shall develop a plan for retail bond issuance as prescribed in Clause 1 of this Article, report to the Ministry of Finance for approval before implementation.

4. Bonds shall be issued at par value in the form of book-entry certificates or electronic data.

Article 29. Procedures and Formalities for Bond Issuance

1. At least twenty working days prior to the retail bond issuance period, the State Treasury shall announce detailed information about the issuance period on the websites of the Ministry of Finance, the State Treasury, the Hanoi Stock Exchange, and other mass media outlets. The announcement shall include:

a) The volume and term of the bonds expected to be issued;

b) The nominal interest rate of the bonds;

c) The form of the bonds;

d) The method of payment of interest and principal of the bonds;

e) The time and place of the issuance organization.

2. The State Treasury shall provide detailed guidance on the procedures and formalities for issuing and paying off bonds through the retail method, report to the Ministry of Finance for approval before promulgation and implementation.

Chapter IV

PAYMENT FOR BOND PURCHASES

Article 30. Payment for Bond Purchases

1. For bonds issued through the auction method and guaranteed issuance as provided in Section 1 and Section 2 of Chapter III of this Circular, the successful bidder (for the auction method) or the main guarantor organization (for the guarantee method) must ensure that the full purchase price of the bonds (including the purchase price of the bonds for customers) has been paid and credited to the account designated by the State Treasury no later than 2 p.m. on the payment date announced by the State Treasury. The successful bidder or the main guarantor organization must ensure that all required information is fully recorded on the transfer order as requested by the State Treasury.

2. For bonds issued through the agency method, based on the time specified in the agency contract and the volume of bonds issued, the agent shall transfer the proceeds from selling the bonds into the designated account of the State Treasury on the issuance day.

3. For bonds issued through the retail system of the State Treasury, the purchase price of the bonds can be paid in the following ways:

a) Paying in cash immediately upon purchasing the bonds at the issuance location announced by the State Treasury;

b) Transferring funds into the designated account of the State Treasury at the issuance location.

Article 31. Late Payment Fine

1. In cases where funds are not transferred to the State Treasury as prescribed, the organization responsible for paying the bond purchase price according to this Circular and contracts signed with the State Treasury must pay a late payment fine. The amount of the late payment fine is determined by the following formula:

 

 

 

 

 

Where:

P = Amount of late payment fine

MG = Par value of the bond

N = Number of issued bonds that have not been paid on time

nh cơ_cr = Nominal interest rate of the bond (% per year)

k = Number of interest payments in one year

n                t = Actual number of days of delay from the payment date

E               T = Actual number of days in one interest payment period during which the delay occurred

2. For bonds issued through auction or issuance guarantee, if the successful bidder or main guarantor does not pay the bond purchase price within five (05) working days from the payment date, the State Treasury will cancel the issuance results for the unpaid bond quantity and notify the successful bidder or main guarantor, the Hanoi Stock Exchange, and the Securities Depository Center in writing.

Chapter V

REGISTRATION, DEPOSITORY, AND LISTING OF BONDS

Article 32. Registration and Depository of Bonds

1. Bonds issued through auction or issuance guarantee shall be centrally registered and deposited at the Vietnam Securities Depository.

2. Based on the notification of bond issuance results from the State Treasury and the Hanoi Stock Exchange, the Vietnam Securities Depository shall register the issued bonds. The registration of bonds must be completed no later than the next working day after the payment date for purchasing the bonds.

3. The Vietnam Securities Depository shall deposit the bonds into the account of the owner after receiving the confirmation document of the completion of the bond purchase payment from the State Treasury.

4. The cancellation of the registration of non-paid bonds shall be carried out by the Vietnam Securities Depository based on the notification of the cancellation of the bond issuance results from the State Treasury.

Article 33. Listing and Trading of Bonds

1. Bonds issued through auction or issuance guarantee shall be centrally listed and traded at the Hanoi Stock Exchange.

2. The Hanoi Stock Exchange shall list the bonds based on the registration notification of the Vietnam Securities Depository. Bonds shall be listed no later than the second working day after the payment date for purchasing the bonds.

3. Bonds shall be traded no later than the third working day after the payment date for purchasing the bonds.

4. The cancellation of the listing of non-paid bonds shall be carried out by the Hanoi Stock Exchange based on the notification of the cancellation of the bond issuance results from the State Treasury and the notification of the cancellation of the listing of non-paid bonds from the Securities Depository Center.

Chapter VI

INTEREST PAYMENT, PRINCIPAL REPAYMENT OF BONDS, ISSUE FEES, AND BOND PAYMENT

Article 34. Payment of Principal and Interest on Bonds

1. The Central Government budget ensures the source for payment of principal and interest on bonds when due. In cases where the payment date for principal and interest on bonds falls on a public holiday or non-working day, such payments will be made on the next working day.

2. Procedures for payment of principal and interest on bonds issued through auction issuance and issuance guarantee methods.

a) By the 25th of each month, the Securities Depository Center shall notify the State Treasury of the amount of principal and interest on bonds to be paid in the following month and the payment date.

b) By 11:00 AM on the payment date for principal and interest on bonds, the State Treasury shall ensure that the full amount of principal and interest on bonds for the payment date is transferred and credited to the account notified by the Securities Depository Center.

c) On the payment date for principal and interest on bonds, the Securities Depository Center, through its depositary members, shall transfer the payment of principal and interest on bonds to the bondholders determined on the final registration date.

d) In cases where the State Treasury transfers the payment of principal and interest on bonds to the account notified by the Securities Depository Center later than the time specified in point b, Clause 2 of this Article, the State Treasury shall bear the late payment penalty. The late payment penalty amount shall be allocated and transferred to the accounts of bondholders according to their share of ownership of the bonds. The late payment penalty amount shall be determined according to the principles stipulated in Article 31 of this Circular.

D) In cases where the State Treasury has transferred the payment of principal and interest on bonds to the account notified by the Securities Depository Center within the time specified in point b) Clause 2 of this Article but the Securities Depository Center transfers the payment of principal and interest on bonds to the accounts of bondholders after the payment date for principal and interest on bonds, the Securities Depository Center shall bear the late payment penalty payable to the bondholders. The late payment penalty amount shall be determined according to the principles stipulated in Article 31 of this Circular.

3. Payment of principal and interest on bonds issued through agency methods shall be carried out according to the agency contract between the State Treasury and the agency organization.

4. Payment of principal and interest on bonds issued through retail sales through the State Treasury system shall be conducted through the State Treasury system in accordance with the guidelines of the State Treasury.

Article 35. Fees for Organizing Issuance and Payment of Principal and Interest on Bonds

1. The Central Government budget ensures the source for payment of fees for organizing issuance, fees for paying principal and interest on bonds, and printing costs for bond certificates (if applicable).

2. Fees for organizing issuance and payment of principal and interest on bonds issued through issuance guarantee and auction methods shall be paid to the following organizations:

a) 0.07% of the nominal value of bonds issued through auction shall be paid to the Hanoi Stock Exchange.

b) Issuance guarantee fees for bonds shall be paid to the main guarantor organization according to the agreement between the State Treasury and the main guarantor organization, but not exceeding 0.15% of the nominal value of distributed bonds.

c) 0.04% of the actual amount of principal and interest on bonds paid shall be paid to the Securities Depository Center.

d) 0.01% of the nominal value of bonds issued shall be paid to the State Treasury.

3. Fees for organizing issuance and payment of principal and interest on bonds issued through retail sales shall be paid to the State Treasury at a maximum rate of 0.10% of the total nominal value of successfully issued bonds, excluding printing costs (if applicable).

4. Fees for organizing issuance and payment of principal and interest on bonds issued through agency methods shall be paid to the issuing agent at a maximum rate of 0.10% of the total nominal value of successfully issued bonds, excluding printing costs (if applicable).

5. Use of Issuance and Principal and Interest Payment Fees

a) The State Treasury may use bond issuance fees for the following purposes:

- Costs serving the issuance of bonds through the State Treasury system (for retail issuance cases);

- Costs for purchasing, constructing software, and equipment serving the issuance of bonds;

- Costs for regular maintenance, upgrading, and emergency repairs of machinery, equipment, and software;

- Costs for information advertising about bond issuance work;

- Direct costs for each auction session and issuance guarantee of bonds;

- Costs for researching and developing the bond market;

- Costs for organizing seminars, surveys, and learning experiences to develop the government bond market;

- Annual customer conference costs summarizing bond issuance work;

- One-time and periodic rewards for organizations and individuals related to bond issuance work according to regulations issued by the State Treasury after approval by the Ministry of Finance;

- Office supplies;

- Other expenses serving bond issuance work.

b) Auction fees for bonds are revenue for the Hanoi Stock Exchange, and fees for paying principal and interest on bonds are revenue for the Vietnam Securities Depository Center. The Hanoi Stock Exchange and the Securities Depository Center have the responsibility to manage and use these fees according to the financial mechanisms of enterprises as prescribed by relevant laws.

Chapter VII

ACCOUNTING RECORDS, REPORTS AND DISCLOSURE OF INFORMATION

Article 36. Accounting Entries

The State Treasury, Hanoi Securities Trading Center, Vietnam Securities Depository, and related organizations are responsible for organizing the accounting entries for revenue from bond issuance, bond interest and principal payments, and issuance and payment fees for bonds as stipulated in this Circular, in accordance with the State Budget Law, the Accounting Law, and related guiding documents.

Article 37. Reporting on Issuance Results

1. For bonds issued through auction or underwritten issuance, the State Treasury shall report to the Ministry of Finance on the issuance results no later than five working days after the end of the bond issuance session, including:

a) Volume and conditions, terms of the announced bond issuance;

b) Tender/bid participation situation of members: number of participating members, volume, and bid interest rates of each member;

c) Issuance results: successful bidder, issuance volume, issuance interest rate, bond selling price.

2. For bonds issued through agency and retail methods, the State Treasury shall report to the Ministry of Finance on the issuance results of the issuance period no later than thirty working days after the end of the issuance period, including:

a) Volume and conditions, terms of the announced bond issuance;

b) Issuance results: selected agents, issuance volume, issuance interest rate of the bond, and the situation of agency fee and issuance fee payments.

Article 38. Reporting on Issuance and Interest and Principal Payment Situations

1. No later than the 25th day of each month, the State Treasury shall report to the Ministry of Finance on the previous month's bond issuance and payment situations and the projected issuance plan for the following month, including:

a) Total volume of bonds issued in the month classified by term and issuance method;

b) Total principal and interest volume of bonds paid in the reported month;

c) Projected total principal and interest volume of bonds to be paid in the next month;

d) Projected volume of bonds to be issued in the month classified by term and issuance method.

2. Quarterly, the Vietnam Securities Depository shall report to the Ministry of Finance on the foreign investor ownership situation of bonds and the bond participation in collateral activities in the money market according to the form specified in Appendix 9 of this Circular.

Article 39. Information Disclosure

1. For listed bonds, before December 31 of each year, the Vietnam Securities Depository shall cooperate with the Hanoi Securities Trading Center to disclose information about the principal and interest payment dates of bonds in the following year on the Hanoi Securities Trading Center's and Vietnam Securities Depository's electronic news pages. Disclosed information includes:

a) Bond codes for principal and interest payments in the year;

b) Principal and interest payment dates for each bond code;

c) Final registration date for each bond code in the year.

2. For bonds issued through retail methods, before December 31 of each year, the State Treasury shall cooperate with the Hanoi Securities Trading Center to disclose information about principal and interest payments of bonds in the following year on the Hanoi Securities Trading Center's electronic news page.

Chapter VIII

RESPONSIBILITIES OF RELATED UNITS

Article 40. Responsibilities of the State Treasury

1. Organize the issuance, payment of interest and principal of government bonds, payment of issuance fees, and agency fees for interest and principal payments of government bonds in accordance with this Circular.

2. Develop regulations guiding the issuance of government bonds and the settlement of government bonds through the retail system of the State Treasury, to report to the Ministry of Finance for approval before promulgation.

3. Sign general contracts, guarantee contracts for the issuance of government bonds, and ensure that the main guarantor implements in accordance with the provisions of the contracts and this Circular.

4. Fully implement reporting systems and accounting records related to the issuance of government bonds in accordance with this Circular.

5. Coordinate with the Securities Depository Center, Hanoi Stock Exchange to publish information in accordance with this Circular.

Article 41. Responsibilities of the Hanoi Stock Exchange

1. Develop bidding regulations for the issuance of government bonds, regulations on the publication of bid prices for government bonds applicable to bidding members, to report to the Ministry of Finance before promulgation.

2. Organize the bidding for the issuance of government bonds in accordance with this Circular.

3. Provide necessary data and documents related to the bidding activities for the issuance of government bonds in accordance with this Circular and/or at the request of the Ministry of Finance.

4. Maintain and preserve information related to the bidding sessions for the issuance of government bonds in accordance with prescribed regulations.

5. Coordinate with the State Treasury and the Securities Depository Center to publish information in accordance with this Circular.

6. Implement listing or delisting of government bonds in accordance with this Circular.

Article 42. Responsibilities of the Securities Depository Center

1. Register, deposit or cancel registration and deposit of government bonds in accordance with this Circular.

2. Ensure the timely payment of interest and principal of government bonds in accordance with the timeframes set out in this Circular.

3. On the 25th day of each month, provide the State Treasury with expected codes to be issued for the first-time issuance of government bonds to inform bidding members and announce on the website of the Hanoi Stock Exchange in accordance with this Circular.

4. Provide necessary data and documents related to the management area in accordance with this Circular and/or at the request of the Ministry of Finance.

Chapter IX

IMPLEMENTATION

Article 43. Transitional Provisions

1. Bidding members recognized by the Hanoi Stock Exchange in accordance with Circular No. 21/2004/TT-BTC, guarantors and agents for issuing government bonds recognized by the Ministry of Finance in accordance with Circular No. 29/2004/TT-BTC, and bill bidding members recognized by the State Bank of Vietnam in accordance with Circular No. 19/2004/TT-BTC shall continue to participate in bill bidding sessions and government bond issuance until the Ministry of Finance announces the selection of bidding members in accordance with Chapter II of this Circular.

2. The Ministry of Finance will specifically notify the time for submitting applications to become bidding members and the period for evaluating the performance of bidding members separately for the years 2012 and 2013.

Article 44. Effective date of implementation

1. This Circular takes effect from March 26, 2012.

2. This Circular replaces the following guiding documents:

a) The contents guiding the issuance of government bonds stipulated in Decision No. 66/2004/QĐ-BTC dated August 11, 2004, issued by the Minister of Finance, guiding the procedures and formalities for the issuance of government bonds, government-guaranteed bonds, and local government bonds;

b) The contents guiding the issuance of government bonds stipulated in Circular No. 21/2004/TT-BTC dated March 24, 2004, issued by the Ministry of Finance, guiding the bidding for government bonds, government-guaranteed bonds, and local government bonds through centralized securities trading markets;

c) The contents guiding the issuance of government bonds stipulated in Circular No. 29/2004/TT-BTC dated April 6, 2004, issued by the Ministry of Finance, guiding the guarantee and agency issuance of government bonds, government-guaranteed bonds, and local government bonds;

d) Decision No. 46/2006/QĐ-BTC dated September 6, 2006, issued by the Minister of Finance, establishing the regulations for the issuance of large-scale government bonds;

đ) Circular No. 132/2010/TT-BTC dated September 7, 2010, guiding amendments and supplements to Decision No. 46/2006/QĐ-BTC dated September 6, 2006, issued by the Minister of Finance, establishing the regulations for the issuance of large-scale government bonds;

e) The contents guiding the bidding fees for government bonds, agency fees for interest and principal payments of government bonds stipulated in Circular No. 27/2010/TT-BTC dated February 26, 2010, regulating the collection, submission, management, and use of securities activity fees applied at stock exchanges and securities depository centers in Vietnam.

Article 45. Implementation

1. The Director of the Office, the Department Head of the Department of Finance of Banks and Financial Institutions, the Director General of the State Treasury, and the Heads of relevant units shall be responsible for implementing in accordance with the guidance provided in this Circular.

2. During the implementation process, if there are difficulties or obstacles, the State Treasury and relevant units shall promptly report to the Ministry of Finance for review and specific guidance./.