Circular No. 22/2016/TT-NHNN on the organization of credit institutions and foreign bank branches purchasing corporate bonds

CIRCULAR

Regarding the organization of credit institutions and foreign bank branches to purchase and sell corporate bonds

thực hiện việc mua trái phiếu doanh nghiệp của nước ngoài

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam issues the Circular stipulating the organization of credit institutions and foreign bank branches purchasing corporate bonds.

Article 1. Scope of Regulation and Applicability

Thông tư này quy định chi tiết khoản 4 Điều 38 Luật Thủy sản số 18/2017/QH14 đã được sửa đổi, bổ sung tại điểm c khoản 21 Điều 14 Luật số 146/2025/QH15.

a) This Circular stipulates the purchase of corporate bonds by credit institutions and foreign bank branches within the territory of the Socialist Republic of Vietnam;

b) This Circular does not stipulate the purchase of bonds issued by credit institutions and foreign bank branches; the purchase of bonds issued by the Vietnam Asset Management Company Limited; the purchase of corporate bonds between credit institutions and foreign bank branches; the purchase with term or purchase with reservation of right to claim corporate bonds in the form of discount; the purchase of bonds issued on the international market.

Thông tư này áp dụng đối với tổ chức, cá nhân có liên quan đến hoạt động kinh doanh đối tượng thủy sản nuôi chủ lực trên lãnh thổ Việt Nam.

a) Credit institutions and foreign bank branches that may purchase corporate bonds are credit institutions and foreign bank branches established and operating in accordance with the Law on Credit Institutions, including commercial banks; financial companies; foreign bank branches;

b) Corporate bond issuers are enterprises established and operating within the territory of the Socialist Republic of Vietnam in accordance with the Enterprise Law and relevant laws, issuing bonds for sale to buyers as prescribed by the Law on Corporate Bond Issuance and the Law on Public Offering of Securities;

c) Individuals and legal entities that are not credit institutions or foreign bank branches are resident persons related to the activity of purchasing corporate bonds as stipulated in this Circular.

Article 2. Interpretation of Terms

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

1. Corporate bonds are debt securities issued by enterprises, confirming the enterprise's obligations to pay principal, interest, and other obligations (if any) to the corporate bond owner.

2. Convertible bonds are bonds issued by joint-stock companies that can be converted into ordinary shares of the issuing enterprise according to conditions determined in the bond issuance plan.

Article 3. Principles for Purchasing Corporate Bonds

1. The purchase of corporate bonds by credit institutions and foreign bank branches must be carried out in accordance with the Law on Credit Institutions, the Securities Law, the Enterprise Law, this Circular, and relevant legal provisions.

2. Credit institutions and foreign bank branches purchasing corporate bonds must have an internal credit rating system, rate the issuing enterprise, and issue internal regulations on purchasing corporate bonds in compliance with this Circular and relevant legal provisions, including at least the following contents:

a) Procedures and formalities for assessing, approving, and deciding to purchase corporate bonds; principles for delegating authority and decision-making levels for purchasing corporate bonds; regulations on managing risks in the activity of purchasing corporate bonds, ensuring transparency between the assessment and decision-making stages;

b) Principles, criteria, and methods for evaluating and determining the risk level of purchasing corporate bonds for different types of enterprises and corporate bonds;

c) Policies and limits for credit management, risk measurement systems, and risk governance, conditions, measures, and procedures for handling risks;

d) Internal control over the activity of purchasing corporate bonds.

3. The purchase of convertible bonds must be carried out in accordance with the Law on Credit Institutions and guidelines from the State Bank of Vietnam regarding capital contribution and share purchases.

4. The currency used in transactions for purchasing corporate bonds is the Vietnamese Dong.

5. Credit institutions and foreign bank branches are not allowed to borrow funds from other credit institutions and foreign bank branches to purchase corporate bonds.

Article 4. Types of corporate bonds that may be purchased

1. Corporate bonds issued in accordance with the laws on corporate bond issuance.

2. Corporate bonds issued in accordance with the laws on public offering of securities, except for cases stipulated in Clause 3, Article 6 of this Circular.

Article 5. Responsibilities of credit institutions and foreign bank branches

1. Appraise and examine the issuance plan and conditions for issuing corporate bonds to consider and decide on purchasing corporate bonds when meeting the requirements:

a) For the purchase of corporate bonds issued for the first time (including cases where credit institutions purchase remaining corporate bonds not sold according to the commitment to guarantee the issuance of corporate bonds):

(i) The bonds are issued in compliance with the provisions of the law;

(ii) The purpose of using funds from the issuance of corporate bonds by the enterprise is lawful and consistent with the issuance plan;

(iii) The enterprise issuing the bonds has the financial capacity to ensure timely payment of principal and interest on the bonds;

(iv) The enterprise issuing the bonds commits to repurchasing the bonds before the maturity date if the enterprise violates the laws on corporate bond issuance or deviates from the issuance plan.

b) For the repurchase of corporate bonds from legal entities and individuals:

(i) The requirements stipulated in point a of this clause;

(ii) The corporate bonds must belong to the ownership of the selling legal entity or individual, without disputes, not under pledge or mortgage for other obligations; not yet due for principal repayment; permitted to trade in accordance with current laws.

2. Implement the signing of contracts to purchase unlisted corporate bonds in compliance with relevant laws and the following provisions:

a) A bond purchase contract must include at least the following contents: Quantity of bonds purchased, purchase price of bonds, total purchase amount, bond interest rate; method of payment for the purchase amount; term and method of bond repayment; handling breaches of the bond purchase contract by the parties; handling disputes arising. Other contents shall be agreed upon by the parties in the contract in compliance with this Circular and relevant laws;

b) Guarantee contract for the case of purchasing guaranteed bonds in compliance with the laws on secured transactions.

3. Monitor or through the bond issuance agent, monitor the use of funds from the issuance of corporate bonds by the enterprise; in case the enterprise issuing the bonds uses the funds from the issuance of corporate bonds for purposes inconsistent with the content of the issuance plan and commitments to bondholders, the credit institution or foreign bank branch shall require the enterprise to repurchase the bonds before the maturity date.

4. Require the enterprise issuing the bonds to repay the bonds when they mature; in case the enterprise issuing the bonds is unable to repay the bonds when they mature, the credit institution and foreign bank branch shall handle the collateral assets for guaranteed bonds in accordance with the law, request the guarantor to fulfill the obligation to repay the guaranteed bonds, initiate legal proceedings against the enterprise or the guarantor for violating the repayment commitments.

5. Handle issues arising during the process of purchasing corporate bonds in compliance with relevant laws to ensure the ability to recover the principal and interest of corporate bonds.

Article 6. Limitations on Purchasing Corporate Bonds

1. The total outstanding amount from purchasing corporate bonds shall be included in the total credit limit for a customer, for a customer and related parties, as stipulated in Article 128 of the Law on Credit Institutions and the regulations of the State Bank of Vietnam regarding limits and safety ratios in the operations of credit institutions and foreign bank branches.

2. Credit institutions and foreign bank branches shall specify the limitations on purchasing corporate bonds: purchasing corporate bonds issued by one issuer; purchasing corporate bonds issued by one issuer and related issuers; purchasing secured and unsecured corporate bonds; purchasing corporate bonds with the purpose of selling, investing, and holding until maturity.

3. Foreign bank branches shall not purchase convertible bonds.

Article 7. Risk Weights, Provisions, and Risk Management for Outstanding Amounts from Purchasing Corporate Bonds

1. The risk weight for the outstanding amount from purchasing corporate bonds shall be implemented according to the regulations of the State Bank of Vietnam regarding safety ratios in the operations of credit institutions and foreign bank branches.

2. Credit institutions and foreign bank branches shall implement provisions and risk management for the outstanding amount from purchasing corporate bonds as follows:

a) For corporate bonds that have been listed on the securities market or registered for trading on the over-the-counter market of non-listed public companies (UPCom), credit institutions and foreign bank branches shall carry out the provision for impairment of investment in corporate bonds and manage the provision according to the laws and guidelines of the Ministry of Finance on the system of provisions and usage of provisions for impairment of financial investments.

b) For corporate bonds that have not been listed on the securities market or registered for trading on the over-the-counter market of non-listed public companies (UPCom), credit institutions and foreign bank branches shall establish provisions for risks for the outstanding amount from purchasing corporate bonds according to the regulations of the State Bank of Vietnam on the level of provisions, methods of establishing provisions for risks, and the use of provisions to manage risks in the operations of credit institutions and foreign bank branches.

Article 8. Accounting, Statistics, and Retention of Documentation for Purchasing Corporate Bonds

1. Accounting for purchasing corporate bonds shall be carried out according to the regulations of the State Bank of Vietnam on the accounting system of credit institutions and foreign bank branches.

2. Statistical reports on the activity of purchasing corporate bonds shall be submitted according to the regulations of the State Bank of Vietnam on the statistical reporting system of credit institutions and foreign bank branches.

3. Documentation for purchasing corporate bonds shall be retained according to the laws on retaining credit documentation.

Article 9. Implementation Organization

1. This Circular takes effect from August 15, 2016, and replaces Circular No. 28/2011/TT-NHNN dated September 1, 2011, which stipulates the activities of credit institutions and foreign bank branches in purchasing corporate bonds.

2. Based on the provisions of this Circular and relevant laws, credit institutions and foreign bank branches shall issue new or amend internal regulations on purchasing corporate bonds and submit them to the Banking Supervisory Authority immediately upon issuance or amendment to serve as the basis for supervising the activities of purchasing corporate bonds by credit institutions and foreign bank branches.

3. For contracts for purchasing corporate bonds signed before the effective date of this Circular, credit institutions and foreign bank branches and customers shall continue to perform the contents of the signed bond purchase contracts or agree to amend and supplement the bond purchase contracts in accordance with the provisions of this Circular.

4. The Director of the Office, the Head of the Monetary Policy Department, and the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities; the Chairmen of the Board of Directors, the Chairmen of the Board of Members, and the General Managers (Directors) of credit institutions and foreign bank branches are responsible for implementing this Circular./.