Circular No. 33/2019/TT-NHNN Amending and Supplementing Certain Articles of Circular No. 34/2013/TT-NHNN dated December 31, 2013, issued by the Governor of the State Bank of Vietnam, on the issuance of promissory notes, bills of exchange, deposit certificates, and domestic bonds by credit institutions and foreign bank branches.

CIRCULAR

||| Amending and supplementing certain provisions of Circular No. 34/2013/TT-NHNN dated December 31, 2013 issued by the Governor of the State Bank of Vietnam on the issuance of promissory notes, treasury bills, deposit certificates, and domestic bondsof credit institutionsOn the basis of the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017 (hereinafter referred to as the Law on Credit Institutions);organization credit institutions, foreign bank branches

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

On the basis of the Securities Law dated June 29, 2006 and the Law Amending and Supplementing Certain Provisions of the Securities Law dated November 24, 2010 (hereinafter referred to as the Securities Law);

On the basis of Decree No. 163/2018/ND-CP dated December 4, 2018 of the Government on the issuance of corporate bonds (hereinafter referred to as Decree No. 163/2018/ND-CP)

On the basis of Decree No. 16/2017/ND-CP dated February 17, 2017 of the Government on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam (hereinafter referred to as the State Bank) The Governor of the State Bank hereby issues this Circular amending and supplementing certain provisions of Circular No. 34/2013/TT-NHNN dated December 31, 2013 issued by the Governor of the State Bank on the issuance of promissory notes, treasury bills, deposit certificates, and domestic bonds of credit institutions and foreign bank branches (hereinafter referred to as Circular No. 34/2013/TT-NHNN).;

Article 1. Amending and supplementing certain provisions of Circular No. 34/2013/TT-NHNN:

Article 1.

"Article 11. Interest Rate

1. The interest rate of securities issued by credit institutions and foreign bank branches shall be determined in accordance with the current regulations on interest rates of the State Bank during each period. Specifically, for bond interest rates, they must comply with the provisions of the Securities Law, Decree No. 163/2018/ND-CP, and other guiding documents of the Securities Law.

1. Amend and supplement Article 11 as follows:

2. The method of calculating interest on securities shall be carried out in accordance with the regulations of the State Bank."

"Article 16. Payment of Securities

1. The method of principal and interest payment of securities issued by credit institutions and foreign bank branches shall be decided in accordance with relevant laws and regulations, and announced to buyers of securities before issuing the securities.

2. Amending and supplementing Article 16 as follows:

2. Early redemption of securities shall be decided by credit institutions and foreign bank branches based on the request of the buyer of securities, ensuring the safe operation of credit institutions and foreign bank branches. The interest rate applied for early redemption of securities shall comply with the regulations of the State Bank."

"1. Securities may be transferred through purchase, sale, gift, exchange, and inheritance in accordance with relevant laws and regulations."

"Article 18. Early Redemption of Bonds and Bond Swap

3. Amending and supplementing Clause 1 of Article 17 as follows:

Credit institutions shall carry out early redemption of bonds and bond swap in accordance with the provisions of the Securities Law, Decree No. 163/2018/ND-CP, and other related laws and regulations."

4. Amend and supplement Article 18 as follows:

"Article 20. Principles of Issuing Bonds

1. Credit institutions issuing individual bonds must comply with the provisions of Decree No. 163/2018/ND-CP, the provisions of this Circular, and other related laws and regulations. Specifically, regarding the conditions stipulated in Point g Clause 1 Article 10 of Decree No. 163/2018/ND-CP, credit institutions must comply with the provisions of Clause 1 Article 130 of the Law on Credit Institutions and the guidance of the State Bank.

5. Amending and supplementing Article 20 as follows:

2. Credit institutions issuing bonds to the public must comply with the provisions of the Securities Law, the provisions of this Circular, and other related laws and regulations."

"Article 21. Approval, Adoption, and Consent of the Bond Issuance Plan

1. The plan for issuing individual bonds must be approved by the competent authority in accordance with the provisions of Decree No. 163/2018/ND-CP.

6. Amending and supplementing Article 21 as follows:

2. The plan for issuing bonds to the public must be adopted by the competent authority of the credit institution in accordance with the Securities Law and must be consented to by the State Bank."

7. Amend and supplement Article 22 as follows:

"Article 22. Documents Requesting the State Bank's Consent to the Bond Issuance Plan to the Public

1. The request for consent to the bond issuance plan to the public by credit institutions must be signed by the legal representative of the credit institution, including an evaluation of the contents regarding meeting the conditions for issuing bonds to the public, at least including: Business results (net profit after tax) of the year immediately preceding the issuance year; subscribed charter capital at the time of issuance; cumulative profit or loss up to the issuance year; overdue debt over one year at the nearest point in time; plan of sources and use of funds for the issuance year.

2. The bond issuance plan to the public adopted by the competent authority of the credit institution must include at least the following contents:

a) Total face value of issuance;

b) Name of the bond, term, interest rate of the bond, target purchasers of the bond;

c) Place of issuance, form of issuance, method of issuance;

d) For cases of issuing convertible bonds or bonds accompanied by warrants, the issuance plan must include the contents specified in Clause 1 Article 24 of this Circular.

3. The plan for using and repaying the proceeds from issuing bonds to the public must be adopted by the competent authority of the credit institution. The adoption of the plan for using and repaying the proceeds from issuing bonds to the public is the adoption of the plan for issuing bonds to the public by the competent authority of the credit institution.

4. Commitment to fulfill obligations of the credit institution towards bondholders regarding issuance conditions, payment, guaranteeing the legitimate rights and interests of bondholders, and other conditions.

5. Decision of the competent authority of the credit institution adopting the bond issuance plan to the public and the plan for using and repaying the proceeds from issuing bonds to the public."

"Article 23. Procedures for the State Bank's Consent to the Bond Issuance Plan to the Public of Credit Institutions

5. The decision of the competent authority of the credit institution approving the Issuance Plan for public bond issuance, the Utilization and Repayment Plan for funds obtained from public bond issuance."

8. Amend and supplement Article 23 as follows:

Article 23. Procedures for approving the Issuance Plan for public bond issuance of credit institutions.

1. A credit institution shall submit one set of documents requesting approval of the Bond Issuance Plan to the State Bank (Department of Monetary Policy) in accordance with Article 22 of this Circular. In case the documents are incomplete or invalid, within seven working days from the date of receipt of the documents, the State Bank shall issue a document requesting the credit institution to supplement and complete the documents.

2. Within thirty working days from the date of receipt of complete and valid documents, the State Bank shall provide its written opinion on approving or not approving the Bond Issuance Plan.

9. Amend and supplement Article 24 as follows:

"Article 24. Requirements for the issuance of convertible bonds and bonds accompanied by warrant rights

1. In case a credit institution issues convertible bonds or bonds accompanied by warrant rights, the Bond Issuance Plan must include contents regarding the conversion of bonds into shares and the exercise of the right to purchase shares for bonds accompanied by warrant rights as follows:

a) The bond purchaser must comply with current laws regarding the limit on capital contribution and share purchase at the time of converting bonds into shares and exercising the right to purchase shares for bonds accompanied by warrant rights;

b) The conversion of convertible bonds into shares and the exercise of the right to purchase shares for bonds accompanied by warrant rights can only be carried out after the State Bank approves the increase in charter capital in accordance with the State Bank's regulations on the procedures and formalities for approving the increase in charter capital of credit institutions.

2. When converting convertible bonds into shares and exercising the right to purchase shares for bonds accompanied by warrant rights, the credit institution and the purchaser of convertible bonds or bonds accompanied by warrant rights shall implement in accordance with the State Bank's regulations on the procedures and formalities for approving the increase in charter capital of credit institutions."

10. Amending and supplementing Article 25 as follows:

"Article 25. Issuing entities

1. Credit institutions and foreign bank branches shall proactively organize periods of issuing promissory notes, bills of exchange, and deposit certificates in accordance with Article 19 of this Circular.

2. Credit institutions shall organize the issuance of individual bonds according to the Bond Issuance Plan that has been approved by the competent authority and in compliance with Decree No. 163/2018/NĐ-CP.

3. Credit institutions shall organize the issuance of bonds to the public according to the Bond Issuance Plan that has been approved and in compliance with the Securities Law."

11. Amend and supplement Clause 3 of Article 26 as follows:

"3. To bear responsibility for the accuracy, truthfulness, and completeness of the documents in the set of documents requesting the State Bank to approve the Bond Issuance Plan of the credit institution."

12. Amend and supplement Article 27 as follows:

"Article 27. Units under the State Bank

1. The Department of Monetary Policy shall take the lead and coordinate with relevant units to examine requests for approval of the Bond Issuance Plan of credit institutions and submit to the Governor of the State Bank for decision.

2. Banking Inspection and Supervision Authority

a) Provide information requested by the Department of Monetary Policy regarding whether the credit institution's issuance of bonds to the public meets the conditions stipulated in the Securities Law;

b) Coordinate with the Department of Monetary Policy to review and provide specific opinions on approving or not approving the Bond Issuance Plan of the credit institution;

c) Supervise, inspect, and handle according to their authority or recommend the Governor of the State Bank to handle cases of violation of the provisions of this Circular.

3. The Department of Finance and Accounting shall submit to the Governor for guidance on financial and accounting matters related to the issuance of securities by credit institutions and foreign bank branches."

Article 2. Implementation clause

1. This Circular takes effect from February 19, 2020.

2. This Circular abolishes:

a) Clause 5, Clause 6 of Article 2; Appendix 01; Appendix 02 of Circular No. 34/2013/TT-NHNN;

b) Circular No. 16/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank on amending and supplementing some articles of Circular No. 34/2013/TT-NHNN.

3. For Bond Issuance Plans that have been approved by the competent authority of the credit institution or have been approved by the State Bank before the effective date of this Circular, the credit institution shall continue to implement the approved Bond Issuance Plan, except in cases where the credit institution repurchases bonds early, which shall be implemented in accordance with the Securities Law, Decree No. 163/2018/NĐ-CP, and other relevant laws.

Article 3. Implementation Organization

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