Circular No. 34/2013/TT-NHNN on the issuance of promissory notes, acceptance bills, deposit certificates, and domestic bonds by credit institutions and foreign bank branches

CIRCULAR

Article 24regulations on the issuance of promissory notes, acceptance bills, deposit certificates, domestic bonds

of credit institutions, foreign bank branchesi

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Pursuant to the Law on the State Bank of Vietnam No.No. 46/2010/QH12 days 1June 6, 202010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH1312 dated June 16, 2010;

Pursuant to the Enterprise Law No. 60/2005/QH1111 of the National Assembly on the 7th Session of the 15th National Assembly; 11 b) Circular No. 03/2015/TT-BKHĐT dated May 6, 2015 of the Minister of Planning and Investment detailing the preparation of construction tender documents.

Pursuant to the Securities Law No. 70/2006/QH1111 dated June 29, 2006 and the Law Amending and Supplementing Certain Provisions of the Securities Law No. 62/2011/QH11No. of the Securities Law No. 62/2011/QH1110/QH124 December 2011 11 in 2010;

|||依据国家保密法 lBASED ON THE FOREIGN EXCHANGE ORDINANCE AMENDMENT ON MARCH 18, 2013;No.i number 28/2005/PL-UBTVQH11The decision to switch the issuance of coats, overcoats, windbreakers, and down jackets to other uniforms for civil servants working at the National Market Management and Development Agency is decided by the Minister of Industry and Trade.QH11 dated December 13, 2005;

Pursuant to Decree No. 90/2011/ND-CP11/NĐ-CP dated 110 October 20111 of Decree No. 81/2013/NĐ-CP on the issuance of corporate bonds;

Pursuant to Decreeand amended and supplemented by certain articles related to conditions for investment and business and administrative procedures in the field of information and communications on November 7, 2018Decree No. 56/2013/NĐ-CP dated 11 the 11 Pursuant to Decree No. 32/2019/NĐ-CP dated April 10, 2019 of the Government on assigning tasks, procurement or tendering for the supply of products and services using state budget from regular operating expenses;1of At the proposal of functions, tasks, powers and organizational structureof the Government stipulating functions, tasks, powers, and organizational structure of the Ministry of Home Affairsu organization of the State Bank of Vietnam (hereinafter referred to as the State Bank);

At the proposal of the Director of the Department of Tax Policy,"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."monetary policy;

The Governor of the State Bank issues this Circular to regulate the issuance of promissory notes, acceptance bills, deposit certificates, and domestic bonds by credit institutions and foreign bank branches for the purpose of raising capital within the territory of Vietnam. organization credit institutions and foreign bank branches.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular regulates the issuance of promissory notes, acceptance bills, deposit certificates, and domestic bonds by credit institutions and foreign bank branches for the purpose of raising capital within the territory of Vietnam.

2. Public offerings, custody, listing, and trading of bonds issued by credit institutions and foreign bank branches on the securities market shall be carried out in accordance with this Circular and relevant securities laws.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. Promissory notes, acceptance bills, deposit certificates, and bonds (hereinafter referred to as negotiable instruments) are evidence of debt obligations between credit institutions, foreign bank branches issuing such instruments and the buyers of such instruments within a specified period, interest payment conditions, and other conditions.

2. Registered negotiable instruments are negotiable instruments issued in certificate form or book-entry form with the name of the holder recorded.

3. Unregistered negotiable instruments are negotiable instruments issued in certificate form without the name of the holder recorded. Unregistered negotiable instruments belong to the owner who holds them.

4. The term of negotiable instruments is the period from the date of issuance to the maturity date. Short-term negotiable instruments have a term of less than one year, long-term negotiable instruments have a term of one year or more, and bonds have a term of one year or more.

5. Fixed interest rate is an interest rate that remains unchanged throughout the term of the negotiable instrument.

6. Periodically adjustable interest rate is an interest rate that changes periodically according to the market, agreed upon by credit institutions, foreign bank branches and the buyer at the time of issuance.

7. Prepaid interest is the sale of negotiable instruments at a price lower than their face value, with the buyer receiving the face value amount when the negotiable instrument matures.

8. Interest paid at maturity is the payment of interest together with the principal when the negotiable instrument matures.

9. Periodic interest payments are interest payments made based on periodic interest payment vouchers agreed upon by credit institutions, foreign bank branches and the buyer of the negotiable instrument.

10. Bond conversion period is the period from when the issuer begins implementing bond conversion until the end of the bond conversion process.

11. Fiscal year starts on January 1 and ends on December 31 of each calendar year.

Article 3. Applicability

1. Issuers of negotiable instruments as stipulated in Article 4 of this Circular.

2. Buyers of negotiable instruments as stipulated in Article 5 of this Circular.

Other organizations and individuals related to the issuance of securities of credit institutions, foreign bank branches.

Article 4. Objects issuing securities

1. Commercial banks.

2. Branches of foreign banks operating in Vietnam.

3. Financial companies and financial leasing companies issuing securities to raise capital from organizations.

4. Vietnamese Cooperative Joint Stock Banks issuing securities according to the provisions in the License for Establishment and Operation.

Article 5. Subjects purchasing securities

1. The subjects purchasing securities are Vietnamese organizations and individuals, and foreign organizations and individuals. The subjects purchasing securities issued for the first time on the primary market by credit institutions and branches of foreign banks do not include credit institutions and branches of foreign banks, and subsidiaries of credit institutions.

2. In cases where credit institutions, branches of foreign banks, and subsidiaries of credit institutions are existing shareholders of the issuing credit institution, they may purchase convertible bonds and bond warrants of that credit institution based on compliance with legal regulations on capital contribution and share purchases.

Article 6. Proportion of ownership of foreign organizations and individuals' bonds

The proportion of ownership of listed bonds on the stock exchange by foreign organizations and individuals must comply with the regulations of the State Bank of Vietnam and related legal documents during each period.

Article 7. Forms of issuance

1. Credit institutions and branches of foreign banks issue securities in the form of registered securities and bearer securities.

2. For foreign organizations and individuals purchasing securities, credit institutions and branches of foreign banks can only issue securities in the form of registered securities.

3. In cases of issuing securities through book-entry, credit institutions and branches of foreign banks shall issue certificates of ownership of securities to the purchasers.

Article 8. Contents of securities

1. Securities must include the following contents:

a) Name of the issuing organization;

b) Name of the security (promissory note, bill, deposit certificate, bond, convertible bond, bond warrant);

c) Face value, term, date of issuance, maturity date;

d) Interest rate, interest payment method, interest payment date, principal and interest repayment location of the security;

e) Clearly indicate whether the security is registered or bearer;

g) For registered securities, clearly state the name of the organization, establishment license number or business registration certificate number, address of the organization purchasing the security (if the purchaser is an organization); name, identification card number or passport number, address of the individual purchasing the security (if the purchaser is an individual);

h) For convertible bonds, clearly state the conversion period of the bond and the conversion ratio of the bond into shares;

i) For bond warrants, clearly state the conditions for purchasing common shares of the warrant holder, the number of shares that can be purchased per warrant unit, other rights and responsibilities of the warrant holder;

k) Issuance series number and symbol;

l) The attached interest payment voucher must include details related to the security (series number, face value), interest rate, amount receivable, interest payment period;

m) Signature of the legal representative of the credit institution or branch of a foreign bank issuing the security or a person authorized under the law, and other signatures as prescribed by the credit institution or branch of a foreign bank;

n) Other contents related to the security.

2. Securities issued in the form of certificates must be designed and printed to ensure high anti-counterfeiting capabilities.

Article 9. Currency for issuance and payment

Valuable papers shall be issued and settled in Vietnamese Dong.

Article 10. Par value of securities

1. The minimum par value of securities is one hundred thousand (100,000) VND. Par values higher than the minimum must be multiples of the minimum par value.

2. The face value of valuable papers (excluding bonds) issued in the form of certificates shall be printed in advance or agreed upon by credit institutions, foreign bank branches issuing such papers with the buyers.

3. The face value of bonds issued in the form of certificates shall be printed on the bonds.

4. The par value of securities issued in the form of book-entry records shall be agreed upon by credit institutions and foreign bank branches with the purchaser.

Article 11. Interest Rates

1. The interest rate on securities issued by credit institutions and foreign bank branches shall be determined in accordance with market interest rates and current regulations on interest rates set by the State Bank during each period, ensuring business efficiency and operational safety for credit institutions and foreign bank branches.

2. During the issuance period of securities, credit institutions and foreign bank branches may independently adjust the interest rate on securities in compliance with the State Bank's regulations on interest rate adjustments during each period.

Article 12. Issuance date and maturity date for bonds

1. Bonds issued in the same batch and with the same term shall be recorded with the same issuance date and maturity date.

2. The issuance date and maturity date for other securities shall be stipulated by credit institutions and foreign bank branches.

Article 13. Methods of issuing securities

1. Credit institutions and foreign bank branches may issue securities through direct issuance, guarantee issuance, agency issuance, and auction methods.

2. Direct issuance, guarantee issuance, agency issuance, and auction issuance of securities shall comply with legal provisions.

3. Fees for guarantee issuance, agency issuance, and auction of securities issued by credit institutions and foreign bank branches shall be agreed upon with the guarantors, agents, and auction organizers of such securities.

Article 14. Participants in Auctions, Guarantees, and Agency Issuances

1. Participants in agency issuance of securities include securities companies, credit institutions (excluding financial leasing companies), foreign bank branches, and other organizations permitted to provide agency issuance services under legal provisions.

2. Participants in auctions and guarantee issuances of securities include securities companies and other organizations (excluding credit institutions, foreign bank branches, and subsidiaries of credit institutions) permitted to provide auction and guarantee issuance services under legal provisions.

Article 15. Procedures for Issuing and Paying Securities

Procedures for issuing and paying securities shall be stipulated by credit institutions and foreign bank branches in accordance with their specific characteristics and management models, current legal provisions, ensuring accurate and safe issuance and payment of securities.

Article 16. Payment of Securities and Repurchase of Bonds

1. Credit institutions and foreign bank branches shall pay the principal amount to the purchaser of securities when the securities mature.

2. Credit institutions and foreign bank branches shall pay interest either in advance, in one lump sum at maturity, or periodically.

3. Credit institutions and foreign bank branches shall agree on fixed interest rates or adjustable periodic interest rates.

4. Early redemption of securities by credit institutions and foreign bank branches shall be decided based on the purchaser's request, in compliance with organizational and operational regulations, ensuring the safety of operations of credit institutions and foreign bank branches.

5. Credit institutions and foreign bank branches may repurchase bonds they have issued based on the State Bank's approval for bond issuance requests.

Article 17. Transfer of Ownership of Valuable Instruments and Handling Other Risk Cases

1. Securities may be transferred ownership through purchase, sale, gift, exchange, and inheritance in accordance with legal provisions. However, individual convertible bonds and warrant certificates attached to individual bonds may not be transferred within a minimum period of one year from the completion of the issuance round, except in cases of transfer between professional securities investors.

2. Procedures for transferring ownership of securities, handling risk situations (damage, tearing, loss of securities, and other risks) shall be stipulated by credit institutions and foreign bank branches in compliance with legal provisions, consistent with their business characteristics and conditions, and ensuring the legitimate rights of security holders.

Article 18. Exchange of Bonds

Credit institutions and foreign bank branches shall carry out bond exchanges in accordance with the regulations of the State Bank and relevant legal documents.

Chapter II

ISSUE OF SECURITIES

Article 19. Issuance of Promissory Notes, Bills of Credit, Deposit Certificates

Credit institutions and foreign bank branches may independently organize issuance sessions for promissory notes, bills of credit, and deposit certificates when complying with safety ratios as stipulated in Clause 1 of Article 130 of the Law on Credit Institutions and guidelines issued by the State Bank.

Article 20. Conditions for Bond Issuance

Credit institutions and foreign bank branches are eligible to issue bonds (including convertible bonds and bonds with warrants) if they meet the following conditions:

1. Compliance with safety ratios as stipulated in Clause 1 of Article 130 of the Law on Credit Institutions and guidelines issued by the State Bank.

2. Having at least one year of operation from the date of commencing operations.

3. Profitable business results according to the audited financial statements of the immediately preceding year and the most recent quarter's business results.

In cases where issuance occurs before April 1st of each year without an audited financial statement of the immediately preceding year, there must be:

a) An audited financial statement of the year prior to the immediately preceding year showing profitable business results;

b) The financial statement of the immediately preceding year with profitable business results approved by the Board of Directors or the Board of Members for credit institutions; by the General Director or Director for foreign bank branches.

4. The audited financial report of the credit institution or foreign bank branch issuing bonds must express an unqualified opinion.

5. For the issuance of convertible bonds and bonds with warrants by credit institutions that are joint-stock companies, in addition to meeting the provisions of Clauses 1, 2, 3, and 4 of this Article, they must also satisfy the following conditions:

a) The plan to increase the charter capital from the issuance of convertible bonds and bonds with warrants for the fiscal year must be approved by the Shareholders' Meeting and consented to by the State Bank;

b) Separate issuances of convertible bonds by credit institutions must be at least six months apart;

c) In cases where the credit institution issues with a commitment to convert bonds into shares upon maturity, the buyer of the bonds must comply with current laws regarding limits on investment and share purchases from the time of issuance;

- The buyer of the bonds must comply with current laws regarding limits on investment and share purchases from the time of issuance;

- The credit institution issuing must comply with conditions for selling shares to foreign investors as stipulated by current laws from the time of issuance.

6. Approval from the State Bank.

Article 21. Plan for Bond Issuance

1. The bond issuance plan includes the following basic contents:

a) Business results of the immediately preceding year and the most recent quarter;

b) Purpose of issuance and plan for using the proceeds from the bond issuance;

c) Total face value of issuance, name of the bond, currency of issuance, place of issuance, form of issuance, term, interest rate, method of paying interest, place of paying principal and interest, target buyers of the bond, terms and conditions regarding rights and obligations of the credit institution or foreign bank branch and the buyer, other commitments to the buyer of the bond;

d) Method of bond issuance; organizations participating in underwriting and distribution (if any);

e) Source for repaying principal and interest on the bond;

g) Method of repaying principal and interest on the bond;

h) For the issuance plan of convertible bonds, additional content on conditions and term for converting bonds, conversion ratio of bonds into shares, conversion price, stock price fluctuation range, and other commitments (if any) must be included;

i) For the issuance plan of bonds with warrants, additional content on conditions for purchasing common shares of the warrant holder, number of shares purchasable per warrant unit, purchase price and timing of share purchase must be included;

k) If there is a plan to repurchase bonds, it must clearly state the purpose of repurchasing, estimated total face value to be repurchased, source of funds for repurchasing, expected repurchase period, and other related information;

l) Other commitments to the buyer of the bond.

2. The bond issuance plan must be approved by the Board of Directors or the Board of Members of the credit institution or the General Director (Director) of the foreign bank branch. The issuance plan of convertible bonds and bonds with warrants by credit institutions must be approved by the Shareholders' Meeting.

Article 22. Documents for requesting issuance of bonds for the fiscal year

1. Request for issuance of bonds for the fiscal year.

2. Plan for issuance of bonds for the fiscal year as prescribed in Article 21 of this Circular.

3. Financial reports of the most recent year before the issuance year that have been audited and the latest quarterly financial report (certified copies). In cases where there is no audited annual financial report of the preceding year, the credit institution or foreign bank branch shall submit financial reports as stipulated in Clause 3, Article 20 of this Circular and provide a written commitment to supplement the financial report after receiving the audit results.

4. Plan on sources of funds and use of funds for the fiscal year.

5. Charter and License for credit institutions issuing bonds for the first time, License for establishment for foreign bank branches issuing bonds for the first time (certified copies).

6. Plan for increasing charter capital from the issuance of convertible bonds and warrants-attached bonds approved by the General Shareholders' Meeting, which must include contents according to current regulations of the State Bank on changes in charter capital of credit institutions (in case of issuance of convertible bonds and warrants-attached bonds).

7. Other changes related to bond issuance (if any).

8. Written request for bond issuance signed by the legal representative of the credit institution or foreign bank branch. The legal representative of the credit institution or foreign bank branch may authorize another person to sign; the authorization document must comply with the provisions of the law.

Article 23. Procedures for approving requests for bond issuance

1. Credit institutions and foreign bank branches issuing bonds (including convertible bonds and warrants-attached bonds) shall directly send or send via postal service one set of documents for requesting issuance of bonds for the fiscal year to the State Bank (Department of Monetary Policy).

2. For requests for issuance of bonds (excluding convertible bonds and warrants-attached bonds), within thirty working days from the date of receipt of complete and valid documents, the State Bank shall issue a written response regarding approval or disapproval of the request for issuance of bonds for the fiscal year of the credit institution or foreign bank branch.

3. For requests for issuance of convertible bonds and warrants-attached bonds, within forty-five working days from the date of receipt of complete and valid documents, the State Bank shall issue a written response regarding approval or disapproval of the request for issuance of convertible bonds and warrants-attached bonds for the fiscal year of the credit institution.

Article 24. Limits for purchasers of convertible bonds and warrants-attached bonds

At the time of conversion into shares or at the time of purchase of shares, the purchaser of convertible bonds and warrants-attached bonds must ensure the shareholding ratio in accordance with the current provisions of the Law on Credit Institutions and relevant legal documents.

Article 25. Issuer of securities

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 and foreign bank branches organize bond issuances within the scope of the approved issuance plan for the fiscal year by the State Bank.

3. Not later than the tenth day of the first month of the next quarter immediately following the reporting quarter, credit institutions and foreign bank branches shall report the results of securities issuance and the results of bond repurchase in writing according to the form prescribed in Appendix 01 and Appendix 02 issued together with this Circular to the State Bank (Department of Monetary Policy; Banking Supervision Agency) and the State Bank branch in the province or centrally-administered city where the credit institution or foreign bank branch has its main office.

4. In cases where credit institutions and foreign bank branches are approved by the State Bank to issue bonds but do not organize the issuance, not later than January 10 of the following year, credit institutions and foreign bank branches must report to the State Bank (Department of Monetary Policy; Banking Supervision Agency).

Chapter III

RESPONSIBILITIES OF FINANCIAL INSTITUTIONS AND BRANCHES

FOREIGN BANKS, AND

UNITS BELONGING TO THE STATE BANK

Article 26. Credit institutions, foreign bank branches

1. Shall be responsible for issuing securities, managing and using capital from issuing securities effectively, for their intended purposes, ensuring safe business operations in accordance with this Circular and related legal documents.

2. Shall publicly disclose information on the issuance of securities; shall be responsible for the accuracy and truthfulness of the disclosed information.

3. Shall be responsible for the accuracy, truthfulness, and completeness of the documents in the application file for issuing bonds.

4. Shall pay principal and interest on time and fully to the purchasers of securities.

5. In cases where convertible bonds or warrant-linked bonds are issued to foreign investors, when the conversion period into shares or the purchase period of shares arrives, credit institutions must meet the conditions for selling shares to foreign investors as stipulated by current laws.

Article 27. Units under the State Bank of Vietnam

1. Monetary Policy Department

a) Receive the application files for issuing bonds for the fiscal year, receive reports on the results of issuing securities from credit institutions and foreign bank branches.

b) Send the file on the plan to increase charter capital from issuing convertible bonds or warrant-linked bonds to the Banking Inspection and Supervision Authority for submission to the Governor of the State Bank of Vietnam for consideration and decision.

c) Take the lead and coordinate with relevant units to consider the application for issuing bonds for the fiscal year for submission to the Governor of the State Bank of Vietnam for consideration and decision.

2. Banking Inspection and Supervision Authority

a) Provide to the Monetary Policy Department:

- An assessment of compliance with safety ratios of credit institutions and foreign bank branches as prescribed in Clause 1, Article 20 of this Circular.

- Business operation results according to the audited financial report of the immediately preceding year and the most recent quarter's business operation results of credit institutions and foreign bank branches.

- An evaluation of the operational situation of credit institutions and foreign bank branches through the process of inspection and supervision.

b) Consider and submit to the Governor of the State Bank of Vietnam for approval or disapproval of the plan to increase charter capital from issuing convertible bonds or warrant-linked bonds, and notify the result to the Monetary Policy Department.

c) Coordinate with the Monetary Policy Department to review and provide specific opinions on the approval or disapproval of the application for issuing bonds from credit institutions and foreign bank branches.

d) Inspect, supervise, and handle violations of the provisions of this Circular within its authority or recommend the Governor of the State Bank of Vietnam to handle such cases.

3. Foreign Exchange Management Department

Coordinate with the Monetary Policy Department to review and provide specific opinions on the approval or disapproval of the application for issuing bonds from credit institutions and foreign bank branches.

4. Department of Finance and Accounting

Guide accounting entries for the issuance of securities by credit institutions and foreign bank branches.

5. Issuance and Treasury Department

Guide credit institutions and foreign bank branches on designing templates and printing securities that ensure high anti-counterfeiting capabilities when requested by credit institutions and foreign bank branches.

6. State Bank of Vietnam Branches in provinces and centrally-administered cities shall coordinate with the Monetary Policy Department to provide specific opinions on the issuance of convertible bonds or warrant-linked bonds by credit institutions headquartered in their respective areas.

Article 28. Handling Violations

Organizations and individuals violating the provisions of this Circular shall be subject to handling according to the law, depending on the nature and extent of the violation.

Chapter IV

IMPLEMENTATION

Article 29. Effective Date

1. This Circular takes effect from February 14, 2014.

2. This Circular replaces the following documents:

a) Decision No. 07/2008/QĐ-NHNN dated March 24, 2008 of the Governor of the State Bank of Vietnam promulgating the Regulations on the issuance of securities within the country by credit institutions;

b) Circular No. 16/2009/TT-NHNN dated August 11, 2009 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of the Regulations on the issuance of securities within the country by credit institutions issued together with Decision No. 07/2008/QĐ-NHNN dated March 24, 2008 of the Governor of the State Bank of Vietnam;

c) Article 5 of Circular No. 26/2011/TT-NHNN dated August 31, 2011 on implementing plans to simplify administrative procedures in the monetary sector according to Government Resolutions on simplifying administrative procedures within the scope of management functions of the State Bank of Vietnam;

d) Document No. 5647/NHNN-CSTT dated May 29, 2007 on issuing securities for foreign non-resident investors.

3. Credit institutions and branches of foreign banks that have been permitted by the State Bank of Vietnam to issue long-term securities before the effective date of this Circular shall continue to implement the Decisions of the State Bank of Vietnam. For short-term security issues organized before the effective date of this Circular, credit institutions and branches of foreign banks shall continue to implement until the end of the issue period.

Article 30. Implementation Organization

The Head of the Office, the Director of the Monetary Policy Department, and the Heads of units under the State Bank of Vietnam; the Governors of the State Bank of Vietnam branch 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 branches of foreign banks are responsible for organizing the implementation of this Circular./.