Circular No. 39/2015/TT-NHNN stipulates the opening and use of foreign currency denominated securities issuance capital accounts to carry out securities issuance abroad by resident organizations.

CIRCULAR

Regulations on opening and using foreign currency denominated capital accounts for issuing securities to carry out the issuance of securities abroadđể thực hiện việc phát hành chứng khoán ra nước ngoài of the resident is an organization

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

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 28/2005/PL-UBTVQH11 dated December 13, 2005 on Foreign Exchange Management, and Decree No. 06/2013/PL-UBTVQH13 dated March 18, 2013 amending and supplementing certain articles of the Foreign Exchange Management Decree;

Pursuant to Decree No. 70/2014/NĐ-CP dated July 17, 2014 of the Government detailing the implementation of certain provisions of the Foreign Exchange Management Decree and the Decree amending and supplementing certain articles of the Foreign Exchange Management Decree;

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;

At the proposal of the Head of the Foreign Exchange Management Department,

The Governor of the State Bank of Vietnam issues this Circular regulating the opening and use of foreign currency denominated capital accounts for the issuance of securities abroad by resident organizations.

Article 1. Scope of Regulation

Article 1. This Circular regulates the opening and use of foreign currency denominated capital accounts for conducting transactions related to the receipt and payment activities associated with the issuance of securities abroad in the form of share issuance, investment fund certificates, and other types of securities as prescribed by securities laws by resident organizations.

Article 2. The opening and use of accounts related to the issuance of international bonds guaranteed and not guaranteed by the Government; international government bonds on the international market are not within the scope of regulation of this Circular.

Article 2. Applicability

Clause 1. An issuer that is permitted by competent authorities in Vietnam to issue securities abroad in foreign currency according to the law.

Clause 2. Other individuals and organizations related to the activity of opening and using foreign currency denominated capital accounts for issuing securities by the issuer.

Article 3. Explanation of Terms

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

1. "Issuer" means a resident organization permitted to offer securities for sale abroad in foreign currency.

2. "Permitted credit institution" refers to commercial banks and branches of foreign banks permitted to operate and provide foreign exchange services.

3. "Foreign currency denominated capital account for issuing securities" means a foreign currency denominated settlement account opened by the issuer at a permitted credit institution in Vietnam to conduct transactions related to the receipt and payment activities associated with the issuance of securities abroad in foreign currency.

4. "Issuing securities abroad in foreign currency" means the act of the issuer offering securities for sale abroad in the form of share issuance, investment fund certificates, and other types of securities in foreign currency according to securities laws.

Article 4. Issuance of convertible bonds into shares

In case the issuer implements the conversion of international bonds into shares according to the provisions of securities laws and other relevant laws, within five (5) working days from the completion of the conversion of international bonds into shares, the issuer must open a foreign currency denominated capital account for issuing securities in accordance with this Circular to conduct transactions related to the issuer's obligations regarding the value of converted shares.

Article 5. Principles for opening foreign currency capital issuance accounts for securities

1. The issuer must open one (1) foreign currency capital issuance account at one (1) permitted credit institution before each registration to offer securities denominated in foreign currency abroad.

2. If the issuer is a permitted credit institution, it may open a foreign currency capital issuance account at itself or at another permitted credit institution.

Article 6. Opening and Closing Foreign Currency Capital Issuance Accounts

1. Before submitting to the State Securities Commission the registration dossier for offering securities abroad, the issuer must open a foreign currency capital issuance account at a permitted credit institution engaged in foreign exchange transactions to implement the income and expenditure activities as stipulated in Article 7 of this Circular.

2. In case of changing the permitted credit institution where the foreign currency capital issuance account is opened, the issuer must close the existing account and transfer the entire balance from that account to an account opened at another permitted credit institution.

3. Procedures for opening and closing foreign currency capital issuance accounts shall be carried out in accordance with the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank) on opening and using settlement accounts at service providers.

Article 7. Use of Foreign Currency Capital Issuance Accounts

The foreign currency capital issuance account shall be used to conduct the following foreign currency income and expenditure transactions:

1. Receipts:

a) Receiving foreign currency from the issuance of securities abroad;

b) Receiving foreign currency purchased from permitted credit institutions and receiving foreign currency transfers from other settlement accounts of the same issuer in foreign currency to implement the expenditure transactions as stipulated in points c, d, đ of Clause 2 of this Article;

c) Other lawful foreign currency income transactions related to the issuance of securities abroad.

2. Payments:

a) Expenditure to sell foreign currency to permitted credit institutions;

b) Expenditure to transfer to a foreign currency settlement account of the same issuer opened at a permitted credit institution to implement the plan for utilizing funds raised from the issuance of securities abroad;

c) Expenditure to pay dividends to foreign shareholders and to fulfill the obligations of the issuer in the host country;

d) Expenditure to repurchase its own securities issued abroad in accordance with Vietnamese and host country securities laws;

đ) Expenditure to settle costs related to the issuance of securities abroad.

Article 8. Responsibilities of the Issuer

1. To comply with the provisions of this Circular and relevant legal documents in opening, closing, and using foreign currency capital issuance accounts.

2. To truthfully and fully declare the contents of income and expenditure on foreign currency capital issuance accounts; To provide relevant documents and materials concerning the opening and use of foreign currency capital issuance accounts upon request and guidance of the permitted credit institution.

Article 9. Responsibilities of Permitted Credit Institutions

1. To comply with the provisions of this Circular and relevant legal documents in opening, closing, and using foreign currency capital issuance accounts.

2. To check and retain documents and vouchers related to transactions conducted on the foreign currency capital issuance accounts of issuers to ensure that foreign exchange services are provided in accordance with their purpose and legal regulations.

3. To implement reporting requirements as stipulated in Article 10 of this Circular.

Article 10. Reporting System

1. Not later than the twelfth day of the month following the month in which the foreign currency capital issuance account of the issuer was opened or closed, the permitted credit institution where the issuer opened or closed the foreign currency capital issuance account must report in writing to the State Bank (Department of Foreign Exchange Management) on the situation of opening and closing the foreign currency capital issuance account (in the form attached as Appendix No. 01 to this Circular).

2. Monthly (no later than the twelfth day of the following month), the permitted credit institution must report to the State Bank (Department of Foreign Exchange Management) on the situation of income and expenditure on the foreign currency capital issuance account of the issuer (in the form attached as Appendix No. 02 to this Circular).

3. In cases deemed necessary, the permitted credit institution must report on the situation of opening and using the foreign currency capital issuance account according to the requirements of the State Bank.

Article 11. Inspection, Audit, Supervision

The State Bank of Vietnam, provincial and centrally-administered municipal branches of the State Bank of Vietnam shall carry out inspection, audit, and supervision of licensed credit institutions in their compliance with the provisions of this Circular within their respective authorities.

Article 12. Implementation Organization

1. This Circular takes effect from March 1, 2016.

2. The Director of the Office, Heads of the Department of Foreign Exchange Management, Heads of relevant units under the State Bank of Vietnam, Governors of provincial and centrally-administered municipal branches of the State Bank of Vietnam, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Managers (Directors) of credit institutions, and foreign bank branches have the responsibility to organize the implementation of this Circular./.