Circular No. 40/2015/TT-NHNN stipulates the opening and use of foreign currency securities issuance accounts denominated in Vietnamese dong for non-resident organizations to carry out securities issuance activities in Vietnam.

CIRCULAR

Regulations on opening and using domestic currency securities issuance capital accounts to conduct securities issuance activities in Vietnam by non-residents who are organizations để thực hiện hoạt động phát hành chứng khoán tại Việt Nam của tổ chức không cư trú

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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 and Decree No. 06/2013/PL-UBTVQH113 dated March 18, 2013 amending and supplementing certain articles of the Foreign Exchange Decree;

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

The Governor of the State Bank of Vietnam issues this Circular regulating the opening and use of domestic currency securities issuance capital accounts to conduct securities issuance activities in Vietnam by non-residents who are organizations.

Article 1. Scope of Regulation

This Circular regulates the opening and use of domestic currency securities issuance capital accounts to conduct transactions related to securities issuance activities in Vietnam by non-residents who are organizations.

Article 2. Applicability

1. Foreign issuers are permitted by competent authorities in Vietnam to issue securities in Vietnam.

2. Other individuals and organizations related to the activities of opening and using domestic currency securities issuance capital accounts of foreign issuers.

Article 3. Explanation of Terms

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

1. "Foreign issuer" means a non-resident organization permitted to issue securities in Vietnam.

2. "Permitted credit institution" refers to commercial banks and branches of foreign banks permitted to operate and provide foreign exchange services according to the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank).

3. "Domestic currency securities issuance capital account" (hereinafter referred to as the securities issuance capital account) is a domestic currency settlement account opened by a foreign issuer at a permitted credit institution to conduct transactions as prescribed in this Circular.

Article 4. Principles for Opening and Using Securities Issuance Capital Accounts

1. A foreign issuer must open one securities issuance capital account to conduct securities issuance for one investment project in Vietnam. In cases where it is permitted to issue securities for multiple investment projects in Vietnam, for each project, the foreign issuer must open one securities issuance capital account.

2. All proceeds from the securities offering must be transferred into the securities issuance capital account. Permitted credit institutions must freeze all proceeds from the securities offering of the foreign issuer until they receive the request from the foreign issuer to lift the freeze on the proceeds from the securities offering accompanied by a notification confirming the results of the securities offering from the Securities Commission in accordance with the laws on securities.

3. After lifting the freeze as stipulated in Clause 2 of this Article, the foreign issuer may use all proceeds from the securities offering to conduct disbursement transactions as prescribed in Clause 2 of Article 6 of this Circular.

Article 5. Opening and Closing of Securities Issuance Capital Account

1. After being permitted to issue securities in Vietnam, foreign issuers must open a securities issuance capital account to conduct transactions for receipts and payments as prescribed in Article 6 of this Circular.

2. In case of changing the authorized credit institution to open a securities issuance capital account, foreign issuers must close the existing securities issuance capital account, and transfer the entire balance from this account to the new securities issuance capital account opened at another authorized credit institution.

3. Procedures for opening and closing the securities issuance capital account shall be carried out in accordance with the regulations of the State Bank on the establishment and use of settlement accounts at service providers.

Article 6. Use of Securities Issuance Capital Account

Foreign issuers may use the securities issuance capital account to conduct transactions for receipts and payments in Vietnamese dong related to the issuance of securities in Vietnam, including:

1. Income:

a) Receipts from the offering of securities in Vietnam;

b) Receipts transferred from the Vietnamese dong settlement account of the foreign issuer to make dividend and bond interest payments and other obligations of the foreign issuer related to the issuance of securities in Vietnam.

2. Expenditure:

a) Payments transferred to the Vietnamese dong settlement account of the foreign issuer opened at an authorized credit institution to implement approved investment projects in Vietnam according to the provisions of the law;

b) Payment of dividends and bond interest and fulfillment of other obligations of the foreign issuer towards investors;

c) Purchase of its own issued securities in Vietnam according to the provisions of the law;

d) Other lawful payment transactions related to the issuance of securities in Vietnam by the foreign issuer.

Article 7. Responsibilities of Authorized Credit Institutions

1. Request foreign issuers to provide relevant documents and certificates concerning their activities of issuing securities in Vietnam when opening and using the securities issuance capital account.

2. Implement the freezing and unfreezing of the securities issuance capital account for the entire amount received from the offering of securities by the foreign issuer according to the provisions of Clause 2, Article 4 of this Circular.

3. Guide foreign issuers to carry out procedures for opening and closing the securities issuance capital account and to conduct transactions for receipts and payments on this account according to the provisions of this Circular.

4. Check and retain relevant documents and certificates concerning transactions conducted on the securities issuance capital account to ensure that services are provided in accordance with the purpose and in compliance with the law.

5. Implement reporting requirements as prescribed in Article 9 of this Circular.

Article 8. Responsibilities of Foreign Issuers

1. Open and use the securities issuance capital account based on compliance with the provisions of this Circular.

2. Truthfully and fully declare the contents of receipts and payments on the securities issuance capital account; Provide relevant documents and certificates concerning the issuance of securities in Vietnam upon request and guidance of the authorized credit institution.

Article 9. Reporting System

1. The authorized credit institution where the foreign issuer opens the securities issuance capital account must report in writing to the State Bank no later than the 12th day of the month following the month in which the opening or closing of the securities issuance capital account by the foreign issuer occurs (in accordance with Form 01 attached to this Circular).

2. Monthly, no later than the 12th day of the month following the reporting month, the authorized credit institution where the foreign issuer opens the securities issuance capital account must report in writing to the State Bank about the situation of receipts and payments on the securities issuance capital account (in accordance with Form 02 attached to this Circular).

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

Article 10. Inspection, Audit, Supervision

1. The State Bank of Vietnam and its provincial and centrally-administered city branches shall carry out inspection and supervision of authorized credit organizations in their compliance with the provisions of this Circular within their respective jurisdictions.

2. Organizations and individuals subject to inspection and audit shall have the responsibility to provide all necessary documents and materials as required by law for timely and effective implementation of such inspections and audits.

Article 11. Handling Violations

In cases of violation of the provisions of this Circular, depending on the severity of the violation, foreign issuing organizations, authorized credit organizations, and related organizations and individuals will be subject to penalties under applicable laws.

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 the State Bank of Vietnam’s provincial and centrally-administered city branches, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Managers (Directors) of credit organizations, and foreign bank branches shall be responsible for implementing this Circular./.