Circular No. 46/2018/TT-NHNN stipulates the time limit, procedure, and formalities for the transfer of shares for significant shareholders of a credit institution and related parties who hold more than 5% of the charter capital of another credit institution.

CIRCULAR

Regulations on the time limit, procedure, and process for transferring shares exceeding the limit held by major shareholders and related parties of such shareholders owning more than 5% of the charter capital of another credit institution.

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

Pursuant to 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;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam issues this Circular regulating the time limit, procedure, and process for transferring shares exceeding the limit held by major shareholders and related parties of such shareholders owning more than 5% of the charter capital of another credit institution.

Article 1. Scope of RegulationApplicability

1. This Circular regulates the time limit, procedure, and process for transferring shares exceeding the limit held by major shareholders and related parties of such shareholders owning more than 5% of the charter capital of another credit institution (hereinafter referred to as "exceeding shareholding limit") arising before the effective date of Law No. 17/2017/QH14 amending and supplementing certain provisions of the Law on Credit Institutions.

2. This Circular does not apply to cases of state-owned shareholding at credit institutions.

Article 2. Interpretation of Terms

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

1. Lead credit institution means:

a) A credit institution with a major shareholder whose related parties own more than 5% of the charter capital of another credit institution; or

b) A credit institution with a major shareholder designated by credit institutions to prepare a Plan to Address Exceeding Shareholding Limit in cases where multiple credit institutions have the same major shareholder; or

c) A credit institution with a major shareholder holding the highest shareholding ratio in cases where multiple credit institutions with the same major shareholder fail to agree on a lead credit institution to prepare a Plan to Address Exceeding Shareholding Limit as stipulated in point b of this Clause.

2. Other credit institution means:

a) A credit institution with a shareholder and related parties of such shareholder owning more than 5% of the charter capital, where such shareholder is a major shareholder of the lead credit institution; or

b) A credit institution with a major shareholder that is not a lead credit institution as stipulated in points b and c of Clause 1 of this Article.

Article 3. Time Limit, Procedure, and Process for Transferring Shares

1. Credit institutions shall cooperate with major shareholders to review and identify a list of major shareholders and related parties owning more than 5% of the charter capital of another credit institution (hereinafter referred to as "related major shareholders").

2. The lead credit institution shall cooperate with other credit institutions and related major shareholders to develop a Plan to Address Exceeding Shareholding Limit (hereinafter referred to as "Plan to Address"), and implement the Plan to Address to ensure that the ownership ratio of related major shareholders complies with the provisions of the Law on Credit Institutions (as amended and supplemented) by no later than December 31, 2020. The Plan to Address must include at least the following contents:

a) List of related major shareholders, including the following information:

(i) For individual major shareholders: Full name; identification number or passport number or other valid personal identification number, date of issue, place of issue; permanent address; information about the number of shares and shareholding ratio over the charter capital currently owned at the lead credit institution, other credit institutions (including the number of shares and shareholding ratio over the charter capital entrusted to other organizations or individuals; information about the organization or individual receiving the entrustment and the relationship between the organization or individual receiving the entrustment and the shareholder (if any));

(ii) For corporate major shareholders: Corporate name; business registration certificate number or equivalent document, date of issue, place of issue, tax code; main office address; information about the number of shares and shareholding ratio over the charter capital currently owned at the lead credit institution, other credit institutions (including the number of shares and shareholding ratio over the charter capital entrusted to other organizations or individuals; information about the organization or individual receiving the entrustment and the relationship between the organization or individual receiving the entrustment and the shareholder (if any));

(iii) For related parties of major shareholders: Relationship with major shareholders and information as prescribed in point a(i) of this Clause for individuals, point a(ii) of this Clause for corporations;

b) Measures and timeline for addressing the issue.

3. The lead credit institution shall submit the Plan to Address to the State Bank of Vietnam (through the Banking Inspection and Supervision Authority), other credit institutions, and related major shareholders within 90 days from the effective date of this Circular.

4. The Banking Inspection and Supervision Authority shall direct the lead credit institution to complete the Plan to Address (if necessary); monitor and supervise the implementation of the Plan to Address.

The lead credit institution shall cooperate with other credit institutions and related major shareholders to complete the Plan to Address and submit it to the State Bank of Vietnam (through the Banking Inspection and Supervision Authority), other credit institutions, and related major shareholders within five working days from the completion date of the Plan to Address.

From the effective date of this Circular, related major shareholders may not increase their shareholding under any form except for the following cases:

a) Receiving bonus shares or dividends in the form of shares;

b) Purchasing additional shares issued when the lead credit institution, other credit institutions increase their charter capital but ensuring that the shareholding ratio after purchase complies with the shareholding limit prescribed in Article 55 of the Law on Credit Institutions (as amended and supplemented).

6. The lead credit organization and other credit organizations shall not grant credit or new credit (in cases where credit has already been granted) to the related major shareholder group for ninety days from the date this Circular takes effect until the related major shareholder group complies with the shareholding ratio prescribed in Article 55 of the Law on Credit Organizations (as amended and supplemented).

7. Individual shareholders and organizational shareholders belonging to the related major shareholder group who have representatives serving as members of the Board of Directors, members of the Supervisory Board, General Director (Director) of the lead credit organization and other credit organizations shall transfer shares exceeding the permitted limit if they currently hold shares beyond the limit.

8. The transfer of shares exceeding the limit in cases of purchasing shares from foreign investors; buying and selling, transferring shares of major shareholders; buying and selling, transferring shares leading to major shareholders becoming ordinary shareholders and vice versa shall be carried out in accordance with the laws on foreign investors purchasing shares of Vietnamese credit organizations and the State Bank's regulations on the documentation, procedures, and approval process for changes in credit organizations and foreign bank branches.

Article 4. Responsibilities of the Lead Credit Organization

1. Urging other credit organizations and the related major shareholder group to implement the Remediation Plan.

a) Results of remedying the excess shareholding ratio of the related major shareholder group;

b) In cases where the progress specified in the Remediation Plan has not been achieved, reporting difficulties and obstacles (if any) and proposals for resolution.

4. Ensuring that the related major shareholder group complies with the shareholding ratio prescribed in Article 55 of the Law on Credit Organizations (as amended and supplemented) when purchasing additional issued shares as stipulated in Point b Clause 5 Article 3 of this Circular.

5. Being responsible under the law for the accuracy and completeness of information provided to the State Bank, other credit organizations, and the related major shareholder group.

Article 5. Responsibilities of Other Credit Organizations

1. Cooperating with the lead credit organization and the related major shareholder group to establish and complete the Remediation Plan; implementing the Remediation Plan in compliance with this Circular and relevant laws., 2. Cooperating with the lead credit organization to urge the related major shareholder group to implement the Remediation Plan.

3. Reporting on the results of implementing the Remediation Plan (including difficulties and obstacles, and proposals for resolution) as required by the lead credit organization for consolidation and reporting to the State Bank.

4. Reporting on shareholder and share issues as required by the State Bank (if any).

5. Ensuring that the related major shareholder group complies with the shareholding ratio prescribed in Article 55 of the Law on Credit Organizations (as amended and supplemented) when purchasing additional issued shares as stipulated in Point b Clause 5 Article 3 of this Circular.

6. Being responsible under the law for the accuracy and completeness of information provided to the State Bank and the lead credit organization.

6. Shall be liable under the law for the accuracy and completeness of the information provided to the State Bank and the lead credit institution.

Article 6. Responsibilities of the related major shareholders group

1. Responsibilities of major shareholders

a) Coordinate with the lead credit institution and other credit institutions to establish and perfect the Remediation Plan; implement the Remediation Plan in compliance with the provisions of this Circular and other relevant laws;

b) Report on the implementation results of the Remediation Plan (including detailed difficulties, obstacles, and proposed solutions) as required by the lead credit institution for consolidation and reporting to the State Bank of Vietnam;

c) Bear legal responsibility for the accuracy and completeness of information provided to the lead credit institution and other credit institutions.

2. Responsibilities of persons associated with major shareholders

a) Coordinate with major shareholders, the lead credit institution, and other credit institutions to establish and perfect the Remediation Plan; implement the Remediation Plan in compliance with the provisions of this Circular and other relevant laws;

b) Bear legal responsibility for the accuracy and completeness of information provided to the lead credit institution, other credit institutions, and major shareholders.

- Prime Minister;7. Effective Date to be implemented

1. This Circular takes effect from March 1, 2019.

2. Repeal Clause 1 and Clause 2 of Article 3 of Circular No. 06/2015/TT-NHNN dated June 1, 2015, issued by the Governor of the State Bank of Vietnam, regarding the time limit, procedures, and transitional arrangements for cases of shareholding exceeding the limits set forth in Article 55 of the Law on Credit Institutions.

3. Amend Clause 3 Article 2 as follows:Article8. Responsibility for Implementation

The Director of the Office, the Head of Banking Inspection and Supervision, Heads of units under the State Bank of Vietnam, Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, and General Managers (Directors) of credit institutions shall be responsible for implementing this Circular./.