Circular No. 58/2000/TT-BTC guiding the implementation of certain points of Government Decree No. 01/2000/NĐ-CP dated January 13, 2000 on the issuance of government bond regulations.

CIRCULAR

Guidelines for Implementing Certain Points of Decree No. 01/2000/NĐ-CP dated January 13, 2000

of the Government on Issuing Regulations on the Issuance of Government Bonds

 

Implementing Decree No. 01/2000/NĐ-CP dated January 13, 2000 of the Government on the issuance of regulations on the issuance of government bonds, the Ministry of Finance provides guidance on certain points regarding government bonds and the issuance of government bonds through the State Treasury system as follows:

 

I. GENERAL PROVISIONS ON GOVERNMENT BONDS

1. Form of Government Bonds:

1.1. Government bonds are issued in the form of certificates or book entries.

a) Bond certificates consist of two parts: the main part given to organizations and individuals purchasing the bonds (referred to as bond purchasers); the stub retained at the State Treasury agency. Bond certificates are prescribed by the Ministry of Finance and contain the following main contents:

Name of issuing authority;

Face value, serial number;

Term, interest rate of the bond;

Name of organization or individual holding the bond (in case the bond is registered);

Date of issue, date of maturity;

Signature of the Director General of the State Treasury.

Based on the approved plan for issuing government bonds, the Central State Treasury is responsible for organizing the printing and unified management of bond certificates throughout the country.

b) Book entries are a form of issuance without using bond certificates. The State Treasury or authorized units maintain records of bond purchases by each individual or organization.

Government bonds issued through the State Treasury system in the form of book entries apply to buyers with amounts of VND 500,000,000 (five hundred million dong) or more, or upon request of the buyer. Records of bond purchases are made in two copies: copy 1 retained at the State Treasury where the bonds were issued, copy 2 handed over to the individual or unit purchasing the bonds.

1.2. Government bonds are issued in registered and unregistered forms.

a) Registered bonds are those where the name of the organization or individual owning the bond is recorded on the bond certificate or on the record of bond purchase.

b) Unregistered bonds are those where the name of the organization or individual owning the bond is not recorded on the bond certificate.

2. Interest Rate of Government Bonds:

2.1. The interest rate of government bonds is announced by the Ministry of Finance for each issuance period according to one of the following methods:

Fixed interest rate applicable for the entire term of the bond;

Flexible interest rate dependent on the volatility of the capital market. The official interest rate is announced in advance for each period or at the interest payment due dates.

Directed interest rate for auction selection of issuance interest rate: This is the maximum interest rate that participating entities can win in the auction. Depending on market conditions, the Ministry of Finance may or may not specify the directed interest rate for selecting the issuance interest rate.

2.2. Basis for determining the interest rate of government bonds:

Average price index published by the General Statistics Office.

Deposit interest rates of credit institutions.

Term of the bond.

Demand for financing the state budget and investment.

Market's ability to supply funds during each period.

3. Method of Principal and Interest Payment for Government Bonds:

3.1. The principal of the bond is paid once at maturity.

3.2. Interest on the bond is paid as follows:

Paid once at maturity together with the principal of the bond.

Paid periodically every six or twelve months.

Paid immediately upon issuance.

The Ministry

of Finance specifies the method of principal and interest payment for each issuance period.

4. Non-Payment Value Bonds:

4.1. Counterfeit bonds; bonds that have been erased, obliterated, or altered with respect to letters and numbers;

4.2. Bond certificates altered, erased, or tampered with letters and numbers;

4.3. Bond

certificates torn or damaged so as to lose their original shape and content.

II. GOVERNMENT TREASURY BONDS ISSUED THROUGH THE STATE TREASURY SYSTEM 1. Issuance of Bonds:

Government bonds issued through the State Treasury system are treasury bonds with terms of one year or longer.

State Treasury units directly organize the issuance of treasury bonds to buyers based on the decision of the Minister of Finance and guidelines from the Central State Treasury.

1.2. Form of Sale of Bonds:

For each issuance period, the State Treasury sells bonds to buyers in one of the following two forms:

a) Par Value Form:

AApplied in cases where bonds are continuously issued throughout the year or in extended periods without a predetermined end date.

Under this form, the buyer must pay the State Treasury an amount equal to the face value of the bond. The issuance date of the bond is considered the day the State Treasury receives the payment from the buyer or the notice of receipt from the Bank (in the case of transfer purchase). of the State Treasury (in the case of purchasing bonds through transfer).

b) Discount Form:

Bonds are issued in batches, with each issuance period not exceeding two months, with predetermined start and end dates.

All bonds issued in a batch have the same issuance and maturity dates.

The selling price of the bond is the amount the buyer must pay to the State Treasury and is determined according to one of the following two methods:

Method 1: The issuance date is set as the first day of the issuance period. The formula for calculating the selling price of the bond is as follows:

G = MG MGx Ls x n

365

c) The Reorganization Enterprise Fund at the state-owned holding corporation level is centralized in a separate account of the state-owned holding corporation, managed by the Board of Directors, to support the reorganization and ownership conversion of enterprises under the state-owned holding corporation as stipulated in Article 2 of this Decision and is responsible for settling accounts with the Ministry

G: Selling price of the bond

MG: Face value of the bond

Ls: Interest rate of the bond (% per annum)

n: Number of days from the issuance date to the actual purchase date.

Method 2: The issuance date is set as the last day of the issuance period. The formula for calculating the selling price of the bond is as follows:

G= MG _ MG x Ls x n

365

c) The Reorganization Enterprise Fund at the state-owned holding corporation level is centralized in a separate account of the state-owned holding corporation, managed by the Board of Directors, to support the reorganization and ownership conversion of enterprises under the state-owned holding corporation as stipulated in Article 2 of this Decision and is responsible for settling accounts with the Ministry

G: Selling price of the bond

MG: Face value of the bond

Ls: Interest rate of the bond (% per annum)

n: Number Number of days from the actual purchase date to the issuance date.

The Ministry

of Finance will specify the method for determining the selling price of the bond for each issuance period. 1.3. The State Treasury may sell bonds to buyers in cash or by transfer. Buyers residing abroad who wish to purchase bonds may do so through representatives in Vietnam.

2. Settlement of Treasury Bonds:

2.1. Organization for Settlement of Bonds: The State Treasury directly pays the principal and interest of the bonds to the owner at maturity.

Clause on the State Treasury directly paying the principal and interest of the bonds to the owner upon maturity.

In the event that the bondholder has not made payment of interest or principal upon maturity, such amounts shall be reserved for repayment when the bondholder requests payment, without accruing compound interest or interest on overdue payments.

2.2. Forms of Bond Payment:

When paying off bonds, the bondholder may receive cash or request the State Treasury to transfer the full amount of principal and interest due into their account as requested. Transfer fees will be deducted from the amount received by the bondholder.

2.3. Authorization for Bond Payment:

In cases where the bondholder is unable to make payment at maturity due to force majeure, they may authorize another person to collect on their behalf. The person collecting the bond must present their Identity Card and the bondholder's authorization letter, confirmed by a notary public or the People's Committee of the district where the bondholder is registered.

3. Issuance Capital Transfer and Payment:

3.1. All proceeds from the issuance of government bonds shall be centralized into the central budget for use according to the state budget approved by the National Assembly.

3.2. Upon maturity, the Department of State Budget shall process the capital transfer to the State Treasury to pay the bondholders.

3.3. If the central budget does not have sufficient funds at maturity, the Department of State Budget shall process a temporary advance from the State Treasury to make the payment according to current regulations.

4. Transfer of Bonds:

4.1. Unregistered bonds can be freely transferred without the need to process at the State Treasury where the bonds were issued.

4.2. Transfers of registered bonds must be processed at the State Treasury where the bonds were issued.

a) In the case of buying and selling bonds:

Both the transferring party (seller) and the receiving party (buyer) must jointly process the ownership transfer at the State Treasury.

For bonds issued in certificate form: After verifying the elements on the bond presented by the transferring party against the original records, if they match, the State Treasury staff will write the name and address of the receiving party, require the transferring party to sign, and submit it for the head of the agency to sign and stamp on the designated section of the bond. Simultaneously, the receiving party must affix two specimen signatures on the stub of the bond retained by the State Treasury. In the case of a third transfer, the State Treasury will process a new bond certificate and retain the old bond certificate along with the original records. For bonds issued in book-entry form:

Representatives of the transferring and receiving parties must bring a power of attorney from the head of their respective agencies when processing the transfer. If the transferring and receiving parties are individuals, they must present their Identity Cards. After verifying the elements on the bond purchase record presented by the transferring party against the records held by the State Treasury, if they match, the State Treasury staff will require the transferring party to confirm the transfer on the bond purchase record; process a new bond purchase record for the receiving party. The power of attorney and bond purchase record of the transferring party will be retained by the State Treasury.

b) In the case of gift or donation:

Both the donor and recipient must jointly process the ownership transfer at the State Treasury as in the case of buying and selling.

If the donor cannot attend the State Treasury for some reason, the recipient must bring their Identity Card and a consent letter for the gift or donation (signed by the donor) when processing the transfer. If they do not have an Identity Card, they must provide a certification from the local authority where they are registered. These documents will be retained by the State Treasury along with the original records.

c) In the case of inheritance:

When processing the transfer of inherited bonds, the inheritor must present the following documents:

Death certificate and will of the bondholder (in the case of testamentary succession) or a legal confirmation of inheritance rights (in the case of intestate succession).

Identity Card or a certification from the local authority where the inheritor is registered.

If the inheritor is a minor or lacks civil capacity, a guardian or legal representative must process the inheritance on their behalf. When processing the inheritance, in addition to the death certificate and will or legal confirmation of inheritance rights, the guardian or legal representative must also bring:

Identity Card;

Decision of the competent authority or certification from the local authority regarding the guardian or legal representative.

The procedure for transferring bonds through inheritance is similar to that for buying and selling. The will or legal confirmation of inheritance rights will be retained by the State Treasury along with the original records.

5. Confirmation of Bonds in Collateral Procedures:

5.1. For unregistered bonds: The State Treasury shall not confirm the bondholder under any circumstances.

5.2. For registered bonds: When a credit institution requests (in writing) confirmation of the legality and validity of the bond being pledged, the head of the State Treasury (without delegation) shall confirm the name of the bondholder and the purchase price after verification and comparison to ensure consistency between the elements recorded on the bond (or bond purchase record) and the original records.

6. Costs Related to Bonds:

6.1. Issuance and Payment Costs:

All costs related to the issuance and payment of government bonds shall be covered by the central budget, including:

Printing costs for bond certificates.

Issuance and payment work costs of the State Treasury system, calculated at 0.5% of the issuance volume.

6.2. Bond Custody and Storage Fees:

Fees for custodial storage of government bonds at the State Treasury shall be applied as prescribed in Circular No. 80/1999/TT-BTC dated June 29, 1999, issued by the Ministry of Finance.

Fees for the custody and safekeeping of Government bonds at the State Treasury shall be applied in accordance with the provisions of Circular No. 80/1999/TT-BTC dated June 29, 1999 of the Ministry of Finance. The Treasury shall guide the management of rare assets and valuable certificates deposited and kept by the State Treasury.

6.3. Transfer fees for bond payments:

The transfer fee for the principal and interest of bonds into the account at the request of the bondholder shall be paid by the bondholder at the bank's transaction fee rate.

III. INVESTMENT BONDS

1. Methods of issuing investment bonds:

Investment bonds shall be issued through auction on the centralized securities trading market, underwritten, or distributed by agents.

a) Achievement certificates of individuals or groups proposed for reward;Issuance method of investment bonds:

2.1. Investment bonds for project financing:

When there is a need to raise funds for projects, relevant Ministries, sectors, Provincial People's Committees directly under the Central Government shall prepare issuance documents for investment bonds to be sent to the Ministry of Finance, including:

A proposal requesting the Ministry of Finance to issue investment bonds;

Decision on investment by the competent authority;

Plan for issuing investment bonds. Content includes: Project name; summary of economic and social benefits of the project; total investment capital for the project, including the expected amount to be raised through the issuance of investment bonds; fundraising methods, amount to be raised (by year), term, interest rate, fundraising period; source of principal and interest repayment when due.

Basic construction investment plan of the project approved by the competent authority;

Confirmation from the Ministry of Finance (for centrally managed projects) or Provincial People's Committee (for locally managed projects) regarding the allocation of sources for principal and interest repayment when due in the state budget plan.

Issuance documents for investment bonds must be submitted to the Ministry of Finance sixty days prior to the planned issuance date. After receiving all documents, within fifteen days, the Ministry of Finance will examine the legality and validity of the documents and submit them to the Prime Minister for review and approval of the issuance plan. In cases where documents are missing or incorrectly prepared, the Ministry of Finance will issue guidance for supplementary documents or clearly state the reasons for non-issuance.

Within five days from the Prime Minister's approval of the issuance plan, the Ministry of Finance will issue a decision to issue investment bonds for project financing.

2.2. Investment bonds for raising funds for the Development Support Fund:

a) Annually, based on the approved credit investment development plan by the Government, the Development Support Fund will develop an issuance plan for investment bonds to be sent to the Ministry of Finance, including:

Total amount of capital needed to be raised in the year; Quantity to be raised each quarter, detailed by term;

Copy of the approved national credit investment plan by the Government.

b) For each issuance, the Development Support Fund will prepare an issuance plan for investment bonds to be sent to the Ministry of Finance at least forty-five days before the planned issuance date. Documents include: Request for issuance of investment bonds to raise funds for the Development Support Fund;

A proposal requesting the Issuance plan for investment bonds. Content includes: Issuance time; issuance method; quantity issued; term; interest rate; repayment plan when due.

After examining the legality and validity of the documents, the

Ministry of Finance will issue a decision to issue bonds for the Development Support Fund according to the plan and scheme of the Fund. 3. Issuance, payment, transfer, and related costs for investment bonds.

The issuance, payment, transfer, and related costs for investment bonds shall be carried out in accordance with the provisions of the Circulars guiding the auction of government bonds through the centralized securities trading market, underwriting, and distribution.

IV. PLANNING ISSUANCE OF BONDS, ACCOUNTING RECORDS, REPORTING AND SETTLEMENT OF GOVERNMENT BONDS

1. Planning bond issuance:

1.1. Plan for issuing bonds to raise funds for the state budget:

The Ministry of Finance will develop a plan for issuing and paying various types of government bonds annually to be included in the state budget estimate for submission to the Government and National Assembly for approval.

AND Based on the annual deficit funding targets approved by the National Assembly, the State Budget Department will coordinate with the State Treasury to develop detailed plans for issuing treasury bills and bonds quarterly by term and issuance method, and notify investors to participate in the treasury bill and bond market.

During the fiscal year, if there are significant unforeseen changes in state budget revenue and expenditure leading to adjustments in the annual funding-raising plan, the

Minister of Finance will report to the Prime Minister for decision. 1.2. Plan for issuing investment bonds to raise funds for projects:

Each year, before November 10, Ministries, sectors, Provincial People's Committees directly under the Central Government that need to issue investment bonds shall send their annual issuance plans to the

Ministry of Finance. The issuance plan must detail the funding needs for issuance, the purpose of using the raised funds, and the expected issuance time within the planning year. 1.3. Plan for issuing bonds to raise funds for the Development Support Fund:

Each year, the Development Support Fund will develop an issuance plan for investment bonds to be sent to the

Ministry of Finance in accordance with the detailed provisions at point 2.2, Section 2, Part III of this Circular. 2. Accounting records:

The Central State Treasury is responsible for guiding the implementation of accounting work for revenues, payments of treasury bills and bonds, and investment bonds in accordance with the State Budget Law, Accounting Regulations, and the Treasury Accounting System.

3. Reporting and settlement system:

Regularly monthly and quarterly, and after the end of each bond issuance period, the Central State Treasury will prepare reports on bond issuance and payment to the

Ministry of Finance. The report content includes: Actual bond revenue submitted to the state budget, principal and interest payments made to bondholders, state budget funds allocated, and temporary balances held by the State Treasury. At the end of the fiscal year, the Central State Treasury must settle with the

Ministry of Finance the situation regarding the use of costs related to the issuance of treasury bonds. V. IMPLEMENTATION ORGANIZATION

V. IMPLEMENTATION ORGANIZATION

1. This Circular shall take effect from January 28, 2000, and replace Circular No. 75/TC-KBNN dated September 14, 1994, of the Ministry of Finance guiding the Regulations on Issuance and Payment of Government Bonds. The heads of ministries, the heads of agencies equivalent to ministries, and the chairpersons of provincial people's committees under the central government have the responsibility to coordinate with the Ministry of Finance in implementing this Circular.

2.Ministry 3. The Director General of the State Treasury, and the heads of units directly under the Ministry of Finance related to this matter shall be responsible for guiding and organizing the implementation of the provisions of this Circular./.

3.The General Director of the State Treasury, Heads of units directly under the Ministry of Finance related to this matter, have the responsibility to guide and organize the implementation of the provisions of this Circular./.