Decree No. 69/2016/NĐ-CP on Conditions for Operating Debt Purchase Services

DECREE

On the conditions for operating debt buying and selling services

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Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Investment Law dated November 26, 2014;

Based on the Civil Code dated June 14, 2005;

Pursuant to the Enterprise Law dated November 26, 2014;

Pursuant to the Law on Credit Institutions dated June 16, 2010;

Based on the Foreign Exchange Ordinance dated December 13, 2005 and the Ordinance amending certain articles of the Foreign Exchange Ordinance dated March 18, 2013;The Government issues this Decree on the conditions for operating debt buying and selling services.Provincial public libraries perform tasks and powers as prescribed in Clause 2, Article 11, Article 38, and Article 39 of the Library Law and the following tasks and powers: sửa đổi một số 1. This Decree stipulates the conditions for operating debt buying and selling services within the territory of the Socialist Republic of Vietnam.2. Credit institutions and foreign bank branches conducting debt buying and selling activities shall comply with the provisions of the Law on Credit Institutions and relevant laws.

At the proposal of the Governor of the State Bank of Vietnam;

3. Organizations and individuals conducting bond buying and selling activities within the scope regulated by the Securities Law shall comply with the provisions of the Securities Law.

PART I

GENERAL PROVISIONS

Article 1. PENALTYa) Clause 1 Article 15 regarding accountability;

4. The Asset Management Company of Credit Institutions of Vietnam shall conduct debt buying and selling activities in accordance with the Government's regulations on the establishment, organization, and operation of the Asset Management Company of Credit Institutions of Vietnam.

5. The Limited Liability Debt Buying and Selling Company of Vietnam shall conduct debt buying and selling activities in accordance with the Government's and Prime Minister's regulations on the establishment and operation of the Limited Liability Debt Buying and Selling Company of Vietnam.

6. Stock exchanges organize securities trading markets in accordance with the Securities Law.

7. Organizations and individuals (except those specified in Clauses 2, 3, 4, 5, and 6 of this Article) conducting debt buying and selling activities that are not business operations shall comply with the provisions of the Civil Code.

1. Enterprises operating debt buying and selling services.

In this Decree, some terms are understood as follows:

1. Debt is the obligation to pay assets from the debtor to the creditor as expressed in a contract or arising under the provisions of the law.

Article 2. Applicability

2. Debt buying and selling is the act of the seller transferring part or all of the right to demand payment and other related rights concerning the debt to the buyer, and the buyer pays the seller.

2. Organizations and individuals wishing to operate debt purchase and sale services.

Article 3. Explanation of Terms

3. Creditor is an economic organization, individual, or other civil transaction subject having the right to demand payment.

4. Debtor is an economic organization, individual, or other civil transaction subject having the obligation to repay debt as stipulated in a contract or arising under the provisions of the law.

5. Other civil transaction subjects are the subjects participating in civil transaction relationships except for the following entities:

a) Economic organizations, individuals;

b) Political organizations, political-social organizations;

c) State agencies, people's armed forces units;

d) International organizations or national governments.

6. Operating debt buying and selling services means continuously performing one or more activities related to debt buying and selling for profit purposes, including: Buying debts, selling debts, brokering debt buying and selling, consulting on debt buying and selling, and debt trading floor services.

7. Non-business debt buying and selling activities are non-continuous debt buying and selling activities not aimed at profit-making, including:

a) Selling debts of the creditor itself, excluding debts purchased from other creditors;

b) Buying debts without the aim of reselling to organizations or individuals, including buying debts to convert debts into capital contributions or shares; restructuring repayment deadlines; disposing of collateral assets;

c) Other non-continuous debt buying and selling activities not aimed at profit-making.

8. Brokering debt buying and selling is an intermediary service arranging debt buying and selling between buyers and sellers and receiving brokerage fees according to agreements, excluding professional auction organizations' auction activities.

9. Consulting on debt buying and selling is a service using specialized knowledge to identify issues and propose solutions related to debt buying and selling activities; it is performed independently and objectively upon customer request and receives consulting fees according to agreements.

10. Debt trading floor services involve providing a debt trading floor, organizing debt buying and selling; introducing and providing information about debts to interested parties; verifying debt-related documents to ensure they meet trading requirements; acting as intermediaries for negotiations and signing debt buying and selling contracts.

11. A debt trading floor is a place where debt buying and selling transactions, consultations, and brokering activities are regularly conducted.

12. Buyer of debt is an organization or individual purchasing or taking over the transfer to become the new creditor of the debt.

13. Seller of debt is an organization or individual owning the debt and selling or transferring the debt to the buyer of debt.

14. Broker is an enterprise providing debt buying and selling brokering services.

15. Enterprise operating debt buying and selling services is an enterprise registered to operate debt buying and selling services (including subsidiaries of commercial banks).

16. Manager of an enterprise operating debt buying and selling services is the company manager and the private enterprise manager, including the owner of a private enterprise, general partner, Chairman of the Board of Members, member of the Board of Members, Chairman of the company, Chairman of the Board of Directors, member of the Board of Directors, Director or General Director, and other individuals holding management positions authorized to sign transactions on behalf of the company according to the company's charter.

14. The intermediary party is a business entity providing brokerage services for the purchase and sale of debts.

15. A business enterprise engaged in the service of purchasing and selling debts is a business that has registered to operate in the field of debt purchase and sale services (including asset management companies directly affiliated with commercial banks).

16. The manager of a business enterprise engaged in the service of purchasing and selling debts is the company's manager and the private business owner, including the private business owner, general partner, Chairman of the Board of Members, member of the Board of Members, Company Chairman, Chairman of the Board of Directors, member of the Board of Directors, Director or General Director, and other individuals holding managerial positions authorized to enter into transactions on behalf of the company according to the Company Charter.

Article 4. Principles for operating debt purchase and sale services

1. Organizations (that are not enterprises) and individuals wishing to operate debt purchase and sale services must establish an enterprise.

2. Enterprises must register their business activities related to debt purchase and sale services in accordance with the provisions of the law.

3. Enterprises conducting debt purchase and sale services must meet the corresponding conditions stipulated in Articles 5, 6, 7, and 8 of this Decree.

4. Ensure transparency, equality, and compliance with legal regulations.

Chapter II

CONDITIONS FOR OPERATING DEBT PURCHASE AND SALE SERVICES

Article 5. General Conditions for Enterprises Operating Debt Purchase and Sale Services

1. The enterprise must have internal management regulations regarding organization and internal rules on the operation of debt purchase and sale services that comply with the provisions of this Decree.

2. The enterprise must meet the minimum charter capital and investment capital requirements as stipulated in Clause 2 of Article 6, Clause 2 of Article 7, and Clause 2 of Article 8 of this Decree. In cases where the enterprise carries out some or all of the activities, the minimum charter capital and investment capital shall be the highest minimum charter capital and investment capital among the activities carried out by the enterprise.

3. Enterprise managers must meet the following conditions:

a) Possess full civil capacity and not be prohibited from managing an enterprise according to the provisions of the Enterprise Law;

b) Have a university degree or higher in one of the fields: Economics, Business Administration, Law, or the specialized field they will manage;

c) Be a manager or have at least five years of direct work experience in the financial, banking, accounting, auditing, legal, asset valuation, or debt purchase and sale sectors;

d) Individuals who have worked in enterprises operating debt purchase and sale services whose business registration certificates have been revoked must also meet the condition of not being a manager of such an enterprise within the three consecutive years prior to the revocation of the business registration certificate.

Article 6. Conditions for Enterprises Operating Debt Purchase and Sale Brokerage and Advisory Services1. The conditions stipulated in Article 5 of this Decree.

2. Must have a minimum charter capital and investment capital of 5 billion VND.

Article 7. Conditions for Enterprises Engaging in Debt Purchase and Sale Activities

2. Must have a minimum charter capital and investment capital of 100 billion VND.

2. Must have a minimum charter capital and investment capital of 5 billion VND.

3. Debts purchased and sold must satisfy the following elements:

a) There is no written agreement prohibiting the purchase or sale of the debt;

b) They cannot be used as collateral to fulfill civil obligations at the time of debt purchase and sale, except with the written consent of the guarantor party regarding the sale of the debt;

c) The buyer of the debt and the debtor must not be related parties as defined by the Enterprise Law.

4. The purchase and sale of debts must be documented in a written contract based on mutual agreement between the relevant parties, ensuring the rights and legitimate interests of the parties involved in the purchase and sale of debts, including specific provisions on the rights and obligations of the debt buyer and seller.

5. Enterprises engaged in debt purchase and sale activities may not receive credit from credit institutions, bank branches to purchase debts from borrowers at those same credit institutions, bank branches abroad, or use credit institution, bank branch guarantees to obtain credit from other credit institutions, bank branches for the purpose of purchasing debts from borrowers at the same credit institutions, bank branches abroad providing the guarantee.

6. The debt buyer, debt seller, debtor, and other related parties must comply with current foreign exchange management laws when debt purchase and sale transactions form foreign lending and borrowing relationships and involve the use of foreign currency in debt purchase and sale transactions.

6. The buyer of debt, seller of debt, debtor, and other related parties must comply with current foreign exchange management laws when the purchase and sale of debts form a foreign loan relationship, foreign borrowing, and use foreign currency in debt purchase and sale transactions.

Article 8. Conditions for enterprises engaging in debt trading service business

2. Must have a minimum charter capital and investment capital of 5 billion VND.

2. Having a minimum charter capital or investment capital of 500 billion VND.

3. Having operated in the debt purchase and sale service business for at least one year, with a minimum revenue from the debt purchase and sale service business in the immediately preceding year being 500 billion VND.

4. Having at least two employees holding a certified public accountant certificate or at least two employees holding a valuation certification as prescribed by law.

5. Having operating regulations for the debt trading platform, including at least the following:

a) Procedures, formalities, responsibilities of members participating in the debt trading platform and rights and obligations of the enterprise providing the debt trading platform;

b) Conditions for debts expected to be listed on the trading platform;

c) Management and supervision of transactions, including provisions on the provision and storage of information about debts expected to be listed on the trading platform;

d) Time and methods for establishing and canceling transactions;

đ) Payment methods and payment guarantee provisions for all parties;

e) Dispute resolution.

6. Having facilities, technical infrastructure, and information technology systems suitable for receiving, updating, and providing information on debt purchase and sale activities among members participating in the trading platform.

7. Conducting independent audits annually as prescribed by law.

Chapter III

STATE MANAGEMENT OF

DEBT PURCHASE AND SALE SERVICE BUSINESS ACTIVITIES

Article 9. Responsibilities of the Ministry of Finance

1. Being responsible before the Government for state management of enterprises engaging in debt purchase and sale service business.

2. Implementing management, inspection, audit, and supervision according to their authority over debt purchase and sale service business activities.

3. Guiding the implementation of this Decree.

Article 10. Responsibilities of Provincial People's Committees and Municipal People's Committees under Central Government

1. Implementing inspections and audits of compliance with legal provisions regarding debt purchase and sale service business activities within their provinces and cities, and handling violations according to their authority against acts violating the debt purchase and sale service business.

2. Reporting to the Ministry of Finance on the situation of debt purchase and sale service business activities within their provinces and cities periodically and urgently.

ArticleArticle 11. Responsibilities of Business Registration Authorities

1. Receiving and processing business registration files and changes to business registration certificates for debt purchase and sale service business activities.

2. Reporting to Provincial People's Committees and Municipal People's Committees under Central Government on the issuance and supplementation of business registration certificates for debt purchase and sale service business activities periodically and urgently.

Article 12. Responsibilities of the State Bank of Vietnam

The State Bank of Vietnam shall cooperate with the Ministry of Finance to implement inspections, audits, and supervision according to their authority over debt purchase and sale service business activities of asset management companies directly under commercial banks as prescribed by this Decree.

Chapter IV

IMPLEMENTING PROVISIONS

Article 13. Effective Date

This Decree takes effect from July 1, 2016.

Article 14. Transitional Provisions

Within one year from the date this Decree takes effect, enterprises that have been engaged in debt purchase and sale service business prior to the effective date of this Decree shall act as follows:

1. In cases where they meet the conditions stipulated in this Decree, enterprises must submit a report to the business registration authority in writing.

2. In cases where they do not meet the conditions stipulated in this Decree, enterprises must submit a report to the business registration authority in writing; take measures to ensure compliance with this Decree, including measures to cease operations in the debt purchase and sale service business.

Article 15. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of Provincial People's Committees and Municipal People's Committees under Central Government, and entities subject to this Decree are responsible for implementing this Decree./.