Decree No. 81/2020/ND-CP amending and supplementing certain articles of Decree No. 163/2018/ND-CP on corporate bond issuance

THE GOVERNMENT --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
NUMBER: 81/2020/NĐ-CP	HA NOI, July 9, 2020

DECREE

AMENDING AND SUPPLEMENTING CERTAIN ARTICLES OF THE DECREE NO. 163/2018/NĐ-CP ON THE ISSUANCE OF CORPORATE BONDS DATED DECEMBER 4, 2018

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

Based on the Enterprise Law dated November 26, 2014;

Pursuant to the Securities Law dated June 29, 2006;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Securities Law dated November 24, 2010;

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

Pursuant to the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

At the proposal of the Minister of Finance;

The Government promulgates the Decree amending and supplementing certain articles of the Decree No. 163/2018/NĐ-CP dated December 4, 2018 on the issuance of corporate bonds (hereinafter referred to as Decree No. 163/2018/NĐ-CP).

Article 1. Amending and supplementing certain provisions of the Governmental Decree No.

Decree No. 163/2018/NĐ-CP as follows:

1. Supplement Clause 4

Article 3

as follows:

"4. Acts of violation regarding the issuance of individual corporate bonds by organizations and individuals involved shall be subject to administrative penalties under the regulations on administrative penalties in the securities and securities market sector and relevant laws."

2. Amend

Clause 8 Article 6

as follows:

"8. Corporate bond trading: Corporate bonds issued in the domestic market are restricted from trading within a range of less than 100 investors excluding professional securities investors for one year from the date of completion of the issuance period, except in cases decided by the Court or inheritance according to the provisions of the law. After the aforementioned period, corporate bonds may be traded without limitation on the number of investors, except in cases where the issuing enterprise has a different decision. Corporate bonds issued to the international market shall comply with the trading regulations at the issuance market."

3. Amending and supplementing

Clause 1 Article 10

as follows:

"1. For non-convertible bonds or bonds not accompanied by warrant rights:

a) The issuing enterprise is a joint-stock company or limited liability company established and operating under Vietnamese law.

b) Has a minimum operating time of one year from the date of the first issuance of the Enterprise Registration Certificate or Business Registration Certificate or equivalent permit according to the law. For enterprises that have been reorganized or converted, the operating time is calculated as the operating time of the divided enterprise (in the case of dividing an enterprise), the operating time of the separated enterprise (in the case of separating an enterprise), the longest operating time among the merged enterprises (in the case of merging enterprises), the operating time of the enterprise receiving the merger (in the case of merging companies), the operating time before and after conversion (in the case of converting companies).

c) Has an audited annual financial report of the preceding year of issuance conducted by an auditing organization meeting the conditions stipulated in Clause 7, Article 4 of this Decree.

d) Enters into a consulting contract with a consulting organization regarding the bond issuance documentation as stipulated in Clause 3, Article 15 of this Decree, except when the issuing enterprise is an organization permitted to provide bond issuance documentation consulting services according to the law.

đ) Ensures compliance with the limit on the number of investors when issuing and trading bonds as stipulated in Clause 2, Article 4 and Clause 8, Article 6 of this Decree.

e) Has a bond issuance plan approved and agreed upon by the competent authority as stipulated in Article 14 of this Decree.

g) Pays the full principal and interest of previously issued bonds for three consecutive years prior to the issuance of new bonds (if applicable).

h) Meets the financial safety ratios and operational safety guarantees as prescribed by specialized laws.

i) Ensures that the outstanding corporate bond debt from individual issuances at the time of issuance (including the expected issuance volume) does not exceed five times the latest quarter-end equity capital as approved by the competent authority.

k) Each issuance must be completed within 90 days from the date of pre-issuance information disclosure; subsequent issuances must be at least six months apart from previous ones, and bonds issued in one issuance must have the same terms and conditions.

l) Credit institutions issuing bonds are not required to meet the requirements set out in points i and k of this clause.”

4. Amend

Point b Clause 2 Article 10

as follows:

"b) Meets the issuance conditions stipulated in points b, c, d, đ, e, g, h, i, k, and l of Clause 1 of this Article;"

5. Amend and supplement

Clause 1 and Clause 3 Article 13

as follows:

"1. The bond issuance documents of enterprises include:

a) The bond issuance plan as stipulated in Clause 1, Article 14 of this Decree;

b) The announcement of information about the bond issuance period according to Appendix 1 attached to this Decree;

c) Contracts signed between the issuing enterprise and organizations providing related services for the bond issuance period;

d) An audited annual financial report of the preceding year of issuance;

đ) The credit rating results of the credit rating organization for the issuing enterprise and the type of issued bonds (if available);

e) A bond purchase contract including the investor's commitment to having fully accessed the pre-issuance information and understanding the risks associated with purchasing bonds."

"3. The audited annual financial report of the preceding year of issuance included in the bond issuance documents as stipulated in point d, Clause 1 of this Article must be audited by an auditing organization meeting the conditions stipulated in Clause 7, Article 4 of this Decree. The audit opinion on the financial report must be an unqualified opinion; if the audit opinion is a qualified opinion, the exception must not affect the issuance conditions; the issuing enterprise must provide reasonable explanatory documents and obtain confirmation from the auditing organization regarding the impact of the exception.

a) In case the enterprise issues bonds within ninety days from the end of the fiscal year without having the audited financial report of the immediately preceding year of issuance, or without having the audited consolidated financial report of the immediately preceding year of issuance, the enterprise shall use the semi-annual financial report or the nine-month financial report of the immediately preceding fiscal year reviewed or audited by the State Audit Agency or an eligible auditing organization as stipulated in Clause 7, Article 4 of this Decree. The enterprise issuing bonds must disclose information to bondholders no later than twenty days from the date of the audit results of the annual financial report.

b) In case the enterprise issuing bonds is a parent company, the audited financial reports include the audited consolidated financial report of the immediately preceding year of issuance and the audited financial report of the parent company of the immediately preceding year of issuance.”

6. Amend

Point b, Clause 1, Article 14

as follows:

''b) Purpose of issuing bonds, including specific information about investment programs and projects; production and business activities requiring additional capital; restructured debts (name of debt, value, term of debt) funded by the proceeds from issuing bonds. For credit organizations, specify the purpose of issuing bonds to increase Tier 2 capital and/or for lending, investment, or other purposes.

7. Amend

Clause 3, Article 15

as follows:

“3. Consulting organizations for bond issuance files are securities companies, credit institutions, and other financial institutions permitted to provide consulting services for bond issuance files in accordance with the law. When providing services, the consulting organization for issuance has the responsibility to review the compliance with the conditions for issuance and the issuance file of the issuing enterprise as prescribed in Articles 10, 11, and 13 of this Decree and the Securities Law.”

8. Supplement Clause 5

Article 21

as follows:

'' 5. The Ministry of Finance shall provide detailed guidance on the disclosure regime for enterprises issuing bonds.”

9. Amend

Clause 1, Clause 2, Article 22

as follows:

“1. At least three working days before the planned date of organizing a bond issuance period, the issuing enterprise shall disclose information prior to the issuance period to investors who have registered to purchase bonds and submit the disclosed information content to the Stock Exchange.

a) The content of the pre-issuance disclosure according to the Model attached as Appendix 1 issued together with this Decree;

b) Specifically, for green bond issuance, in addition to the information disclosure content as prescribed in point a of this clause, the issuing enterprise must disclose information about the management and disbursement process of funds from green bond issuance as stipulated in Clause 4, Article 5 of this Decree;

c) The issuing enterprise sends the pre-issuance disclosure content to investors who have registered to purchase bonds and the Stock Exchange in either paper form or electronic form.

2. For enterprises issuing bonds in multiple issuance periods:

a) For the first issuance period, the pre-issuance disclosure shall be carried out in accordance with the provisions of Clause 1 of this Article.

b) For subsequent issuance periods, at least three working days before the bond issuance period, the enterprise supplements the documents as prescribed in Clause 2, Article 13 of this Decree to send to investors who have registered to purchase bonds while also sending to the Stock Exchange.”

10. Amend the provision at

point b, Clause 2, Article 24

as follows:

“b) For green bond issuance, in addition to the provisions at point a of this clause, there must be a report on the use of funds from the issuance source with the review opinion of an auditing organization and an environmental impact assessment report.

11. Amended

Clause 1, Article 29

as follows:

“1. The Stock Exchange, under the assignment of the Ministry of Finance, shall be responsible for compiling information on corporate bonds, building and operating a dedicated website for corporate bond information to disclose information as prescribed in Articles 21, 22, 23, 24, 25, 26, 27, and 28 of this Decree and the guidance of the Ministry of Finance.”

12. Amending and supplementing

Article 30.

as follows:

"Article 30. Reports of the Securities Exchange, Depositary Organizations, and Issuance Advisory Organizations on the Situation of Corporate Bond Issuance

1. The Securities Exchange shall implement a regular reporting system monthly, quarterly, and annually regarding the situation of corporate bond issuance and trading, including domestic market issuance and international market issuance, in accordance with the guidelines of the Ministry of Finance. The contents of the Securities Exchange's report include:

a) The number of enterprises issuing bonds, detailed by type of enterprise, including public companies, non-public joint-stock companies, limited liability companies; the number of bond issuance tranches (including convertible bond issuance, secured bond issuance, bond issuance accompanied by warrant rights, green bond issuance);

b) Main conditions and terms of proposed bond issuance and issuance results;

c) Average issuance interest rate for each term;

d) Market, location of issuance organization;

đ) Report on the situation of registration, deposit, and trading of corporate bonds, including:

- The number of enterprises registering and depositing bonds and the volume of bonds registered and deposited during the period; the volume of bonds traded during the period.

- The situation of principal and interest repayment of bonds;

- The number of investors holding bonds for each listed bond code.

2. Depositary organizations are responsible for providing information to the Securities Exchange within one working day after completing bond transactions. Depositary organizations provide periodic information monthly, quarterly, and annually on the situation of bond registration and deposit to the Securities Exchange so that the Securities Exchange can compile reports to submit to the Ministry of Finance as stipulated in Clause 1 of this Article.

3. Issuance advisory organizations shall implement a regular reporting system every six months and annually to the Ministry of Finance on the situation of bond issuance advisory services.

4. The Ministry of Finance shall guide the reporting systems of the Securities Exchange, depositary organizations, and issuance advisory organizations as stipulated in Clauses 1, 2, and 3 of this Article."

13. Amendment

Clause 1, Clause 2 of Article 36

as follows:

1. Implement the provision of issuance advisory services, tender organization, agency, and issuance guarantee services for bond-issuing enterprises according to signed service contracts, in accordance with this Decree and securities laws.

2. Review compliance with the provisions on the limit on the number of investors as stipulated in Clause 2 of Article 4 and Clause 8 of Article 6 of this Decree, provisions on issuance conditions and issuance documents as stipulated in Articles 10, 11, and 13 of this Decree.

14. Amend

Clause 2 of Article 37

as follows:

"2. Provide periodic information on the situation of bond deposit, trading, and ownership of corporate bonds by investors to the Securities Exchange as stipulated in Article 30 of this Decree."

Article 2. Implementation clause

1. This Decree takes effect from September 1, 2020.

2. Corporate bonds issued before the effective date of this Decree continue to be implemented according to the conditions and terms of the issuance plan already disclosed to investors; perform deposit, reporting, periodic information disclosure, and comply with the responsibilities of bond-issuing enterprises as stipulated in this Decree and the guidance of the Ministry of Finance.

3. Ministers, Heads of Ministries equivalent to ministries, Heads of government agencies, Chairmen of provincial People's Committees under central government jurisdiction; Councils of Management, Councils of Members, General Directors, Directors of bond-issuing enterprises are responsible for implementing this Decree./.

Place of Receipt: - Central Party Committee Secretariat; - Prime Minister, Deputy Prime Ministers; - Ministries, ministerial-level agencies, and agencies under the Government; - Provincial People's Councils, People's Committees of centrally governed cities; - Central Party Office and Party Committees; - General Secretary's Office; - President's Office; - Office of the National Assembly; - Supreme People's Court; - Supreme People's Procuracy; - National Financial Supervisory Commission; - State Audit Agency; - Social Policy Bank; - Vietnam Development Bank; - Central Committee of the Vietnam Fatherland Front; - Central bodies of mass organizations; - VPCP: Deputy Prime Minister, Vice Ministers, Assistant Prime Minister, Director of the Government Portal. various Departments, Bureaus, subordinate units, Official Gazette; - File: VT, KTTH (2b).

PRIME MINISTER PRIME MINISTER Nguyen Xuan Phuc