Decree No. 84/2010/ND-CP Amending and Supplementing Certain Articles of Decree No. 14/2007/ND-CP dated January 19, 2007, of the Government detailing the implementation of certain provisions of the Securities Law.

DECREE

Amending and supplementing some articles of Decree No. 14/2007/NĐ-CP  dated January 19, 2007 of the Government

detailing the implementation of certain provisions of the Securities Law

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THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Securities Law dated June 29, 2006;

Considering the proposal of the Minister of Finance,

DECREE:

Article 1. Amending and supplementing some articles of Decree No. 14/2007/NĐ-CP dated January 19, 2007 of the Government detailing the implementation of certain provisions of the Securities Law, as follows:

1. Amend Article 1 as follows:

"Article 1. Scope of application

This Decree details the implementation of certain provisions of the Securities Law regarding public offerings of securities, public companies, listing of securities, securities companies, fund management companies, and investment securities companies."

2. Supplement Article 3a following Article 3 as follows:

"Article 3a. General provisions on public offerings of securities

1. Organizations and individuals shall not make public offerings of securities in the following cases:

a) The enterprise does not meet the conditions for making public offerings of securities as stipulated in Article 12 of the Securities Law;

b) Making public offerings of securities to establish an enterprise; except for the cases specified in Clause 4 and 5 of this Article.

2. The registration of offering securities to the public must be carried out by the issuer, except in the following cases:

a) State owners (including state-owned corporations and state-owned joint-stock companies) implement the sale of state-owned shares held by corporations and joint-stock companies to the public to exercise their rights as representatives of state-owned capital at enterprises.

b) Major shareholders sell their ownership shares in listed companies to the public.

The Ministry of Finance shall prescribe the procedures and formalities for public offerings of securities in the cases specified in point a and b of Clause 2 of this Article.

3. The issuer must open a separate account at a commercial bank to freeze the proceeds from the offering period. In the case where the issuer is a commercial bank, it must choose another commercial bank to freeze the proceeds from the offering period. Within ten days from the end of the offering period, the issuer must report to the State Securities Commission on the results of the offering accompanied by confirmation from the commercial bank where the frozen account was opened about the proceeds from the offering period. After submitting the report to the State Securities Commission, the issuer may release the proceeds from the offering period.

4. Annually, six months from the end of the offering period until the completion of disbursement, the issuer must disclose information on the progress of using the proceeds from the offering period. In the event of a change in the purpose of use of funds, the issuer must disclose information on the reasons for the change and the Resolution of the Board of Directors on the change or approval of the competent authority issuing the Investment Certificate for foreign issuers as stipulated in Article 17a of this Decree."

3. Supplement Clause 7, 8, and 9 of Article 4 as follows:

"7. Documents, procedures, and formalities for public offerings of shares to establish joint-stock credit organizations shall be carried out according to the guidelines of the Ministry of Finance.

8. In the case of public offerings of securities of a joint-stock company formed through mergers and acquisitions, there must be at least one year of operation and profitable business results up to the registration date of the offering.

9. Documents, procedures, and formalities for public offerings of securities to exchange shares and carry out mergers, acquisitions, and buyouts shall be carried out according to the guidelines of the Ministry of Finance."

4. Supplement Point c of Clause 1 of Article 5 as follows:

"c) In the case where the issuer plans to issue additional shares or bonds within the term of convertible bonds, the offering documents must clearly state the risks to the interests of bond buyers along with a compensation plan for investors to ensure their interests."

5. Supplement Point d of Clause 1 of Article 6 as follows:

"d) Comply with the regulations of the law on foreign exchange management."

6. Amend Point b of Clause 2 of Article 6 as follows:

"b) Documents proving compliance with the conditions stipulated in Clause 1 of this Article and the content of information disclosure according to the form prescribed by the Ministry of Finance."

7. Supplement Chapter IIa following Chapter II as follows:

"Chapter IIa

PUBLIC COMPANIES

Article 7a. Securities Trading of Public Companies

1. Securities of public companies that meet the listing conditions prescribed in Articles 8 and 9 of this Decree shall be traded on stock exchanges.

2. Securities of public companies not listed on stock exchanges shall be traded in accordance with the guidelines of the Ministry of Finance.

Article 7b. Termination of Status as a Public Company

1. Except for public companies that have offered securities to the public or have listed shares on a stock exchange, public companies as stipulated in Clause 2, Article 25 of the Securities Law must notify the State Securities Commission in writing and publicly announce the termination of their status as a public company within thirty (30) days from the date they no longer have one hundred (100) investors holding shares, excluding professional securities investors or where the registered capital has been adjusted down to less than ten (10) billion Vietnamese dong.

2. The State Securities Commission is responsible for publishing on its electronic information website the termination of the status of a public company within seven (07) days from the date it receives the company's notification regarding the termination of its status as a public company.”

8. Amend the name of Article 8 as follows:

“Article 8. Conditions for Listing Securities on the Ho Chi Minh City Stock Exchange”.

9. Amend Point d, Clause 1, Article 8 as follows:

“d) At least twenty percent (20%) of the voting shares of the company must be held by at least one hundred (100) shareholders who are not professional securities investors and are not major shareholders, except in cases where state-owned enterprises are converted into joint-stock companies in accordance with the regulations of the Prime Minister.”

10. Add Point g, Clause 1, Article 8 as follows:

“g) The Ministry of Finance shall specify the listing conditions for shares of joint-stock companies formed through mergers and acquisitions.”

11. Add Point đ, Clause 2, Article 8 as follows:

“đ) The Ministry of Finance shall specify the listing conditions for bonds of joint-stock companies formed through mergers and acquisitions.”

12. Repeal Clause 4, Article 8.

13. Add Clause 5, Article 8 as follows:

“5. The Ministry of Finance shall specify in detail the listing conditions for other types of securities and the listing conditions for each trading board on the Ho Chi Minh City Stock Exchange.”

14. Amend the name of Article 9 as follows:

"Article 9. Conditions for Listing Securities on the Hanoi Stock Exchange”.

15. Amend Point b, Clause 1, Article 9 as follows:

“b) Business operations in the five years immediately preceding the registration for listing must show profits, without overdue debts exceeding one year, fulfill all financial obligations to the State, and have sound financial conditions up to the time of registration for listing;”

16. Add Point g, Clause 1, Article 9 as follows:

“g) The listing conditions for shares of joint-stock companies formed through mergers and acquisitions shall be implemented in accordance with the regulations of the Ministry of Finance;”

17. Amend Clauses 3 and 6, Article 9 as follows:

“3. Government bonds, government-guaranteed bonds, and local government bonds shall be listed on the Hanoi Stock Exchange upon the request of the bond issuing organization.

6. The Ministry of Finance shall specify in detail the listing conditions for other types of securities and the conditions for each trading board on the Hanoi Stock Exchange.”

18. Repeal Clauses 4 and 5, Article 9.

19. Add Article 9a following Article 9 as follows:

“Article 9a. Listing of Securities of Credit Institutions that are Joint-Stock Companies

For the case of registering to list securities of credit institutions that are joint-stock companies, in addition to the conditions stipulated in Articles 8 and 9 of this Decree, approval from the State Bank of Vietnam is also required.”

20. Delete the phrase “Securities Trading Center” in Articles 10, 11, 12, 13, 14, 16, and 26 of Decree No. 14/2007/NĐ-CP.

21. Amend Point đ, Clause 1, Article 14 as follows:

“đ) Results of production and business operations showing losses for three consecutive years or cumulative losses exceeding net assets in the most recent annual financial report before the review period.”

22. Amend Clause 3, Article 15 as follows:

“3. Meeting the listing conditions on a stock exchange of a country whose securities market regulatory authority or stock exchange has entered into cooperation agreements with the State Securities Commission or the Vietnamese Stock Exchange.”

23. Add Section 3 comprising Articles 17a and 17b to Chapter III as follows:

“SECTION 3. PUBLIC OFFERING AND LISTING OF SECURITIES IN VIETNAM BY FOREIGN ISSUERS”

Article 17a. Conditions for Offering and Listing Securities in Vietnam by Foreign Issuers

A foreign-established enterprise operating under foreign laws may offer securities to the public and list securities on a stock exchange in Vietnam if it meets the following conditions:

1. Conditions for foreign issuers to offer securities to the public in Vietnam:

a) Having an investment project in Vietnam that has been approved by competent authorities; having a plan for issuing and using the proceeds from the public offering of securities to invest in the project in Vietnam;

b) Commitment from the foreign organization to implement the project in Vietnam;

c) Commitment not to transfer raised capital abroad and not to withdraw corresponding own capital during the term of the permitted project;

d) Commitment to fully fulfill the obligations of the issuer as prescribed by Vietnamese law;

đ) Being supported by at least one securities company established and operating in Vietnam to participate in guaranteeing the issuance;

e) Complying with the provisions of Vietnamese law regarding foreign exchange management for the issuance of securities in Vietnam.

2. Conditions for listing securities of foreign issuers on a stock exchange in Vietnam:

a) Being securities issued in Vietnam as stipulated in Clause 1 of this Article;

b) The quantity of securities registered for listing corresponds to the quantity of securities permitted to be offered in Vietnam;

c) Commitment to fully fulfill the obligations of the listed entity as prescribed by Vietnamese law;

d) Being supported by one (01) securities company established and operating in Vietnam to participate in advising on the listing of securities.

Article 17b. Documents, Procedures, and Formalities for Approving Registration of Public Offering and Listing, and Delisting of Securities by Foreign Issuers in Vietnam

Documents, procedures, and formalities for approving registration of public offering and listing, and delisting of securities in Vietnam by foreign entities shall be carried out in accordance with the guidelines of the Ministry of Finance.”

24. Amend Clause 3 of Article 18 as follows:

“3. The minimum statutory capital of a fund management company, a fund management company with foreign investment, and a foreign fund management company branch in Vietnam is twenty-five (25) billion Vietnamese dong.”

25. Add Article 20a after Article 20 as follows:

“Article 20a. Financial advisory services and other financial services of securities companies.

The Ministry of Finance shall guide the financial advisory services and other financial services specified in Clause 3 of Article 60 of the Securities Law and specify the conditions for securities companies to provide and perform these types of services.”

26. Amend Clause 4 of Article 21 as follows:

“4. Management of investment capital of a securities investment company:

a) A private securities investment company may manage its investment capital itself or entrust a fund management company to manage its investment capital;

b) A publicly-traded securities investment company may not manage its investment capital itself but must entrust a fund management company to manage its investment capital;

c) In the case where a securities investment company entrusts a fund management company to manage its investment capital, the Director or General Manager, Deputy Director or Deputy General Manager (if any), Chairman of the Board of Directors, and at least two-thirds (2/3) of the members of the Board of Directors of the securities investment company must be independent from the fund management company.”

27. Repeal Clause 5 of Article 21.

28. Merge Articles 22 and 23 into Article 22 and amend as follows:

“Article 22. Documents, Procedures for Registering Public Offering of Shares and Procedures for Issuing Licenses for Establishment and Operation of Publicly-Traded Securities Investment Companies

The public offering of shares and issuance of licenses for establishment and operation of publicly-traded securities investment companies shall be carried out in accordance with the regulations of the Ministry of Finance.”

29. Amend Point g Clause 1 of Article 24 as follows:

“g) Other documents as prescribed in Article 22 of this Decree”

30. Repeal Article 28.

31. Repeal Clause 1 of Article 29.

Article 2. Implementation clause

This Decree takes effect from September 20, 2010.

Article 3. Implementation Organization

1. The Ministry of Finance shall be responsible for guiding the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for implementing this Decree./.