Decree No. 88/2014/ND-CP on credit rating services

DECREE

Regulations on Credit Rating Services

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

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to the Securities Law dated July 12, 2006, and the Law Amending and Supplementing Certain Provisions of the Securities Law dated November 14, 2010;

At the proposal of the Minister of Finance,

The Government promulgates this Decree stipulating credit rating services.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree regulates credit rating services; conditions for the establishment and operation of credit rating enterprises operating in Vietnam.

2. This Decree does not regulate the following activities:

a) National credit ratings;

b) Credit ratings of the State Bank of Vietnam for credit institutions;

c) Credit information center ratings of the State Bank of Vietnam;

d) Internal credit ratings of credit institutions and foreign bank branches.

Article 2. Applicability

A credit rating enterprise shall be issued a Business Condition Certificate in accordance with this Decree.

Enterprises and organizations subject to credit ratings.

Organizations and individuals related to credit rating activities.

Article 3. Credit Rating Services

1. Credit ratings for enterprises and organizations;

2. Credit ratings for debt instruments.

Article 4. Definitions

In this Decree, the following terms shall be understood as follows:

1. "Credit Rating Result Report": Is a report announcing the results of credit ratings on the rated organization.

2. "Credit Rating Level": Is the symbol representing the ranking assessing the ability to fully and timely fulfill debt obligations of the rated organization.

3. "Debt Instrument": Are financial products establishing debt obligations including: bonds, bank loans, and other financial products generating debt obligations.

4. "Analyst": Is a person conducting activities such as collecting information, analyzing, evaluating, and rating the ability to fully and timely fulfill debt obligations of the rated organization.

5. "Credit Rating Service for Enterprises and Organizations": Is a service provided by a credit rating enterprise to analyze, evaluate, and rate the ability to fully and timely fulfill debt obligations of enterprises and organizations.

6. "Credit Rating Service for Debt Instruments": Is a service provided by a credit rating enterprise to analyze, evaluate, and rate the ability to fully and timely fulfill debt obligations of the issuer of the debt instrument at the time of rating.

7. "Rated Organization": Is an enterprise or organization that has been rated or whose debt instrument has been rated as stipulated in Article 3 of this Decree.

8. "Business Condition Certificate": Is the abbreviated name of the Business Condition Certificate for credit rating services as stipulated in this Decree.

9. "Credit Rating Contract": Is a contract signed between a credit rating enterprise and a rated organization.

10. "Credit Rating Committee": Is a specialized committee established by a credit rating enterprise for each credit rating contract to decide on the credit rating level, update the credit rating level, and report the results of the credit rating.

11. "Related Party": Is a term defined in Clause 34, Article 6 of the Securities Law, referring to an individual or organization having relationships with another in the following cases:

a) Father, adoptive father, mother, adoptive mother, wife, husband, child, adopted child, brother, sister of an individual;

b) An organization where an individual is an employee, Director, or General Director, or an owner holding more than ten percent of the circulating voting shares;

c) Members of the Board of Directors, Supervisory Board, Director, or General Director, Deputy Director, or Deputy General Director, and other management positions of the organization;

d) A person who, in relation to another person, directly or indirectly controls or is controlled by that person or jointly controlled by that person;

đ) Parent company, subsidiary;

e) Contractual relationship in which one party acts as an agent for the other.

12. "Contributed Charter Capital": Is the total charter capital contributed by shareholders or contributing members to a business as reflected in the business's financial statements at the reporting date.

Article 5. Principles of Credit Rating Operations

1. Independence and objectivity.

2. Honesty.

3. Transparency.

4. Compliance with current laws and regulations, this Decree, and the terms of the credit rating contract when conducting credit ratings.

Article 6. Use of Credit Rating Services

1. The use of credit rating services is based on the needs of organizations and individuals.

2. The results of credit ratings are reference information and not investment recommendations for debt instruments or financial instruments issued by the rated entity.

Article 7. Prohibited Acts

1. Altering, erasing, or forging documents in the business registration dossier that has been certified as meeting the conditions for business operation.

2. Altering, erasing, or forging the Certificate of Eligibility for Business Operation.

3. Leasing or transferring the Certificate of Eligibility for Business Operation.

4. Providing credit rating services without holding a Certificate of Eligibility for Business Operation as stipulated in this Decree.

5. Demanding or accepting money or any other benefit from the rated entity outside the agreed service fee in the signed credit rating contract.

6. Using the credit rating result and the issuance result of debt instruments of the rated entity as the basis to determine the cost of credit rating services.

7. Colluding with the rated entity to influence the credit rating result.

8. Distorting the credit rating result.

9. Announcing information about the credit rating result without having a credit rating contract with the rated entity.

10. Analysts and members of the credit rating council providing credit rating services in cases where conflicts of interest arise as prescribed in Article 38 of this Decree.

11. Rated entities shall not engage in the following acts:

a) Obstructing analysts in performing credit rating activities;

b) Providing false and dishonest information related to credit ratings;

c) Threatening, bribing, or colluding with analysts, members of the credit rating council, or credit rating companies to distort the credit rating result.

Article 8. Planning for the Development of Credit Rating Services

Based on the development situation of the financial market, the Ministry of Finance shall take the lead in coordinating with relevant ministries and sectors to submit to the Prime Minister for consideration and approval of the planning for the development of credit rating services during each period.

Chapter II
CREDIT RATING COMPANIES

Article 9. Types of Credit Rating Companies

1. The following types of enterprises may operate credit rating services after obtaining a Certificate of Eligibility for Business Operation in accordance with this Decree:

a) Limited liability companies;

b) Joint-stock companies;

c) Limited Liability Partnership.

2. The naming of credit rating companies must comply with the provisions of the Enterprise Law.

3. Enterprises that have not registered to operate credit rating services are not allowed to use the term "credit rating" or other terms with similar meanings in their names.

Article 10. Shareholders or capital contributors of credit rating enterprises

1. The contribution of capital to establish a credit rating enterprise shall be carried out in accordance with the provisions of the Enterprise Law and must ensure the following principles:

a) An organization or individual that has contributed capital and owns more than five percent (5%) of the subscribed capital of one (01) credit rating enterprise shall not contribute capital to establish or purchase, hold shares or capital contributions of another (01) credit rating enterprise;

b) Organizations and individuals shall not use state budget funds to participate in contributing capital to establish a credit rating enterprise.

2. A credit rating enterprise that is granted a Business Registration Certificate under this Decree shall not contribute capital to establish another credit rating enterprise.

Article 11. Statutory Capital

1. The level of statutory capital for a credit rating enterprise for credit rating activities is fifteen (15) billion VND.

2. The level of statutory capital specified in Clause 1 of this Article does not include the statutory capital level of other business fields that the credit rating enterprise is permitted to operate according to the law.

Article 12. Scope of Activities of Credit Rating Enterprises

1. Credit rating services as prescribed in this Decree.

2. Services related to credit rating activities, including:

a) Information services on credit ratings;

b) Training, upgrading, and updating knowledge related to credit rating activities.

3. When providing services related to credit rating activities as stipulated in Clause 2 of this Article, credit rating enterprises must ensure that there are no conflicts of interest as prescribed in Article 38 of this Decree.

4. Credit rating enterprises shall not engage in the following sectors:

a) Accounting, auditing;

b) Securities including: Brokerage; advisory; underwriting; distribution agents; fund management; portfolio management; securities investment;

c) Banking.

Article 13. Rights and Obligations of Credit Rating Enterprises

1. Credit rating enterprises have the following rights:

a) To provide services as prescribed in Article 12 of this Decree;

b) To receive service fees from providing services as prescribed in Article 12 of this Decree;

c) To request organizations being rated to provide necessary documents and information related to the credit rating contract.

2. Credit rating enterprises have the following obligations:

a) Only provide credit rating services when they have been granted a Business Registration Certificate and comply with the information disclosure requirements as prescribed in Article 18 of this Decree;

b) Organizing the provision of credit rating services must comply with the operational principles prescribed in Article 5 of this Decree;

c) Comply with the provisions of this Decree and other relevant laws when providing credit rating services;

d) Ensure that salaries, remuneration, and bonuses for analysts and members of the credit rating committee are not dependent on service fees and the results of the credit rating contract in which they participate;

đ) Bear responsibility for maintaining sufficient conditions regarding capital, personnel, and operations as prescribed in this Decree and relevant laws;

e) Bear legal responsibility before the law and before the organization being rated for the results of the credit rating contract signed.

Article 14. Conditions for Issuing a Business Registration Certificate

2. Have a minimum subscribed capital equal to the statutory capital level prescribed in Article 11 of this Decree.

3. Shareholders or capital contributors meeting the conditions stipulated in Article 10 of this Decree.

4. Have a General Director or Director who meets the criteria and conditions stipulated in Article 19 of this Decree.

5. Have a minimum of five (05) employees who meet the criteria and conditions of credit rating trust board members as prescribed in Article 20 of this Decree.

6. Have a minimum of ten (10) employees who meet the criteria and conditions of analysis specialists as prescribed in Article 21 of this Decree.

a) Business plan;

b) Estimated revenue and operating costs;

c) Human resources plan;

d) Estimated sources of data usage.

9. Have a corporate website.

Article 15. Documents for Application for Issuance of a Business Registration Certificate

1. An application form for issuing a Business Registration Certificate according to Model No. 1 attached as an appendix to this Decree.

3. Information about shareholders or capital contributors:

a) List of shareholders with the amount of subscribed capital and ownership ratio of each shareholder;

b) Documentation proving that the subscribed capital meets the conditions stipulated in Article 11 of this Decree and the structure of shareholders or capital contributors meets the conditions stipulated in Article 10 of this Decree.

5. Confirmation of legal land use.

5. Documentation proving that the General Director or Director meets the criteria and conditions stipulated in Article 19 of this Decree, including the following basic documents:

a) A certified copy of the labor contract by the competent state agency;

b) Certified copies of vocational certificates, professional certificates, and certificates of expertise by the competent state agency proving professional qualifications, experience, and competence;

c) A certified copy of the criminal record certificate by the competent state agency.

6. Documentation proving the number of employees meeting the criteria and conditions for credit rating trust board members as prescribed in Article 20 of this Decree and analysis specialists as prescribed in Article 21 of this Decree.

7. Drafts of business procedures complying with the provisions of Article 31 of this Decree.

8. The business plan of the enterprise.

9. The address of the corporate website of the credit rating enterprise.

Article 16. Procedure for Issuing a Business Registration Certificate

1. The enterprise submits one (01) set of application documents for issuing a Business Registration Certificate to the Ministry of Finance for verification of completeness and validity of the documents.

2. Within ten (10) working days from the date of receipt of the documents, the Ministry of Finance will notify the enterprise of the completeness and validity of the documents and request additional documentation if necessary, and submit five (05) sets of formal documents for review.

3. Within sixty (60) working days from the date of receipt of complete and valid documents, the Ministry of Finance, in collaboration with the Ministry of Planning and Investment, the State Bank of Vietnam, and relevant ministries and sectors, will review and examine the documents to issue the Business Registration Certificate. In case of rejection, the Ministry of Finance will notify the enterprise in writing and specify the reasons.

4. The content of the review of the documents shall be based on the conditions stipulated in Article 14 of this Decree.

Article 17. Business Operation Qualification Certificate

1. The Business Operation Qualification Certificate shall contain the following basic contents:

a) Name of the credit rating business enterprise;

b) Head office address and website address of the credit rating business enterprise;

c) Number and date of issuance of the Enterprise Registration Certificate;

d) Number and date of issuance of the Business Operation Qualification Certificate;

đ) Legal representative of the enterprise;

e) Content and scope of activities.

2. In cases where the Business Operation Qualification Certificate is reissued or adjusted, the number of reissues or adjustments shall be clearly stated, and the business operation qualification certificate number issued for the first time shall be used for the enterprise.

Article 18. Publicizing Information Before Commencing Operations

Credit rating business enterprises must publicize on mass media and their corporate websites at least ten (10) working days before the planned opening day of operations the following basic information:

1. Name and head office address of the credit rating business enterprise.

2. Website address of the credit rating business enterprise.

3. Business Operation Qualification Certificate.

4. Registered capital contribution.

5. List and corresponding percentage of contributions of each shareholder or capital contributor holding more than five percent (5%) of the registered capital contribution of the credit rating business enterprise.

6. Name of the legal representative of the credit rating business enterprise.

7. Planned opening date for credit rating operations of the enterprise.

Article 19. Standards and Conditions for the General Director or Director of the Enterprise

3. Having a bachelor's degree or higher in economics, finance, banking, accounting, auditing, statistics, or business administration.

4. Having at least ten (10) years of direct work experience in the field specified in Clause 3 of this Article.

5. Legally residing in Vietnam during the term of office.

Article 20. Standards and Conditions for Members of the Credit Rating Council

2. Not being a civil servant or public official as stipulated in the Law on Civil Servants and the Law on Public Officials.

3. Having a bachelor's degree or higher in economics, finance, banking, accounting, auditing, statistics, business administration, or a specialty related to the business area of the rated organization.

4. Having at least seven (07) years of direct work experience in the field specified in Clause 3 of this Article.

Article 21. Standards and Conditions for Analysts

2. Not being a civil servant or public official as stipulated in the Law on Civil Servants and the Law on Public Officials.

3. Having a bachelor's degree or higher in economics, finance, banking, accounting, auditing, statistics, business administration, or a specialty related to the business area of the rated organization.

4. Having at least three (03) years of direct work experience in the field specified in Clause 3 of this Article.

Article 22. Reissuing the Business Operation Qualification Certificate

1. The Business Operation Qualification Certificate shall be reissued in the following cases:

a) The Business Operation Qualification Certificate is lost or damaged;

b) The credit rating business enterprise undergoes division, separation, merger, consolidation, or change in ownership form and continues to meet all conditions prescribed from Clause 1 to Clause 7 of Article 14 of this Decree.

2. Procedures and formalities for reissuing the Business Operation Qualification Certificate in the case specified in Point a Clause 1 of this Article:

a) The documents include:

- Original Business Operation Qualification Certificate (except in cases of loss);

- Application for reissuance of the Business Operation Qualification Certificate according to Model No. 3 attached as an appendix to this Decree.

b) Within five (5) working days from the date of receipt of the Application for reissuance of the Business Operation Qualification Certificate, the Ministry of Finance shall review and reissue the Business Operation Qualification Certificate.

3. Procedures and formalities for reissuing the Business Operation Qualification Certificate in the case specified in Point b Clause 1 of this Article:

a) The documents include:

- Application for reissuance of the Business Operation Qualification Certificate according to Model No. 1 attached as an appendix to this Decree;

- Documents and materials proving that the enterprise continues to meet all conditions prescribed from Clause 1 to Clause 7 of Article 14 of this Decree.

b) Within fifteen (15) working days from the date of receipt of complete valid files, the Ministry of Finance shall examine and review the file to reissue the Business Operation Qualification Certificate. In case of refusal, the Ministry of Finance shall notify the enterprise in writing and specify the reasons.

Article 23. Adjustment of Business Registration Certificate

1. A credit rating enterprise must submit procedures to request adjustment of the Business Registration Certificate within fifteen (15) working days from the date of change in the contents of the Business Registration Certificate as stipulated in Article 17 of this Decree.

2. The dossier for requesting adjustment of the Business Registration Certificate includes:

a) An application form for adjusting the Business Registration Certificate according to Model No. 4 attached to this Decree, clearly stating the reasons for the adjustment;

b) The original Business Registration Certificate issued most recently;

c) Documents proving the content of the requested adjustment of the Business Registration Certificate.

3. Within ten (10) working days from the date of receiving a complete and valid dossier, the Ministry of Finance will review and examine the dossier to adjust the Business Registration Certificate. In case of refusal, the Ministry of Finance will notify the enterprise in writing and specify the reasons.

Article 24. Changes to be Notified to State Management Agencies

Within ten (10) working days from the date of changes in the following contents, a credit rating enterprise must notify in writing to the Ministry of Finance and the business registration agency:

1. Failure to meet any of the conditions prescribed in Article 14 of this Decree;

2. The name, main office address, and website address of the credit rating enterprise;

3. The legal representative of the enterprise;

4. Dissolution, bankruptcy, or voluntary cessation of credit rating service operations;

5. Revocation of the Enterprise Registration Certificate.

Article 25. Revocation of Business Registration Certificate

1. A credit rating enterprise shall have its Business Registration Certificate revoked in the following cases:

a) Failure to meet any of the conditions prescribed in Clauses 1 to 6 of Article 14 of this Decree for six (06) consecutive months;

b) Committing any of the prohibited acts prescribed in Clauses 1 to 9 of Article 7 of this Decree;

c) Being dissolved, bankrupt, or voluntarily ceasing credit rating service operations;

d) Revocation of the Enterprise Registration Certificate.

2. The Business Registration Certificate automatically becomes invalid in the cases specified in Points c and d of Clause 1 of this Article.

3. The Ministry of Finance issues a decision to revoke the Business Registration Certificate in the case specified in Clause 1 of this Article.

4. The decision to revoke the Business Registration Certificate of the enterprise shall be published on the Ministry of Finance's electronic information website.

5. The enterprise must immediately cease all credit rating activities and related services from the date the Business Registration Certificate automatically becomes invalid; or from the date the decision to revoke the Business Registration Certificate takes effect.

Chapter III
CREDIT RATING SERVICE ACTIVITIES

Article 26. Credit Rating Process

1. A credit rating enterprise must establish a credit rating process including the following basic steps:

a) Negotiating and signing a credit rating contract with the rated organization;

b) Selecting and assigning tasks to analysts participating in the credit rating contract in accordance with Article 29 of this Decree;

c) Establishing a credit rating committee to implement the credit rating contract in accordance with Article 30 of this Decree;

d) Collecting information, analyzing, assessing, and rating the ability of the rated organization to fulfill debt obligations fully and on time;

đ) Approving the credit rating results;

e) Publishing the report on credit rating results;

g) Monitoring, updating, and periodically evaluating the report on credit rating results according to the credit rating contract until the end of the credit rating contract;

h) Ending the credit rating contract.

2. A credit rating enterprise must comply with the credit rating process as prescribed in Clause 1 of this Article.

3. A credit rating enterprise must publish the credit rating process and updates to these processes (if any) on the enterprise's electronic information website.

Article 27. Credit Rating Contract

1. The credit rating contract must comply with the principles stipulated in Article 5 of the Decree.

2. The credit rating contract shall be documented in writing and include the following basic contents:

a) Name, address, and representative of the credit rating enterprise and the entity being rated.

b) Purpose, scope, and content of the credit rating activities.

c) Duration of the credit rating contract.

d) Conditions and terms regarding the publication of credit rating results.

đ) Service fees for credit rating.

e) Rights, obligations, and responsibilities of the parties during the implementation of the credit rating contract.

g) Obligation to maintain confidentiality of information according to Article 39 of this Decree.

h) Provisions on monitoring, periodic evaluation, and updating reports on credit rating results until the end of the credit rating contract.

i) Provisions on early termination of the credit rating contract and the responsibilities of the parties.

k) Provisions on dispute resolution.

Article 28. Service Fees for Credit Rating

1. Service fees for credit rating shall be agreed upon between the credit rating enterprise and the entity being rated within the credit rating contract.

2. Service fees for credit rating shall be based on the following factors:

a) Content, volume, and nature of work.

b) Duration of the credit rating contract.

c) Level of expertise, experience, and reputation of the analysts, credit rating committee, and credit rating enterprise.

d) Degree of responsibility of the credit rating enterprise.

Article 29. Analysts

1. For each credit rating contract, the credit rating enterprise selects, assigns tasks, and determines the number of analysts based on the scale and nature of the contract. Analysts participating in each credit rating contract must meet the following basic requirements:

a) Satisfy the standards and conditions specified in Article 21 of this Decree.

b) Not engage in management activities of the credit rating enterprise.

c) Not simultaneously be a member of the credit rating committee of the same credit rating contract.

d) Not fall under the conflict of interest situations when participating in the credit rating contract as stipulated in Clause 2, Article 38 of this Decree. If a conflict of interest situation arises for the analyst during the contract implementation as defined in Clause 2, Article 38 of this Decree, the credit rating enterprise must terminate the analyst's participation in the credit rating contract. The enterprise may replace or supplement new analysts if necessary.

2. Responsibilities of analysts:

a) Collecting information, analyzing, assessing, and rating the ability of the entity being rated to fulfill its debt obligations fully and timely, as assigned by the credit rating enterprise.

b) Reporting anticipated credit rating results to the credit rating committee as assigned by the credit rating enterprise.

c) Reporting to the credit rating committee and requesting termination of participation in the credit rating contract in case of a conflict of interest as stipulated in Article 38 of this Decree.

d) Adhering to the code of ethics standards set forth in Article 34 of this Decree.

Article 30. Credit Rating Council

1. For each credit rating contract, the credit rating enterprise shall establish a credit rating council, select and determine the number of members based on the scale and nature of the contract but must have at least three (03) members. The selection of credit rating council members for each credit rating contract must comply with the following basic principles:

a) There must be at least one (01) member of the credit rating council who is an employee of the credit rating enterprise;

b) There must be at least one (01) member holding one of the following certificates: Certificate of Auditor issued by the Ministry of Finance, internationally recognized certificate in the field of securities investment analysis, accounting and auditing;

c) Meet the standards and conditions prescribed in Article 20 of this Decree;

d) Not participate in the management activities of the credit rating enterprise;

đ) Not be an analyst of the same (01) credit rating contract;

e) Not belong to the cases of conflict of interest when participating in the credit rating contract as prescribed in Clause 2, Article 38 of this Decree. During the implementation of the contract, if a conflict of interest occurs involving a credit rating council member, the credit rating enterprise must terminate the member's participation in the credit rating contract. The enterprise may replace or supplement new credit rating council members if necessary.

2. Responsibilities of the credit rating council:

a) Decide on the credit rating result or change the credit rating level according to the voting mechanism prescribed in the Operation Regulation of the credit rating council;

b) During the implementation of the contract, the credit rating council must report to the enterprise manager any cases of conflict of interest involving analysts and credit rating council members as prescribed in Clause 2, Article 38 of this Decree.

3. Responsibilities of credit rating council members:

a) Credit rating council members have the right to attend credit rating council meetings to review, discuss and vote on the credit rating level, update the credit rating level, and report the credit rating results;

b) During the implementation of the credit rating contract, credit rating council members who fall under the cases of conflict of interest as prescribed in Clause 2, Article 38 of this Decree have the obligation to report to the credit rating council and request termination of their participation in the contract;

c) Adhere to the ethical code rules prescribed in Article 34 of this Decree.

4. Operation Mechanism of the Credit Rating Council:

a) The credit rating enterprise has the responsibility to issue the Operation Regulation of the credit rating council including the following main contents:

- Voting mechanism of the credit rating council, which must include at least 60% of members voting to pass each decision of the council;

- Election mechanism for the chairman of the credit rating council to manage the council's operations;

- Conflict of interest resolution mechanism for analysts and credit rating council members (if any);

- Mechanism for supplementing and replacing credit rating council members.

b) When voting to approve the credit rating level, updating the credit rating level, and reporting the credit rating results, the credit rating council must ensure independence, objectivity, transparency, and not be influenced by the General Director, Director, Board of Directors, and Board of Members of the credit rating enterprise.

c) The credit rating council will automatically dissolve upon completion of the credit rating contract.

Article 31. Business Processes

1. Credit rating enterprises shall establish business processes for credit rating activities in accordance with this Decree.

2. The system of business processes includes:

a) Working procedures of analysts;

b) Regulations on the operation of the Credit Rating Council as stipulated in Clause 4, Article 30 of this Decree;

c) Credit rating methods as stipulated in Article 32 of this Decree;

d) Procedures for developing, evaluating, and updating credit rating methods;

đ) Code of ethics standards as stipulated in Article 34 of this Decree.

Article 32. Credit Rating Methods

1. Credit rating enterprises must develop credit rating methods to analyze and assess the ability of rated organizations to fully and timely fulfill their debt obligations. Credit rating methods must include both quantitative evaluation methods and qualitative evaluation methods.

2. Credit rating methods must evaluate basic risk factors and their impact on the ability of rated organizations to fully and timely fulfill their debt obligations, including the following main contents:

a) Macroeconomic risks;

b) Market and business environment risks;

c) Strategic risks;

d) Management risks;

đ) Human resource risks;

e) Financial risks;

g) Other risks as assessed by the credit rating enterprise.

3. Credit rating enterprises must use systematic and consistent credit rating methods for each type of debt obligation and each industry or field of production and business.

4. Periodically, credit rating enterprises have the responsibility to review credit rating methods and underlying assumptions used for adjustment if necessary.

5. Credit rating enterprises must publish on their corporate websites the main contents of credit rating methods.

Article 33. Credit Rating Levels

1. Credit rating enterprises must establish and uniformly apply a credit rating level system based on the following main principles:

a) Credit rating levels must be clear, understandable, and ensure comparability between different credit rating levels;

b) Credit rating levels are ranked from highest to lowest according to the ability of rated organizations to fully and timely fulfill their debt obligations.

2. Credit rating enterprises must publish on their corporate websites the symbols and meanings of each credit rating level.

Article 34. Code of Ethics Standards

1. Credit rating enterprises must issue and implement a code of ethics standards in accordance with International Organization of Securities Commissions (IOSCO) standards and publish them on their corporate websites.

2. Credit rating enterprises must issue and implement a code of ethics standards for the operations of the enterprise, analysts, and members of the Credit Rating Council.

Article 35. Report on Credit Rating Results

1. Credit rating enterprises must publish on their corporate websites reports on credit rating results within twenty-four (24) hours after officially deciding on the credit rating level results.

2. Reports on credit rating results must include the following main contents:

a) Credit rating level;

b) General assessment of the rated organization;

c) Basic factors positively and negatively affecting the ability of the rated organization to fully and timely fulfill its debt obligations;

d) Comprehensive statistics on past credit rating results of the rated organization (if applicable);

đ) Name and position of the analyst and member of the Credit Rating Council participating in the credit rating contract;

e) Cases where analysts and members of the Credit Rating Council cease participation in the credit rating contract before its completion and specify the reasons;

g) Ownership ratio of the rated organization in the credit rating enterprise;

h) Ownership ratio of the employees of the credit rating enterprise in the rated organization;

i) Commitment to conducting credit ratings independently and objectively;

k) Clearly state that the credit rating report is reference information and not investment or capital contribution recommendations for debt instruments or financial instruments issued by the rated organization.

3. Reports on credit rating results must be signed by the legal representative or authorized person of the credit rating enterprise.

Article 36. Disclosure of Information

1. Credit rating enterprises must disclose on their corporate website the following basic information:

a) The name of the General Director or Director of the credit rating enterprise;

b) The code of conduct ethics rules as stipulated in Article 34 of this Decree;

c) Credit rating methods as stipulated in Article 32 of this Decree;

d) The credit rating grade as prescribed in Article 33 of this Decree;

đ) A list and proportion of shares held by shareholders or contributing members holding more than five percent (5%) of the subscribed capital of the credit rating enterprise;

e) Changes in ownership ratio of shareholders or contributing members holding more than five percent (5%) of the subscribed capital of the credit rating enterprise;

g) Reports on the results of credit ratings as prescribed in Article 35 for each credit rating contract.

2. Annually, six (06) times a year, credit rating enterprises must disclose on their corporate website the following basic statistical data:

a) The credit rating grades of each organization rated since the first time they were rated;

b) The average rate of timely fulfillment of debt obligations by organizations rated according to each credit rating grade.

3. Before May 1st each year, credit rating enterprises must disclose on their corporate website a list of organizations rated whose service fees for credit ratings account for more than five percent (5%) of the total revenue from credit rating activities of the enterprise in the preceding fiscal year at the time of disclosure.

4. The information specified in Clause 1, Clause 2, and Clause 3 of this Article must be maintained and stored on the corporate website of the credit rating enterprise for a period of five (05) years from the date of disclosure.

Article 37. Internal Control System

1. An internal control system is a set of mechanisms, policies, procedures, and internal regulations aimed at ensuring prevention, detection, and prompt resolution of risks in credit rating activities.

2. Credit rating enterprises must establish and operate an internal control system to ensure:

a) Monitoring the independence and objectivity of the credit rating enterprise, analysts, and members of the Rating Council with respect to the rated organization;

b) Prevention, detection, and prompt resolution of actual or potential conflicts of interest of the credit rating enterprise, analysts, and members of the Rating Council;

c) Prevention, detection, and prompt resolution of unauthorized disclosure of information about the rated organization;

d) Compliance with laws and internal regulations, procedures, and rules.

3. The internal control system of credit rating enterprises must be reviewed annually by an independent auditor.

Article 38. Conflict of Interest Situations

1. Credit rating enterprises:

a) Purchase or hold stocks, equity contributions, or debt instruments of the rated organization during the performance of credit rating contracts;

b) Provide credit rating services to related parties of the credit rating enterprise;

c) Have investment relationships with the rated organization;

d) Have related parties owning more than five percent (5%) of the subscribed capital or more than five percent (5%) of the total outstanding debt of the debt instrument of the rated organization.

2. Enterprise managers, analysts, and members of the Rating Council:

a) Purchase or hold stocks, equity contributions, or debt instruments of the rated organization during the performance of credit rating contracts;

b) Own more than five percent (5%) of the subscribed capital of organizations providing issuance advisory services, risk management, issuance guarantees, and distribution agencies for the rated organization;

c) Participate in negotiating service fees for credit rating contracts;

d) Enter into economic contracts with the rated organization;

đ) Have employment contracts with the rated organization;

e) Provide issuance advisory services, risk management, issuance guarantees, and distribution agency services for the rated organization;

g) Be related parties of the rated organization, organizations providing issuance advisory services, risk management, issuance guarantees, and distribution agencies for the rated organization;

h) Have related parties owning more than five percent (5%) of the subscribed capital or more than five percent (5%) of the total outstanding debt of the debt instrument of the rated organization.

Article 39. Confidentiality of Information

Credit rating enterprises, credit analysts, and members of the credit rating enterprise's credit rating committee shall not disclose information about the rated organization as stipulated in the confidentiality clause of the credit rating contract, except for the information specified in Article 36 of this Decree, information approved by the rated organization to be published, and information required by competent state management agencies.

Article 40. Record Keeping

1. Credit rating enterprises must store both hard copies and electronic data of all credit rating analysis files including all documents and data used during the credit rating process.

2. The minimum retention period for records is ten (10) years.

3. Credit rating enterprises are responsible for providing stored files to competent authorities upon request.

Chapter IV
ACCOUNTING, AUDITING, REPORTING REGIME

OF CREDIT RATING ENTERPRISES

Article 41. Accounting, Auditing

1. Credit rating enterprises must implement accounting and financial reporting systems in accordance with current laws on accounting.

2. Annual financial reports of credit rating enterprises must be independently audited.

Article 42. Reporting Regime

1. Annually, credit rating enterprises are responsible for implementing the reporting system on their business operations as follows:

a) Reporting period: Credit rating enterprises report their business operation results from January 1 to December 31 each year;

b) Content and format of the report follow Model No. 5 attached to this Decree;

c) Deadline for submission: Before April 30 of the following year;

d) Submission address: Ministry of Finance.

2. Credit rating enterprises are responsible for submitting extraordinary reports as prescribed in Article 24 of this Decree or at the request of the Ministry of Finance.

Chapter V
RESPONSIBILITIES OF RELATED ORGANIZATIONS

Article 43. Ministry of Finance

The Ministry of Finance is the agency accountable to the Government for managing the credit rating service business, including:

1. Taking the lead and coordinating with relevant ministries and sectors to submit to the Prime Minister for approval the planning for the development of credit rating services in each period.

2. Summarizing, monitoring, and evaluating the implementation of this Decree.

3. Issuing, reissuing, adjusting, and revoking the Certificate of Eligibility for Business Operations of credit rating enterprises as prescribed in this Decree.

4. Monitoring and evaluating the operational status of credit rating enterprises through the reporting regime as prescribed in this Decree.

5. Inspecting compliance with the activities of credit rating enterprises as prescribed in this Decree every five (05) years or at any time as required by management work.

Article 44. Ministry of Planning and Investment

Participating in coordination with the Ministry of Finance in reviewing and providing opinions on issuing, reissuing, adjusting, and revoking the Certificate of Eligibility for Business Operations as prescribed in this Decree.

Article 45. State Bank of Vietnam

Participating in coordination with the Ministry of Finance in reviewing and providing opinions on issuing, reissuing, adjusting, and revoking the Certificate of Eligibility for Business Operations as prescribed in this Decree.

Article 46. Responsibilities of credit rating enterprises

Article 46. Responsibilities of Credit Rating Enterprises

1. Adhering to the principles of credit rating service operations as prescribed in this Decree during operations.

2. Continuously maintaining the conditions for credit rating enterprise operations as prescribed in this Decree.

3. Conducting credit rating activities in accordance with the credit rating process as stipulated in Clause 1, Article 26 of this Decree.

4. Complying with the code of ethics standards as prescribed in Article 34 of this Decree.

5. Allocating personnel to participate in credit rating contracts as prescribed in this Decree.

6. Reporting to the Ministry of Finance as prescribed in Article 42 of this Decree.

Article 47. Responsibilities of credit rating organizations

1. Provide conditions for credit rating enterprises to access information necessary to perform credit ratings in accordance with contracts signed with such credit rating enterprises.

2. Fulfill all obligations as stipulated in the credit rating contract and as prescribed in this Decree.

Chapter VI
IMPLEMENTING PROVISIONS

Article 48. Effective Date

This Decree takes effect from November 15, 2014.

Article 49. Responsibility for Implementation

The Ministers, Heads of ministerial-level agencies, Heads of government-attached agencies, Chairpersons of provincial People's Committees under central city administrations, credit rating enterprises, and related organizations and individuals are responsible for implementing this Decree./.