Cases of exemption from requirement of share repurchase by a public company in Vietnam

16:10, 05/12/2019

Recently, the National Assembly of Vietnam has issued the Law on Securities 2019, replacing the Law on Securities 2006 and the amended Law on Securities 2010.

Vietnam: A public company shall send reports to the State Securities Commission before repurchasing its own shares / Regulations on involuntary delisting in Vietnam

Trường hợp được miễn trừ điều kiện CTĐC mua lại cổ phiếu của chính mình, Luật Chứng khoán 2019

According to Article 36 of the Law on Securities 2019 of Vietnam, share repurchase by a public company are waived from requirements in the following cases:

- The share repurchase is repurchased by the shareholders as prescribed by the Law on Enterprises of Vietnam;

- The employees’ shares are repurchased in accordance with the regulations on employee share ownership or under a scrip issue plan or share issuance from equity;

- The share repurchase is meant to fix a transaction error or is an odd lot buyback.

In which, the requirements mentioned above include:

- There is a decision of the General Meeting of Shareholders to approve the share repurchase to reduce its charter capital and a repurchase plan which specifies the repurchase quantity, time and price;

- The company has sufficient funds to repurchase its shares from the following sources: share premium, development investment funds, undistributed post-tax profits, other equity funds used for charter capital increase as prescribed by law;

- A securities company is assigned to carry out the transaction, unless the repurchasing company is a member of Vietnam Stock Exchange (VSE);

- All conditions are satisfied if the public company has conditional business lines.

View more details at the Law on Securities 2019 of Vietnam, effective from January 01, 2021.

Ty Na

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