How much is the minimum charter capital to become a professional investor in Vietnam?
How much is the minimum charter capital to become a professional investor in Vietnam?
Pursuant to Article 11 of the Law on Securities 2019 stipulates professional securities investors as follows:
Professional investors
1. Professional investors are investors that have adequate financial capacity or securities qualifications, including:
a) Commercial banks, foreign branch banks (FBB), finance companies, insurers, securities companies, fund management companies, securities investment funds, international financial institutions, off-budget financial funds, state-owned financial institutions permitted to buy securities as prescribed by relevant laws;
b) Any company whose contributed charter capital exceeds 100 billion VND; every listed or registered organization;
c) Holders of securities professional certifications;
d) Any individual holding a quantity of listed or registered securities that is worth at least 02 billion VND as confirmed by the securities company;
dd) Any individual whose taxable income in the latest year is at least 01 billion according to his/her submitted tax return or tax deduction documents of his/her income payer.
2. The Government shall elaborate this Article.
How much is the minimum charter capital to become a professional investor in Vietnam?
Will the private placement by public companies be available to professional investors in Vietnam?
According to Point b, Clause 1, Article 31 of the Law on Securities 2019, the private placement of securities by public companies, securities companies and securities investment fund management companies is as follows:
Private placement by public companies, securities companies, fund management companies
1. In order to make a private placement of shares, convertible bonds, warrant-linked bonds, a public company shall satisfy the following requirements:
a) There is a decision of the General Meeting of Shareholders to ratify the plan for issuance and the plan for use of capital generated by the private placement with specific criteria and quantity of investors;
b) The private placement is only available to strategic investors and professional investors;
c) The transfer of privately placed shares, convertible bonds and warrant-linked bonds is limited to 03 years for strategic investors and 01 year for professional investors from the ending date of the private placement, except for transfer between professional investors, transfer under an effective court judgment or decision, arbitral decision, and transfer due to inheritance as prescribed by law;
d) There is an interval of at least 06 months between two private placements of shares, convertible bonds, warrant-linked bonds;
dd) The ratio of holding of shares, conversion of bonds into shares and execution of warrants by foreign investors is conformable with law.
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As such, professional investors can participate in private placement by public companies.
How to identify professional bond buyers in Vietnam according to Decree 65 and Decree 153?
According to the provisions of Clause 1, Article 8 of Decree 153/2020/ND-CP (amended by Clause 6, Article 1 of Decree 65/2022/ND-CP), the regulations on professional bond buyers are as follows:
Bond buyers
1. Eligible bond buyers
a) Buyers of non-convertible bonds without warrant are professional investors as defined in the Law on securities.
b) Buyers of convertible bonds and warrant-linked bonds are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.
c) Professional investors are investors that have financial capacity or securities qualifications as prescribed in Article 11 of the Law on securities. Organizations shall identify professional investors and obtain documents serving identification of professional investors as prescribed in Article 4 and Article 5 of the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020 on elaboration of some articles of the Law on securities and its amending or superseding documents (hereinafter referred to as “Decree No. 155/2020/ND-CP”), except the identification of professional investors prescribed in Point d of this Article.
d) An individual that is identified as a professional investor as prescribed in Point d Clause 1 Article 11 of the Law on Securities shall be eligible to buy privately placed bonds if he/she holds a quantity of listed or registered securities, excluding securities borrowed to conduct margin transactions and those of repo transactions, of which the daily average price determined in a minimum period of 180 consecutive days preceding the date on which he/she is identified as a professional investor shall not be lower than VND 02 billion. The certification of a professional investor status as prescribed in this Point shall be valid for 03 months from the date of certification.
Thus, according to regulations, professional bond buyers must be professional investors; holds a quantity of listed or registered securities, excluding securities borrowed to conduct margin transactions and those of repo transactions, of which the daily average price determined in a minimum period of 180 consecutive days preceding the date on which he/she is identified as a professional investor shall not be lower than VND 02 billion
However, Decree 08/2023/ND-CP decided to postpone the deadline for applying standards to determine professional investors until December 31, 2023, this is to create conditions for extension/ Debt rescheduling, subprime investors can continue to buy new bonds for businesses to reverse debt.
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