Vietnam: What is the face value of securities under current regulations? In what form is the offering of securities to the public?
- What is the face value of securities under current Vietnam regulations?
- What are the conditions for underwriting securities to the public in Vietnam?
- In what form is the offering of securities to the public in Vietnam?
- In which cases do not have to register for public offering of securities in Vietnam?
What is the face value of securities under current Vietnam regulations?
Pursuant to Article 13 of the Law on Securities 2019 of Vietnam, the face value of securities is prescribed as follows:
Article 13. Face values of securities
1. Face values of securities offered within Vietnam’s territory shall be expressed as VND.
2. The face value of a publicly offered share or fund certificate shall be 10 thousands VND. The face value of a publicly offered bond shall be a multiple of 100 thousands VND.
3. In case the securities price of an issuer on the securities trading system is lower than the face value, the issuer may offer the securities at that lower price.
So:
- Face values of securities offered within Vietnam’s territory shall be expressed as VND.
- The face value of a publicly offered share or fund certificate shall be 10 thousands VND. The face value of a publicly offered bond shall be a multiple of 100 thousands VND.
- In case the securities price of an issuer on the securities trading system is lower than the face value, the issuer may offer the securities at that lower price.
Vietnam: What is the face value of securities under current regulations? In what form is the offering of securities to the public?
What are the conditions for underwriting securities to the public in Vietnam?
Pursuant to Article 17 of the Law on Securities 2019 of Vietnam, the organization underwriting securities to the public is a securities company or organization that satisfies the following conditions:
Article 17. Requirements for underwriting public offering
1. A securities company or an organization shall satisfy the following requirements to underwrite a public offering:
a) The securities underwriting is licensed by SSC in accordance with this Law;
b) Financial safety criteria are satisfied as prescribed by law;
c) The underwriter is not a related person of the issuer.
2. If underwriter opts to purchase of part or all of the issuer’s securities, the total value of securities purchased must not exceed the equity and 15 times the difference between the short-term assets and short-term debts according to the latest financial statement.
Accordingly, in order to be able to underwrite securities to the public, the organization performing the guarantee must meet the following requirements:
- The securities underwriting is licensed by SSC in accordance with this Law;
- Financial safety criteria are satisfied as prescribed by law;
- The underwriter is not a related person of the issuer.
In what form is the offering of securities to the public in Vietnam?
Initial public offering of securities is specified in Clause 1 Article 10 of Decree 155/2020/ND-CP, including:
- IPO for raising additional capital to the issuer;
- IPO to become a public company by changing ownership structure without increasing the issuer’s charter capital;
- Combination of (a) and (b);
- Initial public offering of fund certificates for establishment of a securities investment fund.
According to the provisions of Clause 2, Article 10 of Decree 155/2020/ND-CP, offering additional securities to the public includes the following forms:
- A public company conducts an FPO of shares or issues call options to its existing shareholders;
- A securities investment fund management company conducts and FPO of fund certificates to increase its charter capital.
In addition to the two forms of initial securities offering and additional securities offering to the public, Clause 3, Clause 4, Article 10 of Decree 155/2020/ND-CP also stipulates the following two forms:
- Public offering of shares by shareholders of public companies.
- Public offering of bonds and securities by issuers.
In which cases do not have to register for public offering of securities in Vietnam?
In Clause 2, Article 16 of the Law on Securities 2019 of Vietnam stipulates the cases in which securities are not required to be offered to the public as follows:
- Offering of debt instruments of the Government, Government-backed bonds issued by policy banks, and municipal bonds;
- Offering of bonds issued by international financial institutions approved by Vietnam’s Government;
- Public offering to convert state-owned enterprises, wholly state-owned single-member limited liability companies, public service agencies into joint-stock companies;
- Sale of securities under an effective court judgment or decision or under an arbitral decision; sale of securities of the asset manager or recipient in case of bankruptcy or insolvency.
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