Principles of Registering Private Corporate Bonds Currently Include Which Principles?
What are the current principles for the registration of private corporate bonds?
According to Article 4 of the Regulations issued with Decision 44/QD-VSD 2023 on the principles for the registration of private corporate bonds.
Principles for the registration of private corporate bonds
1. The issuing organization must register private corporate bonds at VSDC within the stipulated time as per Clause 12, Article 1 of Decree No. 65/2022/ND-CP dated September 16, 2022, of the Government of Vietnam, amending and supplementing several articles of Decree No. 153/2020/ND-CP (hereinafter referred to as Decree 65/2022/ND-CP).
2. Private corporate bonds registered at VSDC must have the face value as required by law.
3. The issuing organization shall register the bonds directly with VSDC or through a securities company.
The three principles for registering private corporate bonds are as follows:
- The issuing organization must register private corporate bonds at VSDC within the stipulated time as per Clause 12, Article 1 of Decree 65/2022/ND-CP of the Government of Vietnam, amending and supplementing several articles of Decree 153/2020/ND-CP (hereinafter referred to as Decree 65/2022/ND-CP).
- Private corporate bonds registered at VSDC must have the face value as required by law.
- The issuing organization shall register the bonds directly with VSDC or through a securities company.
What are the current principles for the registration of private corporate bonds? (Image from the internet)
Which organizations participate in the payment system for private corporate bond transactions?
Based on Article 15 of Circular 30/2023/TT-BTC, the organizations participating in the payment system for private corporate bond transactions are as follows:
(1) Organizations that perform the transfer of private corporate bonds on the deposit account system at the Vietnam Securities Depository and Clearing Corporation include:
- Depository members executing payments for their own private corporate bond transactions and those of their customers;
- Organizations opening direct accounts executing payments for their own private corporate bond transactions.
(2) The payment bank executing the money transactions for private corporate bonds is a commercial bank selected by the State Securities Commission as stipulated in Article 69 of the Securities Law and Articles 167 and 168 of Decree 155/2020/ND-CP.
Money transactions are executed on the payment bank's deposit account system according to payment obligations identified by the Vietnam Securities Depository and Clearing Corporation and authorization from depository members or directly accountable organizations to the payment bank to execute private corporate bond transactions' payments.
(3) Depository members and organizations opening direct accounts participating in the payment system for private corporate bond transactions must meet the connectivity requirements of the Vietnam Securities Depository and Clearing Corporation in terms of system connection and procedural operations to execute the payment functions for private corporate bond transactions.
(4) Depository members and organizations opening direct accounts must ensure system connection, adhering to the processes for submitting, withdrawing, transferring, and reconciling the money balance for the private bond transactions executed by the payment bank.
(5) The payment bank shall be responsible for compensating the Vietnam Securities Depository and Clearing Corporation, depository members, and organizations opening direct accounts for any costs and damages arising from the failure to execute the money payment for private bond transactions due to the payment bank's errors.
(6) Depository members, organizations opening direct accounts, and the payment bank shall execute reporting policies as stipulated in Articles 41, 42, and 43 of Circular 119/2020/TT-BTC and other applicable legal provisions.
What are the principles for adjusting the quantity of registered trading bonds when repurchasing bonds before maturity?
Based on Clause 3, Article 10 of Circular 30/2023/TT-BTC, this issue is addressed as follows:
Registration and cancellation of private corporate bond transactions
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3. The Hanoi Stock Exchange shall adjust the quantity of registered trading bonds in cases where the issuing company repurchases, exchanges, converts a portion of the private corporate bonds, or changes the bond term but bondholders do not accept the term change, leading the issuing company to fulfill principal and interest payments according to the issuance plan announced as stipulated in Article 2 of Decree No. 08/2023/ND-CP.
The Hanoi Stock Exchange shall adjust the quantity of registered trading bonds in cases where the issuing company repurchases, exchanges, converts a portion of the private corporate bonds, or changes the bond term but bondholders do not accept the term change, leading the issuing company to fulfill principal and interest payments according to the issuance plan announced based on the following principles:
- Comply with the provisions of Clause 3, Article 1, Decree 65/2022/ND-CP.
- In cases of extending the bond term, the maximum period shall not exceed 02 years compared to the term in the issuance plan announced to investors.
- For bondholders who do not accept changes in the conditions and terms of the bonds, the issuing company must negotiate to ensure the investor's rights.
In cases where bondholders do not accept the negotiation plan, the issuing company must fully fulfill the obligations to bondholders according to the issuance plan announced to investors (even if the changes in the conditions and terms of the bonds have been accepted by the bondholders representing 65% or more of the total issued bonds).
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