Can bond buyers make joint investment in bonds with other investors in Vietnam?
What is investment in corporate bonds in Vietnam?
Investment in corporate bonds is regulated in Clause 13, Article 3 of Circular 22/2019/TT-NHNN as follows:
Definitions
For the purpose of this Circular, the terms below are construed as follows:
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12. “total credit extensions” includes the total balance of loans, discounting, finance lease, factoring, total investment in corporate bonds, other credit extensions defined by the State bank (including credit extensions derived from capital sources of other juridical persons the risks of which are taken by the credit institution or FBB); undisbursed loan limits, credit limits, bank guarantee balance, letters of credit (minus LC deposits) and other trust funds for credit extension other credit institutions and FBBs.
13. “investment in corporate bonds” means the purchase of corporate bonds or fiduciary purchase of corporate bonds by trustees that also include other credit institutions and FBBs.
14. “related person” of an organization or individual means a person who is directly or indirectly related to such organization or individual.
a) A related person of an organization (including credit institutions) can be:
(i) The parent company or a credit institution that is the parent company (hereinafter referred to as parent credit institution) of the said organization;
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Thus, "investment in corporate bonds” means the purchase of corporate bonds or fiduciary purchase of corporate bonds by trustees that also include other credit institutions and FBBs.
Can bond buyers make joint investment in bonds with other investors in Vietnam? (Picture from internet)
Which entities are buyers of convertible bonds in Vietnam?
Buyers of convertible bonds are specified in Clause 1, Article 8 of Decree 153/2020/ND-CP (amended by Clause 6, Article 1 of Decree 65/2022/ND-CP and Clause 1, Article 3 of Decree 08/2023/ND-CP) 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.
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Thus, buyers of convertible bonds include:
(1) For non-convertible bonds without warrant: bond buyers are professional investors as defined in the Law on securities.
(2) For convertible bonds and warrant-linked bonds: bond buyers are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.
Can bond buyers make joint investment in bonds with other investors in Vietnam?
Pursuant to the provisions of Clause 2, Article 8, Decree 153/2020/ND-CP (amended by Clause 6, Article 1, Decree 65/2022/ND-CP and Clause 1, Article 3, Decree 08/2023/ND-CP) has the following content:
Bond buyers
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2. Responsibilities of bond buyers
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d) Before buying bonds (both in primary market and secondary market), each investor must sign a written certification of compliance with the provisions of Points a, b and c of this Clause, and shall assume responsibility for its decision to buy bonds after signing the certification. The written certification shall be made using the form in Appendix V enclosed herewith, and shall be kept together with the bond offering dossier or by the securities company where the investor conducts bond transactions in accordance with regulations of law.
dd) Conduct bond transactions according to the provisions of Article 16 of this Decree; not sell bonds to or make joint investment in bonds with investors that are not professional investors in any forms. Capital mobilization and purchase/investment in corporate bonds by credit institutions, FBBs and fund management companies shall comply with specialized laws.
e) When selling bonds in the secondary market, provide bond buyers with adequate information which has been disclosed by the issuer as prescribed in this Decree.
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Bond buyers are not allowed to make joint investment in bonds with investors that are not professional investors in any forms.
Thus, bond buyers can make joint investment in bonds with professional investors.
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