Which agency has the competence to identify professional securities investors in Vietnam? What are the responsibilities of bond buyers in Vietnam?
Can professional securities investors buy bonds?
According to the provisions of Article 8 of Decree No. 153/2020/ND-CP (amended and supplemented by Clause 6, Article 1 of Decree No. 65/2022/ND-CP) on bond buyers 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, professional investors are investors that have financial capacity or securities qualifications as prescribed in Article 11 of the Law on securities.
Which agency has the competence to identify professional securities investors in Vietnam? What are the responsibilities of bond buyers in Vietnam?
What are the responsibilities of bond buyers in Vietnam?
Clause 6, Article 1 of Decree No. 65/2022/ND-CP amending and supplementing Clause 2, Article 8 of Decree No. 153/2020/ND-CP stipulates the responsibilities of bond buyers as follows:
- Fully access the information disclosed by the issuer; have a thorough grasp of terms and conditions of bonds, and other commitments of the issuer before deciding to buy and trade bonds.
- Clearly understand risks that may occur during investment and trading of bonds; clearly understand and ensure compliance with regulations on eligible bond buyers, and trading of privately placed corporate bonds in accordance with regulations herein and relevant laws.
- Self-assess and assume responsibility for their investment decisions as well as incur any risks which may occur during investment and trading of bonds. The State provides no guarantee that the issuer will make full and timely payment of bond principal and interest amounts when they become due, and exercise other rights for bondholders.
- 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 Clause 2 Article 8 of Decree No. 153/2020/ND-CP, 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.
- Conduct bond transactions according to the provisions of Article 16 of Decree No. 153/2020/ND-CP in 2020; 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.
- When selling bonds in the secondary market, provide bond buyers with adequate information which has been disclosed by the issuer as prescribed in Decree No. 153/2020/ND-CP.
Which agency has the competence to identify professional securities investors in Vietnam?
According to the provisions of Article 4 of Decree No. 155/2020/ND-CP, the competence to identify professional securities investors is determined as follows:
- Issuers and securities investment fund management companies:
Issuers and securities investment fund management companies shall identify or authorize securities companies to identify professional securities investors that purchase securities upon private placement or registration of private funds. In case of authorization, the authorized securities investment fund management company shall sign a contract with the securities company, which specifies the rights and responsibilities of the parties.
- Securities companies:
For privately placed securities that are traded on the transaction systems of Stock Exchanges, the securities company where the investor purchases the securities shall identify whether such investor is a professional investor before conducting the transaction.
- Registering or depositing organizations:
For privately placed securities that are not traded at Stock Exchanges, the registering or depositing organizations shall identify professional securities investors before transfer of ownership.
LawNet
