Vietnam: From 16/9/2022, the par value for bonds offered for sale in the domestic market increased 1,000 times compared to the previous regulations?
The par value of bonds offered for sale in the domestic market increased 1,000 times in Vietnam?
Previously, at Point a, Clause 4, Article 6 of Decree 153/2020/ND-CP stipulated the par value for bonds offered for sale in the domestic market as follows:
Article 6. Fundamental terms and conditions of bonds
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4. Face value:
a) Face value of a bond offered in the domestic market is VND 100.000 (one hundred thousand) or a multiple of VND 100.000 (one hundred thousand).
In Clause 4 Article 1 of Decree 65/2022/ND-CP, there have been changes in par value regulations for bonds offered for sale in the domestic market as follows:
- Bonds offered for sale in the domestic market, the face value is one hundred million (100,000,000) Vietnamese dong or multiples of one hundred million (100,000,000) Vietnamese dong.
Accordingly, the par value for bonds offered for sale in the domestic market will change from VND 100,000 to VND 100,000,000, an increase of VND 1,000 times compared to the previous regulations.
Vietnam: From 16/9/2022, the par value for bonds offered for sale in the domestic market increased 1,000 times compared to the previous regulations?
Additional regulations on the responsibility of investors who buy bonds in Vietnam?
According to the provisions of Article 8 of Decree 153/2020/ND-CP stipulating:
Article 8. Bond buyers
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2. Responsibilities of bond buyers
a) Fully access 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.
b) Self-assess and assume responsibility for their investment decisions as well as incur any risks from the investment and trading in bonds. The State provides no guarantee that the issuer will make full and timely payment of bond principals and interests when they become due, and exercise other rights for bondholders.
c) Clearly understand and comply with regulations on eligible bond buyers, purchase and trading of privately placed corporate bonds in accordance with regulations herein and relevant laws.
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According to the provisions of Article 8 of Decree 153/2020/ND-CP as amended by Clause 6 Article 1 of Decree 65/2022/ND-CP as follows:
Investors buy bonds
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2. Responsibilities of investors who buy bonds
a) Fully access the information disclosure contents of the issuing enterprise; understand the conditions, terms of bonds and other commitments of the issuing enterprise before deciding to buy and trade bonds.
b) Understand the risks arising in bond investment and trading; understand and ensure compliance with regulations on individual investors and corporate bond transactions as prescribed in this Decree and relevant laws.
c) Self-assessment, self-responsibility for their investment decisions and bear the risks arising in the investment and trading of bonds. The State does not ensure that enterprises issuing bonds pay in full and on time interest, bond principal when due and other rights for investors to buy bonds.
d) Before buying bonds (both on the primary and secondary markets), investors must sign a document certifying the implementation of the provisions of Points a, b and c of this Clause and take responsibility for their own decision to buy bonds after signing this confirmation document. The written confirmation of implementation follows the form specified in Appendix V promulgated together with this Decree and must be stored in the offering dossier when issuing bonds or at the securities company where the investor conducts bond transactions in accordance with the provisions of law.
dd) Conduct bond transactions as prescribed in Article 16 of this Decree; may not sell or jointly contribute bond investment capital with investors who are not professional securities investors in any form. The mobilization of capital and purchase and investment of corporate bonds by credit institutions, foreign bank branches and fund management companies shall comply with the provisions of specialized laws.
e) When selling bonds on the secondary market, they must fully provide the information disclosure contents of the issuing enterprise as prescribed in this Decree to investors to buy bonds.
Accordingly, Decree 65/2022/ND-CP has added a number of responsibilities of investors buying bonds such as having to sign a document certifying access to information, understanding risks arising in bond investment, taking responsibility for investment decisions,... before buying bonds.
Bond investors no longer have the right to use bonds to transfer, donate, inherit in Vietnam?
Clause 3 Article 8 of Decree 153/2020/ND-CP stipulates:
Article 8. Bond buyers
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3. Rights and benefits of bond buyers
a) Access adequate information disclosed by the issuer as prescribed herein, and bond offering dossiers as requested.
b) Receive full and timely payments of bond principal and interests when they become due and exercise other associated rights (if any) under terms and conditions of bonds and as agreed upon with the issuer.
c) Transfer, give, donate, discount or leave bonds as inheritance or use them as collateral in civil and commercial transactions in accordance with regulations of law.
However, in Clause 6 Article 1 of Decree 65/2022/ND-CP, there have been changes in the rights of investors to buy bonds as follows:
Investors buy bonds
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3. Interests of investors buying bonds
a) Fully disclosed information by the issuing enterprise as prescribed in this Decree; have access to bond offering records upon request.
b) Be paid in full and on time by the issuing enterprise for interest and bond principal when due, exercise the accompanying rights (if any) according to the conditions and terms of the bond and agreements with the issuing enterprise.
c) To request the issuing enterprise to buy back bonds ahead of time as prescribed in Clause 3, Article 7 of this Decree.
d) To request bond sellers to fully provide information disclosure contents of the issuing enterprise as prescribed in this Decree when buying bonds on the secondary market.
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According to the above provisions, currently, bond investors will no longer have the right to use bonds to transfer, donate, inherit and discount as before.
In addition, Decree 65/2022/ND-CP has also added regulations on bond investors being entitled to request bond enterprises to buy back bonds ahead of time.
Decree 65/2022/ND-CP comes into force from 16/9/2022.
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