Vietnam: What are the responsibilities of securities company designated as share repurchase agent?
What are the responsibilities of securities company designated as share repurchase agent in Vietnam?
Pursuant to the provisions of Article 14 of Circular 118/2020/TT-BTC, the responsibilities of securities company designated as share repurchase agent are as follows:
- Instruct the public company to carry out the share repurchase according to regulations and the announced plan;
- Ensure that public company has enough money on its trading account when placing buy order for the trading volume according to the reported plan and disclosed information;
- Not to use information about the share repurchase of the designating public company, which is not yet disclosed, for selling securities of that public company or reveal relevant information to a third party, unless information is provided in accordance with regulations of law.
What are the responsibilities of securities company designated as share repurchase agent in Vietnam?
What are the requirements for a public company to repurchase its own shares in Vietnam?
Pursuant to the provisions of Clause 1, Article 36 of the Law on Securities 2019, in order to repurchase its own shares, a public company shall satisfy the following requirements:
- There is a decision of the General Meeting of Shareholders to approve the share repurchase to reduce its charter capital and a repurchase plan which specifies the repurchase quantity, time and price;
- The company has sufficient funds to repurchase its shares from the following sources: share premium, development investment funds, undistributed post-tax profits, other equity funds used for charter capital increase as prescribed by law;
- A securities company is assigned to carry out the transaction, unless the repurchasing company is a member of VSE;
- All conditions are satisfied if the public company has conditional business lines;
- It is not the case specified as follows:
A public company must not repurchase its own shares in the following cases:
+ The company has overdue debts according to the latest audited annual financial statement. In case the expected repurchase date is later than 06 months from the end of the fiscal year, overdue debts will be identified according to the latest audited or examined biannual financial statement, except for the case in Point c Clause 2 of Article 36 of the Law on Securities 2019;
+ Shares are being offered or issued to raise additional capital, except for the cases specified in Point c Clause 2 of Article 36 of the Law on Securities 2019;
+ The company’s shares are being offered in a tender offer, except for the cases specified in Clause 2 of Article 36 of the Law on Securities 2019;
+ There was a share repurchase or an additional share issuance to increase capital over the last 06 months, except for the cases in Clause 2 of Article 36 of the Law on Securities 2019.
The requirements specified in Points a, b, c, d Clause 1, Article 36 of the Law on Securities 2019 are waived in the following cases:
(1) The share repurchase is repurchased by the shareholders as prescribed by the Law on Enterprises;
(2) The employees’ shares are repurchased in accordance with the regulations on employee share ownership or under a scrip issue plan or share issuance from equity;
(3) The share repurchase is meant to fix a transaction error or is an odd lot buyback.
What are the regulations on involuntary delisting in Vietnam?
Pursuant to the provisions of Article 38 of the Law on Securities 2019, regulations on involuntary delisting are as follows:
- The public company shall send SSC a notice enclosed with a list of shareholders provided by VSDCC within 15 days from the day on which the contributed charter capital is found to be under 30 billion VND according to the latest audited financial statement, or the composition of shareholders is found to be unconformable with Point a Clause 1 Article 32 of this Law according to confirmation of VSDCC.
- In case a public company fails to fully satisfy the requirements for listing after 01 year from the day on which it no longer fully satisfies the requirements specified in Point a Clause 1 Article 32 of this Law, SSC shall consider delisting it.
- The company shall fully comply with regulations on public companies until SSC issues a delisting notice.
- Within 07 working days from the receipt of SSC’s notice of delisting, the company shall announce the delisting on its website and the media of SSC and VSE, follow procedures for delisting or deregistration as prescribed by law.
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