What is the process of distribution agent selection for Government bonds in Vietnam according to the latest regulations 2024?
What is the process of distribution agent selection for Government bonds in Vietnam according to the latest regulations 2024?
The process of distribution agent selection for Government bonds from January 15, 2024 is specified in Clause 4, Article 1 of Decree 83/2023/ND-CP (amended provisions in Clause 3, Article 17 of Decree 95/2018/ND-CP) as follows:
- The State Treasury that wishes to make a private placement of bonds via a distribution agent shall published the bond issuance plan on its website and on the websites of the Ministry of Finance of Vietnam and the Stock Exchange so that commercial banks and foreign bank branches may apply for registration as distribution agent. Information to be published includes:
Information on the bond to be issued, including: fundamental terms and conditions of the bond (currency, term, face value, and method for principal and interest payment); quantity of bonds to be issued; planned date of issuance, issuance method;
Information on selection of distribution agent, including: eligibility requirements to be satisfied by the distribution agent as prescribed in Clause 5 of this Article; application submission deadline and location.
- Any organization that meets all eligibility requirements laid down in Clause 5 of this Article and wishes to become a distribution agent shall submit a properly sealed application directly to the State Treasury or by post to the address notified by the State Treasury. Such application includes:
The application form which is made using Form No. 06 in the Appendix enclosed herewith;
A bond distribution and payment plan, which shall, inter alia, include the following information: forecasts about the bond market and capacity for distributing bonds; plan for distribution and payment for bonds; proposed bond distribution and payment service fees;
Documentary evidences of the applicant’s satisfaction of eligibility requirements for distribution agent: copy from the master register, copy certified by a competent authority, or a copy presented together with its original for verification purpose, of the enterprise registration certificate, license for establishment and operation, or another document of equivalent validity; information on its business network and infrastructure for distributing and making payment for bonds as required by the State Treasury.
- When the application submission deadline expires, the State Treasury shall establish a team in charge of opening properly sealed applications and organizing appraisal and selection of one or some qualified applicants as distribution agent(s) based on eligibility requirements and the bond distribution and payment plan.
- Within a maximum of 15 working days from the closing date of receiving applications to register as a distribution agent, the State Treasury shall notify the results of distribution agent selection in writing to the registered organizations and companies. published on the websites of the Ministry of Finance, State Treasury and Stock Exchange.
- Within a maximum duration of 15 working days from the application submission deadline, the State Treasury shall notify distribution agent selection results in writing to applicants, and publish such results on its website and on the websites of the Ministry of Finance of Vietnam and the Stock Exchange.
- The distribution agent shall perform bond distribution and payment activities under the contract signed with the State Treasury.
What is the process of distribution agent selection for Government bonds in Vietnam according to the latest regulations 2024? (Image from the Internet)
Vietnam: What are the contents of the scheme for issuing sovereign bonds in international capital market?
Pursuant to the provisions of Article 28 of the Law on Public Debt Management 2017:
A scheme for issuing sovereign bonds in international capital market shall at least contain:
- Necessity of issues of sovereign bonds in the international capital market;
- Demand for and capacity to raise funds, domestic macro economy, Vietnam’s credit rating and international capital market;
- Types of processes for bond issuance, amount, terms, expected interest rates, currency, and market;
- A plan for using raised capital;
- Evaluation of loan efficiency and impact of the new loan on public debts, and indicators of public debt safety.
How to trade government bonds in Vietnam?
Pursuant to the provisions of Article 19 of Decree 95/2018/ND-CP:
- Government bonds shall be traded on the securities market by order-matching method and/or put-through (negotiated trading) method in accordance with the Law on securities and the Stock Exchange’s regulations approved by a competent authority.
- Government bonds shall be traded on the securities market in the following forms:
+ Outright;
+ Repo and sell/buy back;
+ Other trading forms as prescribed by the Law on securities.
- Repo and sell/buy back transactions of government bonds set forth in Point b Clause 2 of this Article are conducted by applying the following principles:
+ Term of a repo or sell/buy back transaction shall not exceed 01 year;
+ The buyer and seller shall themselves carry out a negotiation and enter into a repurchase agreement or sell and buy back agreement, which includes the following contents: quantity; interest rate (or bond price); term; collateral; hedge ratio; rights and obligations of contractual parties; disposal of collateral in case of either party’s failure to make the previously agreed settlement.
- The SBV shall provide guidance on classification of debts and credit risk provisions for credit institutions that enter into repos and sell/buy back transactions of government bonds on the securities market.
- The Minister of Finance shall provide guidance on trading of government bonds on securities market in accordance with regulations herein and the Law on securities.
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