The Prime Minister of Vietnam directed to strengthen the management, inspection and examination of the issuing of corporate bonds

Prime Minister, Pham Minh Chinh requested the Ministry of Finance of Vietnam to urgently inspect, examine and supervise the compliance with the law on the issuance and use of capital obtained from the issuance of bonds, especially the private placement of real estate enterprises, of credit institutions related to real estate enterprises, enterprises with large issuance volume and high interest rates, enterprises with loss-making business results, enterprises without collateral…

Strengthening management, inspection and examination of corporate bond issuance

The Government Office of Vietnam has just promulgated Official Telegram No. 8857/CD-VPCP dated December 3, 2021 on strengthening the management, inspection and examination of corporate bond issuance.

The corporate bond market is an important medium and long-term capital mobilization channel for enterprises in accordance with the Government's policy on balanced development between the capital market and the money and credit markets... However, businesses have recently increased capital mobilization through the issuance of corporate bonds in the form of private placement with a scale of over 436 trillion dong in the first 11 months of 2021, increased by over 23.4% over the same period in 2020, with many potential risks. Regarding this content, Prime Minister Pham Minh Chinh requested:

1. Ministry of Finance of Vietnam:

a) Urgently inspect, examine and supervise the compliance with the law on the issuance and use of capital obtained from the issuance of bonds, especially the private placement of bonds by real estate enterprises; of credit institutions related to real estate enterprises, enterprises with large issuance volume and high interest rates, enterprises with loss-making business results, issuing enterprises without collateral… in order to report to the Prime Minister before December 15, 2021.

b) Urgently review legal provisions related to the corporate bond market and corporate bond issuance to promptly amend and supplement to increase the effectiveness and efficiency of management and supervision of corporate bond market, ensuring a healthy, transparent and safe market development.

2. The State Bank of Vietnam shall assume the prime responsibility for, and coordinate with relevant agencies in, strengthening the inspection and examination of the situation and investment activities of corporate bonds of credit institutions, promptly detecting and warning of risks and taking measures to handle according to regulations, ensuring the safety of the credit institution system.

3. The Ministry of Public Security shall coordinate with the Ministry of Finance, the State Bank of Vietnam and relevant agencies in grasping the situation, receiving information and cases showing signs of law violations (if any) to tackle strictly according to the provisions of law.

Source: Cổng thông tin điện tử Chính phủ

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