From 2021: What is the definition of securities according to the law in Vietnam? What are types of securities?

From 2021: What is the definition of securities according to the law in Vietnam? What are types of securities?

Pursuant to Clause 1 Article 4 of the Law on Securities in 2019:

Securities include the following assets:

+ Shares, bonds, fund certificates;

+ Warrants, secured warrants, pull options, depository receipts;

+ Derivatives;

+ Other kinds of securities defined by the Government.

Shares are securities that certify their holders’ lawful rights and interests to a portion of share capital of the issuer.

Bonds are securities that certify their holders’ lawful rights and interests to part of the debt of the issuer.

Fund certificates are securities that certify their holders’ ownership of a stake in a securities investment fund.

Warrants are the securities that are issued together with bonds or preference shares and bestow upon their holders the right to buy a certain amount of common shares at a specified price over a specific period of time.

Secured warrants are securities secured by collateral and issued by a securities company. They allow their holders to have the right to buy (call option) or the right to sell (put option) the securities to their issuer at a specified strike price prior to or on a specified date, or receive the difference between the strike price and the underlying security price at that time.

Call option is a type of securities which is issued a joint-stock company and bestows upon the existing shareholders the right to buy new shares under specific conditions.

Depository receipts are the securities issued on the basis of securities of an organization that is lawfully established in Vietnam.

Derivatives are financial instruments in the form of contracts, options, futures, forwards that determine rights and obligations of the parties to pay money and transfer a specific quantity of underlying assets at a specified strike price prior to or on a specified date in the future.

Underlying assets are securities, securities indexes or other assets prescribed by the Government upon which the derivative price is based.

In addition, the Law on Securities in 2019 also stipulates following definitions (see more details in Article 4):

Securities investment means the purchase, sale and holding of securities by investors on the securities market.

Investors are organizations and individuals that make investments in the securities market.

Strategic investors are the investors selected the General Meeting of Shareholders according to their financial capacity, technological capacity and commitment to cooperate with the building work for at least 03 years.

A major shareholder means a shareholder that holds at least 5% of the voting shares of an issuer.

...

From 2021: What is the definition of securities according to the law in Vietnam? What are types of securities? - image from internet

What are rules for securities activities in Vietnam?

Respect of ownership and other rights to assets in securities activities; freedom to trade, invest and provide information about securities of organizations and individuals.

Fairness, openness, transparency.

Protection of investors’ the lawful rights and interests.

Accept risks.

What are policies on development of the securities market in Vietnam?

The State shall introduce policies facilitating Vietnamese and foreign organizations and individuals to invest and operate in the securities market in order to mobilize medium-term and long-term capital.

The State shall introduce management and supervision policies to ensure the fairness, openness, transparency, safety and effectiveness of the securities market.

The State shall introduce policies on investment in modernization of infrastructure and information technology serving the operation of the securities market, develop human resources for the securities industry, provide basic knowledge about securities and the securities market.

Best regards!