Is it permissible for students to buy bonds in Vietnam?

Is it permissible for students to buy bonds in Vietnam?

Pursuant to Clause 1 Article 8 of the Decree 153/2020/NĐ-CP (amended by Article 1 of the Decree 65/2022/NĐ-CP) stipulating bond buyers as follows:

Bond buyers

1. Eligible bond buyers

a) Buyers of non-convertible bonds without warrant are professional investors as defined in the Law on securities.

b) Buyers of convertible bonds and warrant-linked bonds are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.

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Pursuant to Article 11 of the Law on Securities in 2019 stipulating professional investors as follows:

1. Professional investors are investors that have adequate financial capacity or securities qualifications, including:

a) Commercial banks, foreign branch banks (FBB), finance companies, insurers, securities companies, fund management companies, securities investment funds, international financial institutions, off-budget financial funds, state-owned financial institutions permitted to buy securities as prescribed by relevant laws;

b) Any company whose contributed charter capital exceeds 100 billion VND; every listed or registered organization;

c) Holders of securities professional certifications;

d) Any individual holding a quantity of listed or registered securities that is worth at least 02 billion VND as confirmed by the securities company;

dd) Any individual whose taxable income in the latest year is at least 01 billion according to his/her submitted tax return or tax deduction documents of his/her income payer.

2. The Government shall elaborate this Article.

Pursuant to Clause 17 Article 4 of the Law on Securities in 2019 stipulating strategic investors as follows:

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.

As regulations above, students are permissible to buy bonds in Vietnam.

However, they must satisfy requirements of civil liability as well as securities professional certifications and financial capacity.

What are methods for certification of individuals buying bonds in Vietnam?

Pursuant to Clause 2 Article 8 of the Decree 153/2020/NĐ-CP (amended by Article 1 of the Decree 65/2022/NĐ-CP) stipulating as follows:

Before buying bonds (both in primary market and secondary market), each investor must sign a written certification of compliance with the provisions of Points a, b and c of this Clause, and shall assume responsibility for its decision to buy bonds after signing the certification. The written certification shall be made using the form in Appendix V enclosed herewith, and shall be kept together with the bond offering dossier or by the securities company where the investor conducts bond transactions in accordance with regulations of law.

As regulations above, you have to sign a written certification before buying bonds in Vietnam. The written certification shall be made using the form in Appendix V enclosed with the Decree 65/2022/NĐ-CP.

What are regulations on redemption of bonds before maturity in Vietnam?

Pursuant to Article 7 of the Decree 153/2020/NĐ-CP (amended by Article 1 of the Decree 65/2022/NĐ-CP) stipulating redemption of bonds before maturity in Vietnam as follows:

1. The issuer is entitled to redeem bonds before maturity or conduct bond swaps. The redemption of bonds offered in the international market before maturity must comply with SBV’s regulations on foreign exchange management. Bonds must be disposed of after redemption.

2. The entity competent to approve the bond issuance plan shall have the power to approve the plan for redemption of bonds before maturity or bond swap, except cases of compulsory redemption prescribed in Point b Clause 3 of this Article.

3. Cases in which bonds are redeemed before maturity:

a) The redemption is made under an agreement between the issuer and bondholder.

b) Bonds shall be compulsorily redeemed at the request of investors in the following cases:

- The issuer commits violations against regulations of law on offering and trading of corporate bonds according to decision issued by a competent authority, and such violations cannot be rectified or a number of bondholders that represents at least 65% of total outstanding bonds of the same type refuses to give approval for remedial measures for such violations.

- The issuer fails to comply with the bond issuance plan, and that violation cannot be rectified or a number of bondholders that represents at least 65% of total outstanding bonds of the same type refuses to give approval for remedial measures for that violation.

- Other cases defined in the bond issuance plan which is prepared according to Article 13 of this Decree (if any).

4. The provisions of Point b Clause 3 of this Article shall not apply to bonds which are withdrawn according to decision of a competent authority.

Above are regulations on redemption of bonds before maturity and bond swaps in Vietnam.

Best regards!