Is Registration Required for Public Offering of Shares?

According to the regulations of the Securities Law 2006 (amended 2010), issuing organizations conducting a public offering of securities must register with the State Securities Commission.

Herein, a security is evidence confirming the legal rights and interests of the owner regarding assets or equity of the issuing organization. Securities are represented in the form of certificates, book entries, or electronic data, including the following types:

- Shares, bonds, fund certificates;

- Rights to buy shares, warrants, call options, put options, futures contracts, groups of securities, or stock indexes;

- Investment contribution contracts;

- Other types of securities as prescribed by the Ministry of Finance.

However, according to Clause 2, Article 13 of the Securities Law 2006, the following cases are not required to register for a public offering of securities:

- Offering of bonds by the Government of Vietnam;

- Offering of bonds by international financial organizations approved by the Government of Vietnam;

- Public offering of shares by state enterprises converted into joint-stock companies;

- Sale of securities according to court judgments or decisions, or the sale of securities by managers or asset receivers in cases of bankruptcy or insolvency.

Thus, based on the provisions cited above, in the case of a public offering of shares by a state enterprise converted into a joint-stock company, it is not required to register for a public offering of securities.

Therefore: In the case that your company is a state enterprise soon to be equitized and will offer shares to the public, it is not required to register for a public offering of shares.

The above represents our advisory opinion on the matter you are inquiring about.

Sincerely!