What are regulations on issuance, offering of shares, increase in charter capital of securities companies in Vietnam?

What are regulations on issuance, offering of shares, increase in charter capital of securities companies in Vietnam? -  image from internet

Pursuant to Article 187 of the Decree 155/2020/ND-CP stipulating issuance, offering of shares, increase in charter capital of securities companies, securities investment fund management companies in Vietnam:

1. securities companies, securities investment fund management companies, branches in Vietnam of foreign securities companies and fund management companies must not increase charter capital before securities operations are officially started.

2. The increase in charter capital must ensure that:

a) The conditions for and regulations on public offering and issuance of securities; private placement of securities are complied with in case of capital increase by offering or issuance;

b) The undistributed post-tax profit is sufficient to pay dividends according to the latest financial statement which is audited by an accredited audit organization in case of scrip issue;

c) In case of share issuance to increase share capital from equity, issuance of ESOP shares, the equity must be sufficient to increase capital according to the latest financial statement which is audited by an accredited audit organization, including the following sources: share premium, development investment fund; undistributed post-tax profit; other funds (if any) used for increasing charter capital as prescribed by law;

d) Contributed capital/share capital under agreements between the company and the creditors shall be the debts that are presented in the latest annual financial statement which is audited or examined and approved by the General Meeting of Shareholders, Board of Members, the company’s owner;

dd) The merger of securities companies, other securities investment fund management companies has been approved by SSC in accordance with Article 207 of this Decree.

3. a) Before increasing charter capital, the securities company or fund management company that is a limited liability company, branch in Vietnam of a foreign securities company or foreign fund management company shall submit an application for registration to SSC, which shall contain:

a) The application form No. 72 in the Appendix hereof;

b) The decision of the Board of Members or the company’s owner to increase capital and the plan for capital raising; the decision of a competent authority of the foreign securities organization on provision of additional capital for its branch in Vietnam;

c) The list of new contributing capitals, members contributing at least 5% of charter capital according to Form No. 68 in the Appendix hereof.

4. Before making an offering or issuance to increase charter capital, the securities company or fund management company that is a joint stock company shall submit an application for registration to SSC, which shall contain:

a) The documents specified in Article 43 of this Decree in case of private placement;

b) If the securities company or securities investment fund management company is not a public company offering shares to existing shareholders according to their holdings, the app shall contain: the application form No. 73 in the Appendix hereof, the decision of the General Meeting of Shareholders to approve the issuance plan and the plan to use the revenue generated by the offering; the documents specified in Clauses 4, 5, 7, 8, 9 Article 43 of this Decree;

c) A securities company or securities investment fund management company that makes a public securities offering, or other kinds of offering or issuance to increase actual capital shall apply the same regulations that apply to public companies.

5. Settlement of shares that are not subscribed or paid for by investors, fractional shares in the cases specified in Clause 4 of this Article shall be carried out in accordance with Article 42 of this Decree.

6. Within 07 working days from the receipt of the satisfactory application as prescribed in Clause 3 of this Article, SSC shall send a written response to the securities company, securities investment fund management company, or branch of the foreign securities company or foreign fund management company.

7. Procedures for registration of offering and issuance mentioned in Clause 4 of this Article shall be the same as procedures to be followed by public companies.

8. A securities company or securities investment fund management company that makes an offering or issuance according to Clause 4 of this Article shall submit reports as if it is a public company.

9. Within 07 working days after charter capital is increased, the company shall apply for the revised license for establishment and securities operation in accordance with Article 174 and Article 181 of this Decree.

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