What are securities listing requirements at Ho Chi Minh Stock Exchange in Vietnam?

What are securities listing requirements at Ho Chi Minh Stock Exchange in Vietnam?

In Article 4 of the Regulations on listing of securities on Ho Chi Minh Stock Exchange, issued together with Decision 85/QD-SGDHCM in 2018, there are regulations on securities listing requirements at Ho Chi Minh Stock Exchange as follows:

1. Requirements for listing of securities (excluding ETF certificates) on HOSE shall conform to Article 53 of Decree No. 58/2012/ND-CP and Clause 15 Article 1 of Decree No. 60/2015/ND-CP.

1.1. Information and figures in the documents and prospectus relating to financial statements must be conformable with audited financial statements prescribed in Clause 3 Article 3 of Circular No. 202/2015/TT-BTC as amended in Point a Clause 1 Article 1 of Circular No. 29/2017/TT-BTC.

1.2. Listing requirements to be satisfied by acquiring enterprises on HOSE as prescribed in Clauses 4 and 5 Article 5 of Circular No. 202/2015/TT-BTC also include the criteria “the enterprise must operate for at least two (02) years as a joint-stock company before the application for listing” (except state enterprises that apply for both equitization and listing) and “structure of shareholders”.

1.3. The return on equity (ROE) shall be considered based on the beginning and ending "average owner's equity" balances recorded in audited financial statements. The criterion ROE is also provided for in Clause 4 Article 3 of the Circular No. 202/2015/TT-BTC as amended in Point b Clause 1 Article 1 of the Circular No. 29/2017/TT-BTC.

1.4. The criterion “the enterprise must attain a minimum ROE at 5% in the last year” shall be considered on the basis of the latest audited financial statements. The criterion “profitable business” shall be considered on the basis of the enterprise’s audited financial statements of the last two (02) years. The criteria “the enterprise must incur no accumulated losses” and “the enterprise incurs no debts more than one (01) year overdue” shall be considered on the basis of the latest audited financial statements.

1.5. If an applicant for listing has subsidiaries or acts as a superior accounting unit that has inferior accounting units, the criteria ““the enterprise must attain a minimum ROE at 5% in the latest year”, “profitable business” and “the enterprise must incur no accumulated losses” shall be considered according to consolidated financial statements/ general financial statements; only the parent company or the superior accounting unit is required to satisfy the criterion “the enterprise incurs no debts more than one (01) year overdue”.

1.6. Individual shareholders or institutional shareholders whose ownership representatives hold the position of Director (General Director), Deputy Director (Deputy General Director) and Chief Accountant must meet the commitment to hold shares by internal shareholders specified in Point dd Clause 1 Article 53 of Decree No. 58/2012/ND-CP. The holders of equivalent positions as specified in Points c, d Clause 5 Article 2 of Circular No. 155/2015/TT-BTC are also required to fulfill this requirement.

1.7. If the listing is changed from Hanoi Stock Exchange (HNX) to HOSE, internal shareholders and majority shareholders related to internal shareholders as prescribed in Point dd Clause 1 Article 53 of Decree No. 58/2012/ND-CP must continue fulfilling all commitment to hold shares made when listing of securities on HNX as prescribed in Point d Clause 1 Article 54 of Decree No. 58/2012/ND-CP if such commitments are still effective.

If the commitments to listing on HNX expire, these shareholders must not make new commitment to hold shares.

1.8. A listed enterprise may change the listing of its stocks from HNX to HOSE, or vice versa, if such change is approved by its General Meeting of Shareholders as regulated in the Law on enterprises and it meets all of listing requirements set forth by the Stock Exchange to which the listing is moved.

2. Requirements for listing of ETF certificates on HOSE shall conform to Article 53 of Decree No. 58/2012/ND-CP as amended in Clause 15 Article 1 of Decree No. 60/2015/ND-CP.

2.1. ETF certificates to be listed must be issued by the ETF that has obtained the Certificate of establishment registration from SSC.

2.2. There are at least two (02) authorized participants and one (01) of them is the trading member of HOSE.

2.3. The application for listing of ETF certificates must be sufficient and valid as prescribed in Article 5 hereof.

What is application for listing of securities at Ho Chi Minh Stock Exchange in Vietnam? 

In Article 5 of the Regulations on listing of securities on Ho Chi Minh Stock Exchange, issued together with Decision 85/QD-SGDHCM in 2018, there are regulations on application for listing of securities at Ho Chi Minh Stock Exchange as follows:

1. Application for listing of securities on HOSE shall conform to regulations in Article 57 of Decree No. 58/2012/ND-CP, Clause 18 Article 1 of Decree No. 60/2015/ND-CP, Clause 2 Article 3, Clauses 1, 7 and 8, Article 9 of Circular No. 202/2015/TT-BTC, and other documents prescribed in Appendix 1 enclosed herewith.

2. The prospectus included in the application for listing must be prepared according to Appendixes 2, 3 and 4 of Circular No. 202/2015/TT-BTC of which Appendix 2 has been amended in Circular No. 29/2017/TT-BTC, and meet the following requirements:

2.1 The prospectus must be sufficiently enclosed with appendixes as regulated;

2.2 It must sufficiently bear signatures of Chairperson of the Board of Directors, Director (General Director), head of Board of Supervisors and Chief Accountant (Chief Financial Officer) of the applicant for listing and legal representative of the consulting firm, and other responsible persons (if any). If a person is authorized to sign the prospectus, the power of attorney must be submitted as regulated;

2.3 In case the General Meeting of Shareholders of the applicant for listing has approved the Resolution on issuance of additional shares for raising capital/ paying dividends/ increasing share capital by using its owner’s equity, issuance or bonds and/or convertible bonds, or payment of cash dividends, the listed prospectus must include information about these issues.

2.4 The applicant for listing must determine the expected price of listed securities on the first trading day on HOSE by adopting the pricing methods specified in the listed prospectus before HOSE issues the listing approval decision;

2.5 Determination of the expected price on the first trading day of securities which are listed/ registered for trading over HNX but changed to HOSE before the listing approval decision is issued by HOSE shall not be required. The listed prospectus must include at least the following pricing methods, the book value method and the weighted average price of at least the last twenty (20) trading sessions before delisting/registration for trading over HNX;

2.6 Prospectuses of real estate investment funds and real estate securities investment companies must contain information about real estate management companies and independent valuation firms, including: Full name, abbreviated name, establishment license number (enclosed with the copy thereof), headquarters, telephone, fax, website, operating duration (if any), experience in real estate valuation (enclosed with the agreement signed between the fund management company and the valuation firm), experience of the real estate management company in management and operation of the real estate which must be conformable with investment objectives of the Fund/ real estate investment company (enclosed with the agreement signed between the fund management company and the real estate management company).

3. The legitimate copy of the enterprise registration certificate must include the appendix on business lines of the applicant for listing.

4. The shareholder register must be made in 01 month before the date of submission of application for listing and updated in a sufficient and valid manner to ensure the satisfaction of shareholders’ structure requirement as regulated. The shareholder register must include the following information: full name of shareholder, ID number (or number of Citizen’s Identity Card/ enterprise registration certificate), representative, ID number (or number of Citizen’s Identity Card) of the representative, shareholder’s address, and his/her/its holding.

5. The applicant for listing shall prepare its Charter by referring to templates of charters of public companies.

6. Financial statements of the applicant for listing of the latest two (02) years must meet the following requirements:

6.1. The financial statements must include the balance sheet, income statement, cash flow statement and notes to financial statements, and comply with current regulations on accounting and auditing;

6.2. If the applicant for listing is a parent company or a superior accounting unit that has its inferior accounting units, both financial statements of the parent company/ superior accounting unit and consolidated financial statements/ general financial statements as regulated by the Law on accounting shall be submitted;

6.3. Annual financial statements, consolidated annual financial statements, if the applicant for listing is a parent company, and general annual financial statements, if the applicant for listing is a superior accounting unit that has its inferior accounting units, must be audited by independent audit firms approved by SSC and bear signatures of auditors approved by SSC;

6.4. The auditor’s opinions about financial statements must be unqualified opinions. If a financial statement bears qualified opinion, exceptions must not relate to the owner’s equity (except qualified opinions about the failure to complete the transfer of state capital at a state enterprise which is equitized), paid-in charter capital and other material items affecting the satisfaction of listing requirements such as cash, inventory, fixed assets, accounts receivable and payable, and other exceptions due to failure to consolidate subsidiaries;

6.5. If a financial statement bears qualified opinion with exceptions of items other than those specified in Point 6.4 Clause 6 of this Article, the applicant for listing must provide written explanations which must be reasonable and certified by the audit firm in terms of effects of such exceptions;

6.6. If the interval between the end of the accounting period covered by the latest financial statements and the date of submission of a sufficient and valid application to HOSE is longer than ninety (90) days, the applicant for listing must prepare and submit additional financial statements covering the period up to the latest month or quarter;

6.7. If an application is submitted after the deadline for publishing information about reviewed half-year financial statements of a large-scale public company, the applicant for listing must submit the half-year financial statements reviewed by an approved audit firm;

6.8. If the modification of an application results in failure to submit it within the time limit for publishing information about annual financial statements, reviewed half-year financial statements, or quarterly financial statements, the applicant for listing must additionally submit the financial statements covering the period up to the latest accounting period according to regulations on publishing of information about financial statements of listed enterprises;

6.9. If the applicant for listing issues additional shares for raising its capital after the end of the accounting period of the latest audited financial statements, it must submit the audit report on capital raised from such issue;

6.10. If a copy of the financial statement is submitted, it must be certified by a competent notary public or by the audit firm (for an audited or reviewed financial statement) or by the applicant for listing (for an unaudited or unreviewed financial statement);

6.11. HOSE may request the applicant for listing to obtain an audit or review of its interim financial statements where necessary.

7. If an applicant for listing engages in conditional business sectors the approval from regulatory authorities of which is required by law when following listing procedures, the application for listing must also include written approvals for listing from sector regulatory authorities.

8. If an application for listing includes documents issued/promulgated/approved by regulatory authorities, certified copies of such documents shall be submitted.

9. If there are any events occurring in the course of appraisal of an application for listing and affecting the organizational structure, holders of key positions, business operations, assets, financial status, structure of shareholders and other important aspects of the applicant for listing, the applicant for listing must modify its submitted application.

10. One (01) original written set of the application for listing in Vietnamese (either original documents or legitimate copies thereof) and one (01) additional set in electronic format shall be submitted.

11. After receiving a complete application, HOSE shall consider and appraise the received application, and request the applicant for listing/ fund management company in writing to make changes or modification of its application if necessary. The date of receipt of an application shall be the date on which HOSE receives a complete and valid application.

What are securities listing registration procedures at Ho Chi Minh Stock Exchange in Vietnam?

In Article 6 of the Regulations on listing of securities on Ho Chi Minh Stock Exchange, issued together with Decision 85/QD-SGDHCM in 2018, there are regulations on securities listing registration procedures at Ho Chi Minh Stock Exchange as follows:

1. The receipt, examination and appraisal of applications for listing as well as the issuance of decisions on approval for listing of securities on HOSE shall conform to regulations set forth in Appendix 2 enclosed herewith. HOSE shall send written requests for opinions from SSC or relevant authorities where necessary and only consider giving approval for listing after receiving responses from relevant authorities.

2. The time limit for processing an application for listing shall exclude the periods of time for modifying the application and getting opinions from relevant authorities.

3. Within ten (10) business days (in case of applications for listing of ETF certificates) or thirty (30) business days (in case of applications for listing of other securities) from the receipt of a complete and valid application for listing, HOSE shall give a written document approving the listing or requesting for completion of the application before giving an official approval. If an application is refused, HOSE shall specify reasons in writing.

4. Over six (06) months from the date on which the application modification is requested in writing, if the applicant for listing/ fund management company fails to complete the application as requested, HOSE shall suspend processing of that application.

5. With regard to ETFs, investment funds and securities investment companies, within thirty (30) days from the effective date of the certificate of fund establishment registration or the license for establishment and operation of securities investment company, the fund management company or the Board of Directors of the securities investment company is required to prepare and submit a complete application for listing of fund certificates/ shares to HOSE.

Best Regards!