03 regulations on corporate bonds are suspended until December 31, 2023 in Vietnam

03 regulations on corporate bonds are suspended until December 31, 2023 in Vietnam (Internet image)

On March 5, 2023, the Government issued Decree 08/2023/ND-CP amending and suspending the implementation of a number of articles in the Decrees regulating the private offering and trading of corporate bonds in Vietnam. domestic market and offering corporate bonds to the international market, effective from March 5, 2023.

1. 03 regulations on corporate bonds are suspended until December 31, 2023 in Vietnam

The following regulations of Decree 65/2022/ND-CP shall be suspended until December 31, 2023 inclusively:

- Regulations on determination of professional investors that are individuals in Point d, Clause 1, Article 8, Decree 153/2020/ND-CP, amended in Clause 6, Article 1, Decree 65/2022/ND-CP. Specifically:

Article 8. Bond buyers

1. Eligible bond buyers

d) An individual that is identified as a professional investor as prescribed in Point d Clause 1 Article 11 of the Law on Securities shall be eligible to buy privately placed bonds if he/she holds a quantity of listed or registered securities, excluding securities borrowed to conduct margin transactions and those of repo transactions, of which the daily average price determined in a minimum period of 180 consecutive days preceding the date on which he/she is identified as a professional investor shall not be lower than VND 02 billion. The certification of a professional investor status as prescribed in this Point shall be valid for 03 months from the date of certification.

- Regulations on time limits for distribution of bonds in Clause 7 and Clause 8, Article 1 of Decree 65/2022/ND-CP. Specifically:

 Bonds offered in each offering wave must be distributed within 30 days from the date of disclosure of information before offering. Total duration for a multiple-wave offering shall not exceed 06 months from the issue date of the first offering wave.

 The issuer shall organize the bond offering according to the methods prescribed in Article 14 of this Decree. The issuer shall complete the distribution of bonds within 30 days from the date of information disclosure before offering.

- Regulations on reports on credit rating of issuers in Point e, Clause 2, Article 12 of Decree 153/2020/ND-CP are amended in Clause 9, Article 1 of Decree 65/2022/ND-CP. Specifically:

2. A bond offering dossier shall include the following documents:

e) The report on credit rating of the issuer that is subject to compulsory credit rating as prescribed in Clause 2 Article 19 of the Decree No. 155/2020/ND-CP of which the time of application is prescribed in Clause 3 Article 310 of the same document.

2. Amendments to responsibilities of bond issuers in Vietnam

Responsibilities of bond issuers in Vietnam include:

- Comply with regulations on offering of bonds herein.

- Properly manage and use funds raised from issuance of bonds according to bond issuance plans approved by competent authorities and regulations of law.

- Make full and timely payments of bond principal and interests when they become due, and perform corporate actions (if any) for bondholders under terms and conditions of bonds. In case of offering of bonds in the domestic market where the issuer is unable to make full and timely payment of bond principal/interests in VND according to the issuance plan disclosed to investors as prescribed in Article 17 of this Decree, the issuer may reach agreement with bondholders on payment of bond principal/interests using assets as follows:

= The payment must comply with regulations of the civil code and relevant laws. In case of conditional business lines, the payment must also comply with regulations of law governing such conditional business lines.

= The payment must be made with consent of bondholders.

= The issuer shall make ad hoc information disclosure and assume the full responsibility for the legal status of assets used for paying bond principal/interests in accordance with regulations of law.

-  Assume legal responsibility for accuracy, truthfulness and adequacy of bond offering dossiers and disclosed information; comply with regulations on financial management, statistical accounting and auditing as prescribed by law.

- Issuers that fail to comply with regulations herein shall be liable to administrative penalties or criminal prosecution depending on the nature and severity of the violation. The imposition of administrative penalties shall comply with regulations on penalties for administrative violations against regulations on securities and securities market, and relevant laws.

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