Cases ineligible to proceed through the individual corporate bond trading system in Vietnam

Cases ineligible to proceed through the individual corporate bond trading system in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

The Minister of Finance of Vietnam issued Circular 30/2023/TT-BTC dated May 17, 2023, guiding registration, custody, exercise of rights, transfer of ownership, payment for transactions, and organization of the market for trading corporate bonds offered for private sale in the domestic market.

Cases ineligible to proceed through the individual corporate bond trading system in Vietnam

Vietnam Securities Depository and Clearing Corporation transfers ownership of individual corporate bonds registered at Vietnam Securities Depository and Clearing Corporation, not through the individual corporate bond trading system, in the following cases:

- Donating or inheriting individual corporate bonds according to the provisions of the Civil Code;

- Division, separation, consolidation, and merger of enterprises; reorganization of public non-business units; dissolution of enterprises, dissolution of business households in accordance with the provisions of the Enterprise Law and other relevant laws;

- Transfer of ownership under a court judgment, decision, arbitral award, or decision of a judgment enforcement agency;

- Transfer of ownership due to the disposal of security assets being individual corporate bonds registered at the Vietnam Securities Depository and Clearing Corporation and blockade as prescribed at Point c, Clause 1, Article 23 Circular 119/2020/TT-BTC;

- Transfer of ownership of individual corporate bonds due to the division of common property between husband and wife during their marriage in accordance with the Law on Marriage and Family;

- Transfer of ownership of individual corporate bonds upon division, separation, consolidation, merger, or dissolution of a securities investment fund; establishing and increasing the charter capital of individual securities investment companies; increasing or decreasing the charter capital of member funds; funds paid by individual corporate bonds in the resale of open-ended funds;

- Transfer of ownership of individual corporate bonds arising when the issuing enterprise complies with the provisions of Article 1 of Decree 08/2023/ND-CP.

(Clause 2, Article 9 of Circular 30/2023/TT-BTC)

What is the individual corporate bond trading system?

According to Clause 1, Article 3 of Circular 30/2023/TT-BTC, the individual corporate bond trading system is a system of physical facilities, technical and technological infrastructure organized by the Hanoi Stock Exchange in service of individual corporate bond trading.

Rights of Vietnam Securities Depository and Clearing Corporation

Specifically, in Clause 1, Article 55 of the Law on Securities 2019, Vietnam Securities Depository and Clearing Corporation (VSDCC) has the rights to:

- Issue regulations on securities registration, depositing, offsetting and payment, and other operational regulations after they are approved by SSC;

- Provide services including securities registration, depositing, offsetting and payment; registration of collateral for securities registered at VSDCC upon request of clients; provide other services specified in VSDCC’s charter;

- Issue domestic ticker symbols and international securities identifying numbers to securities registered at VSDCC;

- Approve, change, cancel registration of securities at VSDCC;

- Grant and cancel membership of depository members of VSDCC; suspend depository members from providing securities depository services;

- Use various sources to assist payment in case a member of VSDCC is temporarily insolvent as prescribed by law;

- Other rights prescribed by law and VSDCC’s charter.

More details can be found in Circular 30/2023/TT-BTC effective from July 1, 2023.

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