Guidelines on handling securities for civil judgment execution in Vietnam from January 1, 2025

Guidelines on handling securities for civil judgment execution in Vietnam from January 1, 2025​ (Image from the Internet)

On November 15, 2024, the Government of Vietnam issued Decree 152/2024/ND-CP amending Decree 62/2015/ND-CP on guidelines on the Law on Civil Judgment Enforcement 2008, which is amended by Decree 33/2020/ND-CP.

Guidelines on handling securities for civil judgment execution in Vietnam from January 1, 2025

According to the provisions of Clause 4, Article 13 of Decree 62/2015/ND-CP (supplemented by Clause 5, Article 1 of Decree 152/2024/ND-CP), the handling of listed securities or those registered for trading at stock exchanges is implemented as follows:

- The Executor issues a decision to freeze securities and sends it to the Vietnam Securities Depository and Clearing Corporation (hereinafter abbreviated as VSDC) and other agencies, organizations, or individuals according to the provisions in Article 67 of the Law on Civil Judgment Enforcement 2008 (amended 2014).

“Article 67. Freezing accounts and assets held in custody

1. The freezing of accounts and assets held in custody is executed when the judgment debtor has accounts or assets in custody.

2. The decision to freeze accounts or assets held in custody must clearly specify the amount of money or assets to be frozen. The Executor must deliver the freezing decision to the agency, organization, or individual managing the debtor’s accounts or assets.

If there is a need to immediately freeze the accounts or assets of the debtor held in custody without issuing a freezing decision, the Executor prepares a document requesting the agency, organization, or individual managing the debtor’s accounts or assets to freeze them. Within 24 hours from the preparation of the document, the Executor must issue a decision to freeze the accounts or assets.

The agency, organization, or individual managing the accounts or assets must immediately execute the Executor's request to freeze the accounts or assets. The document and decision to freeze accounts or assets in such cases must be immediately sent to the same-level People’s Procuracy.

3. Within 10 days from the issuance of the freezing decision on accounts or assets held in custody, the Executor must apply enforcement measures or decide to terminate the freezing according to this Law.”

Within one working day from receiving the Executor's decision, VSDC must execute the securities freeze as per securities law and send notifications to the civil enforcement agency and depository members.

The decision to freeze securities includes: the request to freeze securities; full name, ID number, and date of issue for individuals; name, registration certificate number, and date of issue for legal entities; the securities code and quantity proposed for freezing.

- The Executor issues a decision on enforcement to distrain and handle securities according to Clause 3, Article 71 of the Law on Civil Judgment Enforcement 2008.

“Article 71. Enforcement measures

...

3. Distrain and handle the property of the judgment debtor, including property held by a third party.”

Within 5 working days from the date of proper notification of the distrain and securities handling decision, the involved party may negotiate the sale of securities under securities law and inform the civil enforcement agency in writing of such agreement.

After this time frame, the civil enforcement agency issues a document requesting VSDC to transfer the distrained securities to the civil enforcement agency. The civil enforcement agency has rights and obligations under the law for the received securities. Within 5 working days from receiving the civil enforcement agency's request, VSDC must perform the securities transfer.

Within 2 working days from the completion of the securities transfer, the Executor executes the sale as per the agreement of the involved party. If there is no agreement or failure to agree, the Executor sells the securities through trade matching at the reference price according to securities law.

If proactively deciding on enforcement, immediately after issuing a decision on distrain, the civil enforcement agency issues a document demanding VSDC transfers the distrained securities to the civil enforcement agency and conducts the sale through trade matching at the reference price according to securities law.

Refer to more detailed in Decree 152/2024/ND-CP effective from January 1, 2025.

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