Reference price when registering to trade unlisted securities in Vietnam

Reference price when registering to trade unlisted securities in Vietnam (Internet image) 

On November 16, 2022, the Board of Members of the Vietnam Stock Exchange issued Decision 34/QD-HDTV on Regulations on Registration and Management of unlisted securities transactions.

1. Reference price when registering to trade unlisted securities in Vietnam

According to Article 19 of the Regulations attached to Decision 34/QD-HDTV, the reference price when registering to trade unlisted securities is specified as follows:

- For new stocks registered for trading, the reference price for the first trading day is proposed by the organization registering for trading.

Before the first trading day, the organization registering for trading must publicly disclose information on the company's website about the method for determining reference prices, principles, and financial data in financial reports or other relevant documents used to determine reference prices.

- In case the organization registering for trading is a public company that has been delisted according to Point b, Clause 1, Article 133 of Decree 155/2020/ND-CP, the reference price for the first trading day is the closing price on the last trading day on the listed market, or the reference price on the last trading day on the listed market (if the last trading day had no transactions to determine the closing price).

- For equitized enterprises associated with registration, depository, and transaction registration on the UPCoM trading system, the reference price for the first trading day is the average successful bid price (in the case of an auction offering) or the distribution price to investors (in the case of a book-building offering).

- The reference price of a security on a trading day is the weighted average of the prices in even lot transactions carried out according to the continuous order matching method of the most recent previous trading day.

- On the ex-rights trading day, except for the cases specified in Clause 7, Article 19 of the Regulations attached to Decision 34/QD-HDTV, the reference price is determined on the principle of taking the weighted average price of the most recent trading day adjusted according to the value of dividends received or the value of attached rights.

- In cases of stock split or consolidation, the reference price at the return transaction date is determined according to the principle of taking the weighted average price of the trading day before the split or consolidation date and adjusting according to the ratio of stock split and consolidation.

2. Cases of not adjusting the reference price in Vietnam

Clause 7, Article 19 of the Regulations attached to Decision 34/QD-HDTV stipulates 08 cases of not adjusting the reference price, specifically:

- Cases where the price fluctuation range has been opened as prescribed in Points c and d, Clause 2, Article 18 of the Regulations attached to Decision 34/QD-HDTV;

- The enterprise issues additional shares at an issue price higher than the weighted average price of the trading day immediately preceding the ex-rights date after adjusting other rights (if any);

- Private issuance of shares, offering shares to investors who are not existing shareholders;

- Issuing shares under the stock option program for employees in the company;

- Issuing additional shares according to swap plans from merger transactions;

- Organizing transaction registration to reduce charter capital;

- Offering to sell Treasury shares to existing shareholders;

- Other issuance cases do not affect the rights of existing shareholders.

3. Price fluctuation amplitude and price fluctuation limit in Vietnam

The price fluctuation amplitude and price fluctuation limit when registering to trade unlisted securities are specified in Article 18 of the Regulations attached to Decision 34/QD-HDTV, specifically:

- The price fluctuation range for stocks registered for trading on a trading day is ± 15% compared to the reference price.

- The price fluctuation range is ± 40% compared to the reference price on other trading days below:

+ The first trading day of a new stock registered for trading until a reference price is established from the results of the continuous order matching method;

+ The first trading day of the stock has no transactions for more than 25 consecutive trading days until a reference price is established from the results of the continuous order matching method;

+ First day of resumption of trading in case of separation of business registered for trading;

+ Ex-rights trading day in the following cases:

++ Pay dividends or reward Treasury shares to existing shareholders;

++ Pay dividends in cash with an amount greater than or equal to the weighted average price of the stock on the trading day immediately preceding the ex-dividend date;

++ Issue convertible bonds to existing shareholders.

- In cases where it is necessary to stabilize the market, the State Securities Commission decides to adjust the price fluctuation amplitude according to the provisions of Clause 2, Article 4 of Circular 120/2020/TT-BTC.

- Price fluctuation limits for shares registered for trading are determined as follows:

Ceiling price = Reference price + (Reference price x Price fluctuation range)

Floor price = Reference price - (Reference price x Price fluctuation range)

- In case the ceiling price or floor price of shares registered for trading is determined according to the provisions of Clause 3, Article 18 of the Regulations attached to Decision 34/QD-HDTV and is equal to the reference price, the ceiling and floor prices will be adjusted as follows:

Adjusted ceiling price = Reference price + 01 quoted price unit

Adjusted floor price = Reference price - 01 quoted price unit

- Ceiling price and floor price on the trading day of shares registered for trading are calculated according to the provisions of Clauses 3 and 4 of Article 18 of the Regulations attached to Decision 34/QD-HDTV and are rounded down for the ceiling price and rounded up for the floor price according to the quoted price unit.

In case the floor price adjusted according to the provisions of Clause 4 and Article 18 of the Regulations attached to Decision 34/QD-HDTV is less than or equal to 0, the floor price will be adjusted to the reference price.

- In case after calculation, the reference price is equal to the quoted price unit (in case there is 01 quoted price unit) or equal to the smallest quoted price unit (in case there are many quoted price units), the price fluctuation limit is redefined as follows:

Adjusted ceiling price = Reference price + 01 quoted price unit

Adjusted floor price = Reference price

More details can be found in Decision 34/QD-HDTV which takes effect from the date of signing.

Nhu Mai

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