The Right of Public Company to Repurchase Its Own Shares

Transactions involving shares repurchased by a public company are regulated by the Draft Circular providing guidelines on transactions in the stock market and must comply with the following regulations:

The right to repurchase shares by a public company (illustrative photo)

- The listed organization and trading registration must execute the repurchase of their own shares in accordance with the content disclosed as stipulated in Clause 4, Article 37 of the Securities Law.- Principles for determining the repurchase price of their own shares by public companies on the trading system via matching or negotiation methods of the listed organization and trading registration are defined as follows:

- Bid price ≤ Reference price + (Reference price * 50% price fluctuation margin).- Purchase volume: on each trading day, the total minimum volume is 3% and the maximum volume is 10% of the transaction volume registered with the State Securities Commission (excluding the canceled volume and this provision is exempted if the remaining volume is less than 3%).- This regulation applies until the listed organization and trading registration completes the repurchase transaction of its own shares as registered with the State Securities Commission.

- A public company that repurchases its own shares is allowed to sell these shares after repurchase as stipulated in Clause 7, Article 36 of the Securities Law, executed on the trading system of the Stock Exchange in accordance with the trading regulations of the Stock Exchange or on the ownership transfer system of the Vietnam Securities Depository and Clearing Corporation in accordance with the ownership transfer regulations of the Vietnam Securities Depository and Clearing Corporation.- In the case of a public company repurchasing its own shares before January 1, 2021, the sale of these shares is executed as follows:

- Ask price ≥ Reference price - (Reference price * 50% price fluctuation margin).- Sale volume: on each trading day, the total minimum volume is 3% and the maximum volume is 10% of the transaction volume registered with the State Securities Commission (excluding the canceled volume and this provision is exempted if the remaining volume is less than 3%).

See more details in the Draft Circular providing guidelines on transactions in the stock market.

Long Binh

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