The right to repurchase shares by a public company in Vietnam

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 in Vietnam (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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