Vietnam: 03 requirements for underwriting public offering

According to the Law on Securities 2019 of Vietnam, a securities company or an organization shall satisfy the following requirements to underwrite a public offering:

- The securities underwriting is licensed by the State Securities Commission of Vietnam (SSC) in accordance with this Law;

- Financial safety criteria are satisfied as prescribed by law;

- The underwriter is not a related person of the issuer.

- It should be noted that, if the underwriter opts to purchase of part or all of the issuer’s securities, the total value of securities purchased must not exceed the equity and 15 times the difference between the short-term assets and short-term debts according to the latest financial statement.

- This new Law guides the application for registration of public offering, including:

- The application form;

- The prospectus;

- The issuer’s charter;

- The decision of the General Meeting of Shareholders to ratify the plan for issuance and the plan for use of capital generated by the offering, and the commitment to have the shares listed or registered on the securities trading system;

- The commitment to comply with the regulations in Point d and Point e Clause 1 Article 15 of this Law;

- The major shareholders’ written commitment to hold at least 20% of the company’s charter capital for at least 01 year from the end of the offering;

- The contract with a securities company for public offering consulting;

- A bank’s or FBB’s (foreign branch banks) confirmation on opening of an escrow account to receive payments for the offered shares;

- The public offering underwriting agreement (if any).

View more at the Law on Securities 2019 of Vietnam, effective from January 01, 2021.

Thuy Tram

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