Vietnam: Guidelines for dealing with risk for outstanding debt of corporate bond purchase

14:35, 05/07/2016

This is an important content specified in Circular No. 22/2016/TT-NHNN of the State Bank of Vietnam on purchase of corporate bonds by credit institutions, branches of foreign banks.

According to Circular No. 22/2016/TT-NHNN of the State Bank of Vietnam, credit institution shall build up reserve fund and deal with risk for the outstanding debt of corporate bond purchase as follows:

- For bonds that are already listed in the securities market or already registered in the trading market of unlisted public companies, the credit institutions shall build up reserve fund for the reduction of bond price and deal with the fund in accordance with provisions of applicable laws and guidance of the Ministry of Finance on the regime of build up reserve fund against the reduction of financial investments' price;

- For bonds that are not listed in the securities market yet or not registered in the trading market of unlisted public companies, the credit institutions shall build up reserve fund against risk for outstanding debt of corporate bond purchase in accordance with regulations of the State Bank of Vietnam on the amount and methods of building up reserve fund and use of fund to deal with risks in the operations of credit institutions.

View full text at Circular No. 22/2016/TT-NHNN of the State Bank of Vietnam, effective from August 15, 2016.

- Thanh Lam -

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