Vietnam: When can an issuer offer securities at a price below the face value?

According to current regulations, face values of securities offered within Vietnam’s territory shall be expressed as VND. The face value of a publicly offered share or fund certificate shall be 10 thousands VND. The face value of a publicly offered bond shall be a multiple of 100 thousand VND.

However, according to Clause 3 Article 13 of the Law on Securities 2019 of Vietnam, in case the securities price of an issuer on the securities trading system is lower than the face value, the issuer may offer the securities at that lower price.

Thus, in comparison with provisions of the Law on Securities 2006 of Vietnam, this new law stipulates to relax the conditions for offering securities to issuers on the securities trading system when the securities price is lower than the face value.

Besides, the Law on Securities 2019 of Vietnam also states clearly that, before a public offering, issuers and shareholders of public companies shall register with the State Securities Commission of Vietnam (SSC), except for the following cases:

- Offering of debt instruments of the Government, Government-backed bonds issued by policy banks, and municipal bonds;

- Offering of bonds issued by international financial institutions approved by Vietnam’s Government;

- Public offering to convert state-owned enterprises, wholly state-owned single-member limited liability companies, public service agencies into joint-stock companies;

- Sale of securities under an effective court judgment or decision or under an arbitral decision; sale of securities of the asset manager or recipient in case of bankruptcy or insolvency.

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

Thuy Tram

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