Regulations on identification of professional securities investors in Vietnam

Regulations on identification of professional securities investors in Vietnam (Internet image)

1. Who are professional investors?

According to Article 11 of the Law on Securities 2019, professional investors are investors that have adequate financial capacity or securities qualifications, including:

(1) Commercial banks, foreign branch banks (FBB), finance companies, insurers, securities companies, fund management companies, securities investment funds, international financial institutions, off-budget financial funds, state-owned financial institutions permitted to buy securities as prescribed by relevant laws;

(2) Any company whose contributed charter capital exceeds 100 billion VND; every listed or registered organization;

(3) Holders of securities professional certifications;

(4) Any individual holding a quantity of listed or registered securities that is worth at least 02 billion VND as confirmed by the securities company;

(5) Any individual whose taxable income in the latest year is at least 01 billion according to his/her submitted tax return or tax deduction documents of his/her income payer.

2. Regulations on identification of professional securities investors in Vietnam

According to Article 4 of Decree 155/2020/ND-CP, identification of professional securities investors is as follows:

- Issuers and securities investment fund management companies shall identify or authorize securities companies to identify professional securities investors that purchase securities upon private placement or registration of private funds.

In case of authorization, the authorized securities investment fund management company shall sign a contract with the securities company, which specifies the rights and responsibilities or the parties.

- For privately placed securities that are traded on the transaction systems of Stock Exchanges, the securities company where the investor purchase the securities shall identify whether such investor is a professional investor before conducting the transaction.

For privately placed securities that are not traded at Stock Exchanges, the registering or depositing organizations shall identify professional securities investors before transfer of ownership.

- For 01 year from the day on which an investor is identified as professional securities investor by the securities company, the investor does not have to undergo the identification process again when trading privately placed securities or private fund certificates.

- Investors who have purchased privately placed securities or private fund certificates do not have to undergo the identification process again after the purchase is made.

- Documents serving identification of professional securities investors shall be retained as prescribed by the law in Vietnam.

3. Documents serving identification of professional securities investors in Vietnam

 Documents serving identification of professional securities investors according to Article 5 of Decree 155/2020/ND-CP are as follows:

- For the organizations mentioned in item (1) of Section 1: the Certificate of Enterprise Registration or Establishment and Operation License or equivalent documents.

- For the organization mentioned in item (2) of Section 1:

= For listed or registered organizations: the decision on listing or registration;

= For organizations other than listed or registered organizations: the Certificate of Enterprise Registration or equivalent documents; audited annual financial statement or examined half-year financial statement.

- For the individuals mentioned in item (3) of Section 1:

= Unexpired ID card or passport;

= Unexpired securities practicing certificate.

- For the individuals mentioned in item (4) of Section 1:

= Unexpired ID card or passport;

= Certification by the securities company where the investor opens the securities trading account of market values of listed or registered securities when the individual is identified as a professional securities investor.

- For the individuals mentioned in item (5) of Section 1:

= Unexpired ID card or passport;

= Tax declaration dossier submitted to the tax authority or tax deduction documents of the latest year before the individual is identified as a professional securities investor.

Quoc Dat

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE