Here is the notable new content of the Securities Law 2019, which is expected to bring a new breeze to the stock market.
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Transparency of Information: 2 New Subjects Required to Disclose Information under Securities Law 2019 (Illustrative Image)
Information transparency is always a crucial criterion for assessing the quality of the financial market. Even in developed countries, legislative bodies continuously strive to increase transparency levels to protect investors through issuing legal documents to regulate this issue.
Establishing a foundation for transparency is clearly reflected in the legal policy regime on securities. When the Securities Law 2019 becomes effective, the subjects required to disclose information will be more detailed and broader. The Securities Law 2019 addresses the gaps in the previous regulations and supplements two new subjects obligated to disclose information.
Article 118 of the Securities Law 2019 stipulates that the subjects obligated to disclose information include:
- Public companies;- Organizations issuing corporate bonds to the public;- Organizations listing corporate bonds;- Securities companies, fund management companies, branches of foreign securities companies, and foreign fund management companies in Vietnam;- Vietnam stock exchange and its subsidiaries, Vietnam Securities Depository and Clearing Corporation;- Major shareholders, related groups owning 5% or more of the voting shares of a public company; investors, and related groups owning 5% or more of the closed-end fund's certificates;- Founding shareholders during the transfer restriction period of a public company, publicly traded investment company;- Insiders of public companies, insiders of public funds, and public investment companies per Clause 45, Article 4 of this Law, and persons related to insiders;- Related foreign investor groups owning 5% or more of the voting shares of an issuing organization or 5% or more of the closed-end fund's certificates;- Other subjects as prescribed by the Minister of Finance.
Compared to the previous regulation, the 2 new subjects required to disclose information are:
- Major shareholders, related groups owning 5% or more of the voting shares of a public company; investors, related groups owning 5% or more of the closed-end fund's certificates; related foreign investor groups owning 5% or more of the voting shares of an issuing organization or 5% or more of the closed-end fund's certificates;- Insiders of public companies, publicly traded investment companies, public funds, and persons related to insiders.
These new subjects are specifically adjusted by two legal articles in the securities law. However, how to guide these adjusted subjects correctly along the directions outlined by the amended law for our stock market to truly transform in quality is a matter of concern.
Legal Basis: Securities Law 2019, effective from January 1, 2021.
Nguyen Phu
