What are the cases of delisting and suspension of trading in Vietnam?

What are the cases of delisting and suspension of trading in Vietnam? (Internet image)

Regarding this issue, LawNet responded as follows:

1. What are warrants?

According to Clause 5, Article 4 of the Law on Securities 2019, warrants are the securities that are issued together with bonds or preference shares and bestow upon their holders the right to buy a certain amount of common shares at a specified price over a specific period of time.

2. Cases of delisting and suspension of trading in Vietnam

2.1. Cases of delisting of trading in Vietnam

Specifically, in Clause 1, Article 9 of Circular 107/2016/TT-BTC, a warrant is delisted in the following events:

- The issuer suspends its operations, engages in a merger or consolidation, dissolves or goes bankrupt or has its license for incorporation and operation revoked;

- The underlying securities are delisted or stock indices are un-determined due to force majeure specified in the principles of index calculation;

- In 03 months upon the commencement of the offering, the quantity of outstanding warrants is less than 50% of the number of warrants issued. The issuer has to delist an amount of untraded warrants equal to 40% of the number of warrants issued;

- The proportion of total quantity of underlying securities converted from the warrants issued by all issuers to the total number of underlying securities negotiable exceeds a percentage defined by the State Securities Commission.

In this circumstance, the issuer shall delist an amount of untraded warrants whose time left to expiration is less than 02 months from the date that the percentage is exceeded under the following principle:

+ 80% of the warrants issued shall be delisted if outstanding warrants make up less than 5% of those issued.

+ 70% of the warrants issued shall be delisted if outstanding warrants make up 5% to 10% of those issued;

- The warrants are fully exercised or expired. In this situation, such warrants shall be delisted automatically.

- Stock Exchange considers delisting necessary to protect investors’ interests with the approval by the State Securities Commission.

2.2. Cases of suspension of trading in Vietnam

According to Clause 6, Article 9 of Circular 107/2016/TT-BTC, the trading of a warrant shall be suspended in the following events:

- The calculation of the underlying index of the warrant is suspended;

- The underlying securities of the warrant are suspended from trading;

- Force majeure such as natural disasters, fire or technical errors in the trading system or payment system;

- Stock Exchange considers suspension necessary to protect investors’ interests with the approval by the State Securities Commission.

Securities Depository Center shall be responsible for reporting and announcing the errors of the payment system to the State Securities Commission and Stock Exchange, respectively. Stock Exchange shall report to the State Securities Commission upon the decision to suspend trading.

3. Policies on development of the securities market in Vietnam

According to Article 6 of the Law on Securities 2019, policies on development of the securities market include:

- The State shall introduce policies facilitating Vietnamese and foreign organizations and individuals to invest and operate in the securities market in order to mobilize medium-term and long-term capital.

- The State shall introduce management and supervision policies to ensure the fairness, openness, transparency, safety and effectiveness of the securities market.

- The State shall introduce policies on investment in modernization of infrastructure and information technology serving the operation of the securities market, develop human resources for the securities industry, provide basic knowledge about securities and the securities market.

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