Vietnam: What is prospectus? What does a prospectus consist of?

Vietnam: What is prospectus? What does a prospectus consist of? (Internet image)

1. What is prospectus?

According to Clause 23, Article 4 of the Law on Securities 2019, prospectus means a physical or electronic document that contains accurate and objective information about the offering or listing of securities by an issuer.

2. Contents of prospectus

- In case of public offering of shares and bonds, the prospectus shall contain the following information:

+ Summary of the issuer, including its organizational structure, business operations, assets, financial status, Board of Directors, the Board of members or the company owner, General Director (Director), Deputy General Director (Deputy Director), chief accountant and shareholders (if any);

+ Information about the offering and the offered securities, including: offering conditions, risk factors, estimated profit and dividends of the nearest year after the issuance, the issuance plan and the plan for use of capital generated by the offering;

+ The issuer’s financial statements of the last 02 years as prescribed in Article 20 of this Law;

+ Other information prescribed in the model prospectus.

- In case of public offering of fund certificates, the prospectus shall contain the following information:

+ The type and scale of the securities investment fund;

+ Investment targets, strategy, method and procedures; investment limits and risk factors of the securities investment fund;

+ Summary of the draft charter of the securities investment fund;

+ The plan for issuance of fund certificates and instructions on making investment in the securities investment fund;

+ Summary of the fund management company and the supervisory bank, regulations on trading with their related persons;

+ Other information prescribed in the model prospectus.

(Clause 1, 2, Article 19 of the Law on Securities 2019)

3. Signature in the prospectus in Vietnam

Signatures in the prospectus must comply with the following provisions:

- In case of public offering of shares and bonds, the prospectus shall bear the signatures of

+ The Chairperson of the Board of Directors, the Chairperson of the Board of members, the company's President;

+ The General Director (Director); CFO or chief accountant of the issuer;

+ The legal representative of the consulting organization or underwriter (if any).

A letter of authorization is required in case of authorized signing;

- In case of public offering of fund certificates, the prospectus shall bear the signatures of

+ The Chairperson of the Board of Directors, the Chairperson of the Board of members, the company's President;

+ The General Director (Director) of the fund management company;

+ The legal representative of the underwriter (if any).

A letter of authorization is required in case of authorized signing.

4. Regulations when making prospectus in Vietnam

When preparing the prospectus, the issuer must comply with the following provisions in Vietnam:

- The prospectus must contain clear, accurate, truthful and adequate information that might affect investors’ decisions. The language of the prospectus must be simple and understandable. The abbreviated or technical terms used in the prospectus must be clearly interpreted;

- Important and comparative information contained in the prospectus must be provided with their reference sources;

- The prospectus must have a clear format, and easily legible font and font size;

- The analysis of risk factors must include their impacts on business operations, financial status and business performance of the issuer; the offering or issuance; prices of securities; and the project using capital generated by the offering. Such risk factors must be classified and named in groups, and sorted by their negative effects in descending order;

- Information about business operations and financial status must clearly reflect business operations of the issuer or public company whose shares are offered within the latest 02 fiscal years and by the end of the latest quarter. In case of a parent company, the information about business performance must include consolidated business performance and business performance of the parent company;

- Information about major shareholders, owner of the company, company’s president, members of Board of Directors, members of Board of Members, Controllers, General Director (Director), Deputy General Directors (Deputy Directors) and Chief Accountant must include information about their interests relevant to the issuer or shareholders of the public company that offers shares to the public;

- Purposes of the offering or issuance and plan for use of capital generated by the offering must be conformable with the plan approved by the General Meeting of Shareholders or Board of Directors or Board of Members or the company’s owner;

- If a prospectus is revised, revised contents and revision reasons must be indicated in the revised prospectus.

(Clause 3, Article 3 of Circular 118/2020/TT-BTC)

Diem My

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