Decree on Instruction to Implementation of Securities Law Issued

The Government promulgated the Decree 14/2007/ND-CP to provide detailed instructions to the implementation of several clauses of the Securities Law, such as initial public offering (IPO), securities listing, Securities Company, fund management company and securities investment company on January 19, 2007 after nearly 20 days the Securities Law took effect.

 

Several detailed regulations of the Decree have been announced, notably those related to the delisting of shares. The delisting of shares will be applicable to companies suffering losses in three consecutive years or companies merging, splitting or dissolving their business or going bankrupt.

 

Regarding the initial public offering, the Decree stipulates that wholly foreign-invested companies want to make the IPO; they must be transformed into joint stock companies and the issuing and capital use schemes must have consent from the owners or boards of directors of those companies. As for the state-run enterprises, they must go public before making IPO.

 

One of the most public-concerned contents is the detailed stipulation on the conditions for the foundation and operation of securities companies. According to the Decree, securities companies will be operated in the form of joint stocks companies, including public securities investment companies and private issuing companies. Notably, private issuing companies are only allowed to offer securities to a maximum of 99 investors, which must prove VND3 billion investment capital each if they are institutional investors, and VND1 billion each in case of individual investors.

 

As for foreign securities investment companies or foreign securities investment funds, if they want to invest in Vietnam, they must entrust local fund management companies or set up branches in Vietnam to carry out their capital investment management business.