Securities means assets, including stocks, bonds, fund certificates; warrants, covered warrants, rights, depositary receipts; derivatives; and other types of securities as specified by the Government.

Public offering of securities

A public offering of securities is the offering of securities by one of the modes including offering of securities in the mass media, offering of securities to at least 100 investors (except professional securities investors), and offering of securities to an unspecified number of investors.  Forms of public offering of securities include initial public offering of securities, additional offering of stocks or rights to the public, and other forms.

Initial public offering of stocks of a joint-stock company

The joint-stock company must satisfy the following conditions for initial public offering of stocks:

  • The company’s charter capital contributed at the time of offering registration is at least VND 30 billion accounted according to the book value;
  • The company’s business operation for 2 consecutive years preceding the year of offering registration is profitable and, at the same time, the company has no accrued loss up to the year of offering registration;
  • The company has an issuance plan and a plan on the use of capital generated from the stock offering approved by the Shareholders’ General Meeting;
  • At least 15% of the voting stocks of the company are sold to at least 100 investors that are not majority shareholders.  In case the company’s charter capital is VND 1 trillion or more, this ratio must be 10%;
  • Before the date of the initial public offering of the stocks of the company, its majority shareholders shall commit to holding altogether at least 20% of the charter capital of the company for at least 1 year from the date of completion of the offering;
  • The company is not being examined for penal liability or has never been sentenced for a crime infringing upon the economic management order;
  • The company has received a securities company’s consultancy on its dossier for registration of the public offering of stocks, unless it is a securities company itself;
  • The company commits and is obliged to list its stocks or register stock trading in a securities trading system after the offering is completed;
  • The company opens an escrow account to receive payments for the offered stocks.

Additional public offering of stocks of a public company

The public company must satisfy the following conditions for the additional public offering of stocks:

  • The company’s charter capital contributed at the time of offering registration is at least VND 30 billion accounted according to the book value;
  • The company has an issuance plan and a plan on use of capital generated from the stock offering approved by the Shareholders’ General Meeting;
  • The company is not being examined for penal liability or has never been sentenced for a crime infringing upon the economic management order;
  • The company has received a securities company’s consultancy on its dossier for registration of the public offering of stocks, unless it is a securities company itself;
  • The company commits and is obliged to list its stocks or register stock trading in a securities trading system after the offering is completed;
  • The company opens an escrow account to receive payments for offered stocks;
  • The company’s business operation in the year preceding the year of offering registration is profitable and, at the same time, the company has no accrued loss up to the year of offering registration;
  • Par value of additionally issued stocks is not larger than the total par value of outstanding stocks, unless there is an issuance underwriting whereby the underwriter guarantees to buy all stocks of the company for resale or to buy the undistributed stocks of the company, stocks issued to increase capital from equity or for swap, consolidation or merger of enterprises;
  • For a public offering of stocks to raise capital to implement a project of the company, stocks to be sold to investors must account for at least 70% of stocks expected to be offered.  The company must have a plan to make up for a deficit of capital expected to be raised through the offering for project implementation.

Public offering of bonds

An enterprise must satisfy the following conditions for public offering of bonds:

  • The enterprise’s charter capital contributed at the time of offering registration is at least VND 30 billion accounted according to the book value;
  • The enterprise’s business operation in the year preceding the year of offering registration is profitable and, at the same time, the enterprise has no accrued loss up to the year of offering registration and has no payable debt which has been overdue for more than 1 year;
  • The enterprise has an issuance plan and a plan on use and repayment of capital generated from the offering approved by the Shareholders’ General Meeting, Board of Directors, Members’ Council or its owner;
  • The enterprise commits to perform the obligation of an issuing institution toward investors in terms of issuance and payment conditions, guarantee of lawful rights and interests of the investors and other conditions;
  • The enterprise has received a securities company’s consultancy on its dossier for registration of public offering of bonds, unless it is a securities company itself;
  • The enterprise is not being examined for penal liability or has never been sentenced for a crime infringing upon the economic management order;
  • The enterprise has obtained results of credit rating of bond issuers under the Government’s regulations, for cases subject to credit rating and time of application of credit rating;
  • The enterprise opens an escrow account to receive payments for offered bonds;
  • The enterprise commits and is obliged to list bonds in a securities trading system after the offering is completed.

Public offering of convertible bonds

The company must satisfy the following conditions for public offering of convertible bonds:

  • The company’s charter capital contributed at the time of offering registration is at least VND 30 billion accounted according to the book value;
  • The company has an issuance plan and a plan on use of capital generated from the stock offering approved by the Shareholders’ General Meeting;
  • The company is not being examined for penal liability or has never been sentenced for a crime infringing upon the economic management order;
  • The company has received a securities company’s consultancy on its dossier for registration of public offering of stocks, unless it is a securities company itself;
  • The company commits and is obliged to list its stocks or register stock trading in a securities trading system after the offering is completed;
  • The company opens an escrow account to receive payments for offered stocks;
  • The company’s business operation in the year preceding the year of offering registration is profitable and, at the same time, the company has no accrued loss up to the year of offering registration;
  • Par value of additionally issued stocks is not larger than the total par value of outstanding stocks, unless there is an issuance underwriting whereby the underwriter guarantees to buy all the stocks of the company for resale or to buy the undistributed stocks of the company, stocks issued to increase capital from equity or for swap, consolidation or merger of enterprises;
  • For a public offering of stocks to raise capital to implement a project of the company, the stocks to be sold to investors must account for at least 70% of stocks expected to be offered.  The company must have a plan to make up for a deficit of capital expected to be raised through the offering for project implementation;
  • The company commits and is obliged to list its stocks or register stock trading in a securities trading system after the offering is completed.

Initial public offering of fund certificates

The following conditions must be satisfied for the initial public offering of fund certificates:

  • Total value of fund certificates registered for offering is at least VND 50 billion;
  • There is an issuance plan and a plan on investment of capital amount raised through the offering in accordance with Law on Securities;
  • The offering is supervised by a supervisory bank in accordance with Law on Securities;
  • Fund certificates to be offered to the public must be listed in a securities trading system after the offering is completed, except the offering of open-end fund certificates.

Private placement of securities

Private placement of securities is the offering of securities not falling into the case of the offering of securities in the mass media and by one of the modes including offering of securities to less than 100 investors (except professional securities investors) and the offering of securities only to professional securities investors.

Private placement of securities of issuing institutions other than public companies must comply with the Law on Enterprises and other relevant laws.  A public company is a joint-stock company which (i) has a contributed charter capital of at least VND 30 billion and at least 10% of its voting stocks held by at least 100 investors other than majority shareholders; or (ii) has completed an initial public offering of stocks as registered with the State Securities Commission under Law on Securities.

Private placement of stocks, convertible bonds or bonds accompanied with warrants of a public company

Private placement of stocks, convertible bonds or bonds accompanied with warrants of a public company must satisfy the following conditions:

  • There is a decision of the Shareholders’ General Meeting approving a plan on private placement and use of proceeds from private placement, and clearly identifying eligible investors and the number thereof;
  • Only strategic investors and professional securities investors are eligible for private placement;
  • Transfer of privately placed stocks, convertible bonds or bonds accompanied with warrants is banned for at least 3 years, for strategic investors, or at least 1 year, for professional securities investors, after the private placement is completed, except the case of transfer among professional securities investors or under a legally effective court judgment or ruling or an arbitration award or in case of inheritance in accordance with law;
  • The interval between two consecutive private placements of stocks, convertible bonds or bonds accompanied with warrants must be at least 6 months;
  • Private placement of stocks, conversion of bonds into stocks or the execution of warrants must satisfy the condition on the holding rate of foreign investors prescribed by law.

Private placement of bonds of a public company

Private placement of bonds of a public company not falling into the cases of private placement of stocks, convertible bonds or bonds accompanied with warrants, must satisfy the following conditions: 

  • There is a decision of the Shareholders’ General Meeting or Board of Directors approving a plan on issuance and use of proceeds from private placement, and clearly identifying eligible investors and number thereof;
  • Only professional securities investors are eligible for private placement;
  • Transfer of privately placed bonds may only be carried out among professional securities investors, unless it is carried out under a legally effective court judgment or ruling or an arbitration award or in case of inheritance in accordance with law;
  • Principals and interests of offered bonds or due liabilities (if any) must be fully paid in 3 consecutive years prior to the private placement, unless bonds are privately placed to creditors being selected financial institutions;
  • There is a financial statement for the year preceding the year of issuance, audited by an accredited audit firm;
  • Financial prudential ratios and adequacy ratios in operations (if any) are maintained in accordance with law.