New regulations on trading of privately placed corporate bonds

Accordingly, Decree 65 has many new regulations on conditions of trading of privately placed corporate bonds for professional investors as follows: investors that are financially capable or professionally qualified for securities activities; sign documents certifying that they have complied with the provisions; not sell or contribute capital to invest in bonds with investors who are not professional securities investors in any form… Below are specific cases:

Investors eligible for bond purchase:

• Investors eligible for purchase of non-convertible bonds not linked with warrants:  Are professional securities investors as specified in the securities law.
• Investors eligible for purchase of convertible bonds and warrant-linked bonds: Are professional securities investors and strategic investors provided that the number of strategic investors must be fewer than 100.
• Professional securities investors are investors that are financially capable or professionally qualified for securities activities as prescribed in Article 11 of the Law on Securities (New regulations).
• The identification of professional securities investors being individuals that ensure that the list of securities listed and registered for trading, held by investors has a value of at least VND 2 billion, which is determined by the daily average market value of the securities portfolio for at least 180 consecutive days prior to the date of determination of the professional securities investor status (New regulations).

The identification of professional securities investors specified at this Point is valid within 03 months from the date of confirmation.

Responsibilities of bond purchasers:

• To fully access information disclosed by bond-issuing corporations; to clearly understand conditions and terms of bonds and other commitments of bond-issuing corporations before making bond purchase or trading decisions.
• To clearly understand risks arising from bond investment and trading; to clearly understand and comply with regulations on investors, the trading in privately placed corporate bonds as prescribed.
• To make self-assessment and take responsibility for their own investment decisions and risks arising from bond investment and trading...
• The written certification shall be made and be archived in placement/offering dossiers when issuing bonds or at the securities company where investors conduct bond trading in accordance with law (New regulations).
• Not sell or contribute capital to invest in bonds with investors who are not professional securities investors in any form (New regulations).
• When selling bonds on the secondary market, it is required to provide full disclosure of information of bond-issuing corporations to bond purchasers (New regulations).

This Circular takes effect on September 16, 2022.