The draft Circular proposes new regulations on the purchase of shares by foreign institutional investors.

Specifically, Clause 2, Article 1 of the draft Circular adds Article 9a after Article 9 of Circular No. 120/2020/TT-BTC, regulating such transactions as follows:

(1) Securities companies shall assess the payment risk of foreign institutional investors to determine the required deposit amount when placing share purchase orders (if any), as agreed between both parties.

(2) If the foreign institutional investor fails to make full payment for the share purchase, the remaining payment obligation shall be transferred to the securities company where the order was placed, via its proprietary trading account, except as stipulated in (5).

(3) The securities company may sell the shares via negotiated transactions on the trading system or transfer ownership off-system in accordance with the law, provided the transaction does not exceed the legal foreign ownership limit.

(4) Except for transactions under (3), the securities company shall sell the shares on the trading system. Financial obligations arising shall be handled as agreed between the two parties.

(5) The custodian bank where the foreign institutional investor holds the securities account shall be responsible for any payment shortfall and costs if it provides incorrect confirmation of the investor’s balance.

Regulations on securities registration with the Vietnam Securities Depository and Clearing Corporation (VSDC):

(1) The types of securities required to be registered with the Vietnam Securities Depository and Clearing Corporation include:

– Listed shares, registered for trading on the stock exchange system;

– Fund certificates, covered warrants, government debt instruments, government-guaranteed bonds, local government bonds, and other types of corporate bonds listed on the stock exchange system;

– Securities of public companies and other types of securities that must be registered with the Vietnam Securities Depository and Clearing Corporation (VSDC) in accordance with the law.

(2) Other securities may be registered at VSDC based on an agreement between the issuer and VSDC.

(3) Registration shall be in the form of book entries or electronic data.

(4) Public companies must register shares with VSDC within 15 days from the date of confirmation of public company registration by the State Securities Commission.

(5) The Minister of Finance shall issue detailed guidance on securities registration, deregistration, coding, ownership transfer, and related procedures.