Draft Decree amending and supplementing Decree 155/2020/ND-CP adds contents to detail articles and comply with the amended Securities Law. Photo: ST

Three key policy groups

According to the Ministry of Finance, after more than three years of implementing Decree 155/2020/ND-CP, a number of provisions in the Decree need to be amended and supplemented to meet the requirements arising from practice, and better protect investors participating in the stock market such as: more stringent regulations on conditions for public offering of bonds; securities offering and issuance to exchange shares and capital contributions of other enterprises.

In addition, a number of provisions in the Decree still have limitations and inadequacies when implementing such as the initial public offering (IPO) process is not linked to the listing process on the Stock Exchange, leading to not attracting enterprises to conduct IPOs on the stock market;

Some regulations on bond listing registration documents and bond delisting are not yet appropriate, there are no regulations on changing bond listing; some regulations are still unclear, which can cause inconsistent understandings in the application of the law such as the concept of corporate restructuring, determining financial statements as the basis for applying conditions related to the offering, issuing, and listing in cases where the enterprise is a parent company...

In addition, some provisions in the Decree are not consistent with newly issued relevant legal documents, such as the provisions on foreign investors' participation in the stock market are not consistent with the provisions on market access restrictions in the investment law (Decree No. 31/2021/ND-CP); the provisions on conditions for providing clearing and settlement services for securities transactions of commercial banks and foreign bank branches are not consistent with the law on credit institutions (Circular 34/2024/TT-NHNN).

Therefore, the draft Decree (amended) stipulates six major issues under three key policy groups including: improving transparency, efficiency, and consistency in securities and stock market activities; perfecting regulations to remove obstacles for foreign investors in the stock market, ensuring safety for clearing and settlement activities for securities transactions, aiming at the goal of upgrading the sustainable stock market; simplifying administrative procedures in the field of securities and the stock market.

Public bond issuance must have a credit rating

Regarding the problems on securities offering and issuance, the draft Decree supplements the contents to provide detailed regulations and to comply with the amended Securities Law, including: supplementing the provisions in Article 19 of Decree 155 on conditions related to debt ratio, issuance value on equity when offering bonds to the public.

Accordingly, public bond issuing companies must conduct a credit rating to become familiar with the culture of credit rating, enhancing the openness and transparency in the activities of the public offering.

In addition, the companies must meet the condition that the debt ratio is not more than 3 times the equity, except other cases described by specialized laws; the value of bonds expected to be issued at par value is not greater than the equity.

According to the Ministry of Finance, the above conditions are set to ensure the financial capacity of the issuing organizations, limit risks for the investing public and comply with relevant laws.

In addition, the Draft also excludes the condition on the debt-to-equity ratio for the issuing organization as a credit institution and the issued bonds which are guaranteed to pay the entire principal and interest of the bonds of credit institutions and foreign bank branches because credit institutions are specialized organizations, have capital mobilization operations and must ensure financial safety according to specialized laws.

At the same time, the Draft also amends Point b, Clause 2, Article 12 of Decree 155 on the dossier for additional public share offering by public companies to be consistent with Article 15 of the Securities Law (amended) on not stipulating the successful offering rate (70%) for the case of public offering to shareholders according to the ownership ratio.

The draft amends the provisions on private offering of shares in Clause 2, Article 43 to clarify the issues that must be approved by the General Meeting of Shareholders and authorized to be approved by the Board of Directors, creating a clear and transparent basis for enterprises when implementing, consistent with the provisions of Article 31 of the Securities Law (amended).

The drafting agency also added in Article 30, Article 31 of Decree No. 155 the provisions on the application of conditions for the public offering dossier of a company after the restructuring process for the case of initial public offering (the issuer must submit a summary report of information according to the convention) to ensure full and transparent reflection on the financial situation and business performance situation after the enterprise restructuring process.