Improving information transparency of public companies plays an important role in protecting shareholders.

Renewal of information disclosure

So far, the stock market has about 1,900 public companies, of which the Ho Chi Minh Stock Exchange (HOSE) has 404 listed companies, the Hanoi Stock Exchange (HNX) has 343 listed companies, and UpCom has 895 companies registered to trade.

According to the State Securities Commission (SSC), the supervision of public companies is currently in the form of two levels of supervision: level 1 is the Stock Exchange (HoSE and HNX) and level 2 is the State Securities Commission. The enhancement of information transparency of public companies plays an important role in protecting shareholders and investors and is in line with the orientation of public companies to organize the implementation of corporate governance more and more professionally, approaching international standards.

In order to enhance transparency in information disclosure activities of public companies and in line with the development of the stock market, from the end of 2020, the Ministry of Finance issued Circular No. 96/2020/TT -BTC on information disclosure on the stock market, effective from January 1, 2021, replacing Circular No. 155/2015/TT-BTC.

A new and important content in Circular 96 is the regulation on the means of reporting and disclosing information in order to enhance the application of information technology. Accordingly, Article 7 of the Circular clearly stipulates that public companies are not required to send a paper copy to report to the State Securities Commission and the Stock Exchange in case full information has been disclosed on the information disclosure means of the company, the State Securities Commission (IDS information disclosure system), and the Stock Exchange.

This is to enhance the information disclosure activities of public companies to shareholders and investors in a timely manner, through which the supervision of public companies is also more effective. Within seven days after the State Securities Commission confirms the completion of the registration of a public company as prescribed in the Clause 3, Article 32 of the Law on Securities, the company is responsible for making a public announcement about becoming a public company together with a statement of information on the company's website and the information disclosure system of the State Securities Commission.

Disclosure of unusual information within 24 hours

Regarding the disclosure of information about the Annual General Meeting of Shareholders (AGM), at least 21 days before the opening date, if the company's charter does not provide for a longer time limit, the public company must disclose on the company's website and that of the State Securities Commission, the Stock Exchange (in the case of a listed organization or a registered trading organization) about the meeting of the General Meeting of Shareholders, clearly stating the link to all documents of the General Meeting of Shareholders, including: meeting invitation, meeting agenda, voting cards, documents used in the meeting and draft resolution for each issue on the meeting agenda. Documents of the General Meeting must be updated with amendments and supplements (if any).

In particular, when one of the following events occurs: an event that seriously affects the legitimate interests of the investor; if there is information related to the company that greatly affects the stock price and it is necessary to confirm that information, the public company must disclose the information within 24 hours from the date of receipt of the request of the State Securities Commission or the Stock Exchange where the company is listed and registered for trading.

The content of information disclosed upon request must clearly state the events requested to be announced by the State Securities Commission or the Stock Exchange; the cause and the company's assessment of the authenticity of the event, as well as remedial solutions (if any).

Regarding extraordinary information disclosure, the Circular stipulates 15 cases where listed companies must disclose unusual information such as: regulations on disclosure of information about decisions to borrow or issue bonds leading to the total value of loans of the company with a value of 30% or more of equity calculated in the most recent audited financial statement (financial statement) or the latest semi-annual financial statement reviewed because the Law on Securities 2019 does not stipulate this content and in practice, many difficulties arise in the implementation of regulations when determining the publication deadline, publication limit and publication time.

Along with that, the Circular abolishes the requirement to disclose information when there is an event that the owner's contributed capital is reduced by 10% or more or the total assets decreased by 10% or total assets decrease by 10% or more in the most recent audited annual financial statement or the most reviewed semi-annual financial statement. The reason is that the Securities Law 2019 does not regulate this content. In addition, the data reflected in the audited financial statements of the latest year are disclosed and it is difficult to determine the damage in unusual cases within 24 hours.

Regarding the disclosure of information by the issuer of corporate bonds to the public, Circular 96 stipulates that the disclosure of information on the progress of capital use and the audited capital use report is only applicable to the case of raising capital for a project of the corporate bond issuer to the public, the time limit for reporting and disclosing the information is “from the end of the bond offering to the public until the completion of bond payment or the full disbursement of the mobilized money whichever comes first”.

The time limit for fulfilling the obligation to disclose information is the same as the time limit for disclosing the audited annual financial statements or at the annual meeting of the General Meeting of Shareholders or the Board of Directors.