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Legal Update

Strengthening Management of the Vietnamese Securities Market

20 January 2009
Mayer Brown JSM Legal Update


On 23 June 2008, the Prime Minister of Vietnam issued Directive 20/2008/CT-TTg ("Directive 20") on strengthening management of the securities market.

Full Update

Directive 20 provides the following guidelines for strengthening the securities market and for ensuring the sustainability of its development:

  • Any public offer of shares must be registered with the State Securities Commission in accordance with the law on securities, and an organization which fails to satisfy all the conditions for a public offer as stipulated in article 12 of the Law on Securities is not permitted to make a public offer.
  • Any private placement of shares must comply with the provisions of the Law on Enterprises and relevant guidelines. An organisation conducting a private placement of shares to increase its capital must register with the business registration office or with the office managing issuance of permission for an additional share issue to increase charter capital, in particular as follows:
    • The State Bank of Vietnam is the managerial body for private placements of shares by joint stock commercial banks and joint stock finance companies.
    • The Ministry of Finance is the managerial body for private placements of shares by joint stock insurance companies; and the State Securities Commission is the managerial body for private placements of shares by public companies and joint stock securities companies.
    • The business registration office (under the Department of Planning and Investment) is the managerial body for private placements of shares by enterprises to which such Department issued their business registration certificate.
  • Enterprises that are not Vietnamese legal entities may not make offers of securities in the territory of the Socialist Republic of Vietnam, except where this is done pursuant to the schedule for implementation of Vietnam's international commitments.
  • Any joint stock company which satisfies all the conditions for becoming a public joint stock company must register with the State Securities Commission.
  • Public joint stock companies including listed companies must carry out the regime on accounting, disclosure of information and corporate governance as stipulated in the Law on Securities and relevant guidelines.
  • Any enterprise which does not have the function of financial investment, with the exception of banks and finance companies, is not permitted to make a public offer of shares in order to raise capital for investment in securities.
  • State-owned enterprises may not use investment capital of the owner, funds for investment and development, or capital sources for capital construction in order to contribute capital to the establishment of or to purchase shares in securities investment funds (including venture investment funds), or in securities investment companies. Any use of capital by a State owned enterprise in order to make financial investments or to invest in the securities market must not adversely affect the production and business activities which the State has assigned to such enterprise. The representative of the State-owned capital portion in an enterprise shall make decisions on the level of any financial investment, ensuring the safety and effectiveness of State capital.

Directive 20 also requires the Stock Exchanges and Securities Trading Centres, the Ministry of Finance, the State Bank, the Ministry of Planning and Investment, the Provincial People's committees of provinces and cities under central authority for strengthening management of the securities market and for ensuring its sustainable development.

For further information, please contact:
Dao Nguyen ( )
Dat Truong (

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