On April 23, 2023, the State Bank of Vietnam issued Circular 03/2023/TT-NHNN (“Circular 03”) stipulating the suspension of Clause 11 Article 4 of Circular 16/2021/TT-NHNN (“Circular 16”) regulates the purchase and sale of bonds by credit institutions and foreign bank branches (“CIs”).
According to the Circular 16, CI is not allowed to redeem unlisted bonds that financial institutions have sold and/or unlisted corporate bonds issued in the same batch as sold (hereinafter referred to as the “unlisted bond”) within 12 months from the date of sale. However, Circular 03 allows CIs to redeem unlisted bonds that do not wait for 12 months, for the period from April 24, 2023, to December 31, 2023, and CIs have to satisfy the following conditions:
- Ensuring the principles of trading bonds as prescribed in Article 4 of Circular 16.
- The Purchaser from the CI shall pay the full amount of bonds on the date that the bond purchase contract is signed by the CI and the Purchaser.
- The Issuer are rated at the highest level according to the internal credit rating regulations of the CI at the latest time.
This solution contributes to increasing liquidity, removing difficulties, and promoting the development of the corporate bond market.
Circular 03 takes effect from April 24, 2023.
Comment: