FROM JANUARY 1, 2025, LISTED ORGANIZATIONS AND LARGE-SCALE PUBLIC COMPANIES MUST DISCLOSE INFORMATION SIMULTANEOUSLY IN VIETNAMESE AND ENGLISH

On September 18, 2024, the Ministry of Finance issued Circular No. 68/2024/TT-BTC (“Circular 68”), which amends and supplements several provisions regarding securities transactions on the trading system, clearing and settlement of securities transactions, the operations of securities companies, and information disclosure on the securities market. In this article, ATA Legal Services will introduce some noteworthy new points of this Circular.

1. Supplementary Regulations Allowing Foreign Institutional Investors to Purchase Shares Without Sufficient Funds at the Time of Order Placement:

    Previously, the provisions and conditions for securities transactions were stipulated in Circular No. 120/2020/TT-BTC issued by the Ministry of Finance. Specifically, investors could only place buy orders for securities if they had sufficient funds in their trading accounts, except for margin transactions. This circular clearly stated that foreign investors were not allowed to engage in margin trading. Thus, it was understood that foreign investors had to meet the requirement of having sufficient funds in their accounts before they could trade.

   Circular 68 has introduced regulations allowing foreign institutional investors to place buy orders for shares without requiring sufficient funds at the time of order placement. Accordingly, the securities company where the investor has opened an account will be responsible for assessing the payment risk of the investor, thereby determining the required funds for the share purchase transaction in the investor's account. In cases where a foreign institutional investor places a buy order for shares without sufficient funds, the payment obligation for the share purchase will be transferred to the securities company or the custodian bank where the foreign institutional investor has opened a custody account (if the custodian bank incorrectly reports the balance in the investor's account).

   This new regulation has resolved a significant "bottleneck" facilitating the attraction of additional foreign investment into the Vietnamese stock market, while also enhancing and binding the responsibilities of securities companies in their business operations.

2. Conditions for Accepting Buy Orders for Shares Without Sufficient Funds from Foreign Institutional Investors and Order Limits:

    Securities companies may only accept buy orders for shares from foreign institutional investors without requiring sufficient funds if the following conditions are met:

• The buy order falls within the limits for accepting share buy orders as stipulated by regulations:

• It must comply with the limits for accepting share buy orders established by law.
• The company cannot accept buy orders from itself.
• The company cannot accept buy orders from its parent company. If subsidiaries of the same parent company hold shares of that securities company, the securities company cannot accept buy orders from those subsidiaries.

• The buy order falls within the investment limit of the securities company: The securities company must not continue to accept buy orders for shares without sufficient funds from foreign institutional investors until it meets its investment limits, and it must take necessary measures within a maximum period of one year to comply with the investment limits.

3. From January 1, 2025, Listed Organizations and Public Companies Must Disclose Information in Both Vietnamese and English:

    To meet the demand for attracting foreign capital and to enhance the status of the Vietnamese stock market globally, Circular 68 requires listed organizations and public companies to disclose information simultaneously in both Vietnamese and English according to the following schedule:

Circular 68 takes effect from November 2, 2024.