The regulations regarding the language of information disclosure on the stock market under Circular 68/2024/TT-BTC ("Circular 68") issued on September 18, 2024, will officially apply to listed organizations and large public companies from January 1, 2025. From this date until January 1, 2028, all public companies will be required to disclose information simultaneously in both Vietnamese and English. As a professional legal consultancy for businesses, ATA Law Firm (“ATA”) has been promoting and disseminating this information to our clients. Many of these clients are public companies and listed organizations directly affected by Circular 68, and they have raised the question of the necessity and urgency of this regulation requiring the disclosure of information in English on the market, as well as for the business community. In this special topic, ATA will analyze and evaluate this issue in depth.
Article 4, Clause 1 of Circular 68 amends and supplements Article 5 of Circular 96/2020/TT-BTC guiding information disclosure on the stock market, as follows:
“Article 5. Language for information disclosure on the stock market
1. The language for information disclosure on the stock market is Vietnamese. Listed organizations, public companies, stock exchanges, and the Vietnam Securities Depository and Clearing Corporation shall disclose information simultaneously in English in accordance with Clauses 2 and 3 of this Article. Information disclosed in English must be consistent with the content disclosed in Vietnamese. In case of discrepancies or different interpretations between the Vietnamese and English versions, the Vietnamese version shall apply.
2. Listed organizations and public companies shall disclose information simultaneously in English according to the following roadmap: a) Large-scale listed organizations and public companies shall disclose periodic information in English starting from January 1, 2025; b) Large-scale listed organizations and public companies shall disclose extraordinary information, requested information, and information about other activities of public companies simultaneously in English starting from January 1, 2026; c) Public companies not subject to points a and b of this Clause shall disclose periodic information in English starting from January 1, 2027; d) Public companies not subject to points a and b of this Clause shall disclose extraordinary information, requested information, and information about other activities of public companies simultaneously in English starting from January 1, 2028.
3. Stock exchanges and the Vietnam Securities Depository and Clearing Corporation shall disclose information in both Vietnamese and English.”
According to the above regulation in Circular 68, at the same time as the obligation to disclose information arises, listed organizations and public companies will be responsible for disclosing information in both Vietnamese and English. The information disclosure must be done simultaneously in both languages and must be consistent with each other. If this language disclosure regulation is not adhered to, companies may face fines ranging from 10,000,000 VND to 30,000,000 VND for each violation.
In terms of benefits, it is clear that, for legislators and regulators, this regulation is considered necessary and urgent to help the Vietnamese stock market approach the standards required to be upgraded to an emerging market according to FTSE Russell and MSCI evaluations. Specifically, the simultaneous disclosure of information in English will contribute to increasing transparency, thereby improving the professionalism and reliability of market participants in the eyes of international investors. At the same time, for foreign investors, according to our evaluation, this regulation will make it easier for them to access official information from listed organizations and public companies without needing translation tools. This will also help investors gain a fuller, more complete assessment when researching the market or making investment decisions. In the context of Vietnam being recognized as a highly potential market, leading in attracting foreign direct investment (FDI), the disclosure of information and documents in English is crucial, laying the foundation to promote, strengthen, and encourage foreign investors to invest in the stock market, contributing to the overall development of Vietnam's economy.
However, in addition to the benefits, the regulation requiring listed organizations and public companies to disclose information in both English and Vietnamese simultaneously also reveals many shortcomings that legislators have not yet addressed.
First, although a roadmap for implementation has been introduced to allow public companies to gradually familiarize themselves with and improve their information disclosure systems, for large-scale listed organizations and public companies, the preparation time to start disclosing periodic information in both languages is only about three months (from September 18, 2024 – when Circular 68 is issued to January 1, 2025 – when Circular 68 becomes effective). Meanwhile, periodic information includes financial reports, annual reports, management reports, and information about annual shareholders' meetings. These types of reports, documents, and information are very voluminous and often take a long time to prepare, especially for large companies with numerous subsidiaries and affiliates. In practice, many large companies will require a lot of time to finalize reports and documents to meet the deadline for disclosure, racing against time, sometimes by the hour or minute. Therefore, requiring large-scale listed organizations and public companies to immediately disclose all this information in both languages will add a significant burden in terms of time, effort, and cost. For companies that already maintain bilingual disclosure systems, this regulation may not have a large impact. However, many listed organizations and public companies have never implemented such practices. For them, the time frame of just over three months to prepare is too short. Furthermore, requiring simultaneous disclosure in both languages could result in lower quality or even inaccurate information.
Second, Circular 68 states that information disclosed in English “must be consistent with the content disclosed in Vietnamese.” However, it does not provide mechanisms for determining or controlling the quality of the information and only anticipates the situation where there is a discrepancy or misunderstanding, in which case the Vietnamese version will prevail. According to our evaluation, this provision may cause concerns for foreign investors. Essentially, they will still need to compare and verify the information in Vietnamese if they want to ensure the accuracy of the English versions.
Third, Circular 68 sets out a roadmap for the implementation of bilingual information disclosure. However, it does not provide guidance on whether existing information and documents already published on a company's website, such as the company charter or information disclosure regulations, need to be translated into English and maintained as official references on the website. These documents play a significant role for shareholders and investors when they begin to research and evaluate the securities and the issuing organization. Therefore, simply requiring public companies to disclose only new information in English does not fully address the needs of investors.
Fourth, as mentioned above, while the disclosure of information in English is seen by legislators as necessary and urgent to meet standards for market upgrading, our research shows that some countries with leading stock markets in the region and globally, such as South Korea and Japan, do not require public companies to disclose information in English (in addition to their native language). Specifically, under the “Securities Market Disclosure Act” of South Korea, issued on July 12, 1988 and last amended on December 14, 2001, South Korea only requires public companies to disclose information in Korean. Disclosure in English is “encouraged” but not mandatory and must occur “within one day of the disclosure in Korean.” Similarly, Japan's "Securities Listing Act" does not require public companies to disclose information in English but only recommends it in the appendix outlining the “Corporate Governance Code.” The code suggests that “considering the number of foreign shareholders, companies should take reasonable steps to disclose information in English.”
Thus, it can be seen that disclosing information in English alongside the native language is not a mandatory standard to determine the professionalism or transparency of a country's stock market. In fact, many large companies (including listed organizations and large public companies) with foreign investors or those seeking to attract foreign investment, or simply complying with professional standards set by themselves, already maintain websites with multiple languages, including English – the international language of business. Investors visiting these companies' websites can easily access information in foreign languages. Therefore, we believe that requiring public companies to disclose information in two languages primarily impacts smaller businesses, with tight-knit shareholders or those not genuinely seeking foreign investment. In contrast, the goal of attracting investment and encouraging development for these businesses is not as clear or urgent.
Above are some opinions from ATA Law Firm on the new regulation concerning the language of information disclosure on the stock market. In the long term, once companies overcome the initial difficulties, this regulation is expected to provide a “boost” to promote the development and enhance the transparency and professionalism of the market in general and each market member in particular. Therefore, although this obligation may create an additional burden and pose a significant challenge for many public companies in the short term, over time, as companies become familiar with and manage this activity, it promises to bring opportunities and benefits for companies seeking to expand into the global market.
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