How are investors buying bonds regulated by law?

How do investors buy bonds regulated by law? What are the bond offering conditions?

1. What are the regulations for investors under the Securities Law?

According to Clause 16, Article 4 of the Securities Law 2019, it is stipulated: “Investors are organizations and individuals participating in investing in the stock market.

2. How are investors buying bonds regulated?

According to Article 8 of Decree 153/2020/ND-CP amended by Clause 6, Article 1 of Decree 65/2022/ND-CP regulating investors buying bonds as follows:

– Subjects buying bonds

+ For non-convertible bonds without warrants: bond buyers are professional securities investors according to the provisions of securities law.

+ For convertible bonds and bonds with warrants: bond buyers are professional securities investors, strategic investors, in which the number of strategic investors must be less than 100 investors.

+ A professional securities investor is an investor with financial capacity or expertise in securities as prescribed in Article 11 of the Securities Law. Organizations are responsible for identifying professional securities investors and documents identifying professional securities investors comply with the provisions of Article 4 and Article 5 of Decree 155/2020/ND-CP, except for identifying professional securities investors specified in Point d of this Clause.

– Responsibilities of investors buying bonds

+ Full access to content Information disclosure content of the issuing enterprise; Understand clearly the bond conditions and terms and other commitments of the issuing enterprise before deciding to buy and trade bonds.

+ Understand clearly the risks arising in investing and trading bonds; Understand and ensure compliance with regulations on investors and individual corporate bond transactions according to the provisions of this Decree and relevant laws.

+ Self-assess, take responsibility for your investment decisions and bear the risks arising in investing and trading bonds. The State does not guarantee that bond-issuing enterprises will fully and punctually pay interest and bond principal upon maturity and other rights for investors buying bonds.

+ Before buying bonds (both on the primary and secondary market), investors must sign a document confirming that they have implemented the provisions at Points a, b, and c of this Clause and are responsible for their own decision to buy bonds after signing this confirmation document. The written confirmation shall be made according to the form specified in Appendix V issued with this Decree and must be archived in the offering file when issuing bonds or at the securities company where the investor conducts bond transactions according to the provisions of law.

+ Carry out bond transactions according to the provisions of Article 16 of this Decree; Do not sell or contribute capital to invest in bonds with investors who are not professional securities investors in any form. The mobilization of capital and the purchase and investment of corporate bonds by credit institutions, foreign bank branches and fund management companies are carried out in accordance with the provisions of specialized laws.

+ When selling bonds on the secondary market, full information disclosure of the issuing enterprise must be provided in accordance with the provisions of this Decree to investors buying bonds.

– Benefits of investors buying bonds ballot

+ Issuing enterprise fully discloses information according to the provisions of this Decree; have the right to access bond offering documents upon request.

+ To have the issuing enterprise pay in full and on time the bond interest and principal upon maturity, and to exercise the accompanying rights (if any) according to the terms and conditions of the bond and agreements with the issuing enterprise.

+ To request the issuing enterprise to buy back the bonds before maturity according to the provisions of Clause 3, Article 7 of this Decree.

+ To be allowed Require bond sellers to provide full information disclosure of the issuing enterprise according to the provisions of this Decree when purchasing bonds on the secondary market.

– In case the investor violates the provisions of law will be subject to administrative sanctions according to regulations on sanctions for administrative violations in the field of securities and stock market or criminal sanctions depending on the nature and severity of the violation. violation.

3. What are the conditions for bond offerings?

Pursuant to Article 9 of Decree 153/2020/ND-CP stipulates as follows:

– For offerings of non-convertible bonds without warrants (excluding bond offerings of securities companies and securities investment fund management companies that are not public companies), enterprises must meet the conditions following:

+ Is a joint stock company or limited liability company established and operating under Vietnamese law.

+ Full payment of principal and interest of issued bonds or full payment of debts due for 03 consecutive years before the bond issuance (if any); except in the case of offering bonds to creditors who are selected financial institutions.

+ Meets financial safety ratios and operational safety ratios according to specialized laws.

+ Has a bond issuance plan approved and accepted according to the provisions of Article 13 of this Decree.

+ Has a report The financial statements of the year immediately preceding the year of issuance are audited by a qualified auditing organization according to the provisions of this Decree.

+ Subjects participating in the offering as prescribed in Point a, Clause 1, Article 8 of this Decree.

– For the offering of non-convertible bonds without warrants of securities companies, securities investment fund management companies that are not public companies: enterprises must meet the conditions specified in Points a, c, d, dd and e, Clause 1 of this Article.

– For offering convertible bonds or bonds with warrants:

+ Issuing enterprise is a joint stock company.

+ Subjects participating in the offering are as prescribed in Point b, Clause 1, Article 8 of this Decree.

+ Meets the offering conditions specified in Point b, Point c, Point d and Point dd, Clause 1 of this Article.

+ Individual offerings of convertible bonds and bonds with individual warrants must be at least 06 months apart from the date of completion of the latest offering.

+ Conversion of bonds into shares and exercise of warrants must meet the requirements. regulations on the ownership ratio of foreign investors according to the provisions of law.