Sample notice of change in stock repurchase plan of a public company? In what cases can the plan be changed?

How is the form for notice of change in stock repurchase plan of a public company regulated?

Pursuant to Clause 4, Article 11 of Circular 118/2020/TT-BTC, the form Notice of change in stock repurchase plan of a public company is made according to the Form in Appendix 38 issued with Circular 118/2020/TT-BTC.

In what cases can a public company change its stock repurchase plan?

In case a public company is allowed to change its stock repurchase plan as prescribed in Clause 1, Article 11 of Circular 118/2020/TT-BTC as follows:

Changes to stock repurchases

1. Public companies are not allowed to change their intention or plan to repurchase shares as reported and announced to the public, except in cases of force majeure (natural disasters, epidemics, war and other cases) that must be approved by the State Securities Commission.

2. Within 24 hours from the decision to change the stock repurchase plan, the public company must report to the State Securities Commission, and at the same time publish information on the company’s website, the information disclosure means of the State Securities Commission, and the Stock Exchange about the decision to change according to the Form in Appendix No. 37 issued with this Circular.

3. The State Securities Commission has an opinion on changing the stock repurchase plan within 03 working days from the date of receiving the change report.

4. Within 24 hours from the date of approval by the State Securities Commission to change the stock repurchase plan, the public company must disclose information on the company’s website, the information disclosure means of the State Securities Commission, the Stock Exchange about the change of the stock repurchase plan according to the Form in Appendix No. 38 issued with this Circular.

5. Public companies are allowed to change the repurchase of shares after disclosing information according to the provisions of Clause 4 of this Article.

Thus, according to regulations, public companies can change the reported stock repurchase plan and disclose information to the public in force majeure cases such as: natural disasters, epidemics, war and other cases.

However, changing the stock buyback plan must be approved by the State Securities Commission.

Within 24 hours from the date of approval by the State Securities Commission to change the stock repurchase plan, the public company must disclose information on the company’s website, the information disclosure means of the State Securities Commission and the Stock Exchange about the change to the stock repurchase plan.

What conditions must a public company meet when repurchasing its own shares?

Conditions for a public company to buy back its own shares are specified in Clause 1, Article 36 of the 2019 Securities Law as follows:

A public company buys back its own shares

1. A public company that repurchases its own shares must meet the following conditions:

a) There is a decision of the General Meeting of Shareholders approving the repurchase of shares to reduce charter capital, the repurchase plan, which clearly states the quantity, implementation time, and principles for determining the repurchase price;

b) Have enough resources to buy back shares from the following sources: surplus capital, development investment fund, undistributed after-tax profits, other funds belonging to equity used to supplement charter capital according to the provisions of law;

c) There is a designated securities company to conduct transactions, except in cases where the securities company is a member of the Vietnam Stock Exchange and repurchases its own shares;

d) Meet the conditions prescribed by law in the case of a public company belonging to a conditional business and investment industry;

d) Not falling into the cases specified in Clause 3 of this Article.

2. Buying back shares is exempt from the conditions specified in Points a, b, c and d, Clause 1 of this Article in the following cases:

a) Buy back shares at the request of shareholders according to the provisions of the Enterprise Law;

b) Buy back shares from employees according to the company’s regulations on issuing shares to employees, buy back odd shares according to the plan to issue shares to pay dividends, issue shares from equity sources;

c) Securities companies buy back their own shares to correct transaction errors or buy back odd-lot shares.

Thus, according to regulations, a public company that wants to buy back its own shares must meet the following conditions:

(1) There is a decision of the General Meeting of Shareholders approving the repurchase of shares to reduce charter capital, the repurchase plan, which clearly states the quantity, implementation time, and principles for determining the repurchase price;

(2) Have enough resources to buy back shares from the following sources: surplus capital, development investment fund, undistributed after-tax profits, other funds belonging to equity used to supplement charter capital according to the provisions of law;

(3) There is a designated securities company to conduct transactions, except in cases where the securities company is a member of the Vietnam Stock Exchange and repurchases its own shares;

(4) Meet the conditions prescribed by law in the case of a public company belonging to a conditional business investment industry;

(5) Not falling into the cases specified in Clause 3, Article 36 of the 2019 Securities Law