Tiếng Việt
中文A public company may not change the intention or plan to repurchase shares as reported and publicly disclosed, except in cases of force majeure (natural disasters, epidemics, wars and other cases) and must be approved by the State Securities Commission (Clause 1, Article 11 of Circular 118/2020/TT-BTC). A public company repurchasing its own shares must satisfy the 05 conditions in Clause 1, Article 36 of the Law on Securities 2019 (as amended by Law 56/2024/QH15).
1. In which cases may a public company change its share repurchase plan?
Only in cases of force majeure and with the approval of the State Securities Commission. Under Article 11 of Circular 118/2020/TT-BTC: a public company may not change the reported and disclosed intention or plan to repurchase shares, except in cases of force majeure (natural disasters, epidemics, wars and other cases), which must be approved by the SSC. Procedure: within 24 hours from the decision to change, the company reports to the SSC and discloses information on the company’s electronic information page, the SSC’s information disclosure media and the Stock Exchange (per Appendix Form No. 37); the SSC gives its opinion within 03 working days; within 24 hours from approval, the company discloses information on the change (per Appendix Form No. 38) and may only implement the change after disclosure.
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2. What conditions must a public company satisfy to repurchase its own shares?
Under Clause 1, Article 36 of the Law on Securities 2019 (as amended by Law 56/2024/QH15), a public company repurchasing its own shares must satisfy:
a) Having a resolution of the General Meeting of Shareholders approving the share repurchase to reduce charter capital, and the repurchase plan (clearly stating the quantity, implementation time and price determination principles);
b) Having sufficient sources for the repurchase from: share premium, the development investment fund, undistributed after-tax profits, and other funds of owner’s equity used to supplement charter capital;
c) Having a designated securities company conducting the transaction (except where a securities company that is a member of the Vietnam Stock Exchange repurchases its own shares);
d) Satisfying conditions as prescribed if operating in conditional investment and business sectors;
đ) Not falling into the prohibited repurchase cases in Clause 3, Article 36.
Exempted from the conditions at points a, b, c and d: repurchases at the request of shareholders (Law on Enterprises); repurchases of shares from employees under the employee share issuance regulations, and repurchases of odd-lot shares; securities companies repurchasing to correct trading errors or repurchasing odd-lot shares.
3. How is the template for notice of change to the share repurchase plan regulated?
Reporting and disclosing information on the decision to change the share repurchase plan is done under the Form in Appendix No. 37, while information on the change after SSC approval is done under the Form in Appendix No. 38 issued with Circular 118/2020/TT-BTC.
Notes on applying current legal provisions
Circular 118/2020/TT-BTC guides public offerings, securities issuance, public tender offers, share repurchases, public company registration and cancellation of public company status; the Law on Securities 2019 has been amended by Law 56/2024/QH15. Companies should check the latest text before applying. Where advice is needed on share repurchases, you should contact an ANT Legal lawyer at 0966.475.966.
Common risks to note
Voluntarily changing a disclosed share repurchase plan without falling into a force majeure case or without SSC approval may result in administrative sanctions in the securities sector and affect the validity of the transaction.
How can ANT Legal help?
ANT Legal supports securities legal advice: public offerings, issuance, share repurchases, information disclosure.
For quick advice, you may contact a lawyer at 0966.475.966.
