Securities investment activities of foreign investors on Vietnam stock market

Securities investment activities of foreign investors on Vietnam stock market

Securities investment activities of foreign investors on Vietnam stock market are regulated in Article 138 of Decree No. 155/2020/ND-CP dated December 31, 2020 of  the Government of Vietnam and Circular No. 51/2021/TT-BTC dated June 30, 2021 of the Ministry of Finance of Vietnam guiding the obligations of organizations and individuals in foreign investment activities on the Vietnam stock market.

1. Foreign investors make securities investments on the Vietnam stock market in the following forms:

a) Directly invest in and trade on the Vietnam stock market in accordance with the Law on securities and the securities market; Foreign investors will open 01 indirect investment capital account at 01 depository bank licensed to do foreign exchange business to conduct investment activities on the Vietnam stock market.

b) Indirect investment in the form of entrusting capital to securities investment fund management companies, branches of foreign fund management companies in Vietnam. Securities investment fund management companies, branches of foreign fund management companies in Vietnam open indirect investment capital accounts to receive capital from foreign investors who do not have indirect investment capital accounts

2. In case of direct investment as prescribed at Point a, Clause 1 of this Article, the foreign investor must register a securities trading code with the Vietnam Securities Depository and Clearing Corporation before doing such investment activities. In case of indirect investment as prescribed at Point b, Clause 1 of this Article, foreign investors are not required to register a securities trading code; securities investment fund management companies, branches of foreign fund management companies in Vietnam that receive capital entrustment from foreign investors must register a securities trading code according to the principles specified at point d, dd Clause 2 Article 145 Decree 155.

3. Foreign investors are allowed to open securities trading accounts and make investments immediately after being issued with securities trading codes in the form of electronic confirmation.

4. Foreign investors may choose a transaction representative in Vietnam that fully meets the following conditions:

a) Not being in the case of serving a prison sentence or being banned from doing business by the court;

b) Possessing professional certificates in securities, including: certificate of basic issues in securities and stock market, certificate of law on securities and securities market;

c) Being the sole trading representative in Vietnam of the foreign investor and authorized in writing by the foreign investor.

5. Foreign investors, trading representatives, securities companies, securities investment fund management companies, branches of securities companies, foreign fund management companies in Vietnam provide services to Foreign investors must comply with legal regulations on foreign ownership ratio when participating in investment in Vietnam stock market.

6. Obligations in investment activities on Vietnam stock market

a) Foreign investors and trading representatives of foreign investors must ensure investment transactions on the Vietnamese stock market and transactions performed by related persons, groups of foreign investors; related external parties not for the purpose of creating artificial supply and demand, manipulating securities prices and other prohibited trading acts as prescribed by law.

b) Foreign investors and foreign depository certificate issuers shall be obliged to declare, pay and finalize taxes, fees, charges and service prices related to securities activities in Vietnam. in accordance with the laws of Vietnam.

c) Foreign investors and related groups of foreign investors shall perform the obligation to report ownership and disclose information on securities transactions in accordance with the law on information disclosure on the stock market in accordance with the law on information disclosure on the stock market with following principles:

i.Foreign investors make or appoint 01 depository member or 01 securities company or 01 securities investment fund management company or its representative office (if any) or 01 organization or authorize 01 individual to perform the obligation to report ownership and disclose information in accordance with the law on information disclosure on the stock market;

ii.The related group of foreign investors shall appoint 01 depository member or 01 securities company or 01 securities investment fund management company or its representative office (if any) or 01 other organization or authorize 01 individual to perform the obligation to report ownership and disclose information in accordance with the law on information disclosure on the stock market;

Notice of appointment or change of organization or individual performing the obligation to report ownership and disclose information, made according to the form prescribed in Appendix I issued together with this Circular, must be sent to the Securities and Exchange Commission. The State, a subsidiary of the Stock Exchange of Vietnam within 24 hours from the date the appointment or authorization takes effect, together with a valid copy of the License for Establishment and Operation or Certificate of Registration business or Funding Registration Certificate or equivalent document of the designated organization; or accompanied by a valid copy of the people”s identity card or citizen identification card or valid passport or other lawful personal identification of the authorized individual.

iii. In case there is a change in the number of foreign investors in the related group of foreign investors but there is no change in the organization or individual performing the obligation to report on ownership and disclose information Organizations and individuals appointed or authorized to report ownership and disclose information are responsible for reporting to the State Securities Commission and subsidiaries of the Stock Exchange of Vietnam within 07 working days since the change arisen. Reporting documents include:
- An update on the list of related foreign investor groups using the form provided in Appendix II to this Circular;
- A written appointment or authorization of the new foreign investor on the performance of the obligation to report ownership and disclose information using the form specified in Appendix I issued with this Circular (in case the case of adding new foreign investors to the related group of foreign investors).

iv.Foreign investors and related groups of foreign investors are responsible for providing sufficient information on their securities ownership status so that the designated organization or authorized individual can make report on their ownership and disclosure of information shall fulfill the obligation to report on ownership and disclose information in accordance with law;

v.Foreign investors and related groups of foreign investors shall perform the obligation to report on ownership concurrently with the obligation to disclose information. The obligation to report ownership and disclose information complies with the law on information disclosure on the stock market.

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