The Vietnam State Securities Commission published an overview of a draft Government decree that would replace the current decrees governing the private placement and trading of corporate bonds in the domestic market and the offering of corporate bonds internationally. The draft is designed to align the regime with amendments to the Securities Law and the Enterprise Law, and to strengthen rules on investor eligibility, issuance conditions and procedures, use of proceeds, disclosure, dispute resolution, and supervisory responsibilities. Key proposed changes include restricting individual professional securities investors to buying, trading and transferring privately placed corporate bonds only where the bonds have a credit rating and are secured by collateral, or have a credit rating and a payment guarantee; for public companies and securities businesses, private placements of convertible bonds would follow Securities Law Article 31, while other privately placed bonds would apply the same approach as for non-public companies. Issuers would face more granular requirements for issuance plans and use-of-proceeds reporting, limits on temporarily idle proceeds (term deposits or certificates of deposit at commercial banks or foreign bank branches), and a mechanism to change use of proceeds only with issuer approval and consent from bondholders representing at least 65% of the outstanding bonds of the same type, coupled with mandatory early repurchases for dissenting bondholders. The draft also restructures issuance conditions by issuer type, including a liabilities-to-equity cap for non-public issuers (liabilities including the planned bond issuance not exceeding five times equity, subject to stated exemptions) and, for public issuers, a minimum six-month gap between private placements and continued application of restrictions linked to transferability and foreign ownership for convertible or warrant-linked bonds. Process and disclosure proposals include requiring issuers to provide the full offering dossier to investors, expanding multi-agency notifications (including provincial Departments of Finance for non-public issuers and the State Bank of Vietnam for credit institutions), moving certain filings to a registration-based mechanism with the Vietnam State Securities Commission checking completeness and validity, adjusting the use-of-proceeds disclosure endpoint (until full disbursement or no outstanding bonds, whichever is earlier), requiring audited annual and reviewed semi-annual financial statements, extending the deadline for reporting offering results to investors and the stock exchange to 10 working days, adding a standalone chapter on disputes and compensation, enabling electronic procedures and e-identification, simplifying professional-investor verification, and allocating greater oversight roles to provincial authorities through reporting, data systems and local inspections.

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