Stricter regulations proposed for corporate bond trading

The Ministry of Finance has published a draft decree tightening regulations on the private placement and trading of corporate bonds, as well as the issuance of bonds on international markets, in an effort to improve transparency and strengthen protection for investors.

This draft decree is set to replace the Government's Decree No. 153/2020/ND-CP and its amendments. 

The new draft decree introduces clear and specific regulations regarding the issuance and trading of privately placed corporate bonds.

It specifies entities eligible to participate in purchasing, trading, and transferring privately placed corporate bonds. For non-convertible bonds and bonds without warrants, only professional securities investors are allowed to participate. For convertible bonds or bonds with warrants issued privately, strategic investors can also participate alongside professional securities investors.

Professional securities investors can be organizations as defined by the amended Securities Law of 2024 or individuals meeting specific criteria, such as holding a listed or registered securities portfolio with a minimum market value of VND2 billion ($76,000) calculated based on the average market value over 180 consecutive days before determining investor status. This status is valid for three months from the date of confirmation.

Strategic investors are individuals or organizations selected by the issuing company based on criteria such as financial capacity, technological expertise, and a minimum three-year cooperation commitment. The total number of strategic investors in a single offering must not exceed 100.

Before purchasing bonds in both primary offerings and secondary market transactions, individual professional securities investors must sign a document confirming that they have thoroughly reviewed the offering information, understand the bond terms, and acknowledge the risks, taking full responsibility for their investment decisions.

Investors participating in the bond market will enjoy clear benefits: receiving full disclosure from the issuing company, being provided with offering documents, receiving principal and interest payments on time according to bond terms upon maturity, and enjoying any attached rights (if applicable) as per regulations.