MONTHLY LEGAL UPDATE – 02/2020: LEGAL UPDATE RELATING TO FINANCE AND CREDIT
v Name of legal document: Circular No. 30/2019/TT-NHNN issued on 31/12/2019 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 19/2013/TT-NHNN dated September 6th, 2013 of the Governor of the State Bank of Vietnam state on the purchase, sale and settlement of bad debts of Vietnam Asset Management Company (referred to as the “Circular No. 32/2019/TT-NHNN”).v Effective date: 14/02/2020.The content should be noted: amending and stipulating on restructure bad debts, adjustment of repayment term and debt rescheduling.
Specifically, Clause 1 Article 1
of Circular No. 30/2019/TT-NHNN stipulates: “Article
1. amending and supplementing a number of
articles of Circular No. 19/2013/TT-NHNN dated September 6th, 2013 of the
Governor of the State Bank of Vietnam state on the purchase, sale and
settlement of bad debts of Vietnam Asset Management Company (referred to
as the “Circular No. 19/2013/TT-NHNN”)
1. Clauses 2, 3 and 4 of Article 3 are amended and supplemented as
follows:
“2. Restructure bad debts is the adjustment of repayment term, debt
rescheduling; reduction of a part or total of interest amounts which are
overdue for payment, violation fees and fines; adjustment of interest rate of
bad debt.
3. Adjustment of repayment term means the approval to extend a period of repayment of part or all of the principal and/or interest of an agreed repayment term (including the case of no change in number of debt repayment term agreed upon) within the previous debt repayment term agreed in the credit agreement or loan agreement, agreement of offer of the trusteeship of credit extension, agreement of purchase, offer of the trusteeship purchasing corporate bonds with the repayment deadline remains unchanged.
4. Debt rescheduling means the approval to extend an additional period of repayment of principal and/or interest in excess of the previous debt payment term agreed in the credit agreement or loan agreement, agreement of offer of the trusteeship of credit extension, agreement of purchase, offer of the trusteeship purchasing corporate bonds.””
v Name of legal document: Circular No. 33/2019/TT-NHNN issued on 31/12/2019 by the State Bank of Viet Nam amendments to the Circular No. 34/2013/TT-NHNN dated December 31, 2013 by the Governor of the State bank of Vietnam on domestic issuance of promissory notes, treasury bills, deposit certificates and bonds by credit institutions and foreign bank branches (referred to as the “Circular No. 33/2019/TT-NHNN”).v Effective date: 14/02/2020.Some contents should be noted:
·
Firstly, amending and stipulating on
interest rates of valuable papers.
Specifically, Clause 1 Article 1
of Circular No. 33/2019/TT-NHNN stipulates:
“Article 1. Amendments to the Circular No. 34/2013/TT-NHNN:
1. Article 11 is amended as follows:
“Article 11. Interest rates
1. The interest rates of valuable papers issued by credit institutions
or foreign bank branches shall be conformable with regulations on interest
rates adopted by the State Bank of Viet Nam in each period. The interest rates
of bonds must be also comply with regulations of the Law on Securities, Decree
No. 163/2018/ND-CP, and legal documents elaborating the Law on Securities.
2. Methods of calculation of interests on valuable papers shall comply
with the State Bank of Viet Nam’s regulations.”.”
·
Secondly, amending and stipulating
on application for the State Bank of Viet Nam’s approval of plan for public
offering of bonds.
Specifically, Clause 7 Article 1
of Circular No. 33/2019/TT-NHNN stipulates:
“Article 1. Amendments to the Circular No. 34/2013/TT-NHNN:
…
7. Article 22 is amended as follows:
“Article 22. Application for the State Bank of Viet Nam’s approval of
plan for public offering of bonds
1. The application for approval of the plan for public offering of
bonds by a credit institution which must bear the signature of the legal
representative of that credit institution and specify the assessment of its
fulfillment of conditions for public offering of bonds, including financial
performance (after-tax profit) in the year preceding the year of issuance,
paid-in charter capital at the date of issuance, profits or losses accumulated
until the year of issuance, accounts payable more than one year overdue, the
funding plan and use of funds in the year of issuance.
2. The plan for public offering of bonds approved by a competent
authority of the credit institution shall include, inter alia, the following
contents:
a) Total face value of bonds issued;
b) Name, term and interest rate of the bond and eligible buyers;
c) Location, form and method of bond issuance;
d) The plan for public offering of convertible bonds or warrant-linked
bonds must also include the contents specified in Clause 1 Article 24 of this
Circular (Circular No. 34/2013/TT-NHNN).
3. The plan for use of funds obtained from the public offering of bonds
and debt repayment approved by a competent authority of the credit institution.
The competent authority of the credit institution that gives approval of the
plan for use of funds obtained from the public offering of bonds and debt
repayment is also the one giving approval of the plan for public offering of
bonds.
4. The written undertaking by the credit institution to perform duties
towards bond buyers regarding issuance conditions, payment and assurance of
rights and legitimate interests of bond buyers as well as other conditions.
5. Decisions made by the competent authority of the credit institution
giving approval of the plan for public offering of bonds and the plan for use
of funds obtained from the public offering of bonds and debt repayment”.””
·
Thirdly, amending and stipulating on
organization of issuance of valuable papers.
Specifically, Clause 7 Article 1 of
Circular No. 33/2019/TT-NHNN stipulates: “Article
1. Amendments to the Circular No. 34/2013/TT-NHNN:
…
10.
Article 25 is amended as follows:
“Article 25. Organization of issuance of financial instruments
1. Credit institutions and foreign bank branches shall take initiative
in organizing their issuance of promissory notes, treasury bills and deposit
certificates in accordance with Article 19 hereof (Circular No. 34/2013/TT-NHNN).
2. Credit institutions shall make private placement of bonds according to their plans for private placement of bonds approved by competent authorities and in conformity with Decree No. 163/2018/ND-CP.
3. Credit institutions shall make public offering of bonds according to their approved plans for public offering of bonds and in conformity with the Law on Securities”.””
