LEGAL UPDATE RELATING TO FINANCE AND CREDIT (MONTHLY LEGAL UPDATE – 12/2021)
·
Firstly, regulating on
corporate bond eligible for trading.
Specifically, Article 5 of
Circular No. 16/2021/TT-NHNN stipulates:
“Article 5. Corporate bond eligible for
trading
A corporate bond is eligible for trading when all requirements below
are satisfied:
1. The corporate bond is issued in accordance with regulations and
law.
2. The corporate bond is issued in VND.
3. The corporate bond is under legal ownership of the seller, has
not reached maturity which requires payment of both principal and interest, is
not subject to any dispute, is allowed to be traded as per the law, is not
under forward contract or discount contract or rediscount contract as
guaranteed by the seller (except for cases where a credit institution purchases
corporate bond to sell for the first time).”
·
Secondly, regulating on corporate
bond purchase limit.
Specifically, Article 8 of
Circular No. 16/2021/TT-NHNN stipulates:
“Article 8. Corporate bond purchase
limit
1. The total corporate bond purchase balance shall be included in
total amount of credit extended of a customer or a customer and a related
person according to Article 128 of the amended Law on Credit Institutions and regulations
of the State Bank of Vietnam on prudential limits and ratios in operations of
credit institutions.
2. Credit institutions shall elaborate on corporate bond purchase
limits: Corporate bonds of an issuer; corporate bonds of an issuer and a
related person; secured bonds; non-secured bond; readily marketable bonds;
bonds held until maturity; corporate bonds being traded.”
·
Firstly, regulating on principles of
rediscounting negotiable instruments.
Specifically, Article 3 of
Circular No. 18/2021/TT-NHNN stipulates:
“Article 3. Principles of rediscounting
negotiable instruments
1. Credit institutions, foreign bank branches may rediscount negotiable
instruments when the License issued by the State Bank of Vietnam (hereinafter
referred to as the State Bank) contains contents of operation on the rediscounting
negotiable instrument.
2. Credit institutions, foreign bank branches shall rediscount
negotiable instruments according to the provisions of this Circular, in
accordance with the provisions of the Law on Credit Institutions, the Law on negotiable
instruments and regulations provisions of relevant laws. In case of
rediscounting a negotiable instrument involving foreign elements, the parties
shall comply with the provisions of this Circular, the Law on Credit
Institutions, the provisions on application of international treaties and
international trade practices in relation to negotiable instruments with
foreign elements in the Law on negotiable instruments and the provisions of the
law on civil relations with foreign elements.
3. Credit institutions, foreign bank branches shall rediscount foreign
currency negotiable instruments in accordance with the permitted scope of
foreign exchange operations of each credit institution, foreign bank branch.”
·
Secondly, regulating on corporate
bond purchase limit.
Specifically, Article 6 of
Circular No. 18/2021/TT-NHNN stipulates:
“Article 6. Rediscount currency
1. For negotiable instruments payable in Vietnam dong, credit
institutions, foreign bank branches shall rediscount in Vietnam dong.
2. For negotiable instruments payable in foreign currency:
a) Credit institutions, foreign bank branches shall rediscount in
foreign currency stated on such negotiable instrument or in Vietnam dong as
agreed. In case of rediscount in Vietnam dong, the parties shall agree on the
applicable exchange rate in accordance with the regulations of the State Bank
on the exchange rate;
b) In case of rediscounting of a negotiable instrument by method of
term purchase, a credit institution or foreign bank branch shall repurchase the
negotiable instrument in the currency of the sale of such negotiable
instrument.”
