Originally published 8 November 2010

Keywords: draft circular, bank listings, State Bank of Vietnam, SBV, stock exchange

The State Bank of Vietnam (SBV) has released for public consultation a draft circular guiding a joint stock credit institution (Credit Institution) on registration for listing of shares on a domestic or foreign stock exchange (Draft Circular).

The Draft Circular sets out the conditions required to be met before SBV's approval to list on a stock exchange can be obtained.

Conditions to Obtain SBV Approval to List on a Domestic Stock Exchange

A Credit Institution must meet three conditions before the SBV will consent to its registration for listing on a domestic stock exchange: (i) conditions on the financial capacity; (ii) conditions on the operational safety; and (iii) conditions on the management and executive operation of the Credit Institution.

  • Financial Capacity Conditions

    Under the Draft Circular, the SBV will approve a Credit Institution for domestic listing when:

    • the actual paid up charter capital of the Credit Institution at the time of the request is equal to or higher than the requisite legal capital amount; and
    • the Credit Institution's business operations have been profitable for the last two consecutive years and it must not have accumulated any losses at the date of the request for approval.

  • Operational Safety Conditions

    Five conditions to safeguard the operations of the Credit Institution must be satisfied:

    • the Credit Institution must have met relevant minimum prudential limits at the close of the previous year;
    • the Credit Institution must have satisfied all banking operation prudential limits for the last three consecutive months prior to the date of application;
    • the ratio of bad debts over the total loan balance must be no more than 3 percent for the previous year and for quarters calculated from the end of the previous year up until the date of application;
    • the Credit Institution must have fully conducted debt classification and establishment of risks reserves in the manner set out in relevant regulations as at the end of the previous year and for quarters calculated from the end of the previous year up until the date of application; and
    • the Credit Institution must not have received total fines of more than VND 5 million from the relevant authorities for breaches of regulations on prudential limits during the previous year and up to the date of application.

  • Management and Executive Operation Conditions
    • The Credit Institution must have complied with legal requirements on the structure and composition of its board of management and board of controllers;
    • The Credit Institution must also have established and implemented an internal audit section and an internal control and inspection system in accordance with relevant requirements.

Conditions to Obtain SBV Approval to list on a Foreign Stock Exchange

In addition to meeting the above conditions, the Credit Institution seeking approval to list on a foreign stock exchange must have also been listed on the domestic stock exchange for at least one year and must not have been penalised by the competent authorities for any breach of the securities market rules in the year prior to application.

Documents and Procedures Required to Apply for SBV Consent

The Draft Circular also sets out the documents required and the procedures for the Credit Institution to apply for SBV's approval to list either domestically or on a foreign exchange.

  • Documents required for Domestic Listing
    • Letter from the Credit Institution requesting the Governor of the SBV to consent to registration for listing on the domestic stock exchange; and
    • Resolution of the General Meeting of Shareholders approving listing of shares on the domestic stock exchange.
  • Documents required for Listing on a Foreign Stock Exchange
    • Letter from the Credit Institution requesting the Governor of the SBV to consent to registration for listing on the foreign stock exchange;
    • Resolution of the General Meeting of Shareholders approving listing of shares on the foreign stock exchange; and
    • Report on compliance with legislation on securities and securities market by the Credit Institution listed on the domestic stock exchange.

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