The Government on July 1 issued the first ever legal framework for debt trading activities in Vietnam.
A transaction is carried out at Vietnam Prosperity Bank__Photo: vtc.com.vn
According to Decree No. 69/2016/ND-CP, debt traders must fully meet the following conditions:
First, they must have at least VND 100 billion in charter or investment capital.
Second, there is no written agreement disallowing the trading of the debts; the debts are not used as a security for a civil liability at the time of debt trading; and debt buyers and sellers are not related parties under the Enterprise Law.
Third, the trading of debts must be under written contracts, which must specify the rights and obligations of debt buyers and sellers.
Next, debt trading companies must not receive loans or guarantee of credit institutions and foreign bank branches to buy debts from other borrowers of these lenders.
Finally, debt buyers and sellers and related parties must observe current regulations on foreign exchange management in case the debt trading forms a foreign lending/borrowing relation and requires foreign currencies in debt transactions.
In addition, managers of debt trading firms must have full civil capacity and are not banned from enterprise management as prescribed by the Enterprise Law. They must also possess a university or higher degree in economics, business management, laws or a field relevant to their charge, and must work for at least five years in banking, finance, accounting, auditing, law, asset valuation or debt trading.
Decree No. 69 also requires several conditions for enterprises providing debt trading intermediary or consultancy and enterprises providing debt trading floor services.- (VLLF)