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Official Gazette

Friday, October 7, 2022

In the draft stage

Updated: 09:45’ - 27/04/2010

- The State Securities Commission has recently circulated a draft of proposed amendments to the Law on Securities for public comment in an attempt to make the Law more practical and capable of effectively regulating a fast-developing stock market.

The proposed amendments would expand the scope of private placement of shares, in addition to the current Law’s focus on public offering, which is already specified in Government Decree No. 01/2010/ND-CP of January 4. Accordingly, listing institutions should be required to make a written commitment on listing or trading of their shares on the organized market within six months after the private placement. This provision would reduce over-the-counter share transactions.

Cross-border securities issuance and trading activities and securities trading by individuals and institutions other than institutional securities traders are also covered by the proposed amendments.  

Real estate investment funds would be required to operate as public funds and managed by their names.

Requirements on information disclosure by the Securities Depository Center would be higher and fines for failure to disclose more specific and heavier.

- The Finance Ministry is working on a draft regulation on foreign investors’ capital contribution to or acquisition of shares of Vietnamese businesses other than purchase of shares of lawfully operating public companies, including equitized or transformed wholly state-owned enterprises, limited liability and joint-stock companies, partnerships and private enterprises, listed or unlisted on the Vietnamese stock market.

Foreign investors are defined as institutions founded and operating under foreign laws and their subsidiaries and foreign nationals. Individuals bearing both Vietnamese citizenship and a foreign citizenship may be treated either as foreign investors if they have overseas permanent residences or as local investors if they permanently reside in Vietnam.    

Vietnam-based lawfully operating institutions, investment funds and securities investment companies with foreign holding rate in their charter capital exceeding 49% would be also permitted to contribute capital to or purchase shares from local enterprises.

- Amendments to land, financial, credit, training support, scientific and technological regulations to facilitate the development of the private economic sector constitute one of major solutions proposed at a conference preliminarily reviewing eight years’ implementation of a Party resolution on economic sectors held on April 6 by the Office of the Party Central Committee.

Also at the conference, revision of the enterprise, labor, social insurance and vocational training laws were also proposed, aiming to improve relevant mechanisms, effectively realize the national economic restructuring, and facilitate provision of high-class services and application of high technologies and feasible development models in the sector to boost its dynamism and competitiveness.   

- Regulations on prevention and combat of trafficking of women and children as well as prostitution should be revised urgently to cope with complicated developments of these illegal practices and address difficulties undermining the combat nationwide.

Revised regulations should focus more on assistance for human trafficking victims to seek employment (with vocational training) and reintegrate themselves into the community, requiring local administrations to list and report them regularly, and effective collaboration among localities in the combat.  

Nguyen Ngoc Thach, head of the Social Evil Prevention Department, called for changes in awareness raising activities on prostitution and human trafficking to make them more effective, especially in rural areas.

- A project to enhance labor relations and prevent labor conflicts entitled “Labor relations support and labor law modifications” has recently been signed by the Ministry of Labor, War Invalids and Social Affairs and the International Labor Organization (ILO).

The project, a component of the Government-signed treaty on national collaboration and sustainable work for the 2006-2010 period, is worth USD 2 million and will be implemented in two years to help Vietnamese labor authorities and experts update the Labor Treaty and promptly submit their suggestions and concerns as the labor law and trade union law are currently revised to match international labor regulations and criteria.

Its major objectives also include exploring labor relations support systems from other countries and new models of negotiation and counseling, and establishing regional-level support centers for labor relations nationwide.

- State Auditor General Vuong Dinh Hue told Vietnam Economic Times on April 13 at a workshop on building and improvement of the legal framework for organization and operation of the State Audit that the National Assembly has proposed an addition of some provisions concerning the State Audit and State Auditor General into the Constitution in order to officially define the status and position of this office as a financial inspection agency founded and monitored by the National Assembly, assigned to operate independently and abide only by the law.

The National Assembly would elect, remove from duty or dismiss the State Auditor General.

- At a recent meeting with the Justice Ministry, Chairman of the Vietnam National Bar Association (VNBA) Le Thuc Anh informed that the VNBA is currently collaborating with the Public Security Ministry in drafting a regulation on coordination between them in criminal investigation.

Such regulation is expected to be jointly discussed and promulgated by the Public Security Ministry in the third quarter of 2010. Subsequently, similar regulations on coordination between the VNBA and the Supreme People’s Court and the Supreme People’s Procuracy will be elaborated and enacted.

The VNBA also requested the Justice Ministry to cooperate in proposing amendments to the Law on Lawyers and the Criminal Procedure Code in order to revise problematic provisions impeding professional activities of lawyers, especially defense counsels and attorneys at law.      

- Over the past five years, numerous private economic conglomerates have been founded such as FPT, Kinh Do, Hoa Phat and Dong Tam. However, the 2005 Enterprise Law currently in force provides no specific criteria for such companies to be referred as private economic groups. They still have to bear names such as group joint-stock company or group limited liability company.

In order to create a legal framework for formation of private economic groups, the policy on recognition of this model should be institutionalized in the Enterprise Law and relevant laws on competition, tax, labor and accounting in order to formulate a complete mechanism for development of private groups without having to pass a discrete law thereon. 

An expert from Vietnam-based Earns & Young suggested that Vietnam’s audit regulations which are compatible with international standards may serve as a legal ground for founding a private economic group, e.g., when a firm has over a half of its capital and more than one share owned by another it is supposed to become the latter’s affiliate and this relationship will result in a private economic group.

In addition, according to Nguyen Manh Cuong, vice chairman of Vietnam Young Business Association, an initial plan for the private economic group model will be submitted to the Prime Minister by October for approval and implementation.   

- At a workshop recently held in Ho Chi Minh City to introduce the Law on State Compensation Liability, assess its effects and gather comments on implementation guidance, a Japanese consultant of the Japanese International Cooperation Agency proposed that the Law should, in order to become more effectively enforceable, broaden its scope of domains subject to compensation claims and allow victims of wrongful decisions of state authorities to prove not only their direct (visible) damage but also indirect damage which is sometimes much more harmful to, say, businesses.

Tran Van Ly from Vietnam Chamber of Commerce and Industry’s Legal Department also attached importance to indirect damage caused to small- and medium-sized businesses such as hard times in corporate governance due to unjust detention and accusation of their leaders or defamation of their reputation and brands which may cause great difficulties in business.

Legal documents guiding the Law should also specify offices at all levels to receive compensation claims and time limit for filing and settling claims.-


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