Vietnam stock market update: Stricter requirements on information disclosure


By Tran Thi Bich Ngoc, Associate

On 5 April 2012, Vietnam's Ministry of Finance issued Circular No. 52/2012/TT-BTC on information disclosure in the stock market ("Circular 52"), which became effective on 1 June 2012 and replaces Circular No. 09/2010/TT-BTC dated 15 January 2010 ("Circular 09").

 Circular 52 provides regulations on information disclosure of public companies, bond issues, securities companies, fund management companies, Stock Exchanges, Securities Depository Centers and related parties. Circular 52 sets out the requirements on information disclosure, the persons authorized to disclose information, the appropriate media and forms for disclosing information, and guidelines on information disclosure that must be conducted by each type of entity.  

 New type of public company

 Circular 52 introduces a new type of public company, "large-scale public companies." A large-scale public company is a public company with: (i) paid up charter capital of VND120 billion or more as determined in the latest financial report; or 300 or more shareholders as from the closing of the shareholder list on December 31 each year.

 Requirements on information disclosure

 Circular 52 stipulates additional requirements to those under Circular 09. For public companies Circular 52 adds types of information to be disclosed periodically such as: corporate administration status, information on offer for sale of securities, and the schedule of use of capital received from an offer tranche.

 Circular 52 requires public companies to disclose extraordinary information within 24 hours after the occurrence of the following events: decision on dividend payment method, issuing bonus shares, restructuring of the company, dividing or consolidating shares, changes in the number of issued shares due to new issuance, sale or purchase of treasury shares, etc. Furthermore, a public company is also required to disclose information within 72 hours after making decisions on establishing, purchasing, selling or dissolving affiliates, investing or no longer investing in joint-ventures or associated companies.

 Circular 52 appears more in favor of protecting minority shareholder when it introduces new regulation relating to major shareholders. If a major shareholder of a public company becomes or loses his position as a major shareholder, he must disclose that fact within 7 days.  In addition, Circular 52 requires large-scale public companies and listed companies to disclose extraordinary information, for example, when the company loses assets with a value of 10% or more of its equity; sells or purchases assets worth more than 15% of the total assets of the company; when the stocks of the listed companies hit the ceiling price or plunge to the floor price for 10 consecutive trading sessions or more.

All disclosures of information must be accompanied by a simultaneous report to the State Security Committee or the Stock Exchanges, as appropriate. Companies subject to the disclosure requirements must set up a website with a special section providing information for investors. The website must the company's charter, internal administration rules, prospectus (if any), and periodical and extraordinary disclosures made according to Circular 52.

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