Thông tư 01/2021/TT-NHNN

CIRCULAR

PRESCRIBING ISSUANCE OF PROMISSORY NOTES, TREASURY BILLS, DEPOSIT CERTIFICATES AND DOMESTIC BONDS BY CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law on amendments to the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Government’s Decree No. 153/2020/ND-CP dated December 31, 2020 prescribing private placement and trading of privately placed corporate bonds in domestic market and offering of corporate bonds in international market;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the request of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam promulgates a Circular prescribing domestic issuance of promissory notes, treasury bills, deposit certificates and bonds by credit institutions and foreign bank branches.

Article 1. Scope

This Circular provides for the issuance of promissory notes, treasury bills, and deposit certificates, and the issuance and offering of domestic bonds (hereinafter referred to as “bond issuance”) by credit institutions and foreign bank branches to raise capital within the territory of Vietnam.

Article 2. Regulated entities

1. Issuers of promissory notes, treasury bills, deposit certificates and bonds (hereinafter referred to as “financial instruments”) as prescribed in Article 3 hereof.

2. Buyers of financial instruments as prescribed in Article 4 hereof.

3. Other entities involved in the issuance of financial instruments by credit institutions and foreign bank branches.

Article 3. Issuers of financial instruments

Credit institutions and foreign bank branches that issue financial instruments under their establishment and operation licenses include:

1. Commercial banks.

2. Cooperative banks.

3. Foreign bank branches (FBBs).

4. Financial companies and finance lease companies.

Article 4. Buyers of financial instruments

1. Buyers of financial instruments are Vietnamese organizations (including credit institutions and FBBs) and individuals, and foreign organizations and individuals, except those specified in Clause 2 and Clause 3 of this Article.

2. Buyers of financial instruments issued by financial companies or finance lease companies are Vietnamese and foreign organizations.

3. Buyers of bonds must be conformable with the Law on Securities, its guiding documents and relevant laws.

Article 5. Definitions

For the purposes of this Circular, these terms shall be construed as follows:

Promissory notes, treasury bills, deposit certificates, and bonds are evidences of debt repayment obligations of the issuing credit institutions or FBBs to holders of financial instruments for a given period of time, which also contain other interest payment and other terms and conditions.

Article 6. Issuance forms

1. Credit institutions and FBBs issue financial instruments in the forms of certificates, book entries and other forms in conformity with regulations of the Law on Securities, its guiding documents and relevant laws.

2. Financial instruments issued in the form of certificates must be designed and printed in a manner that prevents counterfeiting.

3. Buyers of financial instruments which are issued in the forms other than certificates shall be issued with certificates of ownership.

Article 7. Currency used in issuance and payment

Financial instruments are issued and paid for in VND.

Article 8. Face value

1. Face value of a financial instrument is VND 100.000 (one hundred thousand) or a multiple of VND 100.000 (one hundred thousand).

2. Face values of financial instruments (except bonds) issued in the form of certificates shall be pre-printed or comply with agreement by and between issuers and buyers.

3. Face values shall be pre-printed on the bonds which are issued in the form of certificates.

4. Face values of financial instruments issued in the forms other than certificates shall be agreed upon by and between issuers and buyers.

Article 9. Interest rate

1. Interest rates of financial instruments shall be decided by issuers in accordance with regulations on interest rates adopted by the State Bank of Vietnam (hereinafter referred to as “SBV”) in each period.

2. Interests on financial instruments shall be calculated by adopting SBV’s methods.

Article 10. Term to maturity, issue date and maturity date

1. Bonds shall have a term to maturity of at least one year. Specific terms to maturity shall be decided by credit institutions. Bonds that are issued in the same issue and have the same term to maturity shall have the same issue date and maturity date.

2. Term to maturity, issue date and maturity date of promissory notes, treasury bills and deposit certificates shall be decided by issuers.

Article 11. Rules for issuance of promissory notes, treasury bills and deposit certificates

1. Credit institutions and FBBs shall proactively organize the issuance of promissory notes, treasury bills and deposit certificates in accordance with regulations hereof when complying with prudential ratios as prescribed in Clause 1 Article 130 of the Law on Credit Institutions (as amended) and SBV’s guidelines.

2. Credit institutions and FBBs shall issue promissory notes, treasury bills and deposit certificates directly at lawful transaction locations within their operating networks.

3. Promissory notes, treasury bills and deposit certificates issued in the form of certificates or certificates of ownership of promissory notes, treasury bills and deposit certificates shall bear the following information:

a) Issuer’s name;

b) Name of promissory note, treasury bill or deposit certificate;

c) Symbol/serial number;

d) Signature of legal representative of the issuer and other signatures prescribed by the issuer;

dd) Face value, term to maturity, issue date and maturity date;

e) Interest rate, method and time of interest payment, and location for principal and interest payment;

g) Full name, number of ID card or Citizen Identity Card or unexpired passport, and address of holder (if the holder is an individual); name, number of establishment license or enterprise ID number or number of business registration certificate (if the enterprise ID number is unavailable), and address of holder (if the holder is an organization);

h) Promissory notes, treasury bills or deposit certificates issued by financial companies or finance lease companies must specify that the holder’s ownership shall be only transferred to an organization.

i) Other contents of promissory notes, treasury bills or deposit certificates shall be decided by issuers.

Article 12. Rules for issuance of bonds

When issuing bonds, credit institutions must comply with regulations of the Law on Securities, its guiding documents, relevant laws and regulations herein. Regarding the requirement for private placement of bonds laid down in Point e Clause 2 Article 31 of the Law on Securities, credit institutions shall comply with Clause 1 Article 130 of the Law on Credit Institutions (as amended) and SBV’s guidelines.

Article 13. Requirements for issuance of convertible bonds and warrant-linked bonds

1. In case a credit institution issues convertible bonds or warrant-linked bonds, the bond issuance plant must have the following contents about the conversion of bonds into shares or execution of warrants:

a) Bond buyers must comply with regulations on limits on capital contributions, purchase of shares, and holding of shares by foreign investors when converting bonds into shares or executing warrants;

b) The conversion of bonds into shares or execution of warrants by holders of warrant-linked bonds shall be made only after the increasing of charter capital is approved by SBV according to SBV’s regulations on required documents and procedures for approval of increasing of charter capital by credit institutions.

2. When converting convertible bonds into shares or executing warrants, credit institutions and holders of convertible bonds or warrant-linked bonds must comply with SBV’s regulations on required documents and procedures for approval of increasing of charter capital by credit institutions.

Article 14. Procedures for issuance and payment for financial instruments

Procedures for issuance and payment for financial instruments shall be stipulated by credit institutions and FBBs in conformity with their characteristics and management models, and relevant laws, and ensure the accurate and safe issuance and payment for financial instruments. Credit institutions and FBBs must provide adequate information about their procedures for issuance and payment for financial instruments for buyers.

Article 15. Redemption of bonds before maturity and bond swaps

Credit institutions shall redeem bonds before maturity and carry out bond swaps in accordance with regulations of the Law on Securities and relevant laws.

Article 16. Use of financial instruments as collateral

Financial instruments may be used as collateral according to guidelines given by credit institutions and FBBs, and regulations of the law on secured transactions.

Article 17. Transfer of ownership of financial instruments and action against other risks

1. The ownership of financial instruments is transferred in the forms of sale, purchase, donation, exchange, inheritance and other forms in conformity with relevant laws.

2. Financial instruments issued by financial companies or finance lease companies shall be transferred between organizations only.

3. Procedures for transfer of ownership of financial instruments and action against risks (crumpling, tearing or loss of financial instruments and other risks) shall be established by credit institutions and FBBs in conformity with relevant laws and their business characteristics and conditions, and must ensure lawful rights and benefits of holders of financial instruments.

Article 18. Payment for financial instruments

1. Credit institutions and FBBs must pay financial instrument principal and interests in full and on schedule to holders.

2. Methods of payment of financial instrument principal and interests shall be decided by credit institutions and FBBs in accordance with relevant laws, and announced to buyers before the issuance of financial instruments.

3. Payment for financial instruments before maturity shall be decided by credit institutions and FBBs at the request of holders and in a manner that ensures safe operation of credit institutions and FBBs. Interests paid in case of payment for financial instruments before maturity must comply with SBV’s regulations.

Article 19. Internal regulations

Pursuant to regulations of the Law on Credit Institutions, this Circular and relevant laws, credit institutions and FBBs shall promulgate their internal regulations on issuance of financial instruments which must be conformable with their management models, business characteristics and conditions, and ensure their safe operation. Responsibility and obligations of each department and individual involved in the issuance of financial instruments must be specified in the internal regulations.

Article 20. Implementation

1. This Circular comes into force from May 17, 2021.

2. This Circular supersedes the following documents:

a) The Circular No. 34/2013/TT-NHNN dated December 31, 2013 of the Governor of the State Bank of Vietnam;

b) The Circular No. 33/2019/TT-NHNN dated December 31, 2019 of the Governor of the State Bank of Vietnam.

3. Bond issuance plans approved by competent authorities of credit institutions or accepted by SBV before the effective date of this Circular shall remain effective. The provision that a credit institution is allowed to include redeemed bonds into tier-2 capital after obtaining SBV’s written approval in the decision of SBV’s Governor on approval of bond issuance by the credit institution shall be no longer valid from the effective date of this Circular, and the inclusion of bonds redeemed before maturity into tier-2 capital must comply with SBV's regulations on limits and prudential ratios in operation of credit institutions.

Article 21. Implementation organization

The Chief of Office, the Director of the Monetary Policy Department, heads of units affiliated to the State Bank of Vietnam, credit institutions and foreign bank branches shall organize the implementation of this Circular./.