Thông tư 100/2015/TT-BTC

CIRCULAR

GUIDANCE ON ISSUANCE OF MUNICIPAL BONDS IN DOMESTIC MARKET

Pursuant to the Law on state budget dated December 16, 2002;

Pursuant to the Law on public debt management dated June 17, 2009;

Pursuant to the Law on securities dated June 29, 2006 and the Law dated November 24, 2010 on amendments to a number of articles of the Law on securities;

Pursuant to the Government’s Decree No.215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and organizational structure of Ministry of Finance;

Pursuant to the Government’s Decree No.01/2011/ND-CP dated January 05, 2011 on issuance of government bonds, government-guaranteed bonds and municipal bonds;

Pursuant to the Government’s Decree No. 79/2010/ND-CP dated July 14, 2010 on operations for public debt management;

At the request of the Director of Department of Banking and Financial Institutions;

Minister of Finance promulgates a Circular providing guidance on the issuance of municipal bonds in the domestic market.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides the guidance on issuance of municipal bonds in domestic market.

2. This Circular applies to the People’s Committees of provinces/central-affiliated cities, other organizations and individuals involved in the issuance of municipal bonds in the domestic market.

Article 2. Issuers

Issuers of municipal bonds are the People’s Committees of provinces/central-affiliated cities (hereinafter referred to as the Provincial-level People’s Committees).

Article 3. Purposes

Municipal bonds are issued to fund programs or projects prescribed in Clause 3 Article 4 of the Government’s Decree No. 01/2011/ND-CP dated January 05, 2011 on issuance of government bonds, government-guaranteed bonds and municipal bonds (hereinafter referred to as the Decree No. 01/2011/ND-CP).

Article 4. Conditions for issuance of municipal bonds

Each Provincial-level People’s Committee must satisfy all of conditions for issuance of municipal bonds prescribed in Article 39 of the Law on public debt management and Article 24 of the Decree No. 01/2011/ND-CP.

Article 5. Terms of municipal bonds

In addition to terms and conditions of bonds prescribed in Article 6 of the Decree No. 01/2011/ND-CP an issuer of municipal bonds must comply with the following provisions:

1. Terms of bond

Municipal bonds are issued with a term of one year or above. Each Provincial-level People’s Committee shall decide specific term of municipal bonds in conformity with demand for capital and market conditions.

2. Face value of the bond

The face value per municipal bond shall be one hundred thousand Vietnamese dongs (VND 100,000). Other face values of the municipal bond shall be the multiples of one hundred thousand Vietnamese dongs (VND 100,000).

3. Issuance quantity

The quantity of each issue is decided by the issuer according to the local demand for capital and the capacity for capital mobilization in the market but must not exceed the issuance limit granted by competent authorities as specified in this Circular.

4. Interest rate of bonds issued

The interest rate of municipal bonds issued is decided by the issuer but must not exceed the bracket of interest rate imposed by the Ministry of Finance as regulated in Article 9 herein.

Chapter II

GRANT OF APPROVAL FOR SCHEMES FOR ISSUANCE OF MUNICIPAL BONDS

Article 6. Formulation and grant of approval for scheme for issuance of municipal bonds

1. When having demand for capital mobilization by issuance of municipal bonds to make investment in social - economic development projects which must be funded by provincial-government budget as regulated or projects capable of capital recovery in the province, the Provincial-level People’s Committee must formulate a scheme for issuance of municipal bonds for each budget year and submit it to the Provincial-level People’s Council for approval.

2. A scheme for issuance of municipal bonds mentioned in Clause 1 of this Article includes the following basic contents:

a) Purposes of the issuance of municipal bonds as regulated in Article 3 herein. To be specific:

- To make investment in a social – economic development and investment project which must be funded by the provincial-government budget; or

- To make investment in a project capable of capital recovery; or

- To make investment in a project funded by the provincial-government budget, and a project capable of capital recovery. In this case, the scheme must specify the estimated quantity of municipal bonds to be issued for each project.

b) Information about the list of investment projects which are granted approval by the Provincial-level People’s Council and will be funded by capital raised from the issuance of municipal bonds, including: name of project; decision on investment issued by a competent authority; funding sources; type of project (a project which must be funded by the provincial-government budget or a project capable of capital recovery).

c) The report on evaluation of the project’s ability to recovery investment capital (if it is a project capable of capital recovery).

d) Planned terms and provisions of a municipal bond, including: quantity; term; face value; currency in bond issuance; interest rate of bonds issued; the issuer’s commitment to ensure rights and benefits of holders of municipal bonds as regulated in Clause 1 Article 8 of the Decree No. 01/2011/ND-CP; provisions for repurchase and swap of municipal bonds (if any).

dd) Planned time and methods of issuance of municipal bonds.

e) The reality of raising funds and the repayment of principal and interests of loans borrowed from all sources of the provincial-government budget within 03 budget years preceding the budget year in which the municipal bonds are issued according to each method of capital mobilization as regulated by law, including: opening balance; total capital raised during the year; the payment of principal and interest in the year; funding for making payment of principal and interest in the year (funding from state budget or revenues earned from the project); balance at the end of the budget year and at the time when the scheme for issuance of municipal bonds is formulated.

g) The limit on total amount of funds to be raised for the provincial-government budget at the time of formulation of the scheme as regulated in the Law on state budget, the Law on public debt management and their instructional documents;

h) The plan for using funds to pay bond interest and principal upon their maturity date;

i) Information provided to investors before the issue of municipal bonds as regulated in Article 8 herein.

3. The scheme for issuance of municipal bonds must be approved by the Provincial-level People’s Council. If the Provincial-level People’s Council grants approval for the investment proposal/ the limit on amount of funds raised from the issuance of municipal bonds and designates the Standing Board of Provincial-level People’s Council to consider approving the scheme for issuance of municipal bonds, these contents must be specified in the Resolution granted by the Provincial-level People’s Council in accordance with regulations of the Law on organization of People’s Councils and People’s Committees and the Resolution No. 753/NQ-UBTVQH11 dated April 02, 2005 by the Standing Committee of the National Assembly on regulations on operation of People’s Councils.

Article 7. Grant of approval for scheme for issuance of municipal bonds by Ministry of Finance

1. After the Provincial-level People’s Council has granted approval for the scheme for issuance of municipal bonds as regulated in Clause 3 Article 6 herein, the Provincial-level People’s Committee shall submit the application for issuance of municipal bonds to the Ministry of Finance. The application submitted to the Ministry of Finance includes:

a) The application form provided in Appendix 1 enclosed herewith;

b) The scheme for issuance of municipal bonds as regulated in Clause 2 Article 6 herein;

c) A document approving the scheme for issuance of municipal bonds issued by the Provincial-level People’s Council or the Standing Board of the Provincial-level People’s Council as regulated in Clause 3 Article 6 herein;

d) The Resolution promulgated by the Provincial-level People’s Council approving the estimate of provincial-government budget of the year in which municipal bonds shall be issued which must specify total domestic investment in fundamental construction.

dd) The list of social – economic development and investment projects which must be funded by the provincial-government budget regulated in the five-year plan approved by the Provincial-level People’s Council.

2. Within twenty (20) working days as from the receipt of a valid application as regulated in Clause 1 of this Article, the Ministry of Finance shall consider and comment on the scheme for issuance of municipal bonds. Elements to be considered:

a) Eligibility for issuance of municipal bonds;

b) The plan for issuance of municipal bonds;

c) The limit on amount of funds raised for the provincial-government budget as regulated in the Law on state budget, the Law on public debt management and their instructional documents;

d) The limit on quantity of municipal bonds to be issued (if it is a project capable of capital recovery in the province).

3. The Ministry of Finance shall grant a written notification of comments on the scheme for issuance of municipal bonds with respect of the contents mentioned in Clause 2 of this Article to the Provincial-level People’s Committee to issue municipal bonds in accordance with regulations herein. If the application is rejected, the Ministry of Finance shall send a written notification to the applicant and provide explanation.

Chapter III

ORGANIZATION OF ISSUANCE OF MUNICIPAL BONDS

Section 1. ISSUANCE OF MUNICIPAL BONDS

Article 8. Publishing information before issue

1. At least five (05) working days prior to the planned date of bidding or at least ten (10) working days prior to the date of issuing municipal bonds through underwriting or brokerage, the Provincial-level People’s Committee must publish basic information about the issue of municipal bonds on its website, or on the website of the Provincial Department of Finance or the organization authorized to issue municipal bonds or the Stock Exchange at the place where the bidding is conducted.

2. Information published as regulated in Clause 1 of this Article includes:

a) The issuer

b) The purposes of issuance of municipal bonds;

c) Terms and provisions of bond (including: quantity; term; face value; method of payment of bond principal and interest; provisions for repurchase or swap of municipal bonds, if any);

d) Date and method of issuance of municipal bonds;

dd) Planned sources of funding for payment of bond principal and interest upon their maturity date;

e) The list of projects using funds from the issuance of municipal bonds, specifying whether it is a project which must be funded by the provincial-government budget or a project capable of capital recovery.

g) The reality of raising funds and the repayment of principal and interests of the provincial-government budget within 3 budget years preceding the budget year in which the municipal bonds are issued for loans of all sources, including the funds raised by issuance of municipal bonds (if any); outstanding debts of the provincial-government budget at the intended time of issuance of municipal bonds.

h) Verified figures about total revenue and total expenditure of the provincial-government budget or estimated figures about revenues and expenditures of the provincial-government budget (if the figures are not yet verified by a competent authority) of 3 budget years preceding the year in which municipal bonds are issued, in which total revenue and total expenditure for balancing the provincial-government budget (including total recurrent expenditure and total capital expenditure) must be specified.

i) Estimated revenues and expenditures of the provincial-government budget of the intended year of issuance of municipal bonds approved by the Provincial-level People’s Council, including total revenue and total expenditure for balancing the provincial-government budget (including total recurrent expenditure and total capital expenditure).

Article 9. Interest rate of municipal bonds issued

1. The Provincial-level People’s Committee must send a written notification of the plan for issuance of municipal bonds to the Ministry of Finance at least fifteen (15) working days before the issue date so that the Ministry of Finance notifies the bracket of interest rates of municipal bonds issued. The written notification of the plan for issuance of municipal bonds includes:

a) Intended issue date;

b) Planned quantity, term, form and method of issuance of municipal bonds.

2. Not later than seven (07) working days as from the receipt of the written notification of the plan for issuance of municipal bonds as prescribed in Clause 1 of this Article, the Ministry of Finance shall notify the bracket of interest rates of municipal bonds in order for the Provincial-level People’s Committee to organize the issuance of municipal bonds in compliance with regulations herein.

3. The Provincial-level People’s Committee shall decide the interest rate of municipal bonds issued according to the interest rate bracket imposed by the Ministry of Finance as regulated in Clause 2 of this Article and the market developments at the issuance time.

Article 10. Methods of issuance of municipal bonds

1. Bidding:

a) The bidding for municipal bonds is organized at the Stock Exchange where the bidding for Government bonds is organized.

b) The principles and methods of bidding, participants in bidding, procedures for bidding organization, and method of determining bidding results and bond settlement method shall comply with regulations on issuance of Government bonds through bidding at the Stock Exchange.

2. Underwriting:

a) The Provincial-level People’s Committee issues bonds through underwriting to a main underwriter or an underwriter syndicate that satisfies all of conditions specified herein. To be specific:

- If bonds are issued through underwriting to a main underwriter, the Provincial-level People’s Committee or its authorized agency shall directly carry out a negotiation with the main underwriter on the quantity, term, interest rate and underwriting fee for each issue of municipal bonds. The main underwriter may purchase bonds for himself/ herself or resell bonds to his/her customers as agreed upon.

- If the bond issue is underwritten by a underwriter syndicate, the Provincial-level People’s Committee or its authorized agency shall directly carry out a negotiation with underwriters or the representative of the underwriter syndicate (if available) on the quantity, term, interest rate and underwriting fee for each issue of municipal bonds. Each member of the underwriter syndicate purchase bonds for himself/ herself or resell bonds to his/her customers.

b) Eligibility requirements for a main underwriter or participant in the underwriter syndicate, rights and benefits, obligations, procedures for selecting the main underwriter and members of the underwriter syndicate, procedures for negotiation and bond settlement process shall comply with regulations provided in Appendix 2 enclosed herewith.

3. Brokerage:

a) The Provincial-level People’s Committee of its authorized agency shall select qualified organizations to act as issuing agents and agents for payment of bond principal and interest.

b) Procedures for selecting issuing agent and payment agent, and procedures for issuance of municipal bonds through agents shall comply with the procedures for issuance of Government bonds through agents.

Article 11. Registering, depositing and listing bonds

1. Municipal bonds shall be registered, deposited and offset at Vietnam Securities Depository, listed and traded at the Stock Exchange as requested by the issuer.

2. Procedures for registering, depositing and listing municipal bonds are the same as those applied to Government bonds.

Section 2. REPURCHASE AND SWAP OF MUNICIPAL BONDS

Article 12. Repurchase of municipal bonds

1. The Provincial-level People’s Committee may repurchase bonds before they mature to reduce liability or serve debt restructuring according to the plan approved by the Provincial-level People’s Council. If the Provincial-level People’s Council grants approval for the proposal and designates the Standing Board of Provincial-level People’s Council to consider approving the repurchase plan, these contents must be specified in the Resolution granted by the Provincial-level People’s Council in accordance with regulations of the Law on organization of People’s Councils and People’s Committees and the Resolution No. 753/2005/NQ-UBTVQH11 dated April 02, 2005 by the Standing Committee of the National Assembly on regulations on operation of People’s Councils.

2. The Provincial-level People’s Committee shall adopt procedures and formalities for repurchase of Government bonds to repurchase municipal bonds.

3. The Provincial-level People’s Committee shall be responsible for the efficiency of the repurchase of municipal bonds and report the repurchase result to the Ministry of Finance in accordance with regulations in Article 23 herein.

Article 13. Principles for swap of municipal bonds

1. The Provincial-level People’s Committee may swap bonds to restructure debts according to the following principles:

a) Swap bonds according to the bond swap plan approved by the Provincial-level People’s Council and commented in written by the Ministry of Finance. If the Provincial-level People’s Council grants approval for the proposal and designates the Standing Board of Provincial-level People’s Council to consider approving the bond swap plan, these contents must be specified in the Resolution granted by the Provincial-level People’s Council in accordance with regulations of the Law on organization of People’s Councils and People’s Committees and the Resolution No. 753/2005/NQ-UBTVQH11 dated April 02, 2005 by the Standing Committee of the National Assembly on regulations on operation of People’s Councils.

b) Ensure the principle of parity price according to the market price; the bond swap must be open and transparent.

c) After the swap of bonds, total outstanding debts of the provincial-government budget must not exceed the limit on amount of funds raised for the provincial-government budget as regulated in the Law on state budget, the Law on public debt management and their instructional documents.

d) The bonds sold out in the bond swap must have the term to maturity of at least one year and are deposited at Vietnam Securities Depository.

2. While swapping bonds (as from the time of bond swap registration to the end of bond swap), the outstanding bonds to be sold out on depository account of the bond holder shall be blocked upon the request of the Provincial-level People’s Committee.

Article 14. Methods of bond swap

1. The bond swap may be carried out by adopting either one of the following methods:

a) The Provincial-level People’s Committee issues new bonds to swap with the outstanding bonds.

b) The Provincial-level People’s Committee issues additional bonds at determined quantity according to terms and provisions of outstanding bonds to swap with another type of outstanding bonds.

2. The Provincial-level People’s Committee shall decide and publish the selected method of bond swap.

Article 15. Bond swap plan

1. A bond swap plan includes the following contents:

a) The purposes of bond swap;

b) Terms and provisions of bond to be sold out (the bond code, quantity of bonds sold, issue date, maturity date, coupon rate, and method of payment of bond interest);

c) Terms and provisions of bond to be purchased

- Terms and provisions of bond additionally issued include: issue date, maturity date, coupon rate, and method of payment of bond interest.

- Terms and provisions of bond issued for the first time include: intended issue date; intended term; principle for determining coupon rate; method of payment of bond interest.

d) Planned time of bond swap.

dd) The limit on raised funds and estimated outstanding debts of the provincial-government budget before and after the bond swap.

2. After the bond swap plan prescribed in Clause 1 of this Article is approved by a competent authority, the Provincial-level People’s Committee shall send it to the Ministry of Finance for giving comments on the following contents:

- The quantity of bonds swapped.

- The limit on raised funds and estimated outstanding debts of the provincial-government budget before and after the bond swap.

- Terms and provisions of the sold bond and those of purchased bond.

Article 16. Discount interest rate

1. The Ministry of Finance shall decide the bracket of discount interest rate to determine price of the bond sold out and that of the bond purchased in each bond swap.

2. The Provincial-level People’s Committee shall carry out an agreement with the bond holder on the discount interest rate provided that it must be within the interest rate bracket imposed by the Ministry of Finance as regulated in Clause 1 of this Article.

Article 17. Bond swap procedures and swap fee

1. Swap procedures, swap fee and method of determining the price of municipal bonds sold out in swap shall be same as those for swap of Government bonds.

2. The Provincial-level People’s Committee shall be responsible for the efficiency of the swap of municipal bonds and report the swap result to the Ministry of Finance in accordance with regulations in Article 23 herein.

Chapter IV

PAYMENT OF BOND PRINCIPAL AND INTEREST, ACCOUNTING WORKS, ISSUANCE FEES AND PAYMENT FEES

Article 18. Payment of bond principal and interest

1. The issuer shall use its legal sources of funding to make payment of the bond principal and interest upon their maturity date.

2. The funding for paying principals and interests of municipal bonds issued to raise funds for investing in social – economic development and investment projects/ programs which must be funded by the provincial-government budget shall be covered by the provincial-government budget.

3. The funding for paying principals and interests of municipal bonds issued to raise funds for investing in investment projects/programs capable of capital recovery shall be derived from legal revenues generated from such projects/programs. If the revenues generated from a project are not enough to pay bond principal and interest when they mature, the Provincial-level People’s Committee shall use the funds from the provincial-government budget to make payment.

Article 19. Fees for bond issuance and fee for principal and interest payment

1. Issuance fee

Bidding fee, underwriting fee and brokerage fee shall be agreed upon between the Provincial-level People’s Committee and the bidders, the underwriters, the agents issuing municipal bonds. The fee for issuance of municipal bonds of each issuance method may be equal to but not exceed the fee for issuance of Government bonds in the domestic market through the same issuance method in accordance with prevailing regulations.

2. Fee for principal and interest payment

The fee for principal and interest payment of municipal bonds may be equal to the fee for principal and interest payment of Government bonds in accordance with prevailing regulations.

3. The funding for paying the issuance fee and the fee for principal and interest payment of municipal bonds shall be covered by the provincial-government budget.

Article 20. Accounting

The issuer and relevant units are responsible for accounting works in accordance with the Law on accounting, the Law on state budget and relevant applicable legislative documents on accounting.

Chapter V

INFORMATION PUBLISING AND REPORTING

Article 21. Brief report on each issue

Within seven (07) working days from the end of each issue of municipal bonds, the Provincial-level People’s Committee shall submit a report on detailed issuance results to the Ministry of Finance for consolidation and monitoring. The report template is provided in Appendix 3 enclosed herewith.

Article 22. Periodic and irregular reports

1. Within thirty (30) working days from the end of the budget year, the Provincial-level People’s Committee shall send the Ministry of Finance a written report on the raised funds, principal and interest payment of municipal bonds (using the template in Appendix 4 enclosed herewith).

2. Apart from reporting contents prescribed in Clause 1 of this Article, the Provincial-level People’s Committee is responsible for submitting reports as requested by the Ministry of Finance on certain extraordinary events.

Article 23. Report on each repurchase or swap of bonds

Within seven (07) working days from the end of the repurchase or swap of municipal bonds in accordance with regulations herein and relevant regulations, the Provincial-level People’s Committee shall submit a report to the Ministry of Finance on the following contents:

1. Code and quantity of repurchased bonds; code and quantity of bonds purchased in bond swap; code and quantity of bonds sold out in bond swap.

2. The interest rates of bonds purchased or swapped sorted by bond code.

3. The outstanding debts of the provincial-government budget and the outstanding municipal bonds before and after the repurchase or the bond swap.

Article 24. Publishing information after issue

Not later than seven (07) working days after the end of each issue of municipal bonds, the Provincial-level People’s Committee shall publish information about the issuance results of municipal bonds, including the quantity, term and interest rate of municipal bonds issued on its website, or on the website of the Provincial Department of Finance or the organization authorized to issue municipal bonds or the Stock Exchange.

Article 25. Annual information publishing

During the period from the date on which bonds are issued to the maturity date of bonds, the Provincial-level People’s Committee shall annually publish information on its website or on the website of the Provincial Department of Finance or the organization authorized to issue municipal bonds or the Stock Exchange. Information to be published annually:

a) The estimate on revenues and expenditures in the budget year of the provincial-government budget approved by the Provincial-level People’s Council shall be published within sixty (60) days from the date on which it is approved; in which, total revenue and total expenditure for balancing the provincial-government budget (including total recurrent expenditure and total capital expenditure) shall be specified.

b) The final statement on revenues and expenditures in the year preceding the budget year of the provincial-government budget approved by the Provincial-level People’s Council shall be published within sixty (60) days from the date on which it is approved; in which, total revenue and total expenditure for balancing the provincial-government budget (including total recurrent expenditure, total capital expenditure and total expenditure for principal and interest payment) shall be specified.

Chapter VI

ACTIONS AGAINST VIOLATIONS IN BOND ISSUANCE

Article 26. Suspending issuance of municipal bonds

1. The Ministry of Finance shall suspend issuance of municipal bonds in the following cases:

a) The Provincial-level People’s Committee does not adhere to the plan for issuance of municipal bonds approved by the competent authority in accordance with regulations herein.

b) The interest rate of municipal bonds exceeds the interest rate bracket notified by the Ministry of Finance.

c) The quantity of municipal bonds issued exceeds the limit prescribed in Clause 3 Article 5 herein.

2. The Provincial-level People’s Committee that commits any of the violations specified in Clause 1 of this Article during an issue of municipal bonds will have it and the next issues (if any) suspended.

3. The Provincial-level People’s Committee shall immediately suspend the issuance of municipal bonds as soon as the notification is received from the Ministry of Finance.

Article 27. Handling violations

Any violations against regulations herein committed by any organizations and/or individuals involved in the issuance of municipal bonds shall be handled depending on the severity of each violation in compliance with prevailing laws.

Chapter VII

RESPONSIBILITY OF RELEVANT AGENCIES

Article 28. Responsibility of Ministry of Finance

1. Fulfill duties prescribed in Articles 7, 9, 15, 16, 21, 22 and 26 herein.

2. Consolidate and inspect the adherence to regulations on information publishing and report on bond issuance, principal and interest payment of municipal bonds by the Provincial-level People’s Committees in accordance with regulations herein.

Article 29. Responsibility of Provincial-level People’s Council

1. Grant approval or authorize the Standing Board of the Provincial-level People’s Council to consider approving schemes for issuance of municipal bonds in accordance with regulations herein.

2. Grant approval for plans for repurchase of municipal bonds which are not mature or swap of municipal bonds submitted by the Provincial-level People’s Committee as regulated in Articles 12 and 13 herein.

3. Inspect the mobilization, management and use of funds raised from issuance of municipal bonds, the payment of bond principals and interests when they mature or the repurchase or swap of municipal bonds in accordance with regulations herein.

Article 32. Responsibility of Provincial-level People’s Committee

1. Formulate the scheme for issuance of municipal bonds and the plan for loan repayment, and submit them to the Provincial-level People’s Council for approval; submit the completed application for issuance of municipal bonds to the Ministry of Finance for consideration in accordance with regulations herein.

2. Submit the scheme for issuance of municipal bonds to the Provincial-level People’s Council or the Standing Board of the Provincial-level People’s Council for approval.

3. Take responsibility for the accuracy and truthfulness of information in the scheme for issuance of municipal bonds. Take responsibility for evaluating the project’s capacity of capital recovery and the solvency to pay bond principal and interest of the provincial-government budget with respect of projects which must be funded by the provincial-government budget.

4. Formulate the plan for repurchase or swap of municipal bonds and submit it to the competent authority for approval; implement the approved plan for repurchase or swap of municipal bonds in accordance with regulations herein.

5. Issue municipal bonds in accordance with regulations herein.

6. Use funds obtained from the issuance of municipal bonds in proper and efficient way in accordance with regulations of the Law on state budget, the Law on public debt management and their instructional documents; take responsibility for the use of funds obtained from the issuance of municipal bonds in compliance with prevailing laws.

7. Balance the provincial-government budget to ensure funding to pay principal and interest of municipal bonds when they mature in case where the municipal bonds are issued to raise funds for investing in projects which must be funded by provincial-government budget and where revenues generated from projects/programs capable of capital recovery are not enough to pay bond principal and interest in accordance with regulations herein.

8. Inspect the use of funds and recovery of capital to pay debts of investment projects capable of recovering capital in the province.

Chapter VIII

IMPLEMENTATION

Article 31. Implementation clause

1. This Circular shall come into force from August 01, 2015.

2. This Circular supersede the Circular No. 81/2012/TT-BTC dated May 22, 2012 by Ministry of Finance providing guidance on the issuance of municipal bonds in the domestic market.

3. Provincial-level People’s Committees and relevant units are recommended to report difficulties that arise during the implementation of this Circular to the Ministry of Finance for guidance./.

APPENDIX 1

 APPLICATION FORM FOR APPROVAL FOR THE SHEME FOR ISSUANCE OF MUNICIPAL BONDS
(Enclosed with the Circular No. 100/2015/TT-BTC dated June 29, 2015)

To: Ministry of Finance

- Pursuant to the Law on state budget No. 01/2002/QH11 dated December 16, 2002;

- Pursuant to the Law on public debt management No. 29/2009/QH12 dated June 17, 2009;

- Pursuant to the Law on securities No. 70/2006/QH11 dated June 29, 2006 and the Law No. 62/2010/QH12 dated November 24, 2010 on amendments to a number of articles of the Law on securities;

- Pursuant to the Government’s Decree No. 01/2011/ND-CP dated January 05, 2011 on issuance of government bonds, government-guaranteed bonds and municipal bonds;

- Pursuant to the Circular No. 100/2015/TT-BTC dated June 29, 2015 by Ministry of Finance providing guidance on issuance of municipal bonds, the People’s Committee of............... (province/city) hereby requests the Ministry of Finance to consider approving the Scheme for issuance of municipal bonds in.......(year) in order that the province/city...............may raise funds through the issuance of municipal bonds in the domestic market in.......(year) (enclosed with the Scheme for issuance of municipal bonds) with the following contents:

1. Name of the issuer;

2. Planned quantity of bonds to be issued

3. Intended terms of bonds

4. Planned form of issuance of municipal bonds

5. Planned face value

6. Planned method of issuance of municipal bonds

7. Intended issue date

This document is enclosed with the Scheme for issuance of municipal bonds approved by the People’s Council of.............. (province/city) or the Standing Board of the People’s Council of.............. (province/city) and the following documents: (specify documents enclosed herewith as regulated in Article 9 of this Circular).

The People’s People's of.............. (province/city) shall take responsibility for the accuracy and truthfulness of information in the Scheme for issuance of municipal bonds.

Looking forwards to the Ministry of Finance’s response as regulated./.

APPENDIX 2

 ISSUANCE OF MUNICIPAL BONDS THROUGH UNDERWRITING
(Enclosed with the Circular No. 100/2015/TT-BTC dated June 29, 2015)

1. Eligibility requirements for main underwriter or participant in the underwriter syndicate

a) Be a commercial bank, foreign bank branch, or securities company which is established and operates under the law of Vietnam, and is licensed to provide securities underwriting services in compliance with relevant laws.

b) Have the charter capital actually contributed at least equal to the legal capital as regulated relevant laws.

c) Have an operating period of not less than three (03) years.

d) Have experience in the area of securities underwriting and have performed at least one (01) bond underwriting contract.

dd) Submit application for becoming the main underwriter

2. Rights and benefits of main underwriter or participant in the underwriter syndicate

a) Negotiate and agree upon with the Provincial-level People’s Committee or its authorized agency on underwriting of bond issue.

b) Purchase bonds issued through underwriting under the underwriting contract signed with the Provincial-level People’s Committee or its authorized agency. The main underwriter may purchase bonds for himself/ herself or resell bonds to his/her customers.

c) Receive underwriting fee as negotiated with the Provincial-level People’s Committee or its authorized agency in accordance with regulations herein.

3. Procedures for selecting main underwriter or participant in the underwriter syndicate

a) At least 10 working days prior to the planned date of issuing municipal bonds through underwriting, the Provincial-level People’s Committee must publish on its website, or on the website of its authorized agency information about the plan for issuance of municipal bonds and invitation for registration as main underwriter or participant in underwriter syndicate. Information to be published:

- Information about the bonds to be issued, including: quantity; terms of bonds to be issued; intended date of issuance organization; date of issuance; maturity date; bond settlement date; method of principal and interest payment; account of the Provincial-level People’s Committee for receiving payments.

- Information about the selection of main underwriter or participant in underwriter syndicate, including eligibility requirements and standards of main underwriter or participant in underwriter syndicate as prescribed in Article 1 of this Appendix.

b) Any organization that meets all of eligibility requirements and desires to become the main underwriter or participant in underwriter syndicate shall send the application for registration as regulated in the notification of the Provincial-level People’s Committee. The application includes:

- The application form.

- The proposed plan for bond underwriting which includes the following contents: Particulars of the organization; Analysis, comments and forecast about the possibility of bond issuance through underwriting method; Implementation plan for expected underwriting; Commitments of the main underwriter or participant in underwriter syndicate and proposed underwriting fee.

- Commitments of the main underwriter.

- Documents proving its eligibility for becoming the main underwriter or participant in the underwriter syndicate, including:

+ Certified copy of business license;

+Audited financial statements of 03 preceding years;

+ Documents proving the organization's experience in the area of securities underwriting, including experience in bond underwriting (if any).

- The application for registration as the main underwriter or participant in underwriter syndicate must be sealed and sent to the Provincial-level People’s Committee or its authorized agency.

c) Within five (05) working days from the end of deadline for receiving applications for registration as main underwriter or participant in the underwriter syndicate, the Provincial-level People’s Committee or its authorized agency shall open the received applications, evaluate and select main underwriter or participant in underwriter syndicate according to the following grounds:

- Standards and conditions of main underwriter or participant in the underwriter syndicate.

- Capacity, experience and ability to organize the issue of municipal bonds of main underwriter or participant in the underwriter syndicate.

- The proposed underwriting fee.

d) The Provincial-level People’s Committee shall send written notification of the selection result of main underwriter or participant in underwriter syndicate to the applicants and publish it on the website of the Provincial-level People’s Committee or of its authorized agency.

dd) The Provincial-level People’s Committee or its authorized agency and the main underwriter or underwriter syndicate shall agree upon the contents and sign the principle contract for bond issuance underwriting.

4. Negotiating and organizing the bond issuance underwriting

a) Based on the interest rate bracket imposed by the Ministry of Finance, the Provincial-level People’s Committee (or its authorized agency) and the main underwriter or underwriter syndicate shall carry out a negotiation on the quantity, terms and provisions of bonds (term, interest rate, issue date, bond settlement date, selling price of bonds), the underwriting fee and other relevant contents. The price of municipal bonds issued through underwriting method shall be determined by adopting the principles for determining the selling price of Government bonds issued through underwriting method in the domestic market.

b) Based on the negotiation results, the Provincial-level People’s Committee (or its authorized agency) shall enter into the bond underwriting contract with the main underwriter or underwriter syndicate. The bond underwriting contract shall be used as the legal ground for determining rights and obligations of the underwriter syndicate; rights and obligations of the Provincial-level People’s Committee or its authorized agency.

c) Within the working day after the date on which the bond underwriting contract is signed, the Provincial-level People’s Committee (or its authorized agency) shall report the underwriting results to Vietnam Securities Depository and the Stock Exchange for carrying out procedures for registration, deposit and listing of bonds; and publish the underwriting results on the website of the Provincial-level People’s Committee or of its authorized agency.

5. Bond settlement

a) The settlement date of bonds shall be agreed upon by the Provincial-level People’s Committee and the main underwriter or underwriter syndicate and specified in the principle contract for bond issuance underwriting.

b) Not later than 16:00 PM of the bond settlement date as notified by the Provincial-level People’s Committee or its authorized agency, the main underwriter or member of the underwriter syndicate must ensure that total bond purchasing amount of the main underwriter or member of the underwriter syndicate (including the bond purchasing amounts of its customers) are credited in the payment account designated by the Provincial-level People’s Committee according to the registered quantity of bonds.

APPENDIX 3

TEMPLATE OF REPORT ON ISSUE OF MUNICPAL BONDS
(Enclosed with the Circular No. 100/2015/TT-BTC dated June 29, 2015)

PEOPLE’S COMMITTEE OF PROVINCE/CITY:......................

REPORT ON ISSUE OF MUNICIPAL BONDS

TIME OF ISSUE:............ IN..........

1. Issuance plan and result

2. Bond buyers

APPENDIX 4

TEMPLATE OF REPORT ON RAISED FUNDS AND PRINCIPAL AND INTEREST PAYMENT OF MUNICPAL BONDS
(Enclosed with the Circular No. 100/2015/TT-BTC dated June 29, 2015)

To: Ministry of Finance

Pursuant to Article 24 of the Circular No. 100/2015/TT-BTC dated June 29, 2015 on the issuance of municipal bonds, the People's Committee of......... (Province/City) prepares a report on the raised funds and payment of principal and interests of municipal bonds with the following contents:

1. Opening balance of funds raised from issuance of municipal bonds:................. billion VND.

2. Funds raised from issuance of municipal bonds in.......(year)

- 2-year term, quantity:.............billion VND.

- 3-year term, quantity:.............billion VND.

- 5-year term, quantity:.............billion VND.

........

3. Payment of principal and interest in the period:

- Payment of principal: ...........billion VND (date of payment).

- Payment of interest: ...........billion VND (date of payment).

4. Ending balance of funds raised from issuance of municipal bonds:................. billion VND.