On 26 June 2015, the Government issued Decree No. 60/2015/ND-CP to amend and supplement certain provisions of Decree No. 58/2012/ND-CP on detailing and guiding the implementation of certain provisions of the Law on Securities and the Law on amending and supplementing certain provisions of the Law on Securities (“Decree 60”).
More flexible foreign ownership ratio in public listed companies
Previously, foreign ownership ratio in public listed companies is the same for all sectors and subsectors. Decree 60 now provides different foreign ownership ratio for each sector and subsector, in particular:
- Requirements on foreign ownership limits in international treaties to which Vietnam is a party will prevail;
- In case public listed companies do business in sectors, subsectors where foreign ownership limits are stipulated by the investment law and its related requirements, such limits will apply;
- In case public listed companies do business in conditional sectors or subsectors applicable for foreign investors but there is not yet a specific requirement on foreign ownership limit, such limit would be 49%;
- In case public listed companies do business in different sectors or subsectors with different requirements on foreign ownership limits, the applicable foreign ownership limit will not exceed the lowest foreign ownership limit required for sectors or subsectors that the company does business in, except otherwise stipulated by the international treaties;
- There would be no limit on foreign ownership ratio for other public listed companies, except otherwise stipulated by the company’s charter.
Decree 60 is thus expected to have a positive impact on the development of the securities market by attracting more foreign investment in the market and expedite the current equitization process.
Unlimited foreign investment in Government bond
Decree 60 allows foreign investors to make unlimited investment in Government bonds, bonds guaranteed by the Government, bonds of the provincial authority or enterprises. Foreign investors may also invest in securities investment fund certificates, shares of securities investment companies, non-voting shares of public listed companies, derivative securities, and depository receipts without limit.
New delisting requirements
If the listing company does not meet the listing requirements after its offer for sale, issues 50% or over of its existing shares in exchange for shares or contribution part in another company, the securities delisting is compulsory.
The company may also voluntarily delist their securities with the condition that there is approval of at least 51% of the voting shares of all shareholders (not including major shareholders) instead of 50% in the previous requirement. The delisting can only be conducted after at least two years from the listing date on the stock exchange.