Currently, many businesses choose to offer their securities privately instead of offering them to the public. So how is the private placement of securities regulated by law? So, go with Lawyer X to find out more about the above issue.
Legal grounds
Law on Securities 2019
Decree 155/2019/ND-CP Guiding the Law on Securities
Consulting content
Conditions for a private placement of securities
Conditions for a private placement of securities by an issuer that is not a public company
Article 30 of the Law on Securities 2019 stipulates: “Private securities offering by an issuer that is not a public company shall comply with the provisions of the Enterprise Law and other relevant laws”
Conditions for a private placement of shares; individual convertible bonds; bonds with individual warrants of public companies
– There is a decision of the General Meeting of Shareholders to approve the issuance plan; use the proceeds from the offering; clearly define the criteria and number of investors;
– Besides, participants in the offering only include strategic investors, professional stock investors;
– The transfer of shares offered for private placement, convertible bonds offered for private placement; bonds with warrants for private placement are limited to at least 3 years for strategic investors; at least 01 years for professional securities investors from the date of completion of the offering;
– Then, except for the case of transfer between professional securities investors or judgment enforcement; the Court’s decision has taken legal effect; so, the decision of the Arbitrator or inheritance as prescribed by law;
– Individual stock offerings and individual convertible bonds; Bonds with individual warrants must be spaced at least 06 months from the end of the latest offering.
– The offering of shares; conversation bonds into shares; The exercise of warrants must satisfy regulations on foreign investors’ ownership ratio as prescribed by law;
Note:
Securities Company; a securities investment fund management company that is not a public company offering individual shares; Individual convertible bonds, bonds with individual warrants must meet the above regulations
Conditions for a private placement of bonds by public companies that do not fall within the above conditions
– There is a decision of the General Meeting of Shareholders or the Board of Directors to approve the issuance plan; use the proceeds from the offering; clearly define criteria, quantity, and investors;
– Besides, participants in the offering only include professional securities investors;
– The transfer of bonds for private placement can only be done between professional securities investors, except for cases by a legally effective court judgment or decision, an arbitrator’s decision. or inheritance as prescribed by law;
– Moreover, fully pay both principal and interest of offered bonds or fully pay due debts for 03 consecutive years before the bond offering (if any), except for the case of bond offering to creditors. is the selected financial institution;
– Then, having financial statements for the year immediately preceding the year of issue audited by an approved auditing organization;
– Satisfy financial safety ratios and operational safety ratios as prescribed by law (if any).
Conditions for a private placement of bonds of securities companies, securities investment fund management companies that are not public companies
▪ There is a decision of the General Meeting of Shareholders or the Board of Directors or the Board of Members or the company owner to approve the issuance plan and use the proceeds from the offering; clearly define criteria and number of investors;
▪ Satisfy the provisions at Points b, c, dd, and e, Clause 2, Article 31 of this Law.
Order and procedures for a private placement of shares
Step 1: The issuer sends the application for registration of a private placement of shares to the State Securities Commission.
Step 2: Within 07 days, the State Securities Commission has approved in writing; posting on the website; in case of refusal, must reply in writing and clearly state the reason.
Step 3: The issuer must complete the private placement within 90 days; from the date of the State Securities Commission’s written approval.
Step 4: Within 10 days from the end of the offering; the issuer must send a report on the results of the offering together with the bank’s confirmation; the foreign bank branch where the escrow account is opened on the proceeds from the offering to the State Securities Commission; disclose information on the website of the issuer, the Stock Exchange about the results of the offering.
Step 5: Within 03 days; The State Securities Commission shall notify in writing the receipt of the report on the results of the offering to the issuer; send it to the Stock Exchange, the Vietnam Securities Depository and Clearing Corporation; posted on the website of the State Securities Commission on the receipt of the report on the results of the offering.
Step 6: The issuer is required to stop freezing the proceeds from the offering.
Dossier for registration of private placement of shares of a public company
A dossier of registration for a private placement of shares of a public company includes:
– Registration form for sale made according to Form No. 10 in the Appendix issued together with Decree 155;
– Decision of the General Meeting of Shareholders approving the issuance plan; plan to use the proceeds from the offering.
– Similarly, decision of the Board of Directors to approve the application for registration of the offering.
– Decision of the General Meeting of Shareholders or the Board of Directors.
– Then, the commitment of the issuer not to violate the regulations on cross-ownership of the Enterprise Law.
– Bank confirmation document; foreign bank branches on opening an escrow account to receive money to buy shares of the offering.
– Documents providing information about the offering to investors (if any).
– Similarly, documents using the proceeds from the offering (if any).
Related article:
Conditions for securities company establishment in Vietnam
Current Vietnamese legal regulations on securities listing
Frequently asked questions
Simple release procedure.
The amount of capital mobilized is small.
The number of issued securities is not much.
Not widely conducted to the public, less attractive to investors due to insufficient capital as well as conditions to issue to the public.
Limited release conditions.
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Cost: Besides, Lawyer X’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
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