Securities offering is one of the important stages of an enterprise; when they want to raise capital for the company. Under what circumstances is the public offering of securities suspended or canceled? So about the matter “When is the public offering of securities suspended in Vietnam?” Let’s find out with LSX in the article below.
Legal grounds:
- Securities Law 2019
What is a public offering of securities?
According to the Securities Law 2019 stipulates:
Public offering means an offer of securities to a large number of investors, excluding professional investors, or the use of advertising or public solicitation methods when making an offer.
Public offering of securities is an offer for sale of securities by one of the following methods:
+ Offer for sale through mass media;
+ Offer to 100 or more investors, excluding professional securities investors;
+ Offer to unspecified investors.
Features of the public offering
– Offering securities to the public on a large scale (widespread nature). Scale is reflected in such aspects as: offering securities to a large number of investors; large offering volume; the use of advertising or public solicitation in a public offering.
– In principle, registration with a competent state agency when offering securities to the public is a mandatory legal procedure. Therefore, the offering can only be made after the issuer has registered the offering with the competent state agency managing the securities market.
– Subjects offering securities to the public are very diverse, can be businesses, the Government or the local government.
– The purpose of a public offering of securities is to raise medium and long-term capital.
– Public offering of securities must meet the conditions and comply with the statutory process.
– The offering is usually conducted through an intermediary organization that is an underwriting company or a securities issuance agent.
– The offering is made on a large scale; attract a large number of investors to put capital to buy securities in the issuance.
– The total value of securities offered for sale usually has to reach a certain level in order to concentrate a large amount of capital, helping the issuer to implement a project to expand business or make new investment.
When is the public offering of securities suspended in Vietnam?
According to the provisions of Clause 1, Article 27 of the Law on Securities 2019, the suspension of a public offering of securities will be implemented by the State Securities Commission within a maximum of 60 days in the following cases:
+ The application file for registration of a public offering of securities contains false information and omits important contents that may affect investment decisions and cause damage to investors;
+ The distribution of securities did not comply with regulations.
How long does it take to decide on the suspension of a public offering of securities?
– Within 07 working days from the date on which the public offering of securities is suspended. The issuer must then:
+ To announce the suspension of the public offering of securities by the method specified in Clause 3, Article 25 of this Law
+ To withdraw issued securities if required by investors
Refund to investors within 15 days from the date of receiving the request.
– Within 07 working days from the date of notification of suspension cancellation, the issuer must announce the suspension cancellation by the method specified in Clause 3, Article 25 of this Law.
– When the shortcomings leading to the suspension of the public offering of securities are remedied, the State Securities Commission shall issue a written notice to cancel the suspension and the securities may continue to be offered for sale.
What is the responsibility of the securities issuer when the public offering of securities is suspended?
Within 07 working days from the date on which the public offering of securities is suspended, the issuer must announce the suspension of the public offering of securities by the method of publishing the Notice of Public Offering on the Internet. 01 electronic or printed newspaper in 03 consecutive issues and must withdraw the issued securities if requested by the investor, and return the money to the investor within 15 days from the date of receipt of the request. demand as prescribed in Clause 2, Article 27 of the Law on Securities 2019.
Under what circumstances will the public offering of securities be cancelled?
According to the provisions of Clause 1, Article 28 of the Law on Securities 2019, the cancellation of a notarized securities offering shall be decided by the State Securities Commission to cancel the public offering of securities in the following cases:
+ Expiry of the 60-day suspension period without remedying the deficiencies leading to the suspension of the public offering;
+ The initial public offering of shares does not meet the minimum ratio of 15% of the issuer’s voting shares sold to at least 100 non-shareholders. major shareholder of the issuer, in case the charter capital of the issuer is VND 1,000 billion or more, the minimum ratio is 10% of the voting shares of the issuer.
+ The offering of additional shares to the public for the purpose of raising capital to carry out the project of the issuer, the shares sold to investors do not reach at least 70% of the expected shares. sell.
In addition, the public offering of securities is canceled according to a legally effective judgment or decision of an arbitrator or a competent authority in accordance with law.
How is the responsibility to announce the cancellation of the offering of the issuing organization regulated?
According to the provisions of Clause 3, Article 28 of the Law on Securities 2019, within 07 working days from the date on which the public offering of securities is cancelled, the issuer must announce the cancellation of the securities offering to the public. to the public by the method of publication in 01 electronic newspaper or printed newspaper in 03 consecutive issues and must withdraw the issued securities and return money to investors within 15 days from the date of the offering. sale is cancelled. At the end of this period, the issuer must compensate the investor for damage according to the terms committed to the investor.
As such, the State Securities Commission has the authority to suspend and cancel the public offering of securities. Note, when a suspension occurs, the party offering securities to the public needs to remedy the issues that led to the suspension before the offering is cancelled.
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- Regulations for professional investors in securities in Vietnam
Frequently asked questions
– Authority: The State Securities Commission has the right to suspend the public offering of securities
– Term: up to 60 days.
According to the provisions of Clause 9 Article 4 of the Law on Securities in 2019; Derivative securities are financial instruments in the form of contracts, including options contracts, futures contracts, forward contracts, which confirm the rights and obligations of the parties to the payment, transfer delivery of a certain amount of the underlying asset at a specified price within a specified period of time or on a specified date in the future
According to the provisions of Clauses 3 and 4, Article 27 of the Law on Securities 2019, when the shortcomings leading to the suspension of the public offering of securities are remedied, the State Securities Commission shall issue a written notice to cancel the suspension. only and securities are continued to be offered for sale.
Within 07 working days from the date of receiving the notice of suspension cancellation, the issuer must announce the suspension cancellation by the method of publishing the Release Notice in 01 electronic or printed newspaper in 03 issues consecutive.
Conclusion: So the above is When is the public offering of securities suspended in Vietnam?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
