Circular 69/2023/TT-BTC: Reshaping Vietnam’s Securities Market
Caption: Headquarters of The Ministry of Finance (MoF). MoF has recently released Circular 69/2023/TT-BTC, amending and supplementing several articles of Circular 57/2021/TT-BTC issued on July 12, 2021. Photo MoF
A Step Towards Transparency
In a significant move aimed at enhancing market liquidity and information transparency, the Ministry of Finance in Vietnam has issued Circular 69/2023/TT-BTC. This circular amends and supplements key provisions from Circular 57/2021/TT-BTC, originally enacted on July 12, 2021. With an effective date set for December 30, 2023, the changes are poised to reshape various trading markets in Vietnam, including stock, bonds, derivatives, and other securities.
Comprehensive Reorganization
One of the cornerstone objectives of Circular 69 is the systematic reorganization of the trading landscape. The Ho Chi Minh City Stock Exchange (HoSE) is tasked with restructuring its trading operations for stocks, fund certifications, and covered warrants in accordance with existing Securities Law and related regulations. This reorganization is not merely administrative; it aims to ensure a more coherent and efficient market flow, set to be completed by December 31, 2026.
New Listing Applications
As part of its restructuring mandate, HoSE will be responsible for accepting and reviewing new stock listing registration applications from eligible organizations. To qualify, these organizations must adhere to listing conditions set forth in Decree No. 155/2020/NĐ-CP, which was established on December 31, 2020. One key stipulation is that organizations need to prove a contributed charter capital of at least VNĐ120 billion (approximately $4.9 million) at the time they submit their listing applications. The window for submitting these applications will remain open until July 1, 2025.
Transfer Procedures from HNX to HoSE
Circular 69 also introduces mechanisms for the transfer of shares from organizations listed on the Hà Nội Stock Exchange (HNX) to HoSE. By December 31, 2025, HoSE must complete this transfer of shares, aiming to consolidate securities trading activities within a unified market framework. This effort seeks not only to streamline processes but also to align more closely with international best practices.
New Standards for HNX
In accordance with the new guidelines, HNX is also set to continue its operations until the specified deadlines. Organizations meeting the necessary listing conditions, with a contributed charter capital of at least VNĐ30 billion, can apply for listing registration with HNX before July 1, 2025. However, once this date passes, HNX will cease to accept new stock listing applications, effectively channeling all future listings to HoSE.
Handling Pending Applications
What happens to organizations that submitted listing applications to HNX before the cutoff date, but whose applications remain unapproved? Circular 69 mandates that HNX must transfer the pending listing registration dossiers to HoSE by July 8, 2025. This transfer ensures a seamless continuation of the application process under the newly established regulations, allowing HoSE to handle these registrations in compliance with current legal frameworks.
Adapting to New Regulations
In instances where HoSE receives a listing registration dossier that does not meet the required VNĐ120 billion charter capital but remains pending approval after the circular’s effective date, HoSE is obliged to forward that dossier back to HNX. This ensures that all applications are processed correctly according to the specified legal regulations within five working days from Circular 69’s effective date.
Impact on Investor Confidence and Market Stability
The implementation of Circular 69/2023/TT-BTC signifies a crucial chapter in Vietnam’s ongoing efforts to enhance its capital markets. By promoting transparency and adherence to international standards, these measures are expected to bolster investor confidence. Ultimately, improving the efficiency and effectiveness of securities trading will contribute to achieving broader economic goals and facilitating sustainable growth.
The ongoing reforms highlighted by Circular 69 represent a proactive strategy in modernizing Vietnam’s financial markets, ensuring they are not only efficient but also equitable and accessible to a wider range of investors.