Transparency in securities offering

Madam, Law No. 56/2024/QH15 has completed regulations to strengthen supervision and strictly handle fraudulent and deceptive acts in the issuance and offering of securities, especially creating fake securities prices and supply and demand. Could you share more specifically about these contents?

Compared to the old regulations of the Securities Law 2019, the recently amended Securities Law for the first time provides detailed concepts of acts considered as stock market manipulation.

It is the act of using one or more personal or other people's trading accounts to collude to continuously buy and sell securities to create artificial supply and demand; placing buy and sell orders for the same type of securities on the same trading day or colluding with each other in buying and selling securities, but not actually transferring ownership, ownership only rotating between members of the group.

In addition, acts considered as stock market manipulation include: Continuously buying or selling securities with a dominant volume at the time of opening and closing the market; trading securities by colluding and enticing others to continuously place orders to buy and sell securities, greatly affecting supply and demand and stock prices; giving opinions directly or indirectly through the media about a type of security or a securities issuing organization, in order to influence the price of securities after the transaction; using methods or performing other trading acts, spreading false rumors, providing false information to the public to create fake supply and demand...

These regulations are supplemented and legalized, based on the reality of recent violations, contributing to reducing fraudulent acts and enhancing the ability to protect investors' rights. This strengthening of the legal framework creates conditions for the market to develop more transparently and sustainably.

So, what are the new points to enhance the responsibility of public companies in information disclosure, as well as tighten the conditions for organizations participating in securities transactions and activities, madam?

The new Securities Law has added more conditions for a business to become a public company. Specifically, a public company is a joint stock company that falls into one of two categories: a company with a contributed charter capital of VND30 billion or more, an equity capital of VND30 billion or more, and at least 10% of voting shares held by at least 100 investors who are not major shareholders.

Or the company has successfully conducted an initial public offering through registration with the State Securities Commission (SSC) as prescribed.

Thus, it can be seen that, with the addition of the condition that the owner's equity must be from 30 billion VND or more, the new Law has emphasized the financial capacity of public companies, indirectly tightening the conditions for organizations participating in securities transactions and activities.

In addition, it is noteworthy that this time the Law has also added many more cases in which a public company's public company status is revoked compared to the previous regulations. Specifically, in addition to the revocation of status due to no longer meeting one of the conditions of a public company as prescribed, Law No. 56 also adds the following cases: Failure to disclose information for 2 consecutive years on audited annual financial statements; Failure to disclose information for 2 consecutive years on resolutions of the Annual General Meeting of Shareholders.

Furthermore, Law No. 56 also gives the State Securities Commission additional authority to base on the list of shareholders provided by the Vietnam Securities Depository and Clearing Corporation or the company's most recent audited financial statements to self-cancel the status of a public company, without receiving notice from the enterprise.

This regulation has "relieved difficulties" for current public companies, because in many cases it is impossible to cancel "public company status" due to lack of shareholder cooperation or there are companies that do not voluntarily and strictly comply with the regulations, affecting the interests of investors.

How do you assess that the new regulations will contribute to creating favorable conditions for foreign investors to trade?

The Law has added foreign individuals and organizations established abroad conducting investment and business activities in Vietnam to be considered professional securities investors. This is a new point compared to the old regulations in the Securities Law 2019.

This contributes to upgrading the Vietnamese stock market in the international arena and creating more favorable conditions for foreign stock investors when deciding to invest in Vietnam.

The amended Securities Law also completes the legal basis for implementing clearing and settlement activities for securities transactions in the market according to the central clearing counterparty mechanism in the Vietnamese securities market to remove practical obstacles, attract foreign capital flows, and promote the development of the stock market with the goal of upgrading the market by 2025.

Thank you very much!