In early October 2018, the Ministry of Finance (MOF) published the latest draft of a new Law on Securities with the objective to replace the Law on Securities No. 70/2006/QH11 (Securities Law No. 70) which came into effect on 01 January 2007 and Law No. 62/2010/QH12 amending and supplementing some articles of Securities Law No. 70 which came into effect on 01 July 2011.  

After more than ten years in force, Securities Law No. 70 and its amendment have some issues which cannot be solved, as follows:

1. Some regulations were not clear enough or no longer comply with the current situation and there is a lack of regulations to manage new factors. For example: the condition to implement public offerings is not clear enough so that it causes difficulties for both authorities and offering companies; a lack of regulations on the scope of offering, and timeline of offering that may cause a risk for investors; a lack of regulations on covered warrants and derivatives.
2. Some regulations of Securities Law 70 no longer comply with the other regulations. For instance, the administration structure of the Stock Exchanges and Securities Deposit, the business certificate of securities companies and securities investment fund management company do not comply with the Enterprises Law.
3. The violation of laws in the securities market is changing and is becoming increasingly complex, while the State Securities Commission of Vietnam (SSC) does not have the proper right to control... so that the administration is not as productive as expected.

A new law on securities is expected to make good the shortcomings of Securities Law No. 70 and its amendment, harmonize with the current legal system and also meet the requirements of administration reform. With the guidelines of building new law, it shall make a big impact to all including the public companies, both domestic and foreign investors, the authorities and related organizations.

The draft of the new law includes 10 chapters with 137 articles. Some important issues in the draft new law include:

1. New regulations on public and private offerings: New conditions of public offering and private offering have been added to the draft of new law. Accordingly, in an Initial Public Offering, the offering company needs to have charter capital of at least 30 billion VND instead of 10 billion VND as current laws and major shareholders must commit to jointly hold at least 20% of the charter capital of the issuing organization for at least one year from the date of closing of the offering.
2. The proportion of ownership for a foreign entity at a public company is unlimited, except for the case where an international agreement of which Vietnam is a member, or a specialized law, specifies the percentage of foreign ownership.
3. The draft of the new law also separates the registration procedures for the establishment of enterprises and the granting of business licenses for business lines which have to meet the condition before operating to ensure that securities business organizations could improve the quality of customer service and compliance with law. According to current laws, the operation certificate in the field of securities of a company is also the business registration certificate of that company.
4. The power of the SSC has been expanded. In inspection, examination or in handling violations, the SSC is entitled to:

• Request other entities having information or documents related to the scope of inspection or examination to supply or request them to explain;
• Request credit institutions and branches of foreign banks in Vietnam to provide information relating to transactions on investors’ accounts;
• Request telecommunication enterprises to provide the name, address, calling telephone number, receiving telephone number, and calling time for verification and handling of prohibited acts stipulated in this law.

As scheduled, the draft of the new law shall be submitted to the National Assembly to provideopinions in the 2^nd quarter of 2019 and shall be submitted to National Assembly for approval in the 4^th quarter of 2019.