Following the issuance of the new Securities Law 2019, in November 2020, the Ministry of Finance issued Circular 96/2020 guiding on disclosure of information on securities market (Circular 96/2020) with effect from 1 January 2021. Circular 96/2020 includes several new points as follows:

Definition of “transaction date” and “transaction completion date”.  

Circular 96/2020 provides detailed description to define a “transaction date” and “transaction completion date”. The detailed description will help clarify the disclosure obligations of the entities subject to disclosure obligation. 

For example, transaction date is:

• The date on which the trading order is excocted on the stock exchange, if the transaction is conducted via a stock exchange;
• The date on which the parties request the Vietnam Securities Depository Corporation (VSD) to transfer the relevant securities in case the transaction is conducted directly at the VSD; 
• The date on which the bid is submitted in case the transaction is conducted by way of auction; and
• The date on which the relevant investors register to exercise the right to purchase or convert into shares if the investors hold option or convertible bonds.

Disclosure by public companies, listed companies and large public companies

• A public company must now report on its corporate governance within 30 days from the end of 06 first months of the year and the end of the calendar year. Under Circular 155/2015, this obligation applies to listed companies only;
• There is no ground for a public company asking the State Securities Commission (SSC) for delaying disclosure of its financial statements. Under Circular 155/2020, a public company may ask the SSC for approval to delay disclosing its financial statements for up to 100 days. 
• When organizing a shareholder meeting, a public company does not need to publish: form of power of attorney, details of candidates for Board members, supporting documents for shareholders’ decision;
• A public company must make an immediate disclosure when one of its banks notices that there is evidence of fraud or violation of law relating to the bank account of the public company.  This is a new requirement under Circular 96/2020;
• A public company must make an immediate disclosure when it receives resignation notice from its internal persons (e.g., Board directors, general director, or chief accountant). This is a new requirement under Circular 96/2020;
• A public company must make an immediate disclosure when it enters into transactions having value of 15% or more of the total assets of the company. Under Circular 155/2015, this requirement only applies to listed companies for sale and purchase transactions; and
• A public company is no longer required to disclose material financing transactions. Under Circular 155/2015, a public company must disclose financing transaction which results in the total indebtedness of the company exceeding 30% of the owner equity;
• Under Circular 96/2020, the SSC will not establish a list of large public companies. Instead, a public company must determine whether it is a large public company (i.e., having paid-up charter capital of VND 120 billion or more); and
• A listed company or a large public company is no longer required to make an immediate disclosure if there is a loss of 10% of the owner equity or total assets of the company. 

Disclosure by public bond issuers 

A company makes a public issuance of corporate bonds is now subject to several additional disclosure obligations. In particular, 

• A public bond issuer being a joint stock company must disclose its annual report and annual resolution of the shareholders meeting;
• A public bond issuer must disclose the repayment status of its bonds every six months;
• A public bond issuer must make immediate disclosure in all situations applicable to a public company (i.e., 18 out of 18). Under Circular 155/2015, a public bond issuer only needs to make immediate disclosure in 5 out of 18 situations applicable to a public company. 

Information disclosure by securities companies, securities investment fund management companies 

Circular 96/2020 provides 06 more circumstances when these entities must make an immediate disclosure, compared with Circular 155/2015. These are: 

• There is a charge or decision on detention or criminal prosecution against a certified securities professional of the company or branch; 
• SSC issues a decision to approve changes in business lines of a branch; establishment of an overseas subsidiary; indirect outward investment; SSC issues a decision to approve the provision of online securities trading services; provision or cooperation with credit institutions granting loans for purchase of securities or securities lending; provision or cooperation with credit institutions in advancing payment for securities; securities depository; clearing and payment for securities; provision of other derivative-related services; 
• SSC issues a decision on offering or listing of securities in a foreign country; 
• The securities company voluntarily terminates or suspends provision of one of securities trading operations, products and services; and 
• The securities company faces an information technology incident that affects the conduct of securities transactions for clients.

Information disclosure by public funds and public securities investment companies

Circular 96/2020 requires a public fund and public securities investment company to make immediate disclosure in the following situations: 

• ratification of decisions of the General Meetings of Investors; 
• issuance or revocation of the certificate of public offering of public fund certificates; 
• change of the fund's name; and 
• breaches of investment limits. 

Circular 96/2020 removes certain disclosure requirements for closed-end fund and information disclosure of real estate investment funds and real estate investment companies. In addition, a public fund does not need to disclose when a decision on replacement, appointment, re-appointment or dismissal of an executive officer of the public fund is made.

This post is written by Tran Duc Long and Nguyen Quang Vu.