One of the methods for an issuer to offer securities to the public is to offer securities to 100 or more investors, excluding professional securities investors. So which individuals/organizations are regulated as professional securities investors?

In this article, BLawyers Vietnam summarizes the main regulation about professional securities investors under the laws of Vietnam.

1. Organizations/individuals considered professional securities investors

Professional securities investors (“PSIs”) are financially capable or professionally qualified for securities activities, including:

1. 1. 1. Commercial banks, foreign bank branches, financial companies, insurance business institutions, securities companies, securities investment fund management companies, securities investment companies, securities investment funds, international financial institutions, non-budgetary state financial funds, and state financial institutions, that may buy securities under relevant regulations;
      2. Companies with contributed charter capital of over VND100 billion (~ USD 4,200,000) or listed institutions or institutions with trading registration;
      3. Securities-practice certificate holders;
      4. Individuals that hold portfolios of listed securities or securities registered for trading valued at least VND2 billion (~ USD84,000); or
      5. Individuals that earn a taxable income of at least VND 01 billion (~USD42,000) in the latest year calculated up to the time when they are recognized as PSIs.

2. Which organizations/individuals can identify PSIs?

The organization/individual that has the authority to identify the statute of PSIs include:

1. 1. 1. Issuers and securities investment fund management companies shall identify or authorize securities companies to identify PSIs that purchase securities upon private placement.For 01 year from the day on which an investor is identified as a PSI by the securities company, the investor does not have to undergo the identification process again when trading privately placed securities or private fund certificates.
      2. The securities company where the investor purchases the securities shall identify whether such investor is a PSI before conducting the transaction of privately placed securities that are traded on the transaction systems of Stock Exchanges.
      3. The registering or depositing organizations shall identify PSIs before the transfer of ownership of privately placed securities that are not traded at Stock Exchanges.

3. Documents serving identification of professional securities investors for individuals

1. 1. 1. For holders of securities practice certificates
         • The documents are:
           • Unexpired ID card or passport; and
           • Unexpired securities practicing certificate.

            

      2. For individuals that hold portfolios of listed securities or securities registered for trading valued at least VND2 billion (~ USD84,000)
         • The documents are:
           • Unexpired ID card or passport; and
           • Certification by the securities company where the investor opens the securities trading account of market value of listed or registered securities when the individual is identified as a professional securities investor.
      3. For individuals who earn a taxable income of at least VND1 billion (~USD42,000)
         • The documents are:
           • Unexpired ID card or passport; and
           • Tax declaration dossier submitted to the tax authority or tax deduction documents of the latest year before the individual is identified as a PSI.

The above is not official advice from BLawyers Vietnam’s lawyers. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. BLawyers Vietnam would love to hear from you.

Date: 02 August 2023

Writer: Tinh Nguyen