You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

March 21, 2025

Vietnam’s Amended Securities Law: What You Need to Know

Subscribe to Updates

Vietnam’s Law on Securities of 2019 was one of several laws amended (“Amended Securities Law”) under the wide-ranging Law No. 56/2024/QH15 passed by the National Assembly on November 29, 2024. The amendments came into force on January 1, 2025, with certain provisions related to professional securities investors and the eligibility criteria for public companies becoming effective on January 1, 2026.

Below are some of the key points of the Amended Securities Law.

Changes to Professional Securities Investors

Professional securities investors (PSIs) are investors who have adequate financial capacity or securities qualifications and can participate in private placements and private funds, among other investment activities. Under the Amended Securities Law, foreign investors, including individuals and organizations, are now automatically classified as PSIs, without having to meet any requirements regarding financial capacity. This loosening of requirements is expected to attract more foreign investment.

However, from January 1, 2026, individual PSIs will only be able to purchase, trade, and transfer privately placed corporate bonds that: (i) have been given credit ratings and are secured by collateral, or (ii) have been given credit ratings and covered by payment guarantees from credit institutions. Meanwhile, institutional PSIs will not be bound by these restrictions relating to privately placed corporate bonds.

Protecting Shareholders in Private Securities Issuance

The Amended Securities Law introduces additional conditions for private issuance of shares, convertible bonds, and warrant-linked bonds by public companies, and revises the required contents in the issuance plans from “criteria and number of investors” to “number of shares, offering price, or principles for determining the offering price.” This change promotes shareholder supervision and protects minority shareholders from overly powerful boards of directors.

Expanded Powers of SSC

The Amended Securities Law grants the State Securities Commission (SSC) new powers to suspend and cancel private placements of securities and adds new circumstances for the SSC to cancel public offerings.

The SSC may suspend a registered private placement of securities for up to 60 days: (i) if the offering documents contain misleading information or omit material information that could impact investment decisions and cause damage to investors, or (ii) if the distribution of the securities does not comply with statutory requirements. The issuer must announce the suspension within 7 business days from the suspension and recall the issued securities upon the investor’s request as well as provide a refund to the investor within 15 days from the investor’s request. If deficiencies leading to the suspension are corrected, the SSC will issue a written notice of withdrawal of the suspension. As a result, such private placement will be allowed to proceed.

The SSC may cancel a registered private placement of securities if (i) the issuer fails to address deficiencies leading to the suspension within the suspension period; (ii) the offering documents or the distribution of the private placement of shares are found to have violated the law while the issued shares are not yet listed or registered for trading on the stock exchange; or (iii) the offering documents or the distribution of the securities upon completion of private placement are found to have breached the law. Cancellation of the private placement does not apply to offered shares, shares converted from convertible bonds, or shares purchased from warrants that have been listed or registered for trading on the stock exchange after the private placement.

Under the Amended Securities Law, the SSC may now cancel a public offering if the offering documents or the distribution of the public offering are found to have violated the law after the public offering, but before completion of procedures to be listed or registered for trading on the stock exchange.

Liability Framework for Public Companies, Shareholders, and Advisors

Previously, issuers, underwriters, auditors, and “certifying organizations” were liable for the legality, accuracy, and sufficiency of securities-related documents and reporting during public offerings or when registering securities for listing or trading. The Amended Securities Law extends this liability to private offerings of securities, public disclosures by public companies or their shareholders, and reporting of secondary trading of securities by investors. Further, advisors involved in these activities may be exposed to greater liability for their failure to adhere to professional standards.

This change pushes public companies, their shareholders, and advisors to be more accountable and enhance the transparency in the securities market. They must ensure that all documents and information related to public disclosures and securities trading do not have misleading information and comprehensively include all material facts that could influence decisions by investors, authorities, and other stakeholders.

Defining “Securities Market Manipulation”

The Amended Securities Law updates the acts of “securities market manipulation” as outlined in the 2015 Penal Code to align the definitions of securities market manipulation under securities law and criminal law, closing any gaps between the two. This change aims to imposes administrative liability for market manipulation that does not reach threshold for criminal liability.

Other Changes

The Amended Securities Law adds additional grounds for the cancellation of public company status, which include a public company (i) failing to publish its audited financial statements or annual shareholder meeting resolutions, for two consecutive years; (ii) failing to register its shares with the Vietnam Securities Depository and Clearing Corporation; or (iii) failing to register its shares for listing.

Privately issued corporate bonds offered before January 1, 2026, will adhere to the 2019 Securities and the 2020 Law on Enterprises until the principal and interest are fully paid. Privately issued corporate bonds disclosed to the stock exchange before January 1, 2026, but not yet distributed will follow the same laws until distribution is complete, after which they will comply with the Amended Securities Law.

A public company repurchasing shares from employees in accordance with an employee stock ownership program does not need to reduce charter capital, but only needs to report the total number of repurchased employee shares at the nearest annual general meeting of shareholders. Accordingly, the Amended Securities Law is implicitly reviving treasury shares as previously outlined in the expired 2006 Securities Law, allowing public companies to hold treasury shares after the effective date of the 2019 Securities Law for this limited case of repurchased employee shares. This amendment is paired with an exception to the 6-month blackout period for issuing new shares after a share repurchase for repurchase of shares from leaving employees according to the employee stock ownership program.

Outlook

The Amended Securities Law aims to significantly strengthen governance, increase robustness, and provide better protection for investors in Vietnam’s securities market. This initiative should help address evolving challenges, upgrade the local market, and ensure alignment with international practice.

Related Professionals

Practices

Banking and Finance

Capital Markets

Location

RELATED INSIGHTS​ 

December 15, 2023
As part of its membership in Lex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2023. This guide outlines the key factors for starting and operating a business in the Thai market. Issues covered include: Investment incentives Financial facilities Exchange controls Import and export regulations Structures for doing business Requirements for the Establishment of a Business Operation of the Business Cessation or Termination of the Business Labor legislation, relations, and supply Tax Immigration requirements This publication is part of Lex Mundi’s Country Guides series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource for planning international business strategy and researching new markets. The full Guide to Doing Business in Thailand is available through the button below.
Read More
December 8, 2023
In a significant development on December 5, 2023, the Central Bank of Myanmar (CBM) issued Letter No. FE-1/2937 granting authorized dealer licensed banks (ADLBs) the authority to freely transact in foreign currency trades, buying and selling at the market exchange rate for Myanmar kyat (MMK) as proposed by buyers and sellers through online trading platforms. Offshore remittances, however, must comply with the remittance criteria set by the Foreign Exchange Supervisory Committee. The online trading platform Refinitiv, initiated in June 2022 under the CBM’s guidance, facilitates the buying and selling of foreign currency between ADLBs and between banks and customers. The initiative was implemented in accordance with CBM Letter No. FE-1/789, dated June 21, 2023. The platform’s inception saw the exchange rate set at over MMK 2,900 per USD 1. Then, in August 2023, the CBM ordered banks and traders to limit foreign exchange transactions to an approved online trading platform, again with the exchange rate fixed at MMK 2,900 per USD 1. Transactions outside of online trading platforms continue to be governed by the exchange rate set by the CBM of 2,100 MMK per USD 1. Conversion Rules for Exporters On December 6, 2023, the CBM issued Notification No. 26/2023 lowering the percentage of Myanmar companies’ export earnings in foreign currency subject to mandatory conversion into MMK from 50% to 35% at the current official exchange rate set by the CBM at USD 1 to MMK 2,100. This mandatory conversion must follow the requirements for mandatory conversion of foreign currency, which remain in effect. For more details on foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].
Read More
December 7, 2023
Thailand’s Securities and Exchange Commission (SEC) has updated its regulations regarding public initial coin offerings (ICOs) that exhibit debt-like or infrastructure-backed characteristics. These new regulations are set to transform the landscape for digital fundraising, ensuring enhanced investor protection and risk mitigation. The introduction of these regulations is a major move toward cultivating a more transparent and secure digital token market in Thailand. It highlights the importance of comprehensive information disclosure and aligning digital-asset fundraising practices with established financial standards. The adjustments require more collaboration between token issuers and ICO portals to comply with the developing regulatory environment. The key features of the new regulations, which took effect on November 16, 2023, are summarized below. Debt-Like ICOs Debt-like digital tokens are digital tokens for which a fixed rate of return is predetermined. The rate does not vary based on the performance of the project or enterprise, but it may be supplemented by extra returns. To ensure that investors have access to adequate and essential information prior to making informed investment decisions, and to evaluate the risk of default by the issuer, the regulation requires disclosure of the project’s creditworthiness and risk assessment factors, as detailed below. Project creditworthiness. Disclosures about project creditworthiness should include information about the credibility assessment of the project, which should be conducted reasonably by an ICO portal or an independent expert. Risk assessment factors. Disclosures should include information about the factors considered in the assessment of risks—particularly the financial capability to repay the investment project’s debt. Infrastructure-Backed ICOs Infrastructure-backed digital tokens are issued for investment in infrastructure assets or to earn a share of the revenue stream from infrastructure projects. The regulations for the ICOs of these infrastructure-backed tokens have been revised to align with those for infrastructure trusts. These regulatory updates cover various aspects: Definition
Read More
December 6, 2023
Over the past two years, Laos has experienced a sharp depreciation in the value of the kip (LAK) against foreign currencies. To thwart this depreciation and get its currency back on track, the government took a series of measures and issued the Law on Foreign Exchange Management No. 15/NA of July 7, 2022 (the “FX Law”) to improve management of the foreign currency and reiterate restrictions on foreign currency in the country. The amended law also aimed to strengthen foreign exchange liquidity and increase the reserve of foreign currency held in Laos. This year, the prime minister of Laos issued the Order on the Implementation of Foreign Exchange Management, which came into force on July 14, 2023. The order addresses foreign currency use, movement, and possession and clarifies administrative roles regarding the FX Law. This article outlines some of the key points related to the FX Law and the prime minister’s recent order. Use of Foreign Currency Other than a major relaxation regarding remuneration for foreign employees, the amended FX Law retains Laos’ strict regulatory approach to the use of foreign currencies. The general rule is that foreign currency payments for goods, services, debt, dividends, or taxes are prohibited; these payments must be in LAK. The amended law also seems to prevent suggestions that a price in LAK may be adjusted based on another currency. One of the few exceptions to these requirements is for the export of goods and services abroad, in which case it is acceptable to receive payment in foreign currencies. Similarly, the import of goods may allow payment in foreign currency. Announcements or advertisements of the price of goods or services in a foreign currency are likewise prohibited, as is offering a salary in foreign currency when advertising a job in Laos. Similarly, employees’ remuneration,
Read More