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 8, 2022
The rapidly growing middle class in Southeast Asia is bringing with it increased household wealth, increased consumption, and increased investment. As a result, the commercial banking sector has seen a boom in the more economically developed countries of the region—especially in Thailand. A select few foreign banks have also been very successful in Cambodia, Laos, Myanmar, and Vietnam for many years, but as other banks seek to replicate their Thai success in these new markets, the field looks likely to become much more crowded in coming years. Six major Thai banks are active in at least one other jurisdiction in mainland Southeast Asia, with some already operating across them all, and many larger international banks also beginning to take note. Amid that background, this guide examines the legal frameworks for foreign banks seeking to operate in these jurisdictions, and addresses some current and upcoming developments that investors should note. The full guide is available as a PDF through the button below.
Read More
November 3, 2022
On October 31, 2022, the Department of Trade in Myanmar’s Ministry of Commerce announced that payments for importation at the border are to be made via bank transaction. This announcement comes into force with Import/Export Newsletter No. 10/2022, dated October 31, 2022, issued by the Department of Trade, with the purpose of implementing a systematic payment system for import and export at the border, in accordance with a suggestion made by the Financial Action Task Force (FATF), an international financial watchdog. (This follows the recent news that the FATF has blacklisted Myanmar.) This requirement means that only bank transactions will be accepted for import payments in the border trade. Initially, this system will be applied to trade at the Myanmar-Thailand border only. The new requirement to pay for imports only via bank transaction states that export earnings and other types of foreign currency earnings (including salary and income remitted by Myanmar workers overseas) will be allowed to be used for imports. Importers are required to make the payments for import goods—using these earnings—via their banks. That is, Importers operating in the border trade must have foreign currency earnings received through official banking channels and must make import payments abroad through official banking channels using those earnings. In contrast to previous practices, they are unable to use other sources of income and are not able to make other payment arrangements that do not involve bank transactions. The procedures for importation at the Myanmar-Thailand border are as follows: Companies applying to the Department of Trade for an import license must produce credit advice and original bank statements that prove the receipt of export earnings or other earnings into their bank account. The Department of Trade will scrutinize the reported export earnings or other earnings, and approve the import license for an
Read More
October 31, 2022
On October 21, 2022, the Financial Action Task Force (FATF) added Myanmar to the list of high-risk jurisdictions having significant deficiencies to counter money laundering, terrorist financing, and financing of proliferation. The FATF is an international financial watchdog that aims to impede global money laundering and terrorist financing. It is a policymaking body that monitors implementation of FATF Recommendations and FATF Standards and is not binding as a supervisory authority for financial institutions. Myanmar will remain on the list of countries subject to a call for action until the country has implemented an action plan that: demonstrates an improved understanding of money laundering risks in key areas; demonstrates that onsite and offsite inspections are risk-based, and hundi (a type of informal remittance instrument for transferring money) operators are registered and supervised; demonstrates enhanced use of financial intelligence in law enforcement authorities’ investigations, and increasing operational analysis and dissemination by Myanmar’s Financial Intelligence Unit; ensures that money laundering is investigated and prosecuted in line with risks; demonstrates investigation of transnational money laundering cases with international cooperation; demonstrates an increase in the freezing, seizure, and confiscation of criminal proceeds, instrumentalities, and property of equivalent value; manages seized assets to preserve the value of seized goods until confiscation; and demonstrates implementation of targeted financial sanctions related to proliferation financing. Enhanced Customer Due Diligence Unlike other blacklisted countries, Myanmar is not applicable to countermeasures. Instead, the financial institutions of members and nonmember states of the FATF are urged to conduct “enhanced customer due diligence (CDD) measures” to mitigate the risk of money laundering, terrorist financing, and proliferation financing from Myanmar. Examples of these enhanced CDD measures to be applied to certain higher-risk activities include: Obtaining additional identifying information about the customer (available through public databases or internet sources) and regularly updating the identifying
Read More
September 27, 2022
The Bank of Thailand (BOT) and the Fiscal Policy Office have drafted a royal decree that will regulate the hire purchase and leasing of cars and motorcycles under the Financial Institution Business Act B.E. 2551 (2008). This draft royal decree, which comes at a time when the level of household debt is surging in Thailand, aims to address the rise in outstanding debts related to hire purchase and leasing of cars and motorcycles. In recent years, there has been growing concern about such financing for cars and motorcycles, as these arrangements conducted by non-banks are currently unregulated and have sparked many public complaints relating to fees and practices. Scope of Regulated Businesses By virtue of the draft royal decree, businesses carrying out hire purchase and leasing of cars and motorcycles will become regulated businesses under the Financial Institution Business Act B.E. 2551 (2008). The draft royal decree defines “hire purchase” and “leasing” as follows: “Hire purchase” refers to hire purchase of cars and motorcycles according to the Civil and Commercial Code—that is, a contract whereby an owner of a car or motorcycle hires out the vehicle to a customer, and either promises to sell it to the customer or promises that it will become the property of the customer, on the condition that the customer makes a certain number of payments. “Leasing” refers to renting of a car or motorcycle under a financial lease contract in which the lessor procures a car or motorcycle according to the lessee’s request from a manufacturer, distributor, or other party, or a car or motorcycle repossessed from another lessee, in order to allow the lessee to utilize the vehicle. The lessee is obligated to maintain and repair the leased car or motorcycle during the leasing term. However, the lessee cannot terminate the contract unilaterally before maturity. Upon
Read More