The Ministry of Finance will not extend the validity of some regulations on corporate bonds.

Do not extend the regulations on defining professional securities investors

On the afternoon of November 28, at the headquarters of the Ministry of Finance , Deputy Minister of Finance Nguyen Duc Chi chaired a meeting with ministries, central agencies, associations and enterprises to assess the implementation of Decree No. 08/2023/ND-CP and policy orientations in the coming time.

At the meeting, the majority of delegates agreed with the proposal of the Ministry of Finance that it is not necessary to extend the suspension of the implementation of the regulation defining professional securities investors as individuals who buy individual corporate bonds.

According to the representative of the Ministry of Finance, Decree 65 stipulates that professional securities investors are individuals who must ensure that their portfolio holdings have an average value of at least VND 2 billion within 180 days using the investor's assets, excluding loans.

In order to maintain the demand for corporate bond purchases by individual investors with financial potential but who have not accumulated enough time for 180 days as prescribed in Decree No. 65 and the market has more time to adjust, Decree No. 08/ND-CP stipulates the suspension of the above provisions in Decree 65 until December 31, 2023.

Up to now, after more than 8 months of implementing Decree 08, professional securities investors who are individuals have accumulated enough time of 180 days to meet the regulations on professional securities investors in Decree 65, so there is no need to extend the suspension of the implementation of this regulation.

In addition, the securities law also stipulates other ways to identify individual professional securities investors such as having a securities practice certificate and having taxable income in the most recent year of at least 1 billion VND.

Implementing the regulations on identifying professional securities investors in Decree 65 will minimize the risk of distribution and solicitation of individual investors who are not professional securities investors to buy bonds, enhancing the safety and sustainability of the corporate bond market.

Timeline for the reduction of bond distribution period to expire

Regarding the policy of suspending the implementation of credit rating regulations, the Ministry of Finance also proposed not to extend the suspension period of mandatory credit rating regulations for individual corporate bonds.

From January 1, 2023, public offerings of corporate bonds have implemented regulations on credit ratings for offerings that require credit ratings. Enterprises issuing to the public in 2023 are not subject to mandatory credit ratings. For private offerings, from the effective date of Decree 08 to November 3, 2023, if the provisions of Decree 65 are applied, few enterprises are subject to credit ratings as prescribed.

Thus, according to the provisions of Decree 65, similar to bonds issued to the public, only a few cases that meet all the conditions must have a mandatory credit rating, so the number of issuances that must have a credit rating is expected to be limited. Therefore, continuing to implement the provisions of Decree 65 will not have any problems.

Currently, the Ministry of Finance has also licensed 01 more enterprise, the total number of enterprises that can provide credit rating services is 03 enterprises out of the maximum allowed number of 05 credit rating enterprises, including one enterprise that has a joint venture with an international credit rating organization. Many countries in the region limit the number of credit rating enterprises.

At the meeting, the Ministry of Finance also said that it was not necessary to extend the suspension of the regulation on reducing the time for distributing bonds. Decree 65 stipulates that the time for distributing bonds for each offering shall not exceed 30 days. The goal is to limit businesses from taking advantage of the long time for distributing bonds to invite small individual investors who are not professional securities investors to buy bonds.

To help businesses balance and mobilize resources to pay off debt obligations when due, Decree 08 stipulates the suspension of the implementation of regulations on reducing the time for distributing bonds until December 31, 2023.

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