Allow banks to buy back corporate bonds

On April 23, the State Bank of Vietnam (SBV) issued Circular No. 03/2023/TT-NHNN stipulating the suspension of the implementation of Clause 11, Article 4 of Circular No. 16/2021/TT-NHNN dated November 10, 2021 regulating the purchase and sale of corporate bonds by credit institutions and foreign bank branches.

Accordingly, the provisions of Clause 11, Article 4 of Circular No. 16/2021/TT-NHNN shall be suspended from April 24 to December 31, 2023.

During the suspension of the implementation of Clause 11, Article 4 of Circular No. 16/2021/TT-NHNN as prescribed in this Article, credit institutions and foreign bank branches (referred to as credit institutions) are allowed to buy back corporate bonds that are not listed on the stock market or not registered for trading on the Upcom trading system (referred to as unlisted corporate bonds) that the credit institution has sold and/or unlisted corporate bonds issued in the same lot/same issuance period as the unlisted corporate bonds that the credit institution has sold when:

Comply with the provisions of Article 4 of Circular No. 16/2021/TT-NHNN;

The buyer of this corporate bond from the credit institution shall pay the entire amount of the corporate bond purchase at the time the credit institution signs the corporate bond sale contract with the bond buyer;

The enterprise issuing the bond is ranked at the highest level according to the internal credit rating regulations of the credit institution at the most recent time before the credit institution purchases the corporate bond.

This Circular takes effect from today, April 24.

According to the State Bank of Vietnam, the issuance of Circular No. 03/2023/TT-NHNN aims to contribute to increasing liquidity, removing difficulties, and promoting the development of the corporate bond market in the current difficult situation according to the Government's policy and the direction of the Prime Minister .

Clause 11, Article 4 of Circular No. 16/2021/TT-NHNN stipulates that within 12 months after selling unlisted corporate bonds, banks are not allowed to buy back the sold bonds. After 12 months from the date of sale, banks are also only allowed to buy sold corporate bonds under certain conditions.

D. Ngoc

Source: https://nld.com.vn/kinh-te/cho-phep-ngan-hang-mua-lai-trai-phieu-doanh-nghiep-20230424143418225.htm