Draft Decree guides Law on Securities: The regulation on the ratio of total debt to equity should be removed

VCN - VNDirect Securities Company has just made comments on the draft decree detailing the implementation of the Securities Law on the basis of studying the contents of the draft decree detailing the implementation of the Securities Law and other attached documents, based on the provisions of the Securities Law No. 54/2019 / QH14.
Draft Decree guides Law on Securities: The regulation on the ratio of total debt to equity should be removed
VNDirect comments on the draft Decree detailing the implementation of the Securities Law. Internet photo.


Reconsider the concept of "corporate restructuring"

According to VNDirect, this draft should consider the appropriate scope of the term "business restructuring".

If the scope is wide, the definition should include activities of "reorganizing enterprises" under the provisions of the Law on Enterprises. If the definition is narrower, the definition should only include "transforming enterprises" according to the provisions of the law. Restructuring enterprises should include enterprise transformation, debt purchase and sale to ensure consistency with the concept of "corporate restructuring" in regulations related to State enterprises.

"Currently, in legal documents (such as Decree No. 126/2017 / ND-CP, Circular 69/2018 / TT-BTC) regulating enterprise restructuring, all mention the concept of structure, which involves transforming the form of business from a responsible company to a joint stock company or buying and selling debt," VNDirect confirmed.

Explaining more about this, VNDirect Securities Company said that this restructuring concept regulates the cases of maintaining listing conditions and types of documents to issue shares to the public.

However, in reality, some firms have very large assets, but small equity and vice versa.

Currently, cases of public offering of securities after restructuring, listing maintenance conditions with companies after consolidation or mergers, including one listed company, but subject is compulsory delisting or unlisted listing, based on the change of 35% of assets after restructuring. It is not appropriate because there are still many cases that enterprises change completely in terms of ownership structure but total assets have not increased much.

Therefore, VNDirect recommends changing the regulations on the size of equity and business indicators after restructuring to consider maintaining listing conditions or issuance cases.

The regulation on the ratio of total debt should be removed

VNDirect Securities Company also commented on the conditions for registration of listing shares and fund certificates at the Stock Exchange (Article 100). Accordingly, VNDirect said that the requirement for a listed company to be an enterprise that has offered shares to the public, equitized or traded on Upcom should be reconsidered to encourage businesses to post listing and mobilizing foreign investment capital through the stock market.

In fact, a number of big enterprises have the need to list or raise capital through stock exchanges associated with listing shares on the Stock Exchange, but rarely register for transactions on Upcom because this market does not really attractforeign investors.

Therefore, it is necessary to consider expanding the condition that a listed company is not necessarily an enterprise that has traded on Upcom or has offered securities to the public.

With regard to the conditions for providing clearing and settlement services for securities transactions (Article 138), VNDirect Securities Company said that the regulation on the ratio of total debt to equity should be removed by the due date. The restriction on the ratio of total debt to equity not exceeding 5 times (under Clause 3 of Article 138) and 3 times (under Clause 1 of Article 189) will limit the operation and development of securities companies.

In fact, the securities company's business activities are under the management of the liquidity ratio (at least 180% as prescribed) to limit the leverage ratio, the additional regulation of the debt ratio leads to the overlap.

Moreover, commercial banks are also only regulated by the CAR ratio; there is no regulation on debt to equity ratios. Under the current zero reduction in transaction fees, securities companies' lending activities are the main source of income and the driving force for the company's development.

In addition, when consulting securities firms in the region, VNDirect found that there is no restriction on the ratio of total debt to equity. This rate of the majority of foreign securities companies with large capitalization is more than 3 times, especially Korean companies have a very high rate, at 6-9 times.

By Bao Minh/Bui Diep

Related News

An Giang Customs announces businesses with tax arrears

An Giang Customs announces businesses with tax arrears

VCN - An Giang Customs Department has just announced 25 businesses with tax arrears worth over VND6.2 billion.
Ensuring reasonableness upon enforcement of regulations in "1 law amending 7 laws"

Ensuring reasonableness upon enforcement of regulations in "1 law amending 7 laws"

VCN - According to the representative of the Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Finance and the National Assembly Committees are urgently collecting opinions to complete the draft Law amending seven Laws, to ensure that the issued regulations are reasonable and remove difficulties for businesses.
Important step to soon upgrade stock market

Important step to soon upgrade stock market

VCN - According to experts, the Ministry of Finance's issuance of Circular No. 68/2024/TT-BTC dated September 18, 2024 is an important step in the process towards the goal of improving the quality of the Vietnam’s stock market.
Foreign institutional investors allowed to buy stocks without 100 percent pre-funding -trading

Foreign institutional investors allowed to buy stocks without 100 percent pre-funding -trading

VCN - The issuance of Circular 68/2024/TT-BTC by the Ministry of Finance is considered a solution to remove a major bottleneck in upgrading the stock market related to the abolition of the regulation on pre-trading margin requirement for foreign institutional investors.

Latest News

Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3.92%.
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

VCN - Discussing in groups about the project "1 law amending 7 laws" in the financial sector according to the program of the 8th Session on October 29, 2024, National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...
Removing difficulties in public investment disbursement

Removing difficulties in public investment disbursement

VCN - According to the report of the Investment Department (Ministry of Finance), the estimated disbursement from the beginning of the year to October 31, 2024 is VND 355,616.1 billion, reaching 47.43% of the 2024 plan, reaching 52.29% of the plan assigned by the Prime Minister.

More News

State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

VCN - According to the report sent to the National Assembly before the 8th Session of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Stipulate implementation of centralized bilateral payments of the State Treasury at banks

Stipulate implementation of centralized bilateral payments of the State Treasury at banks

VCN - The Ministry of Finance (MOF) gathers feedback on the draft Circular regulating the management and use of accounts of the State Treasury opened at the State Bank of Vietnam (SBV) and commercial banks.
Rush to finalize draft decree on public asset restructuring

Rush to finalize draft decree on public asset restructuring

VCN - According to the Ministry of Finance, the draft Decree regulating the rearrangement and handling of public assets is being urgently completed by the Ministry of Finance to submit to the Government for promulgation.
Inspection report on gold trading activities being complied: SBV

Inspection report on gold trading activities being complied: SBV

The State Bank of Vietnam (SBV) has announced that inspections on compliance with legal policies in gold trading activities of credit institutions and gold trading businesses have been completed and an inspection report is being compiled.
Budget revenue in 2024 is estimated to exceed the estimate by 10.1%

Budget revenue in 2024 is estimated to exceed the estimate by 10.1%

VCN -The Government estimates that state budget revenue in 2024 will exceed VND 172.3 trillion, up 10.1% over the estimate, of which tax and fee revenue will reach 13.1% of GDP.
Ensure timely and effective management and use of public asset

Ensure timely and effective management and use of public asset

VCN – In order to promptly and effectively implement public asset management and use, ensuring compliance with legal regulations, the Ministry of Finance has just issued an official dispatch requesting ministries, branches and localities to comply with regulations in the Government’s Decree No. 114/2024/ND-CP dated September 15, 2024.
Accelerating decentralization in public asset management

Accelerating decentralization in public asset management

VCN - Amending the Law on Management and Use of Public Assets aims to improve regulations on accelerating decentralization and improving efficiency in management and use of public assets, and promoting financial resources, ensuring that the unified application the Law on Management and Use of Public Assets and other legal documents.
Difficulty in finding banks eligible to receive compulsory transfers

Difficulty in finding banks eligible to receive compulsory transfers

VCN - Reporting to the National Assembly, the State Bank of Vietnam (SBV) said that one of the difficulties in restructuring the credit institution system is the long process of finding and negotiating banks eligible to receive compulsory transfers.
Businesses can choose a suitable electronic invoice model generated from the cash register

Businesses can choose a suitable electronic invoice model generated from the cash register

VCN - The Ministry of Finance said that individual business households can choose a suitable model to apply electronic invoice solutions from cash registers, depending on the number of invoices used in the year, in the month and the current status of software solutions and technical infrastructure.
Read More

Your care

Latest Most read
Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...
Removing difficulties in public investment disbursement

Removing difficulties in public investment disbursement

VCN - According to the report of the Investment Department (Ministry of Finance), the estimated disbursement from the beginning of the year to October 31, 2024 is VND 355,616.1 billion, reaching 47.43% of the 2024 plan, reaching 52.29% of the plan assigne
State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

According to the report of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Mobile Version