The Ministry of Finance is not responsible for chairing, studying and proposing the establishment of a debt trading market

Debt trading service is no longer a conditional business. Source: Internet

Recently, some media outlets said that the Government has issued Decree 69/2016/ND-CP which clearly stipulates that the Ministry of Finance should take the lead in studying and proposing the establishment of a debt trading market and exchange in Vietnam.

However, the Ministry of Finance said that the Law on Investment 2014 stipulates that debt exchange is a conditional business. To implement the Law, on July 1, 2016, the Government issued Decree No. 69/2016/ND-CP on conditions for debt trading services.

“Decree No. 69/2016/ND-CP does not assign the Ministry of Finance to chair, study and propose the establishment of a debt trading market in Vietnam,” the Ministry of Finance said.

Specifically, in Article 9 of Decree No. 69/2016/ND-CP, the responsibilities of the Ministry of Finance are specified as follows: Take responsibility before the Government for the state management of enterprises providing debt trading services; to manage, examine, inspect and supervise debt trading services in accordance with its competence; giving guidelines for the implementation of the Decree.

Deploying the assigned tasks, the Ministry of Finance issued Circular No. 53/2017/TT-BTC dated May 19, 2017 guiding the implementation of Decree No. 69/2016/ND-CP and implementing the management and supervision of firms providing debt trading services through reports of the People's Committees of provinces and cities.

In 2020, the National Assembly promulgated the Law on Investment No. 61/2020/QH14, which stipulated that debt trading is no longer a conditional business. Accordingly, the Government issued Decree No. 31/2021/ND-CP dated March 26, 2021, stipulating in detail and guiding the implementation of a number of articles of the Law on Investment 2020, including the abolition of Decree No. 69/2016/ND-CP. Thus, Decree No. 69/2016/ND-CP has expired.

Pursuant to the above provisions, the firm providing debt trading service is no longer a conditional business line. Debt trading is carried out as a normal service activity according to current regulations (no restrictions on this business).

The Ministry of Finance also said that the current regulation has removed legal barriers to make debt trading activities more open.

Specifically, in terms of debt trading, there are many firms operating this type of business, and each group of businesses has a different legal framework for operation. In particular, the Debt Management and Asset Exploitation Company affiliated with commercial banks (AMCs) to buy and sell debts of credit institutions, this company was established under Decision No. 150/2001/QD-TTg dated October 5, 2001 of the Prime Minister.

Vietnam Debt and Asset Trading Company Limited (DATC) is established, organized and operated under Decree No. 129/2020/ND-CP of the Government dated October 27, 2020, conducting debt trading of state-owned enterprises.

Vietnam Asset Management Company (VAMC), established and operating under the Government's Decree No. 53/2013/ND-CP dated May 18, 2013 and its amendments, supplementing regulations on buying and selling bad debts of credit institutions.

Along with that, for other organisations and individuals, according to the amended Law on Investment, debt trading is no longer a conditional business; therefore, the activities of buying and selling debt will be generally adjusted in accordance with the provisions of the civil law and the law on enterprises (for debt trading companies).

The Ministry of Finance added that in 2020, the Ministry has also reported to the Prime Minister to review the legal framework for debt purchase and sale activities and has proposed relevant ministries and agencies to pay attention to the above regulations.