SECURITIES TRADING AND INVESTMENT Foreign Major Equity & Local Overseas Presence

On July 1, 2016, the Government issued Decree No. 86/2016/ND-CP setting out regulatory conditions for securities trading and investment enterprises (“Decree 86”). Some notable provisions of Decree 86 are as follows:

1. Certain conditions for foreign organizations to acquire more than 51% of the charter capital of a securities company in Vietnam:

(a)      A foreign organization purchasing shares exceeding 51% of the charter capital of a Vietnamese securities company shall seek (i) its own internal approvals and (ii) approvals from the General Meeting of Shareholders, Members’ Board or Owners of Vietnamese securities company to perform such acquisition;

(b)     Only owner equity or other legitimate capital funds of the foreign organization is permitted to be used for the share purchase; the acquirer must not be subject to foreign ownership limits provided under the laws of Vietnam

2. Securities companies can be restructured in various forms including merger, acquisition or conversion upon fulfilment of legal conditions and requirements.

3. Certain conditions for local securities companies to establish a commercial presence overseas:

-         compliance with Article 73 of Decree 58/2012/ND-CP dated July 20, 2012;

-         The plan of establishment must have written approval by the General Meeting of shareholders, Members’ Board, or Owners of the Vietnamese securities company;

-         meeting financial safety ratio requirements after remitting investment capital to its commercial presence; and

-         scope of operation of its commercial presence must be in line with the Vietnamese parent company

4. Legal requirements on the issuance of a Securities Practicing Certificate for individuals.