DECREE

REQUIREMENTS FOR RUNNING DEBT TRADING SERVICE

Pursuant to the Law on organization of the Government dated June 19, 2015;

Pursuant to the Law on Investment dated November 26, 2014;

Pursuant to the Civil Code dated June 14, 2005;

Pursuant to the Law on Enterprises dated November 26, 2014;

Pursuant to the Law on credit institutions dated June 16, 2010;

Pursuant to the Ordinance on Foreign Exchange dated December 13, 2005 and the Ordinance dated March 18, 2013 on amendments to a number of articles of the Ordinance on Foreign Exchange;

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The Government promulgates this Decree to provide for requirements for running debt trading service.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Decree provides for requirements for running debt trading service in the territory of the Socialist Republic of Vietnam.

2. Credit institutions and branches of foreign banks buy and sell debts in conformity with the Law on credit institutions and relevant laws.

3. Entities that trade in bonds under amendments of the Law on securities shall comply with regulations of the Law on securities.

4. Vietnam Asset Management Company shall conduct debt trading activities in conformity with the Government's regulations on the establishment, organization and operations of Vietnam Asset Management Company.

5. Vietnam Debt and Asset Trading Corporation shall buy and sell debts in conformity with the Government's and Prime Minister’s regulations on the establishment and operations of Vietnam Debt and Asset Trading Corporation.

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7. Entities (except for the entities mentioned in Clause 2, Clause 3, Clause 4, Clause 5 and Clause 6 of this Article) that buy and sell debts not for business purposes shall comply with regulations of the Civil Code.

Article 2. Regulated entities

1. Enterprises running debt trading services.

2. Entities in need of running debt trading services.

Article 3. Interpretation of terms

In this Decree, these terms shall be construed as follows:

1. Debt refers to an obligation whereby a debtor must transfer assets to a creditor as agreed upon in a contract, or an obligation that gives rise to rights and obligations referred to in laws.

2. Debt trading refers to the fact that a debt seller transfers a portion or all of the rights to collect that debt and other rights related to that debt to a debt buyer who must give money to the debt seller.

3. Creditor may be an economic organization, or individual, or a party of a civil transaction that has the right to collect debt.

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5. Parties of a civil transaction are the entities participating in a civil transaction, except for the following entities:

a) Economic organizations and individuals;

b) Political organizations and sociopolitical organizations;

c) State agencies and people’s armed forces;

d) International organizations or governments of other countries.

6. Running of debt trading service refers to the continuous execution of one or certain activities related to the debt trading for profit purpose, including debt purchase, debt sale, debt brokerage, debt trading consultancy and debt trading floor services.

7. Debt trading not for business purpose refers to debt trading activities which are conducted by entities not for profit purpose in an interrupted manner, consisting of:

a) The sale of debts of a creditor, except for debts bought by that creditor from other creditors;

b) The purchase of debts not for reselling to other entities, including debts bought for the purpose of conversion of debts into contributed capital or share capital, debt rescheduling or settlement of collateral.

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8. Debt trading brokerage is an intermediary service provided to the parties of a debt transaction whereby a debt broker is in charge of arranging that debt transaction and enjoyed a commission as agreed. Debt brokerage activities do not include auction activities organized by professional auction organizations.

9. Debt trading consultancy refers to a service by which consultants use their professional knowledge to find out issues and propose solutions for debt trading. That service is provided in an independent and objective way at the requests of customers who must pay consulting fees as agreed.

10. Debt trading floor services include the provision of debt trading floor and organization of debt transactions; introduction and provision of information about the debts to entities that want to enter into transactions; examination of documents to ensure the eligibility to conduct debt transactions; and provision of intermediary service between the parties to communicate, negotiate and enter into a debt trading contract.

11. Debt trading floor is a place where debt transactions, debt trading consultancy and debt brokerage activities are regularly conducted.

12. Debt buyer refers to an entity that buys or receives the transfer of a debt in order to become a new creditor of that debt.

13. Debt seller refers to an entity that is a creditor of a debt and sells or transfers that debt to a debt buyer.

14. Debt broker refers to an enterprise that provides debt trading brokerage service.

15. Enterprise running debt trading service refers to an enterprise whose registered business sectors include the debt trading service (including debt and asset management companies affiliated to commercial banks).

16. Manager of an enterprise running debt trading service refers to the company’s manager or a manager of private enterprise. A manager may be a proprietor of private enterprise, or a general partner, or a Chairperson of the Board of members, or a member of the Board of members, or the Company’s President, or a Chairperson of the Executive Board, or member of the Executive Board, or Director or General Director or another individual who holds the managing position and authorized to act in the name of a company to enter into transactions conducted by that company as referred to in the company’s charter.

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1. An organization (that is not an enterprise) or individual that wants to run a debt trading service must establish an enterprise.

2. Registered business sectors of that enterprise must include the debt trading service in accordance with the law.

3. The enterprise running debt trading service must satisfy all of the conditions thereof regulated in Article 5, Article 6, Article 7 and Article 8 of this Decree.

4. The debt trading service must be provided on public, transparent and equal terms in compliance with the law.

Chapter II

REQUIREMENTS FOR RUNNING DEBT TRADING SERVICES

Article 5. General requirements for enterprises running debt trading service

An enterprise running debt trading service must satisfy the following requirements:

1. The enterprise running debt trading service must have internal management rules in terms of organization and internal regulations on debt trading activities in conformity with regulations in this Decree.

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3. A manager of an enterprise running debt trading service must satisfy the following requirements:

a) Have full legal capacity and be not prohibited from management of enterprise as referred to in the Law on enterprises;

b) Possess bachelor's degree or a degree of higher level in either economics, or business administration, or law, or a specialty of which he/she is going to be in charge;

c) Hold the position of manager or have at least 05 consecutive years of experience in financial sector, banking, accounting, auditing, law, asset valuation or debt trading;

d) An individual who has worked in an enterprise running debt trading service whose certificate of business registration has been revoked must also meet the following conditions: That individual must not a manager of the enterprise running debt trading service whose certificate of business registration has been revoked for 03 consecutive years before the year he/she is going to act as the manager of the enterprise running debt trading service.

Article 6. Requirements for providers of debt trading brokerage service and debt trading consultancy service

1. Requirements mentioned in Article 5 of this Decree must be satisfied.

2. The minimum charter capital or investment capital is VND 5 billion.

Article 7. Requirements for enterprises running debt purchase and sale service

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2. The minimum charter capital or investment capital is VND 100 billion.

3. A debt to be sold and purchased must have all of the following elements:

a) There is no written agreement stating that the debt trading is not permitted;

b) The debt is not used as a security for the performance of a civil obligation at the time when the debt trading is conducted, except for the cases where the secured party approves the debt trading in writing;

c) The buyer and the seller of a debt have no relation as referred to in the Law on enterprises.

4. A written contract for debt trading must be made on the basis of the contractual parties’ agreement which must ensure lawful rights and interests of the parties of a debt transaction, including specific rights and obligations of the debt buyer and those of the debt seller.

5. An enterprise running debt trading service is not allowed to either get credit granted by a credit institution/foreign bank's branch to buy debts from customers of that credit institution/foreign bank's branch or receive security from a credit institution/foreign bank's branch to get credit granted by another credit institution/foreign bank's branch for the purpose of buying debts from customers of securing credit institution/foreign bank's branch.

6. The debt buyer, debt seller, debtor and involved parties must comply with current regulations of the law on foreign exchange control in cases where the debt trading results in the formation of loans related to foreign parties and the foreign exchange is adopted during the debt trading.

Article 8. Requirements for debt trading floor service providers

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2. The minimum charter capital or investment capital is VND 500 billion.

3. Have provided the debt trading service for at least 01 year and the minimum revenue from the debt trading service of the year before the year when the debt trading floor service is provided must be VND 500 billion.

4. Contract at least 02 persons who possess certificate of professional auditor or at least 02 persons who have obtained practicing card in valuation in accordance with the law.

5. Regulations on operations of debt trading floor must be available, consisting of:

a) Procedures and responsibilities of participants in the debt trading floor, and rights and obligations of the debt trading floor service provider;

b) Requirements for debts planned to be listed on the debt trading floor;

c) Regulations on management and supervision of debt transactions, including regulations on the provision and retention of information about the debts planned to be listed on the debt trading floor;

d) Period and methods of confirmation and cancellation of debt transactions;

dd) Methods of payment and regulations on payment guarantee for involved parties;

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6. Have facilities, techniques and appropriate information technology systems to receive, update and provide information about debt trading activities to participants in the debt trading floor.

7. Perform annually independent audit in compliance with the law.

Chapter III

STATE MANAGEMENT OF DEBT TRADING SERVICES

Article 9. Responsibilities of Ministry of Finance

1. Assume responsibility before the Government for the state management over enterprises running debt trading service.

2. Within its competence, manage and supervise debt trading activities.

3. Instruct the implementation of this Decree.

Article 10. Responsibilities of people's committees of central-affiliated cities or provinces

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2. Report to Ministry of Finance on the situation of debt trading services in cities or provinces on a regular or extraordinary basis.

Article 11. Responsibilities of business registration agencies

1. Receive and process applications for business registration or applications for change of contents in Certificate of business registration with respect to the debt trading service.

2. Report to people’s committees of central-affiliated cities or provinces on the issuance or amendment of Certificate of business registration with respect to the debt trading service on a regular or extraordinary basis.

Article 12. Responsibilities of the State Bank of Vietnam

The State Bank of Vietnam shall coordinate with Ministry of Finance in inspecting debt trading services provided by debt and asset management companies affiliated to commercial banks within their competence as referred to in this Decree.

Chapter IV

IMPLEMENTATION

Article 13. Effect

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Article 14. Transitional provisions

Within one year from the effective date of this Decree, enterprises that have been running debt trading services before the effective date of this Decree must comply with the following regulations:

1. The enterprise that has satisfied all of requirements as prescribed in this Decree must send a written report to the business registration agency.

2. If an enterprise fails to satisfy all of requirements as prescribed in this Decree, that enterprise must send a written report to the business registration agency and implement measures for ensuring the compliance with all regulations herein, including measures for termination of debt trading services.

Article 15. Implementation

Ministers, Heads of ministerial-level agencies, Heads of affiliates of the Government, Chairpersons of people's committees of central-affiliated cities or provinces and entities of this Decree shall be responsible for implementing this Decree./.

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER




Nguyen Xuan Phuc

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