Circular No. 32/2021/TT-BTC dated May 17, 2021 on providing instructions on the initial sale of shares, management and use of proceeds from equitization involving transformation of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies

• Official number: 32/2021/TT-BTC
• Legislation Type: Circular
• Organization: The Ministry of Finance
• Signer: Huynh Quang Hai
• Issued Date: 17/05/2021

MINISTRY OF FINANCE --------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 32/2021/TT-BTC	Hanoi, May 17, 2021

CIRCULAR

PROVIDING INSTRUCTIONS ON THE INITIAL SALE OF SHARES, MANAGEMENT AND USE OF PROCEEDS FROM EQUITIZATION INVOLVING TRANSFORMATION OF STATE ENTERPRISES AND SINGLE-MEMBER LIMITED LIABILITY COMPANIES WITH 100% OF THEIR CHARTER CAPITAL WHOLLY HELD BY STATE ENTERPRISES INTO JOINT-STOCK COMPANIES

Pursuant to the Government's Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017 on transformation of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies;

Pursuant to the Government’s Decree No.140/2020/ND-CP dated November 30, 2020, amending and supplementing several articles of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, regarding transformation of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies; the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, regarding investment of state capital in enterprises and management, use of capital and assets at enterprises and the Government's Decree No. 32/2018/ND-CP dated March 8, 2018, prescribing amendments and supplements to several Articles of the Decree No. 91/2015/ND-CP dated October 13, 2015, regarding investment of state capital in enterprises and management, use of capital and assets at enterprises;

Upon the request of the Director of the Corporate Finance Department,

The Minister of Finance promulgates the Circular, providing instructions on the initial sale of shares, management and use of proceeds from equitization involving the transformation of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies:

Chapter I

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Article 1. Scope and subjects of application

1. This Circular shall provide the following instructions:

a) Processes, procedures and methods for the initial sale of shares, management and use of proceeds from equitization; combination of registration of share auction with registration, depository and registration of transaction of shares successfully auctioned by subjects of equitization prescribed in Article 2 of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017 on conversion of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies (hereinafter referred to as Decree No. 126/ 2017/ND-CP), Clause 1, Article 1 of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020, amending and supplementing a number of articles of the Government’s Decree No. 126/2017/ND-CP dated November 30, 2020 on conversion of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies; the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 on state capital investment in enterprises and management and use of capital and assets at enterprises, and the Government’s Decree No. 32/2018/ND -CP dated March 8, 2018, amending and supplementing a number of articles of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 on state capital investment in enterprises, management and use of capital and assets at enterprises (hereinafter referred to as Decree No. 140/2020/ND-CP);

b) Settling and disposing of balances of Corporate Reorganization Support Funds available at parent companies of economic groups, parent companies of state corporations, parent companies belonging in parent company-subsidiary complexes as on December 31, 2017.

2. Subjects of application:

a) Enterprises specified in Clauses 2 and 3, Article 2 of Decree No. 126/2017/ND-CP, Clause 1, Article 1 of Decree No. 140/2020/ND-CP (hereinafter referred to as equitized enterprises), including:

- a) Enterprises whose charter capital is wholly held by the State (hereinafter referred to as tier-I enterprises), including: Single-member limited liability companies with their wholly state-owned charter capital which are parent companies of economic groups, parent companies of state corporations, parent companies belonging in parent company-subsidiary groups; sovereign single-member limited liability companies with 100% of their charter capital wholly held by the State.

- Single-member limited liability companies with 100% of their charter capital wholly held by tier-I enterprises (hereinafter referred to as tier-II enterprises)

b) Owner’s representative, relevant entities or organizations prescribed in clause 1 and 4 of Article 2 of the Decree No. 126/2017/ND-CP.

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1. “Initial sale of shares” means the sale of shares by an equitized enterprise in any form specified in this Circular for conversion into a joint stock company.

2. Unsuccessful share auction is an auction falling into one of the following cases:

a) No investors subscribes for shares;

b) Only one investor subscribes for shares;

c) All investors do not submit bids for the auction;

d) All investors win the bid in the public auction, but refuse to buy.

3. Underwriting organization means one or a group of securities companies licensed to render underwriting services to enterprises in accordance with law on securities.

4. Deposit means an advance offered by an investor participating in the purchase of shares to secure the right to buy shares.

Chapter II

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Section 1. PURCHASERS AND STOCK SELL PRICES

Article 3. Purchasers

1. Domestic investors, foreign investors prescribed in Clauses 1 and 2, Article 6 of Decree No. 126/2017/ND-CP, Clause 3, Article 1 of Decree No. 140/2020/ND-CP who are organizations or individuals, even including employees and corporate executives in equitized enterprises.

2. Strategic investors who are domestic investors and foreign investors who fully satisfy the conditions specified at Point a, Clause 3, Article 6 of Decree No. 126/2017/ND-CP.

3. Entities and persons specified in Article 42 of Decree No. 126/2017/ND-CP, Clause 21, Article 1 of Decree No. 140/2020/ND-CP.

4. Trade unions at equitized enterprises as prescribed at Point b, Clause 2, Article 33 of Decree No. 126/2017/ND-CP. Trade unions that authorize competent persons of trade unions at equitized enterprises to carry out the procedures related to the purchase of shares.

Article 4. Initial share prices

1. The price of shares sold at auction to an investor is the bid that the investor makes at an auction and is determined as a winning bid according to the auction results specified in Clause 5, Article 6 of this Circular. In case of selling shares in the form of underwriting a share issue, the underwriting price must not be lower than the starting price approved in the equitization plan.

2. The selling price of preferential shares sold to purchasers specified in Clauses 1 and 2, Article 42 of Decree No. 126/2017/ND-CP shall be regulated as follows:

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b) The selling price of shares sold to the purchasers specified in Clause 2, Article 42 of Decree No. 126/2017/ND-CP is the starting price approved by the owner's representative agency in the equitization plan.

3. The selling price of preferential shares for trade unions in equitized enterprises is equal to the par value (VND 10,000/share).

4. Selling price of shares sold to strategic investors:

a) In the case of an auction between strategic investors, the selling price is the bid price determined as the winning bid according to the principles of selection of the investor with the bid price from high to low for a number of shares to be sold at auction between strategic investors and not less than the average successful bid of the public auction.

In case the public auction is unsuccessful, the selling price of shares sold to strategic investors must not be lower than the starting price of the public auction.

In case the public auction has only one (01) investor subscribing for shares, the selling price of shares sold to strategic investors must not be lower than the price agreed upon with the investor subscribing for shares of the public auction.

b) In case there are two (02) or more strategic investors subscribing for shares with the subscription volume equal to or smaller than the number of shares expected to be sold to strategic investors according to the approved equitization plan, or only one (01) strategic investor subscribing for shares, the selling price agreed upon with each investor must not be lower than the average successful auction price of the public auction.

In case the public auction is unsuccessful, the selling price of shares sold to strategic investors must not be lower than the starting price of the public auction.

In case the public auction has only one (01) investor subscribing for shares, the agreed selling price of shares sold to strategic investors must not be lower than the price agreed upon with the investor subscribing for shares at the public auction.

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Article 5. Initial share sale

1. Based on the equitization plan approved by the competent authority (according to Appendix 1 to this Circular, including the English version), the Steering Committee on Equitization directs the equitized enterprise to implement the plan for initial sale of shares according to the methods approved in the equitization plan as follows:

a) Auctioning approach shall be applied in the following cases:

- Holding the initial public auction of shares, including the number of shares that employees, trade unions in enterprises refuse to buy and all of shares offered for sale according to the approved equitization plan that strategic investors do not subscribe for;

- Shares shall be offered at auction to strategic investors in the event that there are two (02) strategic investors who meet the criteria for selection of investors subscribing for shares and total number of shares for which strategic investors subscribe is greater than the number of shares expected to be sold to strategic investors according to the approved equitization plan.

b) Direct agreement approach shall be applied in the following cases:

- Shares shall be sold to strategic investors in the event that there are only one (01) strategic investor who subscribes for shares; or strategic investors subscribe for the number of shares equal to or smaller than the number of shares expected to be sold to strategic investors according to the approved equitization plan;

- Selling investors the number of shares not yet sold out as prescribed in clause 4, Article 37 in the Decree No. 126/2017/ND-CP, clause 19, Article 1 in the Decree No. 140/2020/ND-CP;

- Selling shares to employees and trade unions

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d) The book-building method shall be subject to the Circular No. 21/2019/TT-BTC dated April 11, 2019 of the Ministry of Finance, providing instructions on the initial sale of shares and transfer of state capital according to the book-building method and documents regulating amendment, supplementation and replacement thereof (if any).

2. Within four (04) months from the date on which the equitization plan is approved, the equitized enterprise must complete the sale of shares according to the approved method. In case the equitization plan is adjusted according to the provisions of Clause 3 of this Article, the time limit for the equitized enterprise’s sale of shares shall start from the date on which the decision on adjustment of the equitization plan is approved by the authority having competence in granting approval.

3. Selling strategic investors shares shall be subject to clause 3 Article 6 in the Decree No. 126/2017/ND-CP, point b clause 3 Article 1 in the Decree No. 140/2020/ND-CP. Such sale is regulated as follows:

a) The selection and conduct of subscribing for shares of strategic investors shall be carried out before the time of public auction information disclosure in accordance with the provisions of Article 6 of this Circular;

b) In case the strategic investor does not subscribe for all the shares offered for sale, the Steering Committee on Equitization shall report to the agency competent to approve the equitization plan to seek their decision on adjustment by transfer of all of the number of shares that the strategic investor does not subscribe for into the number of shares offered at public auction in the equitization plan.

Article 6. Public auction method or approach

1. General principles:

a) When an equitized enterprise applies for the initial auction of shares through the auctioning organization, they must simultaneously register, deposit and register for transaction of shares on the unlisted public company market (UpCom). After the equitized enterprise is converted into a joint stock company, the registration for listing of securities of the joint stock company shall conform to the provisions of law on securities;

b) Vietnam Securities Depository Center (or Vietnam Securities Depository and Clearing Corporation after it is established and put into operation) and the Hanoi Stock Exchange shall register, deposit and register the transaction for the number of winning shares that have been paid for. The number of shares auctioned to strategic investors and the number of shares sold by agreement or by underwriting as prescribed in Article 7, Article 8, Article 9 of this Circular shall be registered and deposited in accordance with the instructions of the Vietnam Securities Depository Center, and registered for additional transactions on the stock market in accordance with the law on securities;

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2. Holding an auction of shares:

a) The public auction is conducted at the Stock Exchange. In case an equitized enterprise has a volume of shares sold with a total par value of less than VND 10 billion, the owner's representative agency may consider deciding to organize an auction at a securities company or an asset auctioning service center or enterprise in accordance with law on asset auction (hereinafter referred to as intermediary organization);

b) The location of the auction is specified in the Regulations on stock auction.

3. Preparing an auction:

a) Conducting the auction of shares, issuing the Decision on the establishment of the Stock Auction Council and promulgating the Regulations on the auction of shares according to regulations; the Chairman of the Stock Auction Council is the Head of the Steering Committee on Equitization or a member of the Steering Committee on Equitization authorized in writing by the Head of the Equitization Steering Committee;

b) The organization conducting the share auction shall disclose information about the enterprise according to Appendix 2 issued with this Circular and the information on the share auction according to Appendix 3 issued with this Circular at least one (01) month before holding the auction.

For enterprises that auction their shares at Stock Exchanges, when making announcements of their auctions according to Appendix 2 to this Circular, the English translations of these announcements must be provided;

c) The Steering Committee on Equitization shall collaborate with the auctioning organization to give presentations on business performance of the equitized enterprises to investors (if necessary).

4. Conducting an auction:

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Auctions with participation of foreign investors shall be subject to clause 2 Article 6 in the Decree No. 126/2017/ND-CP, point a clause 3 Article 1 in the Decree No. 140/2020/ND-CP;

b) Within the time limit specified in the Auction Regulations, investors shall provide the required information in the Auction Participation Form, including the bid price and send it to the auction organization by

- Voting directly at the intermediary organization (if the auction is conducted by an intermediary organization) and voting directly at the auction agent (if the auction is organized by the Stock Exchange);

- Voting by post in accordance with the Regulations on the auction of shares.

5. Determining auction results:

a) The determination of auction results is carried out according to the principles of selection of the bid price from high to low for a sufficient number of shares to be offered but not lower than the starting price. At the lowest winning bid price, in case investors (including foreign investors) make the same bid, but the remaining number of shares is less than the total number of shares subscribed for by these investors at the lowest winning bid price, the number of shares purchased by each investor shall be determined as follows:

Volume of shares purchased by an investor

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Remaining shares offered for sale

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Volume of shares subscribed for by each investor

Total volume of shares subscribed for by investors

In case there is a regulation on the maximum percentage of shares purchased by a foreign investor, the determination of auction results shall conform to the above principles, but the number of shares purchased by foreign investors must not exceed the maximum percentage according to the provisions of current law;

b) At the end of the auction, based on the auction results, the organization conducting the auction, the Auction Council, the representative of the Steering Committee on Equitization and the representative of the equitized enterprise shall make and co-sign the Minutes of Determination of public auction results according to Appendix 6 issued with this Circular;

c) Within a maximum of three (03) working days from the date of making the Minutes of determination of the results of the share auction, the Steering Committee on Equitization and the auction organization shall jointly announce the results of the stock auction.

6. Unsuccessful share auction:

a) If there is none of investors subscribes for shares put up for auction:

Within three (03) working days from the deadline for registration for participation in the auction, the organization conducting the auction shall be responsible for notifying the Steering Committee for Equitization and the equitized enterprise of the unsuccessful auction. The Steering Committee on Equitization shall report to the owner's representative agency to decide to adjust the charter capital structure, the level of charter capital and carry out the capital transfer according to regulations after the equitized enterprise already operates in the form of a joint stock company;

b) In case only one (01) investor subscribes for shares offered for sale at auction, the equitized enterprise shall comply with the provisions of Clause 3, Article 8 of this Circular;

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Within three (03) working days from the deadline for payment for purchase of shares, the organization conducting the auction shall be responsible for notifying the Steering Committee on Equitization and the equitized enterprise of the unsuccessful auction. The Steering Committee on Equitization shall report to the owner's representative agency to obtain their permission to take actions prescribed in Point a of this Clause;

d) If all investors do not submit auction participation forms,

Within three (03) working days from the deadline for submission of forms of stock auction participation, the organization conducting the auction shall be responsible for notifying the Steering Committee on Equitization and the equitized enterprise of the unsuccessful auction. The Steering Committee on Equitization shall report to the owner's representative agency to obtain their permission to take actions prescribed in Point a of this Clause.

7. Investors cannot claim their deposit back if they violate the Auction Regulations, including: paying a lower price than the starting price; relinquishing the right to buy the number of shares won at auction and other violations as prescribed in the Auction Regulations.

8. Registering and depositing the winning shares at the Vietnam Securities Depository Center and registering for trades at the Hanoi Stock Exchange:

a) Within fifteen (15) days from the deadline for payment for the purchase of winning shares, the organization conducting the auction shall send the Vietnam Securities Depository Center and the Ha Noi Stock Exchange a written notice of the results of the auction of shares, including average successful bid price and the list of owners of the shares that have been paid for at the auction. The list of winning owners of shares held for sale at auction must have full information about their full names, ownership registration numbers, addresses, depository accounts and volume of shares under their ownership;

b) The Vietnam Securities Depository Center shall be responsible for granting a share trading code to an equitized enterprise upon the enterprise's request made in the Registration Form for the auction of shares, and putting shares into trades on UpCom according to Appendix 5 to this Circular. The Hanoi Stock Exchange shall put shares into trades on the UpCom trading system within a maximum period of ninety (90) days from the deadline for payment for the purchase of winning shares at auction.

In case where the equitized enterprise is granted an enterprise registration certificate before the deadline for registration of transaction of shares as mentioned above, the equitized enterprise shall notify the Hanoi Stock Exchange in writing within five (05) working days from the date of on which the Business Registration Certificate is issued. The Hanoi Stock Exchange shall put shares into trades on the UpCom trading system within a maximum period of five (05) working days from the date on which the equitized enterprise’s notice is received.

The reference price for the first trading day on the UpCom trading system shall be determined on the basis of the average successful bid price at the public auction;

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Article 7. Approach or method of underwriting of issuance of shares

1. Within twenty (20) days from the date on which the equitization plan is approved by the competent authority, the Steering Committee on Equitization shall reach agreement with the underwriter on the number of shares and the underwriting price to report to the owner's representative agency for approval within a maximum of ten (10) days from the date of receipt of the report of the Steering Committee on Equitization.

2. The legal representative of the equitized enterprise shall sign a contract with the underwriter within a maximum period of five (05) working days from the date of approval by the owner’s representative agency.

3. The underwriter shall distribute and sell the number of shares underwritten under the provisions of the underwriting contract. In case all shares are not sold, the underwriter is responsible for buying all the remaining shares at the guaranteed price committed in the underwriting contract.

4. The underwriter shall be entitled to the underwriting fee as agreed between the Steering Committee on Equitization and the underwriter, but must not exceed the price range prescribed by the Ministry of Finance on underwriting fees. The underwriting fee must be specified in the underwriting contract and included in the equitization costs.

5. The underwriting currency must be specified in the underwriting contract and must be paid in Vietnamese dong.

6. At the end of the process of distribution and sale of shares, the Steering Committee on Equitization shall cooperate with the enterprise and the underwriter to check and review the contents of the underwriting contract for the purpose of terminating the contract according to the time stipulated in the underwriting contract.

Article 8. Direct agreement method or approach

1. Selling shares under agreement to corporate employees, executives and trade unions:

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b) With respect to the volume of shares that employees, executives and trade unions refuse to buy under the equitization plan, the Steering Committee on Equitization shall report to the owner's representative agency to decide whether they should be added to the volume of shares offered for sale at the public auction.

2. Selling shares under agreement to strategic investors:

a) Within twenty (15) days from the deadline for payment made by the investor participating in the public auction, the Steering Committee on Equitization shall collaborate with the equitized enterprise in reaching agreements with strategic investors on the selling price of the volume of shares subscribed for, and reporting to the owner's representative agency to seek their approval within a maximum of ten (10) days from the date of receipt of the report of the Steering Committee on Equitization;

b) Based on the results of the agreement to sell shares to strategic investors, the Steering Committee on Equitization shall direct the enterprise and strategic investors to sign a contract to buy/sell shares within five (05) working days from the date on which the owner's representative agency approves the results of the agreement to sell shares to strategic investors.

3. Selling shares under agreement in case only one (01) investor subscribes for shares at the public auction:

a) The Steering Committee on Equitization shall make an agreement to sell shares to investors who subscribe for shares at the selling price not lower than the starting price of the volume of shares subscribed for in a valid manner;

b) Based on the results of the agreement to sell shares to the investor, the Steering Committee on Equitization shall direct the enterprise and the investor to finalize a contract to buy/sell shares within five (05) working days from the date on which the selling price and volume of shares sold under agreement to the investor are agreed upon;

c) For shares not sold out yet, the Steering Committee on Equitization shall report to the owner's representative agency on them to seek their decision on adjustment of the charter capital structure, the level of charter capital.

4. Selling shares not sold out yet at the public auction (even including the volume of shares that investors win at the auction, but then refuse to buy) under agreement:

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Based on the results of the agreement to sell shares with the investor who attends the auction, the Steering Committee on Equitization shall direct the enterprise and the investor to finalize a share purchase/sale contract within twenty (20) days from the deadline for payment made by the investor participating in the public auction;

b) In case of failure to sell all shares to investors after the sale of shares under agreement as prescribed in point a of this clause:

Within five (05) working days from the deadline for payment for share purchase under the contract for purchase/sale of shares in effect, based on the number of unsold shares, the Steering Committee on Equitization shall notify investors winning the public auction (exclusive of investors winning the auction but refusing to buy shares) to enter into agreement to sell shares according to the bid price told at the auction with each investor according to the principles of selection of the bid price from the highest to the lowest at the auction till the full number of shares is sold out.

Based on the results of the agreement to sell shares with the investor who attends the auction, the Steering Committee on Equitization shall direct the enterprise and the investor to finalize a share purchase/sale contract within ten (10) days from the date of the investor’s subscribing for purchase of shares;

c) For shares not sold out yet according to point b of this clause, the Steering Committee on Equitization shall report to the owner's representative agency on them to seek their decision on adjustment of the charter capital structure, the level of charter capital.

Article 9. Sale of shares at auction between strategic investors

1. If at least two (02) strategic investors meeting the selection criteria subscribe for shares and total volume of shares that strategic investors subscribe for is greater than the volume of shares expected to be sold to strategic investors according to the approved equitization plan, the Steering Committee on Equitization shall seek permission from the owner’s representative agency to hold an auction attended by strategic investors at the Stock Exchange.

2. The starting price for auction between strategic investors is the average successful bid price of the public auction or the price agreed upon with investors in case the public auction is attended by only one (01) investor subscribing for shares, or the starting price at the public auction in case of the unsuccessful public auction.

3. The strategic investor may choose the following forms: placing a deposit, security deposit or obtaining guarantee from a credit institution or foreign bank branch in accordance with law with the security value equal to 20% of the value of the shares that they subscribe for at the starting price of the public auction in the approved equitization plan. The strategic investor shall be responsible for paying a deposit into the account of proceeds from shares of the enterprise or completely placing the deposit, obtaining guarantee from by credit institutions, foreign bank branches within the maximum time limit of five (05) working days from the deadline for subscribing for shares by the strategic investor.

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5. Determining auction results:

a) The determination of auction results shall be subject to the provisions laid down in point a, clause 5, Article 6 herein;

b) At the end of the auction, the organization conducting the auction, the Stock Auction Council, the representative of the Steering Committee on Equitization and the representative of the equitized enterprise shall make and co-sign the Minutes of Determination of auction results between strategic investors according to Appendix No. 4 issued with this Circular;

c) The Steering Committee on Equitization shall cooperate with the Stock Exchange in announcing the auction results immediately after signing the Minutes of determination of the auction results;

d) The Steering Committee on Equitization shall direct the equitized enterprise to return the deposit to the investor who participates in the valid auction but does not win the auction according to the provisions of Point a, Clause 1, Article 10 of this Circular.

6. Based on the results of the auction of shares to the strategic investor, the equitized enterprise shall report to the owner's representative agency to consider and complete the signing of the official contract with the winning strategic investor within the maximum period of fifteen (15) days from the date of announcement of auction results.

7. The equitized enterprise shall be responsible for paying the proceeds from the sale of shares to the strategic investor to the Enterprise Reorganization and Development Support Fund within a maximum duration of five (05) working days from the deadline for payment to the strategic investor.

Section 3. MANAGEMENT AND USE OF PROCEEDS FROM EQUITIZATION

Article 10. Management of deposits and payment for purchase of shares

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a) Auctioning method or approach:

- The investor shall be responsible for paying a deposit equal to 10% of the value of shares that they bid for according to the starting price into the account of the organization conducting the auction at least five (05) working days before the auction date according to the Auction Regulations. In case of the auction between strategic investors, the provisions of Clause 3, Article 9 of this Circular shall apply;

- In case where the foreign investor places a deposit in foreign currency by using the money transfer approach, the organization conducting the auction or the equitized enterprise (in the case of the auction between strategic investors) shall be responsible for opening a separate foreign currency account at a commercial bank for use in activities prescribed in Clause 2 of this Article.

The exchange rate used to calculate the value of deposit or security deposit in foreign currency of the foreign investor is the buying rate quoted by the commercial bank where the organization conducting the auction or the equitized enterprise (in the case of an auction between strategic investors) opens a foreign currency account and on the date of the investor’s placement of deposit or security deposit in accordance with the provisions of the Auction Regulations;

- Within five (05) working days from the date of announcement of the auction results, the organization conducting the auction or the equitized enterprise (in the case of an auction between strategic investors) shall be responsible for reimbursing the deposit to the investor who participates in the valid auction, but is not allowed to buy shares. If the foreign investor places the deposit or the security deposit in foreign currency, they shall be reimbursed in foreign currency;

b) Direct agreement method or approach:

- In case of the sale of shares to strategic investors, the provisions of Clause 3, Article 9 of this Circular shall apply;

- In case of selling shares to an investor who purchases shares according to the provisions of Point a, Clause 3, Article 8 of this Circular, the investor shall be responsible for paying a deposit at the same time as subscribing for shares into the account of proceeds from equitization of the enterprise which is equal to 10% of the value of the shares that the investor bids for at the offer price approved by the owner’s representative agency;

- In case of sale of shares to an investor who purchases shares as prescribed at Points a and b, Clause 4, Article 8 of this Circular, the investor shall be responsible for paying a deposit at the same time as subscribing for shares into the account of proceeds from equitization of the enterprise equal to 10% of the value of shares that they bid for at the selling price prescribed Points a and b, Clause 4, Article 8 of this Circular to be applied to each investor;

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c) Approach or method of underwriting of issuance of shares:

At the time of signing the underwriting contract, the underwriter shall pay a deposit equal to 10% of the underwritten value of shares agreed upon in the underwriting contract into the account of proceeds from equitization of the enterprise.

2. Payment for purchase of shares:

a) The investor shall be responsible for paying for purchase of shares in accordance with the following provisions:

- The auction method or approach (even including the auction between strategic investors): Within ten (10) days from the date of announcement of the results of the auction of shares, the investor must complete the share purchase and sale and transfer money into the account of the auction organization (or the account of proceeds from the equitization of the enterprise in the case of an auction between strategic investors) as prescribed in the Auction Regulations.

- Direct agreement method or approach:

The investor (even including strategic investors) shall make payment for purchase of shares within a maximum period of five (05) working days from the date of signature of the contract to buy/sell shares.

- Approach or method of underwriting of issuance of shares:

Within ten (10) days from the date of completion of the purchase and sale of shares under the underwriting contract, the underwriting organization shall be responsible for transferring money as prescribed in Clause 1, Article 11 of this Circular.

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The deposit or the security deposit in foreign currency shall not be deducted from the total amount payable by the foreign investor. The organization conducting the auction/the equitized enterprise (in case of placement of the deposit) or the credit institution (in case of the security deposit) shall refund the foreign investor within three (03) working days from the date of the foreign investor’s complete payment for the purchase of the winning shares in Vietnamese dong into the account of the auction organization, or into the account of proceeds from the equitization of the equitized enterprise (in the case of an auction between strategic investors) in accordance with the Auction Regulations;

c) Upon expiry of the deadline for payment as prescribed in Point a of this Clause, if the investor fails to pay or makes underpayment compared to the amount to be paid for the purchase of shares, the investor is not required to return the deposit or security deposit amount corresponding to the number of shares for which payment is not made. The deposit or security deposit in foreign currency that is not refundable to the foreign investor shall be converted into Vietnam dong at the buying exchange rate of the commercial bank where the auction organization or the equitized enterprise (in the case of an auction between strategic investors) opens an account on the date of the auction organization's transfer of the proceeds from the sale of shares to the equitized enterprise and the Enterprise Reorganization and Development Support Fund according to the provisions of Clauses 1 and 4, Article 11 of this Circular.

The number of shares that have not been paid for shall be considered as the number of shares that have not been sold out yet and disposed of according to the provisions of Clause 4, Article 8 of this Circular.

3. All payments for trades in shares shall be made in Vietnamese dong. Either cash payment or money transfer is accepted.

Article 11. Proceeds from sale of shares

1. Proceeds from the public auction of shares:

Within three (05) working days from the deadline for payment by the investor participating in the auction, the organization conducting the auction shall assume the following responsibilities:

a) If the equitized enterprise is a tier-I enterprise:

Transferring the proceeds from the sale of shares to the following accounts: funding for settlement of redundant labor policies; equitization costs according to the estimate determined in the equitization plan; the value of additional shares calculated according to par value (in case of the additional stock issue) and tax liability (if any).

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- Transferring the proceeds from the sale of shares to the tier-II enterprise to record them into the following accounts: funding for settlement of redundant labor policies; equitization costs according to the estimate determined in the equitization plan; the value of additional shares calculated according to par value (in case of the additional stock issue) and tax liability (if any).

- Transferring proceeds from the sale of shares to a tier-I enterprise to record them into the account of the book value of the sold shares corresponding to the investment of the tier-I enterprise in the tier-II enterprise.

c) The residual amount of proceeds from the sale of shares shall be transferred to the Enterprise Reorganization and Development Support Fund (including the deposit not payable to the investor (if any)).

2. Proceeds from underwriting activities:

Within ten (10) days from the date of the complete purchase and sale of shares under the underwriting contract, the underwriting organization shall be responsible for transferring proceeds from sale of shares as prescribed in Clause 1 of this Article.

3. In case of sale under agreement of shares to the investor, sale of preferred shares to trade unions, employees and executives of enterprises, or the auction between strategic investors, the Steering Committee on Equitization shall direct the equitized enterprise to pay the proceeds from the sale of shares to the Enterprise Reorganization and Development Support Fund within five (05) working days from the deadline for payment.

4. In case where total proceeds from the sale of shares specified in Clauses 1, 2 and 3 of this Article are lower than total expenditure prescribed for each equitized enterprise specified at Points a and b, Clause 1 of this Article, the equitized enterprise shall be entitled to retain all proceeds to pay expenses according to the approved estimate, and officially settle financial obligations at the time the equitized enterprise is initially granted the enterprise registration certificate.

Article 12. Treatment of proceeds from equitization at the time of official transformation into a joint-stock company

1. Proceeds from equitization, including:

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b) Proceeds from selling shares, including deposits or security deposits that are not required to be returned to investors in accordance with this Circular;

c) The difference in state capital at book value that increases from the time of enterprise valuation to the time when it is officially transformed into a joint stock company;

d) Profits set aside for transfer into the Development Investment Fund under clause 6, Article 21 in the Decree No. 126/2017/ND-CP;

dd) The residual balance of the Bonus Fund for enterprise executives and controllers at the time of official transformation into a joint stock company after spending according to regulations (if any).

2. Proceeds from equitization at the time of official transformation into a joint-stock company shall be treated according to clause 2, Article 39 in the Decree No. 126/2017/ND-CP, including:

a) In case of selling a portion of state capital:

The proceeds from equitization may be used to pay equitization costs and compensation packages to redundant employees as prescribed. The residual amount (including the difference in the selling price of shares) shall be paid into the Enterprise Reorganization and Development Support Fund;

b) In case where the state capital is kept unchanged and additional shares are issued to increase charter capital, the proceeds from equitization shall be treated as follows:

- Retaining the value corresponding to the number of additional shares issued at par value for use by the enterprise;

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Surplus of additionally issued shares

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Volume of additionally issued shares

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Winning bid – Starting Price

The residual amount of the capital surplus (if any) shall be retained for use by the joint-stock company in proportion to the additional shares issued in the charter capital structure and paid into the Enterprise Reorganization and Development Support Fund. Meanwhile, the amount retained for use by the joint-stock company in proportion to the additional shares issued in the charter capital structure (symbol A) is determined as follows:

A

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Volume of additionally issued shares

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Surplus of additionally issued shares

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Equitization costs recorded in the financial account of the competent authority

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Costs of employee redundancy recorded in the financial account of the competent authority

Total shares calculated according to the charter capital of the joint-stock company

c) In case of sale of state capital combined with the additional issuance of shares (including the case where the number of shares offered for sale is not sold out as prescribed in Clause 19, Article 1 of Decree No. 140/2020/ND-CP), the proceeds from equitization shall be treated as follows:

- Remitting the value obtained from sale of state shares (even including the difference between prices of sale of shares) into the Enterprise Reorganization and Development Support Fund.

- The residual amount shall be treated as provided in point b of this clause.

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4. In case where the actual proceeds from the sale of preferred shares to employees, trade unions, strategic investors and other investors are not enough to cover related costs (including equitization costs, expenditures on support packages for redundant employees, and costs of preferential treatment for employees) according to the final account approved by the competent authority, the provisions of Point d Clause 2 Article 39 of Decree No. /2017/ND-CP shall apply.

5. In case of equitization of a tier-II enterprise:

a) With respect to sale of shares of the tier-I enterprise’s investment:

- The proceeds from the equitization shall be used to repay the tier-I enterprise the book value of the shares sold and the taxes payable as prescribed (if any). The residual amount, after deducting the cost of equitization and settlement of policies for redundant employees, shall be paid to the Enterprise Arrangement and Development Support Fund.

- In case the proceeds from equitization are not enough to cover expenses according to the final account approved by the competent authority (equitization costs, expenses for compensation packages granted to redundant employees), the tier-I enterprise shall make up for the deficit and shall be charged into the financial operating expenses of the tier-I enterprise. These expenses shall not be deductible when determining the taxable income of the enterprise.

b) In case where the tier-I enterprise’s investment is kept unchanged and additional shares are issued, the proceeds from equitization shall be treated as follows:

- Retaining the value corresponding to the number of additional shares issued at par value and prescribed tax payables (if any) for use by the enterprise;

- The capital surplus of the additionally issued shares is used to pay the costs of equitization and compensation packages granted to redundant employees. The residual amount of the capital surplus (if any) shall be retained for use by the joint-stock company in proportion to the additional shares issued in the charter capital structure, and the rest shall be paid into the Enterprise Reorganization and Development Support Fund.

The capital surplus of the additional shares issued, and the amount retained for use by the joint-stock company in proportion to the additional shares issued in the charter capital structure, shall be determined as prescribed at Point b, Clause 2 of this Article;

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c) In case where the tier-I enterprise’s portion of invested capital is sold and additional shares are issued, the proceeds from equitization shall be treated as follows:

- Refunding the tier-I enterprise part of the book value of the shares corresponding to the investment capital sold by the tier-I enterprise and the tax payables as prescribed (if any); the residual amount shall be treated as prescribed in point b of this clause;

- In case where the proceeds from equitization according to the final account approved by the competent authority are not enough to cover prescribed expenses (refunding the tier-I enterprise the book value of the shares corresponding to the share capital sold by the tier-I enterprise and the prescribed tax payables (if any), equitization costs, expenses for compensation packages granted to redundant employees, value of preferential treatment granted in the form of selling shares to employees), the tier-I enterprise shall make up for the deficit and shall be charged into the financial operating expenses of the tier-I enterprise. These expenses shall not be deductible when determining the taxable income of the enterprise;

d) In case where an enterprise is equitized in the form of selling off the investment capital of the tier-I enterprise in combination with the issuance of additional shares, or selling the entire investment capital of the tier-I enterprise in combination with the issuance of additional shares, then the number of shares sold is determined to be the number of additional shares issued according to the approved equitization plan, the rest is determined to as the part of shares to be sold from the investment capital of the tier I enterprise. The volume of shares preferentially sold to those specified at Points a and c, Clause 1, Article 42 in the Decree No. 126/2017/ND-CP is determined as the number of shares sold from the investment capital portion of the tier-I enterprise. The proceeds from equitization in this case shall be treated according to the provision of point c of this clause.

6. Within ninety (90) days from the date of initial issuance of the Certificate of Business Registration, the equitized enterprise shall be responsible for, on their own accord, calculating and paying the proceeds from equitization to the Enterprise Reorganization and Development Support Fund according to the provisions of this Circular.

7. Within five (05) working days from the date on which there is a decision of the owner’s representative agency to approve the value of the state capital portion at the time of official transformation into a joint stock company and treat the proceeds from the equitization, the equitized enterprise shall continue to pay the difference increased compared to the amount already paid as prescribed in Clause 6 of this Article (if any) into the Enterprise Reorganization and Development Support Fund.

Article 13. Equitization costs and expenses

Equitization costs and expenses shall be subject to Article 8 in the Decree No. 126/2017/ND-CP, clause 4 Article 1 in the Decree No. 140/2020/ND-CP as follows:

1. Equitization costs and expenses are determined from the time of entry into force of the equitization decision to the time of handover between the equitized enterprise and the joint stock company.

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3. For agricultural and forestry companies that are equitized according to the provisions of the Government’s Decree No. 118/2014/ND-CP dated December 17, 2014 on reorganization, renovation, development and improvement of efficiency of activities of agricultural and forestry companies and documents prescribing amendments and supplements (if any), equitization costs thereof shall be subject to the instructions given in this Circular and other relevant instructional documents.

Section 4. FINAL SETTLEMENT OF ENTERPRISE REORGANIZATION SUPPORT FUND (hereinafter referred to as Fund)

Article 14. Treatment of receipts of the Fund at parent companies of economic groups, state corporations, parent companies belonging in parent company-subsidiary complexes (hereinafter referred to as parent company)

The parent company shall be responsible for making a final account of the Fund as of December 31, 2017 for submission to the owner's representative agency according to the following regulations:

1. Reconcile and confirm all debts of the Fund as at December 31, 2017.

2. The final account of the Fund must fully and truthfully disclose data on revenues, expenditures and liabilities (including late payment interest) and outstanding issues arising in the management activities of the Fund, including the management of the proceeds from the Fund at the parent company before the effective date of Decree No. 126/2017/ND-CP in effect (January 1, 2018), shall be handled as follows:

a) Proceeds from equitization:

- For a tier-II enterprise that is transformed into a joint stock company before January 1, 2018 but have not yet approved the final account of capital at the time of official transformation into the joint stock company:

Pursuant to the provisions of law in effect on the date in which a joint-stock company is initially granted the Certificate of Business Registration, the owner's representative agency (for tier-II enterprises as prescribed in Point b Clause 1 Article 45 Decree No. 126/2017/ND-CP), the Members' Council or the company president of the tier-I enterprise shall approve the final account of the proceeds from equitization on the date of the joint-stock company’s being initially granted the Certificate of Business Registration;

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- For a tier-II enterprise that is transformed into a joint stock company from January 1, 2018 to the effective date of the Decree No. 140/2020/ND-CP, the final account of the proceeds from equitization at the time of official transformation into the joint stock company shall be subject to the provisions of Decree No. 126/2017/ND-CP.

- For a tier-II enterprise that obtains approval of the equitization plan, but is not officially transformed into a joint stock company before the effective date of Decree No. 140/2020/ND-CP, the final account of the proceeds from equitization at the time of official transformation into a joint stock company shall be subject to the provisions of the Decree No. 126/2017/ND-CP, Decree No. 140/2020/ND-CP and instructions given in this Circular.

b) Proceeds from other reorganization and transformation manners:

The determination of proceeds from other forms of reorganization and transformation of a tier-II enterprise shall be subject to the provisions of law on corporate reorganization and transformation. The tier-II enterprise shall be responsible for paying the proceeds from other forms of reorganization or transformation (if they remain available) to the Enterprise Reorganization and Development Support Fund within the time limit specified in the Regulations on management and use of the Enterprise Reorganization and Development Support Fund.

Article 15. Treatment towards the Fund as at December 31, 2017

1. The parent company shall be responsible for remitting the entire balance of the Fund (including uncollected debts of the Fund) as of December 31, 2017 to the Enterprise Reorganization and Development Support Fund as prescribed in Clause 7 Article 48 of Decree No. 126/2017/ND-CP and Resolution No. 131/NQ-CP dated December 6, 2017 of the Government issued in the Government’s Regular Meeting in November 2017.

2. If the balance of the Fund (including uncollected debts of the Fund) as of December 31, 2017 is not yet remitted to the Enterprise Reorganization and Development Support Fund before June 30, 2018, the parent company must pay late payment interest as prescribed in the Regulations on management and use of the Enterprise Reorganization and Development Support Fund from July 1, 2018.

3. Within five (05) working days of receipt of the decision of the owner’s representative agency to approve the final account of the Fund as at December 31, 2017, the parent company shall make an additional payment of the difference increased in comparison to the amount already paid to the Enterprise Reorganization and Development Support Fund. After expiry of this time limit, the parent company must pay extra interest on late payment of the increasing difference in accordance with the Regulations on management and use of the Enterprise Reorganization and Development Support Fund.

4. In case where the amount to be paid into the Enterprise Reorganization and Development Support Fund according to the final account of the owner’s representative agency is lower than the amount that the enterprise calculates and pays by themselves, the owner's representative agency shall send the Ministry of Finance an official request for refund of the overpaid amount.

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Chapter III

ENFORCEMENT AND EXECUTION RESPONSIBILITIES

Article 16. Responsibilities of the Steering Committee on Equitization

1. Seeking the competent authority’s approval of the equitization plan to decide on the criteria for selection of strategic investors, the number of shares and the starting prices for selling shares.

2. Checking and completing information related to equitization.

3. Publicizing and providing auction organizations with complete and accurate information about the pre-equitized enterprises as prescribed.

4. Registering for participation in auctions:

a) Sending auction registration applications and equitization-related documents to organizations conducting auctions according to the form and list of documents specified in Appendix 5 to this Circular, and sending them to the Vietnam Securities Depository Center, Hanoi Stock Exchange to conduct the registration for the auction of shares and the registration of share codes, registration, depository and transaction registration of the number of winning shares at auction;

b) Signing contracts or authorizing equitized enterprises to sign contracts to provide auction services with organizations conducting auctions of shares.

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6. Supervising the auction of shares when businesses sell them at Stock Exchanges or intermediary organizations.

7. Keeping investors' bid prices secret until official results are announced.

8. Co-signing the Minutes of determination of the results of the public auction, the Minutes of determination of the results of the auction among strategic investors in accordance with the provisions of this Circular. Summarizing and reporting on the results of the auction of shares to the owner's representative agency.

9. Reporting to the owner's representative agency to seek their approval of the final settlement of costs, expenses and proceeds from equitization payable.

10. Complying with regulations of this Circular and other relevant laws.

Article 17. Responsibilities of equitized enterprises

1. Bearing responsibility for providing complete and accurate documents and information about enterprises (including equitization plans, draft charters of organization and operation of joint stock companies) before selling shares in accordance with regulations specified in this Circular.

2. Co-signing the Minutes of determination of the results of the public auction, the Minutes of determination of the results of the auction among strategic investors in accordance with the provisions of this Circular.

3. At the end of the equitization process, equitized enterprises must settle equitization costs and redundant labor support funds, sending a report to the Steering Committee on Equitization and submitting it to the owner's representative agency for approval.

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5. Within fifteen (15) days from the date on which the equitized enterprise is officially transformed into a joint stock company (granted an enterprise registration certificate), the equitized enterprise shall be responsible for registering official information with the Vietnam Securities Depository Center in accordance with the law on securities and the guidance of the Vietnam Securities Depository Center, including information about the issuer of shares; information about issued shares; information on the list of organizations and individuals owning shares and the number of shares owned, including the number of shares sold to strategic investors, trade unions and employees.

6. Paying the entire balance of provision for warranty of products, goods, and construction works (if the signed contract, warranty period remains valid after the date of first issuance of the Certificate of Business Registration), but not paying all to the Enterprise Reorganization and Development Support Fund within thirty (30) days from the date of expiry of the warranty period under the contract.

7. Making a report on payment of proceeds from equitization to publicize information according to the provisions of Clause 1, Article 11 of Decree No. 126/2017/ND-CP and sending it to the Ministry of Finance (the Department of Corporate Finance), the owner's representative as follows:

a) Within ten (10) working days from the end of the initial offering of shares, the equitized enterprise shall report on the payment of proceeds from the sale of shares according to Appendix No. 10 hereto;

b) Within five (05) working days from the expiration of the period of ninety (90) day within which enterprises must, on their own accord, determine the payable amount to the Enterprise Reorganization and Development Support Fund as prescribed at Point a, Clause 1 of this Article. 2 Article 39 of Decree No. 126/2017/ND-CP, equitized enterprises report on the payment of proceeds from equitization at the time of official transformation into joint stock companies according to Appendix 11 to this Circular;

c) Within five (05) working days from the date on which the owner’s representative agency approves the final account of proceeds from equitization, the equitized enterprise shall report on the payment of proceeds from the equitization after obtaining approval according to Appendix 12 to this Circular.

8. Ensuring public disclosure and transparency of information about the corporate equitization as prescribed in Clause 1, Article 11 of Decree No. 126/2017/ND-CP.

9. Signing contracts to provide auction services with organizations conducting auctions of shares under the mandate of the Steering Committee on Equitization.

10. When any loss occurs due to violation or failure to comply with the provisions of this Circular, the equitized enterprises and related individuals shall be responsible for compensation in accordance with the provisions of law.

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1. Requesting enterprises to provide sufficient documents and information on equitization as prescribed.

2. Issuing the decision on establishment of the Stock Auction Council.

3. Consulting the sample Regulations on the public auction of shares and the sample Regulations on the auction of shares to strategic investors (Appendix No. 8 and Appendix 9 to this Circular) to develop the Regulations on share auction according to the provisions of Point a, Clause 3, Article 6 and Clause 4, Article 9 of this Circular.

4. Notifying the Steering Committee on Equitization and enterprises of the time and location of the auction.

5. Making public announcements at enterprises, auction venues, on mass media (over three (03) consecutive issues of one (01) national newspaper and one (01) newspaper at the locality where the enterprise's head office is located) about information related to the sale of shares according to Appendix 3 to this Circular (including the English version) at least one (01) month before the auction date.

6. Providing investors with information related to equitized enterprises according to Appendix 2 to this Circular (including the English version), equitization plans, draft charters of the joint stock company, application for participation in share purchase according to Appendix 7a and Appendix 7b to this Circular (including the English version), and other information related to the auction as prescribed;

In case where the disclosed information is inaccurate or inconsistent with the information and data provided by the Steering Committee on Equitization and the enterprise, the organization conducting the auction shall be responsible for paying compensation in accordance with the provisions of law.

7. Receiving applications for participation in the auction, checking the condition for participation in the auction and distributing auction participation forms to qualified investors;

In case where any investor is not eligible to attend the auction, the organization conducting the auction must notify and return the deposit to the investor (if the investor has already made a deposit).

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9. Keeping investors' bid prices secret until official results are announced. Bearing responsibility for determination of auction results in accordance with regulations.

10. Remitting the proceeds from equitization according to the provisions of this Circular. In case of late remittance, the organization conducting an auction must pay an additional interest as prescribed in Clause 3, Article 39 of Decree No. 126/2017/ND-CP.

Article 19. Responsibilities of the owner’s representative agencies

1. Approving the equitization plan to sell shares, manage and use the proceeds from equitization according to the provisions of this Circular.

2. Inspecting and supervising the Steering Committee on Equitization and equitized enterprises to ensure that they sell shares according to the approved plan, and manage and use the proceeds from equitization according to regulations.

3. Directing and urging equitized enterprises to pay equitization proceeds to the Enterprise Reorganization and Development Support Fund in accordance with this Circular.

4. Approving the final account of equitization costs, redundant labor support funds and proceeds from equitization, and send it to the Ministry of Finance (the Department of Corporate Finance).

5. Directing and urging parent companies to treat the balance and make the final account of the Enterprise Reorganization Support Fund in accordance with Articles 14 and 15 of this Circular.

6. Based on the parent company's report as prescribed in Article 14 of this Circular, the owner's representative agency shall check and keep the final account of the Fund at parent companies as of December 31, 2017 and sending a report to the Ministry of Finance.

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Article 20. Responsibilities of the Members’ Council and the President of enterprises whose charter capital is wholly held by the State

Members’ Council and Presidents of enterprises whose charter capital is wholly held by the State shall implement rights and responsibilities under clause 3, Article 45 in the Decree No. 126/2017/ND-CP, as follows:

1. Approving the equitization plan of the tier-II enterprise to sell shares, manage and use the proceeds from equitization according to the provisions of this Circular, except those enterprises prescribed in point b, clause 1, Article 45 in the Decree No. 126/2017/ND-CP.

2. Making decisions on approval of the final account of equitization costs, redundant labor support funds and proceeds from equitization of tier-II enterprises, except those units prescribed in point b, clause 1, Article 45 in the Decree No. 126/2017/ND-CP, and at the same time sending them to the Ministry of Finance (the Department of Corporate Finance).

3. Guiding, inspecting and supervising the Steering Committee on Equitization and equitized tier-II enterprises to ensure that they sell shares according to the approved plan, and manage and use the proceeds from equitization according to regulations.

4. Directing and urging equitized tier-II enterprises to pay equitization proceeds, including balances of provisions for warranty of products, goods and construction works under clause 6, Article 17 herein on the Enterprise Reorganization and Development Support Fund in accordance with this Circular.

Article 21. Grandfather clauses

1. Enterprises that obtain approval of the equitization plans from competent authorities before the effective date of Decree No. 126/2017/ND-CP shall continue to sell shares according to the approved equitization plans. The management and settlement of proceeds from equitization at the time the enterprise is officially transformed into a joint stock company shall comply with the provisions of Decree No. 126/2017/ND-CP, Decree No. 140/2020/ ND-CP and instructions in this Circular.

2. Enterprises that complete the initial offering of shares before the entry into force of the Government’s Decree No. 60/2015/ND-CP dated June 26, 2015 on amendments and supplements to certain Articles of the Government's Decree No. 58/2012/ND-CP dated July 20th 2010, detailing and guiding the implementation of a number of articles of the Law on Securities and the Law on amending and supplementing a number of articles of the Law on Securities:

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b) In case an enterprise does not satisfy the listing conditions but satisfies the conditions of a public company in accordance with the securities law, they must register for transactions on the Upcom trading system in accordance with the provisions of the securities law within the time limit specified at Point a of this Clause. In case the enterprise does not meet the conditions of a public company, it is not required to register for transactions on the Upcom trading system.

Article 22. Entry into force

1. This Circular shall take effect as from July 1, 2021 and replacing the Circular of the Ministry of Finance: No. 40/2018/TT-BTC dated May 4, 2018, guiding the initial sale of shares and the management and use of proceeds from the equitization of state-owned enterprises and single-member limited liability companies with 100% charter capital held by state-owned enterprises that are transformed into joint-stock companies; No. 34/2019/TT-BTC dated June 11, 2019, amending and supplementing a number of articles of Circular No. 40/2018/TT-BTC.

2. Equitized enterprises, the owner's representative agencies and the relevant agencies, organizations and individuals shall undertake the implementation of the provisions of this Circular.

3. In the course of implementation, if there is any difficulty arising, the Ministry of Finance should be promptly informed to seek their possible actions./.

PP. MINISTER
DEPUTY MINISTER




Huynh Quang Hai