Proposal on Transfer of Equity Ownership

04/09/2020, 04:38 AM

The Ministry of Finance is drafting a Circular providing guidance on securities registration, depository, clearing and settlement activities, in which clear provisions are made on the transfer of securities ownership.

According to the draft, the transfer of ownership of securities registered at the Vietnam Securities Depository and Clearing Corporation (VSD) in accordance with the Law on Securities is implemented by VSD according to the following principles:

  1. Transfer of ownership of securities through purchase and sale transactions conducted through the trading system of the Stock Exchange;
  2. Transfer of ownership of securities outside the securities trading system for transactions that are not trading in nature or cannot be performed through the trading system of the Stock Exchange in the following cases:
  • Give, inherit securities according to the provisions of the Civil Code;
  • Trading odd-lot securities in accordance with the law on securities and stock market;
  • Issuing organizations redeem employees' shares according to the company's regulations on issuing shares to employees, redeem odd shares under the plan of issuing shares to pay dividends, issue shares from equity sources; The issuing securities repurchase shares of officers and employees who are eligible for preferential purchases in accordance with the equitization regulations.
  • Issuing organizations redeem shares at the request of shareholders, repurchase shares of each shareholder in proportion to their shares in the company according to the provisions of the Enterprise Law;
  • Transfer of ownership according to a judgment, a court decision, an arbitral award or a decision of a judgment enforcement agency;
  • Selling capital by method of auction, competitive offering, bookkeeping in accordance with law...

The draft also stated that securities owners must conduct securities depository before transferring ownership under the above provisions, except for the following cases: The transferor is missing, dead, or has resettled abroad and cannot be contacted; the issuing organization redeems the shares of the employees and employees who are entitled to buy back the privilege in accordance with the regulations on equitization; transfer of ownership under a court judgment, ruling, an arbitral award or a decision of the judgment enforcement agency.

Source: Bao Chinh Phu