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Registration simplified for unlisted firms
The new circular from the Ministry of Finance, providing guidance on trading rules for unlisted securities, is expected to improve the transparency of public companies and better protect investors' interests.
The State Securities Commission (SSC) published Circular 180/2015/TT-BTC, dated November 13, under the Ministry of Finance, on the registration of securities trading on the trading system for unlisted securities, which will take effect on January 1, 2016.
According to the new rules, the deadlines for trading registration of public companies, delisting or equitised enterprises have been shortened significantly compared with Circular 01/2015, issued early this year.
Public companies that are not eligible for listing on the two stock exchanges must register for trading in the Unlisted Public Company Market (UPCoM) system within 30 days from the date of completion of the registration of the public company.
Within 30 days of the closing day of the initial public offering, unlisted public companies or equitised enterprises must register for trading in the UPCoM system. The previous deadline was one year.
The registration deadline for delisted public companies from the stock exchanges fully meeting the requirements for a public company has also been reduced from 30 days to 10 days (applicable to mandatory delisting, voluntary delisting and delisting due to failure to meet the listing requirements of the consolidated company or the acquired company).
"This is positive news for the stock market as it expands the entities of trading registration on the UPCoM market to all public companies," analysts at FPT Securities Co said.
The new rules will constrain eligible companies from avoiding listing or deliberately delisting on the stock exchanges, actions that may harm investors' interests.
However, the new regulations have limitations, as penalties for companies that do not comply with the rules have not been defined, and this may reduce the enforceability of the circular, FPT Securities Co's analysts said.
According to the latest data released by the SSC on November 30, 1,071 public companies had not listed their securities on the stock exchange or UPCoM market.
To date, 683 companies are trading on the two national stock exchanges, while the listing number on the UPCoM market stands at 284.
Major corporations that have not registered for trading include Vietnam National Sea Products Corporation, Saigon Beer-Alcohol-Beverage Joint Stock Company, Hanoi Beer Alcohol and Beverage Joint Stock Corporation, Cholimex Seafood and Foodstuff Processing Company and Hanoi Construction Corporation Joint Stock Company.
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