A full information disclosure regime has Y v id e ly been recognized as a cornerstone o f securities law to assure a continuous flow o f iníormation, which in turn ensures that investors are protected. This position has becom e embedded, for exam ple, in the IOSCO (International Organization o f Securities Commissions) d o c u m e n t,113 and in the u s 114 and J a p a n 115 securities regulation. Having been
avvare o f that fact, the lavvmakers in Vietnam created relatively comprehensive disclosurc requirements, w hich seem impressive to íb re ig n e rs.116
T he information disclosure regime is quite distinct com pared with other co m ponents o f the current securities regulations because o f the fact that it lies in various legal texts regulating both the securities industry and enterprises; and because it has undergone consecutive changes vvithin a short lime. The core legal rule o f the securities regulalions, D ecree 48/1998, merely gives general principles concerning iníbrmalion disclosure. Principles that are m ore detailed were created latcr by the ssc. Three months after the issuance o f D ecree 48/1998, the
" R e°u la lio n o f Public Issuance o f Shares and B onds” prom ulgated under Circular 0 1 /1 9 9 8 U1 was passed. In Seplem ber 28, 2001, C ìrcular 01/1998 was replaced by C ircu la r 02/2001. This circular, similar to its predecessor, provides a legal basis for public olTering disclosures. Continuous disclosures are mainly subject to the
"Rcm ilalion ot' Membcrs, Listing, Inlbrmation Disclosure, and Securities
i:' S e e I O S C O , “ O b ị e c t i v e s a n d P r i n c i p l e s o t S e c u r i t i c s R e g u l a t i o n - A R e p o r t o f t h e I n t e r n a t i o n a l O r s ; a n i z a t i o n o l ' S e c u r i t i e s C o m m i s s i o n s : S e p t e m b e r 1 9 9 8 ” , P a r t 1 . 4 . 2 . 1 : a t IOSCO Docim ient L ib ra ry, i i l l p : / / w \ \ \ \ . I( ) S C O . o i ' u / d o c s - p u b l i c / ỉ 9 9 8 - o b ị c c ú \ c s . ỉ i l i i ì L v i s i t e d N o v . 6, 2 0 0 1.
114 S e e S ecurities A d oJ 1933 s s 5, 6, 7, 8, & 10. 15 u s c s s 77e, 771'. 77g, 7 7 h , & 77) ( 2 0 0 2 ) : t h e p r i n c i p a ỉ a i m o f t h e u s S e c u r i t i e s A c t is t o í a c i 1 i t a t e t h e a v a i l a b i l i t y o f r e l i a b l e i n l o r m a t i o n c o n c c r n i n g s e c u r i t i e s t h a t a r e g o i n g t o b c o í ĩ e r e d l o t l i e p u b l i c ; s e e a l s o Securiíies Exchange Act ọ f 1934 s s 12, 13, & 14. 15 u s c s s 781, 7 8 m . & 7 8 n ( 2 0 0 2 ) .
115 S e e S e c u r itie s a n d Exchunge Law o f 1 9 4 8 ( 2 0 0 1 J a p a n ) , A r t s 5 & 2 4 : t h e f u n d a m e n t a l o b j c c t i v e o l ' t h e s e c u r i t i e s r e m i l a t i o n o l ' J a p a n is t i m e l y d i s c l o s u r e o f i n f o r m a t i o n .
116 S e e i n d i r a A . R. L a k s h m a m a n , G l o b e S t a f f , “ V i e t n a m T a k e s S l o v v R o a d T o v v a r d C a p i t a l i s m S t o c k E x c h a n g e O p e n s l o T r a d e 011 l y 4 S t o c k s " . ( N o v . 2 7 . 2 0 0 0 ) The Boston Globe,
< L e x i s N e . \ i s : T o p N e v v s : M o s l R c c c n t T w o W e e k s o T N e v v s S t o r i e s > .
117 T h e fuII n a n i e o f t l i i s d o c i i i n c i i t is Circulur 01 Ì99H TT-LÌBCK d a t e đ O c t o b c r 13, 1 9 9 8 ( h e i e i i i a l ì c r . Circti/ur 01 1998).
35
T o v v a r d s a W e l l P u n c t i o n i n ụ S e c i i í i t i es M a r k e t in V i e t n a m : C h a p t e r II
Transactions” , which WÍ1S only released in 1999 bv D ecision 04/1999. 118 In June 12, 2000, D ecision 04/1999 was revised by D ecisỉon 4 2/200 0, 119 vvhich, in turn, was shortly repealed by D ecision 79/2000 in D e cem ber 29, 2000. Thus, information disclosure requirem ents can now be found in D ecree 48/1998, C ircular 02/2001, D ecision 79/2000, the E nterprise A c t and other legal texts guiding the implementation o f the Act.
The disclosure regime applying to issuing com panies requires four types o f disclosure:
(a.l.) Disclosure at the tim e an issuer is seeking to m ake a public offering (hereinafter, public offering disclosure);
(a.2.) Periodic disclosure (a disclosure made on a quarterly, half-yearly or annual basis);
(a.3.) Timely disclosure (disclosure oí' ncvvly em erged material facts tliat might alTect the share prices);
(a.4.) Disclosure at the request o f either the ssc or a securities trading center.
Securities trading centers are also subịect to iníbrmation disclosure rcgulation but their duties arc con!lned \vithin the disclosure o f m arket activities.
Apart ừ om Ihcse rcquirements, inlbrmation disclosure is also required when a lender oỉTer takcs place.
a. Disclosures by Issuing Companies (1. 1. Public Offering Disclosure
Public oíTerino disclosure is oi' importance since it provides the public, for the iìrst time, vvith relevant inlbrmalion about the issuers as soon as they publicly o íĩer securities. Such disclosures enable investors to make wise and right investmcnt decisions in the primary markets. Possibly íor this reason, regulations
118 T h e full na me of tliis d oc u m en t is D c c is io n 0 4 / Ì 9 9 9 / O D - U B C K Ỉ dated March 27, 1999 (hereinaf tcr. D ecisitìn 0-1/1999).
11 * T h e íull nanic ol lliis d o cum ent is D e c is io n 42 2 0 0 0 ' Ọ D - U B C K Ỉ dated June 12, 2000.
I lereinaíler. D c c isio n 4 2 / 2 0 0 0 .
T o v v a r d s a W elỉ F u n c t i o n i n g S e c u r i t i e s M a r k c t in V i e t n a m : C h a p t e r I I
o f public offering in most developed countries' securities laws require information to be w idely published and distributed by issuers.120
In Vietnam, the vvhole set o f statutory provisions that govern public offering disclosures can be found in the regulation o f public offering promulgated under C hapter II D ecrec 48/1998 and Section IV Circular 02/2001.
U nder the regulation on public offering, before securities can be sold to the public, the issuer m ust file an application dossier containing speciíìed information
\vith the s s c to obtain an issuing license, and must provide public investors with speciíìed information. The public offering disclosure an issuer has to make is thus done through this application process. Documents found in the d o s s ie r 121 are expected to contain ađequate and necessary iníbrmation concerning the issuer.
A m o n g these documents, perhaps the most important ones that provide the public with essential inlbrmation about the issuer are the com pany-proíìle notice and the tìnancial slatement.
T he company-profile notice must contain necessary, faithful, and transparent inlbrm ation that will be hclpllil in enabling public investors and securities tìrms to appraise precisely the íìnancial situation, busincss perform ance and prospects o f the issuer. 122 The com pany-proíìle noticc must provide the public with the follow ine inlbrmation: 12c
1. Name, domicile, telephone and fa\ numbers:
2. Summary o í t h c c o m p an y 's chartcr and history;
3. Structure oi' the organization or business eroup (conglom erate) the issuer belongs to;
4. Com pany m anagem cnt apparalus;
5. Pinancial perform ance analysis;
6. Shareholdings held by the currenl sharcholders; nam cs and addresses o f lars,e s h a r e h o l d e r s ( Ho l di n g m o re than 5% o f e qu i ty Capital o f the i ssuer), o f manas;ement board m em bers and o f the director, and the c h ief accountant,
an d th e ir c o r r e s p o n d in g e q u ity and debt o w n e r s h ip ;
120 See Ja m es D. C o x , “T h e Future Content o f the us Securilies Lavv: Prem ises for R eform ing the Reỉỉulation o f S e c u r itie s OíTering: An Essay” (2 0 0 0 ) 63 L a w tìììd C o n le n i p o r a r y P r o b le m s
II. 14.
1:1 T h e list o f t l i es e d o c u m c n t s is i n e n l i o n e d in S e c t i o n 1. S u b - s e c t i o n I ( " P n b l i c O f f e r i n g ” ) of lliis Chapter.
1:2 Se e C i r c u l a r 0 2 / 2 0 0 1 , S c c t i o n IV. 4. a.
1:3 Ibi I. S c ctio n IV. 4.b.
37
T o v v a r d s a W e ỉ ỉ P u n c t i o n i nụ S c c u r i t i e s M a r k et in V i e t n a m : C h a p t e r II
7. Tax liabilities and the way il is intended lo discharge such liabilities o f the com pany; pending debts; issuing plans and proposals for the use o f the proceeds (Capital raised from the public);
8. O utcom es o f business performance and o f marketing; and principal products/services produced/provided in the last two consecutive years, and so on.
W here the issuer intends to issue shares thai give shareholders the right to purchase othcr shares o f stock (calỉ option), or intends to issue preferred shares having ca ll option, or intends to issue convertible bonds or bonđs having call option, or secured bonds, the company-proíile notice must prescribe the rights and other conditions that relate to such securities.124
The íĩnancial statement must be presented in conibrmity with the current accounting regulation. 125 The annual balance sheet and annual business p e ríb n n a n c e report must be audited hy an approved auditing Firm.126 Where the issuer holds more than 50% o f the equity C a p i t a l o f another company, the íìnancial statem ent of'this company must be included in the application dossier íìled by the
• 127
issuer.
A lte r obtaining an issuing license IVom the s s c , Ihe issuer must get its i s s u i n g a n n o u n c e i n c n t p u b l i s h e đ in o n e Central a nd o n c l o c a l128 nev vs pap er on tìve conseculive days and in a 1'ormal bulletin o f a trading cenler.129 The announcement must include: the name o í'th e issuer. domicile o f the head oHìce, telephone and íầx num bers; charter C a p i t a l ; busincss purpose; public issuing price; types o f shares or bonds; lotal number o f shares or bonds permilted lo bc issued to the
124 Ibiđ, S e c t io n IV. 4.C. P ossibly il is too early to introduce this provision w hen the V ietna m ese se c u r itie s niarkct is mcrely in its inlầncy.
The lollovving Su b -seclion o f tliis S e c lio n svill discuss the ciirrcnt accou n tin g regulation.
I2<’ 1 he "R e ^ u la lio n o f hulepencìeiil Aucỉiting Firnis Sưlecleil f o r Aucliting Issuers a n d S e c a r ìtie s F ir m s " w a s pronuilgated under Dticision 2 6 /2 0 0 0 /Q D - U B C K 2 d a t e d Apr. 5, 2 0 0 0 (hereinaíter, D e c ìs io n 2 6 / 2 0 0 0 ) . Pursuant to A rlicle 2, D ecisiun 2 6 / 2 0 0 0, an approved auditing firm is an in dependont auditing firm thai gcts approval from the s s c to audit issuing com p a n ie s and se c u r ities firms. Article 5.1, D e c isiu n 2 6 /2 0 0 0 , provides for criteria to be met by independent auditinu firms that seek to be approvcd auditing firms.
For m o r e inforination c ơ n c e m i n g independent auditino íìrnis, s e e D e c r e e 0 7 / C P dated Jan.
2 9. 1994. Art. 4 (w h ic h d e íìn e s independent auditinu firms); Circnlcir 2 2 / T C / C D K T dated Mar.
19, 1994, Se c tio n III. 16 (vvhicl) s p e c if ie s criteria to be met b\ tliose vvho seek to establish an independent auditing firm).
127 S e e C i r c u l a r 0 2 / 2 0 0 ỉ, S ec lio n IV .5.
128 A lo cal nevvspaper issued in the place \vhere the licad o lt ic c v't the issuer is located.
129 S e e D ư c rơ e -IS/I99S, A n . 13.
T o v v a r d s a W e l l F u n c t i o n i n ằ S e c u r i t i e s M a r k e t in V i c t n a m : C h a p t e r 11
public; date and term (thoi han) o f the issuance; place w here shares or bonds will be d i s t r i b u t e d ; p l a c e w h e r e t he p r o s p e c t u s will be a v a i l a b l e f o r p u b l i c a c c e s s . 130
T he last item in the announcem ent that concerns the place where the public can obtain the prospectus o f the issuer is a nevv rule introduced by Circular 02/2001, com pared with C ircular 01/1998.
A fter obtaining an issuing license from the s s c , and before distributing securities to the public, issuers have to fíle with thc s s c speciíìed documents such as a resum e o f the prospectus, an issuance notiíying document, and other docum ents (if any are available), that are to be used for the distribution o f securities. After five vvorking days from the date o f receipt o f the said documents, if the s s c has no refusal, the issuer can use Ihese documents in offering securities for sale to the p u b lic.13' The issuer is responsible for providing a formal prospectus or its resum e (if any is available) at the request o f investors or securities fírms, and in the places speciíìed in the Issuing A nnouncem ent.132 Som e other possible ways by vvhich the issuers, underwriters or distributors can directly furnish the prospectus to individual investors such as mailing and íacsimilc transmission, however, do not seem to be legally required.
(1.2. Periodie Discltìstire
Issuers arc rcquircd to disclose inlbrmation concerning their llnancial
s i t u a t i o n s a n d b u s i n e s s p e r ỉ b r m a n c c o n a p c r i o d i c b a s i s . 1”
O n the whole, D ecree 48/1998 and the Enterprise A cl merely a,ive general principles concerning conlinuous disclosures imposed on issuers. More detailed provisions can bc found in D ecision 79/2000.''U
L isted com panies have to report to the securitics tradins, cenler and the s s c a boul t h c i r b us ines s p e r i b r m a n c e , Capital, assets, turnover, proíìls and taxes on a quartcrly basis, and also on hali-yearly basis, vvithin the íìrst 15 days o f the followins, monlh.
130 See C i r c u l a r 02/200L S e c lio n V I . 2 131 Ibid, S e c tio n V I.3.
132 See S e c t io n VI.4.
133 See D e c r e e 4 8 / 1 9 9 8 , Al t. 18.2; se e also llìc E n terprise Ací, Al t. 93.
134 Tlìis D e c is io n reserves o n e ehapler, Chaptcr IV titlcd "Iníormation Disclosure", vvlìich applies to listccỉ c o m p a n ic s, to fund m anauement c om p a n ic s and to securitics tradini* ccntcrs.
i o Scc D e c i s i n n 7 9 /200 0, Al t. 32.1.
3 9
T o v v a r d s a W e l ỉ F u n c t i o ni 11^ S e c u r i t i e s M a r k e t in V i e t n a m : C h a p t e r n
They aỉso have to disclose the annual report \vithin 90 days írom the date o f completion o f a íìscal year. Such a report includes a balance shcet, a business períbrm ance report, a cash flow report, a commentary on the fmancial statement (vvith attached certification by an approved audilinơ firm) and a general report.136 The íìrst four items o f the annual rcport are actually com ponents o f a financial statement under the current accounling re g u la tio n .137 Thus, the annual report consists o f a íĩnancial statement and a general repo rt.138
D ecision 79/2000 also requires listed companics that ow n more than 50% o f the equity o f anolher company, or those having 50% or m ore equity Capital owned by another company, to disclose the íìnancial statem ent o f their subsidiaries or holding companies, respectively.139
The annual report must be filed vvith the securities trading center and the SSC; its contenls must be published in thc annual releases o l'th e listed companies, and be bricíly published in the tvvo consecutive issues oi'a Central newspaper. M0
Purthermore, such annual reports must be prcservcd at the Information Disclosure Section o f the Securities Trading Center vvithin tvvo years, for investors'
r MI
reterence.
(1.3. Time lỵ Disc/osure
Timcly disclosures are required in a numbcr o f spccilìed circumstances.
D ecree 48/1998 brierty says that issuers have to report, in a timely way, to the ssc
on their ovvn initiative where important iníbnnation that can aíTect the prices o f thcir securities is available.1'12
L,<> Ibid., A lt. 32 .2 .
1,7 Sec D e c is io n 1 6 7 / 2 0 0 0 - Ọ D / B T C (hereinaíter, D ecisiu n 1 6 7 /2 0 0 0 ) dated Oct. 25, 2 0 00, prom ulgating the "‘Enterprise Pinancial Statement R e gim e ”, Parl I, S e c tion II.
I3S Althoui2.li D ư cision 7 9 /2 0 0 0 im poses a duty to d is c lo s e financial statements on listed c o m p a n ie s, the core o f the a cc ou n tin g regulations, O n lin tu ìc c on A c c o u n t i n g a n d Statistic, does not h ave any c o n crete provision layin g do\vn such a duly. Thus, public a c c e ss to enterprise tìnancial information d o e s nót seeni legallv recomiized under the current accounting regulation.
This fact m akes the O rdinance disagree vvith the E n te rprise A c í and the securities regulations and c a u se s d iffic u ltie s in im plem enting the accounting regulation.
139 Scc D c c is in n 7 9 / 2 0 0 0, A n . 32.3.
140 Ibid., A n . 32.4.
141 See Art. 32 .5 .
142 See D c c r e e 4 8 / Ị 9 9 H, Alt. 1 8.3.
T o v v a r d s a \ Ve 11 F u n c i i o n i n g S e c u r i t i e s M a r k c t in Y i e t n a m : C h a p t e r 11
The timely disclosure regime is, moreover, provided for in some detail undcr Z ‘íC Ìsion 79/2000. Listed com panies must, on their own initiative, make timely cĩi-closure in a num ber o f circumstances, which can be grouped as follows:
2 1 T heir íĩnancial situation has changecỉ, e.g. their b ank accounts are to be ịu s p e n d e d or blocked; or w hen such situations have been reversed; their assets
; , 3 e been dam aged up to 10% or more; or they go bankrupt;
b ' Their leẹal structures m ight be changeđ: going into consolidation, merger, i5 v isio n or separation; business registration certiíicate or business operation - e r m i s s i o n being revoked; facing a dissolution decision;
c I T h eir pertb rm an cc does not go smoothly, for example: their business operation h25 ceased for m ore than three months, or has been suspended or restarted; or the
^ .'nsum ption o f their m ain products has been suspended;
ã I They are threatened by some legal acũons such as being prosecuted í01' iolatinơ the listing regulation; being investigated by a tax authority; or receiving a c o u n decision concerning com pany business períormance;
f I W hen thcy m ake a dccision concerning a number o f issues such as paying c : \ i d e n d s . splitting or addins, up oulstandina, shares or issuing new shares,
^ h a n s i n s business purpose, expanding business scale up to 10% or 1Ĩ10re o f the equiry Capital, dc-listine, and other decisions thai might aíTect stock price or :r.\ esto rs’ b e n e íìl.1'13
A listed com pany is required to report such inlbrmation to the trading center ĩn \vritten form, vvithin 24 hours ỈVom thc time the event occurs. The listeđ co m p an y also has to announce such an event vvithin three days IVom the date it
-■•ccurs. in a C e n tra l n e v v sp a p e r an d a n evvspap er o f the lo c a l ily w h e r e its head
: :Yice is lo cated .14'1
The securities trading center is required to release the above-mentioned m io rm atio n on its ovvn iníbrmation disclosure lầcilities. Hovvever, when the r e ) e \a n t com panies are being investigated by a tax authority, receiving a court iec isio n . or being d e -1 iSteel, and vvhen companies íầce events that might aíTcct
See D e c i s i o n 7 9 / 2 0 0 0 , Art. 33 .1 .
" Ibid. A lt. 33 .2 .
41
T o v v a r d s a W e l l r u n c t i o n i n g S c c u r it i e s M a r k e t in V i e t n a m: C h a p t e r II
their securilies prices, then the trading center \vill have to disclosc such in íb rm atio n in the p u b lic m e d i a. 145
A part from these requirem ents, under the E nterprise A c t, shareholders must be informed about the com pany decision to acquire its ovvn sharcs within 30 days from the date o f approval o f that decision.146 The Act, hovvever, does not specify the w ay in which such information is to be furnished to shareholders.
CI.4. Disclosures aí the R equest o f either the s s c or a Securities Trading Center (hereinaữer, disclosures at a request)
D ecree 48/1998 merely says that where it is d eem ed necessary to protect public investors, the s s c can requesl a relevant issuer to li le with it a report on the issuer’s business situatio n .14
D ecision 79/2000 íurther develops the above-m entioned provision.
Accordingly, listed com panies have to disclose relevant information at the request o f either the s s c or a securities trading center if: (a) there is rumor, concerning a listed company, that threatens the price o f its security, and it is deemed necessary to clarily such rumor; (b) w hen the price o f a listed security and volume o f transactions on such a security have suddenly bcen c h a n g e d .NX
Whcre such circum stances have occurred, vvithin 24 hours Irom the time the securities Irading center or the s s c makes the request, a listed company has to d i s c l o s e the re le v an t i n í o r m a t i o n in a Central nevvspaper a n d a nevvspaper o f the locality where its head oíììce is situated. The listed com pany has to report to the s s c and the trading center in vvritten í b r m . " 9 The concrete contents o f the report made by the listed com pany will be subịect to the rules o f Ihc trading centcr where it has its securities Iisted.150
145 Ibid, Art. 33.3.
146 Ibid' Art 65.
147 S e e D e c r e e 4H/Ỉ99H, A lt. 18.4.
'■|X S e e D e à s i n n 7 9 / 2 0 0 0, Arts. 3 4 . 1.
149 lbid, Al t. 34.2.
150 Ibid’ Art. 34.3.
T o v v a r d s a W e ỉ l F u n c t i o n i n ằ S e c u r i t i c s M a r k e t in V i e t n a m : C h a p t c r 11
I) Trading Information D isclosure Requirements YVith Respect to Securities Tradìng Centers
Securities trading centers have to disclose information concerning: market transactions (securities’ prices, volurne and value o f securities transacted and so on); purchasing and selling orders (the best oíTering/purchasing prices, number o f buying and selling orders); indexes o f listeci securities; m arket m anagem ent and market situation; listed com panies and fund m anagem ent com panies, members o f the trading center and investors.151
T he m anner in vvhich securities trading cenlers disclose iníbrm ation includes e l e c t r o n i c boards, C o m p u t e r system on the trading íloors; p r i n t e d r e l e a s e s by the centers; and public m ed ia.152 A m o n g these íầcilities, perhaps, the electronic boards can only provide the public vvith information such as securities’ prices, voluine, and value o f securities transacted, and indexes o f listed securities. Material information that is helpíul for appraising the situation o f listed com panies vvill thus be disclosed by the rem aining íầcilities.
Securities trading centers are also responsible l'or furnishing information concerning listed companics to securities lìrms. Those securities íìrins will then be in charge o f making such intormation available lo public investors.153 Since the num ber o f securities firms remain poor, it seems hard t'or public investors to get inlbnnation dircclly íVom the relevant lìrm.
Furthermore, tlic C o m p u t e r nelvvork am ong the Securities Trading Center, listed com panies and securities finns has not becn connected, and so inlbnnation has been transferred mainly by mail, vvhich is oflen dclayed and dependent on the efforts o f the relevanl parties.154
The vvay in vvhich information reaches the public investors can best be illustrated by the lbllovving chart:
151 Ibid, A n . 40.
152 Ibid, Art 41.
153 Ibid, Art. 42.1.
154 See Kim Chi, “ Hoai d o n g c o n g bo tho ng tin tren thi Iruoniì chunsĩ khoan” I Iníormation D isc losu r c on Securities Trading Centre], ( 2 0 0 1 ) 2, Tin Thi T ru o n ạ C h u n g K h o a n [S e c u riíie s M arkưís B u lle tin ] (Jan. 6, 2 0 0 1 ) I, I. Pa csim ile transm ission is not m e ntioned liere; it is unclear vvhether tlìis lacility has been c m p lo y e d in translerring inlbrm ation, hercinaỉter, Kim Chi.
4 3
T o v v a r d s a W e l l P u n c t i o n i rm S e c u r i t i e s M a r k e t in V i e t n a m : C h a p t e r 11
ssc
Chcirt No. ì: Iníorm alion Flow
c. ỉn/orntdtion Discỉosure in Tender Offcrs
II is notevvorthy that “Corporato T ender OITers and M ergers” are inserted in Chapter VIII, Decree 48/1998, under the titlc “ Prohibited and Restricted
A ctivitics” . 155 Article 74, litled “ Corporale T ender O íĩers and M ergers” comprises two sub-arúcles. Sub-article one reads:
Orgcinization(s) a n d individucil(s) w hich engage in any tronsaction thai ciffects the holding or the trans/erring o f 5%
or m ore o f voting shares o f one issuing companv, shall be subject to repo rting to the Securilies Trading Cenler or Stock
Exchange.
155 A lth o u gh having been titled "Corporate T e n d e r OITers and M ergers”, Article 74 g iv e s more vveight to remilation o f tender olTers. Its co n ten ts do not em brace what is implied in the title. In other w ords. the Article cloes not se e m to deal directlv vvilh meruers.
Tlie q u e slio n ot' iníormalion d isc lo su r e in meru,ers V N Í 1 1 not be discussed here since such disclosu re is niainlv requircd and made <1 1 1 1 0 1 1” the sliarclioldcrs ot tlie parties in a merger, not anionu public investors.
T o v v a r d s a W e j Ị F u n c i i o n i n g S e c u r i t i e s M a r k e t in V i e t n a m : C h a p t c r II
The language o f this provision sounds ambiguous and does not seem lo cover the activities that might be expected. Pirst, if the term s “organization” and
“ individual”, employed in the provision, are read in singular form, the scope o f this provision does not seem to cover an event that very likely occurs in practice, viz.
the purchase in collusion o f more than 5% o f voting shares from one issuer by two or more persons where each o f them merely buys, for instance, 4.9% o f the shares.
If these terms are read in plural form (“organizations” and “ individuals”), then it seems thai any group o f persons whose purchases exceed 5% o f the said shares will be subject to reporting requirements regardless o f w hether or not they have purchased in collusion.
Secondly, the provision merely imposes reporting responsibilities on purchasers o f 5% or more o f voting shares o f an issuer. It does not spell out which kinds o f iníormation are to be reported. D ecision 79/2000, while providing for the types o f information that securities trading centers have to disclose, says that the relevant securities trading center shall disclose information concerning the investors that fall within the scope o f Article 74 D ecree 4 8/199 8. l!>6 It appears that the only information required to be disclosed here concerns the investors making tender oíTers.
Furthermore, the securities trading center seems to be the only entity that should be rcported to, since the provision does nol require the purchaser lo report either lo the issuer or to the ssc. Experience írom abroad shovvs that the issuer and thc governmental regulatory agency should also get a report írom the acquirer vvhere such transactions occur.
The Securities Exchange Acl o f 1934 o f the us also regulates this m.atter but in a IĨ10re com prehensive manner. Pursuant lo Section 13(d), the acquirers o f more than 5% o f a n y equily securities o f class/classes reaistered under Section 12 o f the act will be subịect to reporting requirements, viz. to notiíỳ the issuer o f such securities; to send to and to lìle vvith the stock exchange and the SEC, respectively, statements containing speciíìcd information. Section 13(d) even stipulates. in detail, the iníormation that must be included in the statement, e.g. iníormation concerning the purchaser, the íund used to acquire such equity securities, the purpose o f the purchase, the amount o f acquired shares, and other iníormation relatina, to any contract, ạgreement or understandine,.157
156 Sce Article 40 .8 .
157 See itcms ( A ) - (H) o l t l i i s Scclion .