The Ministry of Finance issued Circular No. 13/2013/TT-BTC on January 25, containing regulations on the supervision of securities transactions.— Illustrative image

(Biz Hub )The Ministry of Finance issued Circular No. 13/2013/TT-BTC on January 25, containing regulations on the supervision of securities transactions.

The circular provides specific definitions of securities transactions, securities listing orgnisations, securities registration, internal transactions, market manipulation, extraordinary transactions, and rumours.

Under the regulations, stock exchanges will be required to supervise transactions and report to the State Securities Commission on weekly, monthly, and annual bases, while the Securities Depository Centre will be required to report monthly. Organisations and individuals engaged in securities transactions will be obligated to provide timely, full and accurate information, materials, and electronic data describing securities transactions in a uniform format described by the circular.

The circular will replace Decision No 127/2008/QD-BTC of December 2008 and will take effect on March 8.

Banks to classify, report on debts

The State Bank of Viet Nam issued Circular No 02/2013/TT-NHNN on January 20, regulating the classification of assets and methods of provision against risks and the use of provisional funds to offset losses of credit institutions.

Under the new circular, the State Bank requires credit institutions and branches of foreign banks themselves to classify debts and off-balance-sheet undertakings on a quarterly basis and report the results to the Credit Information Centre (CIC).

Debts shall be classified into five categories: Standard Debt, Debt Needing Special Attention, Subprime Debt, Doubtful Debt, and Potentially Irrecoverable Debt.

Within three days of receiving the results, the CIC shall summarize a list with the most risky debts classified by credit institutions, making this list available upon the request of credit institutions.

The State Bank has also requested credit institutions to create an internal credit rating system for rating customers as a foundation for evaluating credit worthiness and for creating a risk reserve policy in conformance with the actual circumstances of the credit institution.

The Circular takes effect on June 1.

Ministry revises definition of equity

The Ministry of Finance issued Circular No 05/2013/TT-BTC on January 9, establishing a new financial regime for credit institutions. Under the new circular, owner's equity shall be defined to include: (i) charter capital; (ii) exchange-rate differences; (iii) differences upon asset revaluation; (iv) share premiums; (v) capital reserve funds; (vi) undistributed earnings; and (vii) owner's other capital.

Credit institutions are entitled to use capital and assets for business operations. However, to ensure safety, they may not invest in acquisition of fixed assets in excess of 50 per cent of charter capital and reserve funds. Credit institutions are entitled to mortgage or pledge assets, as well as transfer or liquidate them in accordance with the circular.

The new circular also requires credit institutions to submit an annual financial plan to the State Bank of Viet Nam and the Ministry of Finance by November 15 of the previous year.

The circular takes effect on February 25 and applies to the current fiscal year. It replaces Circular No 12/2006/TT-BTC of December 2006. — BIZCONSULT