New rule requires firms' information disclosure in English

Thursday, Jan 29, 2015 07:06

HA NOI (Biz Hub) — A market watchdog plans to direct public companies to disclose their information in both Vietnamese and English in a move to boost the Vietnamese securities market to the global level.

However, this will prove to be a big challenge for most companies at present.

Speaking at a workshop about the improvement of the legal framework for information disclosure on the stock market on Monday in HCM City, Nguyễn Sơn, director of the State Securities Commission's Market Development Department, said disclosing information in English is a necessary step for upgrading the Vietnamese market from the frontier to emerging markets, and will also help attract more foreign investment.

The new draft, which is expected to replace an earlier circular guiding the disclosure of information on the securities market, will require large public companies, listed businesses, stock exchange authorities and the Vietnam Securities Depository to deliver information in English.

Listed companies with a charter capital of VND500 billion (US$23.4 million) or more, or which has a foreign ownership of at least 20 per cent over a period of one year, will have to disclose information in both Vietnamese and English.

Their financial statements, annual reports, resolutions of shareholders' meetings will also be published in English, which must be released one working day after the Vietnamese versions.

In case of any dispute arising from differences between the two versions, the settlement will be based on the Vietnamese documents.

According to the State Securities Commission, around 100 companies on the HCM Stock Exchange will be liable to follow this regulation. There are 138 such businesses on the Ha Noi Stock Exchange, accounting for 20 per cent of the total listed companies on the stock market.

Tran Anh Dao, deputy general director of the HCM Stock Exchange proposed that a preparation time of three to six months should be given to the companies to implement this order. Beyond that deadline, the authorities will have the power to punish companies that violate the rule.

Dao also suggested that the authority prepare templates for the English publication to ensure consistency in reporting.

Representatives from listed companies, including the Bank for Investment and Development of Vietnam (BID) and Saigon Securities Inc. (SSI), also agreed with the authority's policy, along with the reporting time of six months.

But they argued that the authorities should not specify the time for the English publication (one working day after the Vietnamese publication) as many big-sized files, such as financial statements and annual reports, need longer to be translated accurately. – VNS

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