CIRCULAR

on guidance the implementation of Governmental Decree 48/1998/ND-CP
dated July 11, 1998 concerning stocks and the stock market
****

The State Securities Commission hereby provides the following guidelines related to issues concerning the issuance of shares and bonds to the public to be listed at the concentrated transaction market

I. General provisions

1. The terms listed below found in this circular are interpreted as follows:

1.1 Shares is one kind of stock issued in the form of certificates or book entries which certify the ownership and legal interest of the holders of the shares regarding the property or capital of a joint stock company.

1.2 Bonds are one kind of stock issued in the form of certificates or book entries which certify the obligation to pay debts (including both principal and interest) of the bond issuing organisation to the holders of the bonds.

1.3 Preferred shares and bonds are those with name of the holders.

1.4 Bearer shares and bonds are those without name of the holders.

1.5 The right to purchase shares is the right reserved for existing share holders of a joint stock company to purchase a number of shares in one new share issuance compatible to their capital contribution ratio.

1.6 Convertible bonds are bonds which can be converted into normal shares of the same bond issuing organisation in accordance with conditions set previously.

1.7 Issuance guarantee is the action in which the issuance guarantee organisation helps the bond issuing organisation conduct necessary procedures related to the compilation and submission of documents asking for bond issuance permission before they start offering the bonds, commit to purchase the bonds of the bond issuing organisation to re-sell, or purchase the remaining bonds which have not been distributed. Issuance guarantee activities cover those in which the issuance guarantee organisation commits to sell the bonds for the bond issuing organisation, but do not too far to mean that the issuance guarantee organisation performs duties to the investors on behalf of the bond issuing organisation.

1.8 The distribution organisation is the organisation which sells the stocks via issuance guarantee organisations or issuance agents.

1.9 Issuance agents are stock companies, trade banks, investment banks and financial companies which commit to sell stocks for the bond issuing organisation in accordance with mutual negotiation.

1.10 The approved auditing organisation is the organisation which is licensed to perform auditing services and allowed by the State Securities Commission to function as the auditing organisation for the bond issuing organisation.

1.11 The equitised enterprise is State-owned enterprises or other types of enterprises which equitise.

2. The face value of the shares and bonds are written in Vietnamese dong. The unique face value of shares is VND10,000. The minimum face value of bonds is VND100,000 or multiples of VND100,000. In one issuance of bonds of the bond issuing organisation and bonds which have the same term must have the same face value.

3. Share and bonds which are issued to the public to be transacted at the concentrated transaction market are registered at the Stock Transaction Centre or the Stock Exchange.

4. Share and bond certificates which are issued to the public must have the following major contents:

4.1 Name and head office of the issuing organisation;

4.2 Number and date of the establishment licence and the business registration certificate;

4.3 Type, face value and series number;

4.4 The number of shares to be issued (regarding shares);

4.5 The interest, deadline of interest payment and term of the bonds (regarding bonds);

4.6 Name of the holder (regarding preferred shares and bonds);

4.7 Date of issuance;

4.8 Seal and signature of the chairman of the Board of Management of the issuing organisation.

5. In cases where shares and bonds are issued in the form of book entries, the share and bond buyer will be granted an ownership certificate.

6. Shares and bonds are sold to the following entities:

6.1 Vietnamese economic and social organisations and citizens, and Vietnamese residing abroad.

6.2 Foreign organisations and individuals.

7. The ratio of shares and bonds of an issuing organisation held by foreign organisations and individuals will be specifically decided by the Prime Minister.

II. Conditions for share issuance

1. Conditions for share issuance as regulated in Article 6 in Governmental Decree 48/1998/ND-CP dated July 11, 1998 concerning stocks and the stock market regarding organisations issuing shares to the public for the first time include:

1.1 Being joint stock companies or equitised enterprises;

1.2 Having an actual minimum prescribed capital as of the day of asking for issuance permission of VND10 billion;

1.3 Having been making a profit in the two most recent consecutive years as of the day of submitting documents asking for issuance permission, as well as having a healthy financial status and development prospects. Regarding equitised enterprises, the two years as set above also includes the time before the equitisation;

1.4 Having a feasible plan regarding usage of the capital derived from the issuance approved by the Board of Management;

1.5 Members of the Board of Management, and the director (general director) having business management experience;

1.6 At least 20 percent of the share capital of the issuing organisation must be sold to more than 100 investors outside the issuing organisation, and in cases where the share capital of the issuing organisation is more than VND100 billion, this ratio will be 15 percent.

1.7 The founding shareholders must have at least 20 percent of the share capital of the issuing organisation at the point of time when the issuance ends, and this ratio must be maintained at least in three years since the end of the issuance;

1.8 In cases where the total value according to the face value of the issued shares surpasses VND10 billion, an issuance guarantee organisation must be involved in.

2. If the issuing organisation wants to issue more shares to the public to increase capital, in addition to having to meet conditions as regulated in 1.1, 1.2, 1.3, 1.4, 1.5, 1.6 and 1.8 in II in this circular, they have to meet the following conditions:

2.1 The additional issuance must be at least one year later than the previous issuance since the day of receiving the issuance licence;

2.2 The value of the additional issued shares not surpassing the total value of existing shares.

3. In cases where shares are issued to increase capital along with the right to purchase shares, the issuing organisation must clearly state the method of performing the right to purchase shares in the prospectus, covering the following contents:

3.1 The duration of performing the right;

3.2 The convert price and the calculation method;

3.3 Other terms related to the interest of the holders of the right to purchase shares (if any).

III. Conditions for bond issuance

1. Conditions for bond issuance as regulated in Article 8 in Governmental Decree 48/1998/ND-CP dated July 11, 1998 concerning stocks and the stock market regarding organisations issuing bonds to the public include:

1.1 Being State-owned enterprises, joint stock companies and equitised enterprises;

1.2 Having an actual minimum prescribed capital as of the day of asking for issuance permission of VND10 billion;

1.3 Having been making a profit in the two most recent consecutive years as of the day of submitting documents asking for issuance permission, as well as having a healthy financial status and development prospects. Regarding equitised enterprises, the two years as set above also includes the time before the equitisation;

1.4 Having a feasible plan regarding usage of the capital derived from the issuance approved by the Board of Management regarding joint stock companies; or the managing body regarding State-owned enterprises;

1.5 Members of the Board of Management, and the director (general director) having business management experience;

1.6 At least 20 percent of the total value of the bonds to be issued must be sold to more than 100 investors, and in cases where the total value of the bonds to be issued is more than VND100 billion, this ratio will be 15 percent;

1.7 Having an issuance guarantee organisation except where the issuing organisations being credit organisations;

1.8 Having made commitments regarding performance of obligations to investors;

1.9 Certifying the representative of the bond holders.

2. Bonds issued in accordance with 1 can be guaranteed, non-guaranteed or convertible bonds.

3. Bonds can be guaranteed partly or completely according to one of the two following methods:

3.1 Payment guarantee of the Ministry of Finance of a credit organisation regarding State-owned enterprises;

3.1 Guaranteed by guarantee property of the issuing organisation or a third organisation.

4. In cases where issued bonds are guaranteed in accordance with 3.2 in III, the issuing organisation must clarify the guarantee ratio and list in detail the guarantee property in the documents asking for issuance permission, and produce legal documents to prove that the guarantee property belongs to their right of ownership (or a third organisation) and is valuable enough to pay for the bonds. The guarantee property must meet requirements as set in 6, 7 and 8 in III in this circular.

5. Property allowed to be used to guarantee for the issuance of guaranteed bonds includes:

5.1 Governmental bonds;

5.2 Other types of bonds, both the principal and interest of which are paid at no conditions by guarantee organisations;

5.3 The land use rights in accordance with land law;

5.4 Houses and construction buildings on the land;

5.5 Business and production facilities such as factories, hotels, shops, stores; tools and machines at factories, ships and planes...

6. Property used to guarantee for bonds in accordance with 5.4 and 5.5 in III in this circular must be ensured.

7. Guarantee property for one bond issuance musty meet the following requirements:

7.1 The value of the guarantee property in accordance with 5.1 and 5.2 in III in this circular must be at least equal to the total value of the bonds;

7.2 The value of the guarantee property in accordance with 5.3 and 5.4 in III in this circular must be at least 1.5 fold of the total value of the bonds.

8. The evaluation or calculation of the value of the guarantee property must be carried out as follows:

8.1 Guarantee property in accordance with 5.1 and 5.2 in III in this circular will be evaluated according to the lowest level of one of the following prices:

8.1.1 Market price;

8.1.2 Face value;

8.1.3 The buying price of the property including the interest and the deduction received until the day of asking for issuance permission.

8.2 Guarantee property in accordance with 5.3, 5.4 and 5.5 in III in this circular must be evaluated by a competent property assessment body. The evaluation is valid in no more than 12 months since the day of evaluation.

9. In cases where convertible bonds are issued, the issuing organisation must clearly state the conversion terms in the documents asking for issuance permission including the following contents:

9.1 Conditions and deadline of the conversion;

9.2 The ratio of conversion and the method to calculate the conversion price;

9.3 The method of calculation and compensation of losses in cases where the bond issuing organisation fails to issue bonds to meet conversion requirements;

9.4 Other terms (if there are any).

IV. Documents asking for issuance permission

1. Documents asking for permission to issue shares to the public as regulated in Article 9 in Governmental Decree 48/1998/ND-CP dated July 11, 1998 concerning stocks and the stock market include:

1.1 An issuance petition (the model for which is attached to this circular);

1.2 A notarised copy of the establishment licence or the decision to transform State-owned enterprises into joint stock companies;

1.3 A notarised copy of the business registration certificate;

1.4 The company's charter;

1.5 The resolution of the shareholders' meeting approving the issuance of new shares;

1.6 The prospectus as regulated in 3 in IV in this circular;

1.7 The list and autobiography of the members of the Board of Management and Directorial Board (the model for which is attached to this circular);

1.8 Financial reports in the two most recent consecutive years as of the day on which the documents asking for permission to issue shares are submitted in accordance with regulations in 4 of IV in this circular;

1.9 The decision certifying the value of the enterprises made by a competent body regarding State-owned enterprises which equitise;

1.10 The commitment to guarantee issuance in accordance with regulations in 5 in IV in this circular (if any).

2. Documents asking for permission to issue bonds to the public include:

2.1 Documents as regulated in 1.1, 1.2, 1.3, 1.4, 1.6, 1.7, 1.8, 1.9 and 1.10 in IV in this circular;

2.2 The resolution of the Board of Management concerning asking permission to issue bonds to the public; in cases where the issuing organisation is a State-owned enterprise, approval of the body which grants the establishment licence is required;

2.3 Commitment of the issuing organisation to perform its obligations to the investors as regulated in 6 in IV in this circular;

2.4 The contract between the bond issuing organisation and the representative of the bond holders as regulated in 3 in VIII in this circular;

2.5 Minutes certifying the value of the guarantee property or the approval notice of the payment guarantee of the guarantee organisation (in cases where guaranteed bonds are issued).

3. The prospectus must meet the following requirements:

3.1 Having enough necessary, correct and clear information to help investors and stock companies accurately evaluate the financial and business situation as well as development prospects of the issuing organisation.

3.2 Having the major contents as follows:

• The full name and transaction name of the issuing organisation;
• The address of the head office, telephone and fax numbers;
• Number, date, month and year of the establishment licence and the business registration certificate;
• A shortened company's charter;
• A summary of the development process;
• The structure of the organisation or group of which the issuing organisation is a member (if it is);
• The management structure;
• Analysis of the financial situation;
• The capital share structure of existing shareholders, name and address of existing shareholders who have more than five percent of the share capital of the company;
• Name and address of the members of the Board of Management, the managing director (general director), chief accountant, and the ratio of ownership of shares and bonds of each of the above-mentioned people in the issuing organisation;
• Business and marketing results in the two most recent consecutive years, and main products and services;
• Research and development of new products;
• Policies regarding labourers;
• Tax and performance of the tax obligation to the State;
• The present debt situation;

The plan of issuance: the purpose of using the money derived form the issuance, the total amount of capital to be issued, the number of shares and bonds to be issued, the offering price, the distribution method and principle, the deadline for registering bond and share purchase, the method of payment and transfer of shares and bonds, and interest of the holders.

3.3 In cases where bonds are issued along with the right to purchase shares or issue convertible shares and guaranteed shares, the prospectus must clearly state the conditions and rights related to the above-mentioned shares or bonds.

3.4 Main financial statistics in the prospectus must correspond with those included in the financial report which has been audited and is included in the documents asking for issuance permission.

3.5 Signature of the chairman of the Board of Management, members of the Board of Management (at least two-thirds of the total), chief of the supervision board, the director (general director), and chief accountant of the issuing organisation, and the managing director (general director) of all issuance guarantee organisations (if there are any). In cases where a representative is to sign, an authorisation letter is required.

3.6 The cover must include:

• The full name as well as the head office address, telephone and fax numbers of the auditing, consulting and issuance guarantee organisations (if there are any);
• The following sentence in capital letters: "The State Securities Commission allows the issuance of stocks, and this only means the issuance of stocks which meet regulations of the law but not guarantee the value of the stocks. All statements other than this are illegal."
• A notice of all risks, conditions or particular terms, and potential elements which can affect the income or the payment ability of the shares or bonds to be issued.

3.7 The prospectus must be printed on white vertical A4 paper with black letters.

4. The financial report must meet the following conditions:

4.1 Abiding by the accounting regulations of the State; the annual accounting balance and the annual report on the business situation must be certified by an approved auditing organisation;

4.2 The financial report of the most recent year must be dated no more than 90 days before the documents asking for permission to issue bonds is sent to the State Securities Commission; in cases where this duration surpasses 90 days, the issuing organisation must make supplementary financial reports as required by the State Securities Commission;

4.3 In cases where the issuing organisation has more than 50 percent of the share capital of another organisation, the former must send along the financial report of the latter.

5. The commitment to guarantee issuance must meet the following conditions:

5.1 Being made in accordance with the model attached to this circular;

5.2 The commitment to guarantee issuance must be signed by the issuing organisation and the issuance guarantee organisation. In cases where joint guarantee takes place, the commitment must be signed between the main issuance guarantee organisation and the issuing organisation.

6. The commitment to perform the obligations of the bond issuing organisation to the investors include the following contents:

6.1 The name of the issuing organisation;

6.2 The address of the head office, branches and representative offices of the issuing organisation;

6.3 The type and characteristics of the bonds to be issued;

6.4 The commitment to pay both the principal and interest of the bonds to be issued;

6.5 The commitment related to the maximum debt ratio;

6.6 The commitment to maintain the total value of the guarantee property until the term of the bonds terminates (if there is);

6.8 Details related to the guarantee of the third party regarding both the principal and interest (if there are any);

6.9 The name of the representatives of the bond holders in accordance with the contract signed between the issuing organisation and the representatives of the bond holders;

6.10 Terms related to the representatives of the bond holders.

7. Amendment of and supplements to the documents asking for permission to issue bonds before receiving the issuance licence:

7.1 Amendments and supplements can be made where:

7.1.1 The issuing organisation needs to amend or supplement;

7.1.2 The State Securities Commission requires the issuing organisation to amend or supplement.

7.2 In cases where amendments and supplements are to be made in accordance with 7.1, the amended or supplemented documents must be signed by those who signed in the initial documents asking for permission to issue bonds sent to the State Securities Commission or those who are in the same position with them;

7.3 In cases where amendments and supplements are to be made in accordance with 7.1.2, the issuing organisation must make the amendments or supplements in accordance with procedures and period of time as regulated by the State Securities Commission.

8. After having been licensed to issue bonds and before completing the distribution of the bonds to the public, if the State Securities Commission discovers incorrect content of the documents asking for issuance permission or necessary information is lacking but this has not caused losses to the investors, the issuing organisation must amend and supplement the documents asking for permission to issue bonds.

8.1 Amendments and supplements are to be made in accordance with 7.2 and 7.3 in IV in this circular;

8.2 The issuing organisation must announce the content of the amendments and supplements in three (03) consecutive issues of a central newspaper and another in the area where it is based and in the official bulletin of the stock market.

9. In cases where the stock buyer is at a loss due to information in the prospectus being incorrect or aimed to cover reality:

9.1 The following organisations and individuals must be responsible for compensating for the losses of the stock buyers:

9.1.1 The issuing organisation, the chairman and members of the Board of Management, chief of the supervision board, the director (general director), chief accountant and those who take part in the compilation of the documents asking for permission to is sue bonds;

9.1.2 The organisation which accepts and signs the commitment to guarantee for issuance of the issuing organisation;

9.1.3 The auditing organisation, and those who sign and certify the audit.

9.2 Those who are listed in 9.1.2 and 9.1.3 can only be exempted from the responsibility as long as they can prove that they did abide by regulations of the law and try to do their utmost to do this;

9.3 The compensation of losses for share and bond buyers as regulated in 9.1 will be carried out in accordance with current law.

V. Granting, cancellation and withdrawal of share and bond issuance licence

1. Organizations which issue shares and bonds to the public to be listed must obtain an issuance licence granted by the State Securities Commission. The issuance licence can only be granted to issuing organizations where they:

• Meet all conditions as set in 1 and 2 in II or 1 and 2 in III in this circular;
• Have documents asking for issuance permission as regulated in 1 or 2 in IV in this circular;
• Have made necessary amendments of and supplements to the documents asking for issuance permission as regulated in 7 in IV in this circular (in cases where amendments and supplements are required).

2. Documents asking for permission to issue shares and bonds to the public must be sent to the State Securities Commission. Within 45 days since the receipt of all necessary documents asking for issuance permission, the State Securities Commission checks, considers and grants or refuses to grant the licence. In cases of refusal, the State Securities Commission must state the reason in written form.

In cases where amendments of and supplements to the documents asking for issuance permission are to be made, the receipt of the documents will be the day on which the State Securities Commission receives the amended or supplemented documents.

3. Before completing the distribution of shares and bonds to the public, the issuing organization may be required to cancel the issuance in the following cases:

3.1. Amendments of and supplements to the documents asking for issuance permission are not made in accordance with 8 in IV in this circular.

3.2. The State Securities Commission discovers incorrect or inadequate information included in the documents asking for issuance permission and as such can affect the investment decision and cause losses to the investor.

3.3. Property of the issuing organization that is lost, seized or confiscated and is valued at more than 10 percent of the total value of the shares and bonds due to be issued

In cases where the issuance is cancelled, the investor has the right to cancel the purchase registration, or return the bought shares and bonds. The issuing organization is obliged to return the money to the buyer in accordance with regulations in 11 in VI of this circular.

4. The issuance licence of issuing organizations will be with- drawn in the following cases:

4.1. The issuing organization voluntarily asks for the issuance licence to be withdrawn;

4.2. Results of the issuance do not meet conditions as regulated in 1.6 and 1.7 in II or 1.6 in III in this circular;

4.3. The issuing organization cannot deal with the cases as listed in 3.1, 3.2 and 3.3 in V in this circular according to procedures and time as regulated by the State Securities Commission;

4.4. The issuing organization violates the law or regulations governing stocks and the stock market, and causes serious losses to the investor;

4.5. The issuing organization, or its representative, does not start offering sales of the shares and bonds within 60 days after the receipt of the issuance licence;

4.6. A law enforcement body proposes the withdrawal of the issuance licence. In cases where the issuance licence is withdrawn, the investor has the right to cancel the purchase registration, or return the bought shares and bonds. The issuing and distribution organizations are obliged to return the money to the buyer in accordance with regulations in 11 in VI of this circular.

5. The issuing organization is obliged to pay an issuance licence granting fee to the State Securities Commission equal to 0.02 percent of the total value of the shares and bonds allowed to be issued, but not more than VND50 million.

6. Shares and bonds allowed to be issued to the public are registered, listed and transacted at the Stock Transaction Centre or Stock Exchange.

VI. Distribution of shares and bonds

1. During the period of time the State Securities Commission takes to consider granting issuance licence:

1.1. The issuing organization is not allowed to either directly or indirectly conduct advertising activities to offer to the public to invest in shares and bonds and distribute shares and bonds to the public under any forms;

1.2. The issuing organization can only use information included in the prospectus sent to the State Securities Commission to carry out market survey, except for information related to the date of issuance and the selling price of shares and bonds to the public. The market survey cannot be conducted in the mass media.

2. Announcement of the issuance: Within five working days after the receipt of the issuance licence granted by the State Securities Commission, the issuing organization must announce the issuance on five consecutive issues of a central newspaper and another in the area where it is based, and in the official bulletin of the stock market. The announcement of the issuance must include the following major contents:

• Name of the issuing organization;
• Address of the head office, telephone and fax number;
• Prescribed capital
• Purpose and field of business;
• Selling price to the public;
• Type of share or bond;
• Total number of shares and bonds allowed to be issued to the public;
• Date and term of issuance;
• Location of share and bond distribution

3. After the receipt of the issuance licence, the issuing organization must send to the State Securities Commission documents serving the distribution of shares or bonds:

• The summarized prospectus as regulated in 4 in VI in this circular;
• The notice of the distribution of shares or bonds according to the content the model of which is attached to this circular;
• Other documents (if there are any). Within five working days of receipt of the above-mentioned documents and the State Securities Commission does not have any different opinions, the distribution organization can use these documents to start offering sales of share sand bonds to the public.

4. Requirements for the summarized prospectus:

4.1. The summarized prospectus must honestly manifest the contents of the prospectus approved by the State Securities Commission;

4.2. Major contents of the summarized prospectus must be in accordance with regulations set in 3.2 in IV in this circular;

4.3. Major sub-titles of the summarized prospectus must be the same as those included in the prospectus approved by the State Securities Commission;

4.4. The summarized prospectus must be announced at all branches and distribution agents or places easily accessible for investors.

5. When choosing the distribution agent, the issuing organization must select one which meets the following conditions:

5.1. Having adequate material facilities and workforce to serve the distribution;

5.2. Be a solvent business;

5.3. Having signed an agent contract with the issuing organization.

6. When distributing shares and bonds to the public, the issuing organization must abide by the following requirements:

6.1. Using only information included in the prospectus and other related references in the documents asking for issuance permission which have been approved by the State Securities Commission;

6.2. Not distributing shares and bonds before announcing the distribution to the public as regulated in 2 in VI in this circular;

6.3. Distributing shares and bonds fairly according to the selling price stated in the prospectus approved by the State Securities Commission;

6.4. Creating favourable conditions for individual investors to buy shares and bonds; 6.5. Ensuring a minimum purchase registration deadline of 30 days for investors;

6.6. Using share or bond purchase registration form;

6.7. Requiring share and bond buyers to only deposit at most 10 percent of the value of the shares and bonds they register to buy.

7. In cases where the number of registered shares and bonds surpasses the number of shares and bonds allowed to be issued to the public:

7.1. The issuing organization can use one or a number of priorities in the distribution process, including those related to time, amount or others according to negotiation;

7.2. The distribution organization must prioritise distributing to individual investors according to the number of shares or bonds they register to buy. In cases where the number of shares or bonds individual investors register to buy surpasses 20 percent of the number of shares or bonds allowed to be issued, the issuing organization must set aside at least 20 percent of the shares or bonds to be issued to the public to distribute to individual investors;

7.3. The issuance guarantee organization or related people must sell all the shares and bonds they guarantee to the public and are not allowed to retain shares and bonds for themselves;

7.4. The manager and major shareholders of the issuance guarantee organization are not allowed to buy shares or bonds issued to the public;

7.5. When the purchase registration deadline terminates, the issuing organization must inform the investor of the number of shares or bonds they are allowed to buy;

7.6. If the investors cannot buy all the shares or bonds they register to buy, they have the right to cancel the registration, and must announce the cancellation within five days after the announcement of the number of shares or bonds allowed to be bought is made. The issuing and distribution organizations are obliged to return the deposited money of the buyer to the buyer at the latest on the day before the payment deadline for share and bond purchase. If the deadline is not met and the issuing and distribution organizations have not returned the money to the buyer, in addition to having to return all the deposited amount, they have to pay the interest for the deposit according to the highest interest rate of call deposit accounts of a State-owned commercial bank applied at the time of payment.

8. The issuing or distribution organization must distribute the shares and bonds within 90 days after the issuance licence comes into effect. If after this deadline terminates, the shares and bonds have not been sold up and the issuing organization wants to continue distributing shares and bonds, it must send a petition to the State Securities Commission in which the reason and method of distribution of the remaining shares and bonds are clearly stated.

9. The issuing and issuance guarantee organizations must transfer the shares and bonds to the buyer within 30 days of the end of the issuance.

10. Within 10 days of the end of the issuance, the issuing organization must send a report on the result of the distribution of shares and bonds to the State Securities Commission (the model of the report is attached to this circular).

11. In cases where the issuing organization is cancelled or the issue licence is withdrawn in accordance with regulation in 3 or 4 in V in this circular, it must:

11.1 Announce the cancellation or withdrawal of the issuance licence in three (03) consecutive issues of a central newspaper and another in the area where it is based, and the official bulletin of the stock market. The content of the announcement includes:

• The number and date of the decision to cancel the issuance or withdraw the issuance licence;
• The time to return the paid money or deposited money to the investor;
• The location of returning the paid money or deposited money to the investor;
• The method of payment.

11.2. Return the paid money or deposited money to the investor within 30 days of the decision to cancel the issuance or withdraw the issuance licence being made. If this deadline is not met and the issuing and distribution organizations have not returned the money to the buyer, in addition to having to return all the deposited amount, they have to pay the interest for the deposit according to the highest interest rate of call deposit accounts of a State-owned commercial bank applied at the time of payment.

VII. Issuance guarantee

1. Organizations wishing to take part in issuance guarantee activities must:

1.1. Have an issuance guarantee licence granted by the State Securities Commission; 1.2. Not belong to those regulated in 3 in VII in this circular.

2. Issuance guarantee organizations are not allowed to guarantee for the issuance of a number of shares and bonds having a total value quadrupling the differential between the value of the available mobile assets and that of short-term debts. The available mobile assets and short-term debts are identified as follows:

2.1. Available mobile assets include cash, collections to be made in the fiscal year, and financial investments having a term of less than one year;

2.2. Short-term debts include short-term loans and amounts to be paid in the fiscal year, including long-term loans which are due.

3. Issuance guarantee organizations cannot guarantee in the following cases:

3.1. The issuance guarantee organization having five percent upwards of the share capital of the issuing organization, or the issuing organization having five percent upwards of the share capital of the issue guarantee organization;

3.2. The issuance guarantee organization and the issuing organization being controlled by another organization.

4. Organizations which provide issuance guarantee must send the following documents to the State Securities Commission among with documents asking for issuance per- mission as regulated in 1 or 2 in IV in this circular:

4.1. A copy of the issuance guarantee licence granted by the State Securities Commission;

4.2. A petition asking for issuance guarantee permission;

4.3. The contract among issuance guarantors (in case of joint guarantee);

4.4. Evidence showing that the issuance guarantee organization meets all conditions regulated in 2 in VII in this circular.

In case of joint guarantee, the main issuance guarantee organization must send documents as regulated in 4.1, 4.2, 4.3 and 4.4 while others having only to send those as regulated in 4.1 and 4.4 in VII in this circular.

5. Issuance guarantee must be carried out according to one of the two following methods:

5.1. Buying all the shares or bonds allowed to be issued to sell to the public;

5.2. Buying the remaining shares and bonds yet to be distributed of the issuance.

6. In cases where two or more guarantee organizations take part in the guarantee, a joint guarantee will be set up:

6.1. The issuance guarantee conglomerate must operate on the basis of the contract signed between the issuance guarantee organizations; and there can be one or more main issuance guarantee organizations in an issuance guarantee conglomerate;

6.2. The main issuance guarantee organization will on behalf of the conglomerate sign the issuance guarantee contract with the issuing organization, and is responsible to the issuing organization regarding commitments of issuance guarantee organizations in the conglomerate in distributing shares and bonds.

7. The issuance guarantee organization must abide by the following regulations when completing issuance guarantee commitments:

7.1. Not revealing information concerning the issuing organization to the third party other than what stated in the prospectus;

7.2. Be responsible for the correctness and adequacy of the information in the prospectus;

7.3. Distribute shares and bonds to the public in accordance with regulations in VI in this circular.

VIII. Representative of bond owners

1. The representative of bond owners can be commercial banks or financial organizations which meet the following requirements:

1.1. Having a depository business licence granted by the State Securities Commission;

1.2. Being economically effective and having a healthy financial status;

1.3. Having a separate operating and management structure for acting as the representative to do away with incurring losses during the period of acting as the representative of bond owners.

2. The following organizations cannot act as the representative of bond owners:

2.1. Organizations which guarantee for debt payment of the issuing organization;

2.2. Organizations which have five percent upwards of the voting shares of the issuing organization, or the issuing organization has five percent upwards of the voting shares of the organizations which ask to be the representative;

2.3. Organizations which are managed by the same person as the bond issuing organization;

2.4. The bond issuing organization and the representative of the bond owners have the same shareholders who have five per- cent upwards of the voting shares.

3. The contract of acting as the representative of bond owners is signed between the issuing organization and the representative of bond owners according to the model attached to this circular, and has the following major contents:

3.1. Name and address of the parties taking part in the contract;

3.2 Rights and obligations of the parties taking part in the contract;

3.3. Regulations related to amendments of and supplements to the draft on rights and obligations of the representative of the bond owners;

3.4. Fee to be paid to the representative of the bond owners;

3.5. Contract liquidation terms;

3.6. The statute of limitation of the contract.

4. The regulation on the rights and obligations of the representative of the bond owner must include the following major contents:

• Supervision of the observation of regulations included in the commitment to perform the obligation of the bond issuing organization in accordance with regulation 6 in IV in this circular;
• Transferring assets, documents or documentation related to the action of representing the bond owner to the new representative of the bond owner whenever there is a change to the representative of the bond owner according to 8 in VIII in this circular;
• Helping and creating favourable conditions for bond owners to check the list of bond owners, financial reports and annual reports of the issuing organization;
• Supervising, liquidating and dividing assets in favour of the bond owners in cases where the issuing organization fails to pay for the bonds;
• Requiring the issuing organization to send reports according to regulations in 4.2 in IX in this circular;
• Limit regulations concerning the representative of the bond owner.

5. Amendments of and supplements to the regulation on the rights and obligations of the representative of the bond owner will be made in accordance with the following principles and procedures:

5.1 The amendments and supplements are not in contrast with regulations set in this circular, and must be approved by the bond owners or representatives of the bond owners who have more than 30 percent of the total value of the bond;

5.2 The bond issuing organization must make a draft of the amendments of and supplements to the regulation on the rights and obligations of the representative of the bond owner and send it to the representative of the bond owners and the State Securities Commission within seven days since the draft is made, and must also send it to the bond owner if required to.

6. The representative of the bond owner has the obligation to inform those included in the list of bond owners at least once a year of the situation and characteristics of the guarantee property (if there is), and the representative of the bond owner must also inform them of any changes within 30m days since the changes are made.

7. Changes to the representative of the bond owner can be carried out in the following cases:

7.1 The contract of acting as the representative of the bond owner terminates;

7.2 The representative of the bond owner has its depository business licence withdrawn;

7.3 The representative willingly asks not to act as the representative anymore;

7.4 More than 30 percent of the bond owners require the issuing organization to change the representative of the bond owner.

8. The substitution and identification of the new representative of the bond owner is only valid when:

• There is an approval of the bond owners or representative of the bond owners who have more than 30 percent of the total value of the bonds;
• There is an approval of the State Securities Commission.

The bond issuing organization must inform all bond owners of the changes to the representative of the bond owner within 30 days since the identification of the new representative of the bond owner is made.

IX. Reporting mechanism

1. The issuing organization must send reports on its financial status and business activities to the State Securities Commission every year. The reports include the financial report and the annual report, which must be publicly announced at the head office of the issuing organization so that the investors can consult.

2. Requirements for the financial report:

2.1 Abiding by the existing accounting mechanism of the State. The annual financial report must be certified by an approved auditing organization;

2.2 Made and sent to the State Securities Commission at least 90 days after the end of the fiscal year;

2.3 In cases where the issuing organization has more than 50 percent of the shares of another organization, the issuing organization must send along the financial report of that organization.

3. Requirements for the annual report:

3.1 Having the following major contents:

• General information on the operational situation of the issuing organization;
• The structure in the group or conglomerate of the issuing organization (if there is);
• The management structure;
• Name and position of the members of the Board of Management, the Directorial Board and major shareholders;
• Marketing activities;
• Production and trade activities;
• Research and development of new products;
• Policies regarding labourers;
• The supplier and customer;
• Analysis of financial activities;
• Division of dividends and profits;
• Tax;
• Other contents in accordance with current regulations.

3.2 Being made every year and sent to the State Securities Commission at least 90 days after the end of the fiscal year;

3.3 Signed by the chairman of the Board of Management, the managing director (general director) and the chief accountant of the issuing organization.

4. In cases of bond issuance, the issuing organization must prepare and send the following reports to the representative of the bond owner every year:

4.1 The report on the debt ratio, and the guarantee of the bond issuing organization possibly making the total outstanding loan balance of the bond issuing organization surpass the committed debt ratio;

4.2 Reports on events which can be the reasons leading to the issuing organization failing to maintain the guarantee property to ensure payment ability (if there is);

4.3 The list of the bond owners according to requirements of the representative of the bond owner.

5. The issuing organization is obliged to report to the State Securities Commission in the following cases:

5.1 Sudden events or developments occur and are likely to seriously affect the stock price, or there are rumours related to the issuing organization in accordance with the operational regulation of the Stock Transaction Centre;

5.2 The State Securities Commission needs to protect the interest of the investment community.

X. Inspection, supervision and treatment of violations

l. Organizations which issue shares and bonds to the public are under the inspection and supervision of the State Securities Commission and other authorized competent bodies in accordance with the law.

2. Issuing organizations, issuance guarantee organizations and related organizations and individuals who violate regulations in this circular will be dealt with in accordance with Governmental Decree on treatment of administrative violations in the field of stocks and the stock market, as well as current legal regulations.

XI. Implementation provisions

1. If shares and bonds which are allowed to be issued not in accordance with regulations in Governmental Decree 48/1998/ND-CP concerning stock and the stock market want to be transacted at the Stock Transaction Centre or the Stock Exchange must be registered according to the following regulations:

1.1 The issuing organization must send to the State Securities Commission the following documents:

1.1.1 Documents proving that the issuing organization fully meets conditions set in 1 in II in this circular regarding share issuing organizations, and 1 in III in this circular regarding bond issuing organizations;

1.1.2 The petition for re-registration;

1.1.3 The licence to issue shares or bonds granted by an authorized competent body.

1.2 The State Securities Commission must answer in writing the approval or unapproval of the re-registration of the issuing organization in accordance with 2 in V in this circular.

2. The circular comes into effect in 15 days after the date of signing.

3. The chief of the State Securities Commission Office, the director of the Stock Issuance Management Department, director of units under the State Securities Commission, issuing organizations and stock companies must be responsible for provision of guidelines for the implementation of this circular within their range of competence.

Chairman of the State Securities Commission

LE VAN CHAU

./.