Update law amending and supplementing the law on securities 20

On November 29th, 2024, the National Assembly voted to pass the Law amending and supplementing the Securities Law 2019 (“Law No. 56/2024/QH15”) within the framework of the 8th session of the 15th National Assembly, effective on January 1st, 2025. Law No. 56/2024/QH15 supplements the following new points to note: 

1. Legalization of the term “Stock market manipulation” 

Law No. 56/2024/QH15 adds clause 49 after clause 48 Article 4 to define market manipulation as including the following acts: 

“a) Using one or more of one’s own or another person’s trading accounts or colluding to continuously buy and sell securities to create artificial supply and demand ; 

b) Placing buy and sell orders for the same type of securities on the same trading day or colluding with each other to buy and sell securities without actually transferring ownership or ownership only circulating among group members to create fake stock prices and supply and demand;

c) Continuously buying or selling securities with a dominant volume at the opening or closing time of the market to manipulate securities prices;

d) Trading securities by colluding with or enticing others to continuously place orders to buy and sell securities, causing a major impact on supply and demand and securities prices, and manipulating securities prices;

d) Giving opinions directly or indirectly through the mass media about a type of security or a securities issuing organization in order to influence the price of that type of security after conducting a transaction and holding a position in that type of security;

e) Using methods or performing other trading acts or combining spreading false rumors, providing false information to the public to create artificial supply and demand, and manipulate stock prices . 

2. Foreign individuals and organizations are considered professional investors. 

Since January 1st, 2025, the law has recognized ” Foreign investors are individuals with foreign nationality, organizations established under foreign law conducting business investment activities in Vietnam ” at point a clause 3 Article 1 of Law No. 56/2024/QH15. 

3. Limits on the behavior of professional investors when participating in the stock market 

Point b clause 3 Article 1 of Law No. 56/2024/QH15 defines the scope of participation in bond transactions and transfers for organizations and individual professional investors, including: 

i. Professional securities investors are organizations that are allowed to participate in purchasing, trading, and transferring individual corporate bonds. 

ii. A professional securities investor is an individual as prescribed in Clause 1 of this Article who is allowed to participate in purchasing, trading, and transferring individual corporate bonds in one of the following two cases: 

1. Individual corporate bonds have credit ratings and are secured by assets; 
2. Individual corporate bonds have credit ratings and are guaranteed by a credit institution for payment of that bond. 

4. Public companies do not need to carry out capital reduction procedures when buying back shares issued by employees. 

Clause 13 Article 1 of Law No. 56/2024/QH15 has a major change compared to point b clause 6 Article 36 of the Law on Securities 2019. In case a company buys back shares from employees according to the company’s regulations on issuing shares to employees, the company must carry out procedures to reduce its charter capital corresponding to the total value calculated by the par value of the shares repurchased by the company within 10 days from the date of reporting to the Annual General Meeting of Shareholders. However, now enterprises do not need to carry out procedures to reduce their charter capital when buying back shares from employees. 

5. Supplementing the dossier components of the Registration dossier for initial public offering of shares of a joint stock company and the Registration dossier for public offering of bonds 

Clause 7, Article 1 of Law No. 56/2024/QH15 has added 2 main types of documents to the dossier for procedures: 

1. Registration dossier for initial public offering of shares: Report on contributed charter capital up to the time of registration for initial public offering of shares audited by an independent auditing organization according to regulations of the Minister of Finance; 
2. Public bond offering registration documents: Contract between the issuer and the bondholder representative. 

6. Limits on the subjects eligible to participate in private bond offerings of public companies 

Point b, Clause 1, Article 9 of Law No. 56/2024/QH15 has limited the subjects participating in the private bond offering to include only institutional investors. This provision has limited the subjects participating, not allowing individuals to buy private bonds of public companies as stipulated in Point b, Clause 2, Article 31 of the 2019 Securities Law. 

7. Adding more cases in which the State Securities Commission decides to cancel a public offering of securities 

Point a clause 8 Article 1 of Law No. 56/2024/QH15 adds 02 (two) cases in which the State Securities Commission is allowed to cancel a notarized securities offering, including: 

1. After the public offering of shares has ended and the shares have not been listed or registered for trading, if the offering is found to be in violation ; 
2. After the end of the public offering of bonds and warrants, if the offering is found to be in violation. 

Date written: 20/10/2025

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