Vietnam Business Law is a website managed by lawyers of Venture North Law Limited (VNLaw). Venture North Law Limited (VNLaw) is a Vietnamese commercial law firm. We won the Rising Law Firm of the Year Award at the Southeast Asia Law Awards for the years 2020 and 2021 held by The Legal 500. Very few Vietnamese law firms have achieved a similar regional recognition.
Posted in: Banking & Finance
Decree 42/2015 is an entirely new decree governing “derivative securities” (chứng khoán phái sinh) and will take effect from July 2015. A quick read of Decree 42/2015 seems to indicate that Decree 42/2015 is intended to provide a legal framework for a regulated market for derivatives in Vietnam. In particular, Decree 42/2015 provides detailed requirements for:
The table below summaries the key conditions that a new foreign institutional investor may need to satisfy when investing in an existing insurance company in Vietnam. The target insurance company can be either a joint stock company (JSC) or a limited liability company (LLC). The investment could either be acquisition of new shares issued by the target or of existing share held by existing owners. Except in case of acquiring less than 10% existing shares, in all cases, an approval from the Ministry of Finance is required.
In addition to auditing companies, credit rating agencies (CRA) are an important private gatekeeper for a well-functioning capital market. Decree 88/2014 introduces a comprehensive regulations on credit rating agencies for the first time in Vietnam. Under Decree 88/2014,
Under Decree 68/2014, a Vietnamese non-life insurance company may now issue a “guarantee insurance” (bảo hiểm bảo lãnh) to guarantee contractual obligations of its customers in favour of a third party. The customer will need to pay insurance premium to the insurance company for the guarantee insurance. Thereafter, if the customer fails to perform the guaranteed obligations then the insurance company must perform the guaranteed obligations and will have a right to require reimbursement from the customer. In essence, a guarantee insurance is not a traditional insurance product but is similar to a surety bond or a bank guarantee. So for the first time, insurance companies will be competing with banks in performance bonds and guarantee market. This must be an important product for some non-life insurance companies in Vietnam as the whole Decree 68/2014 is all about definition of guarantee insurance.