Press release on issuance of Circular No.15/2018/TT-NHNN
On June 18, 2018, the Governor of the State Bank of Vietnam (SBV) issued Circular No.15/2018/TT-NHNN revising and supplementing a number of articles of Circular No.22/2016/TT-NHNN dated June 30, 2016 regulating the corporate bond purchases by the credit institutions and the foreign banks’ branches in Vietnam.
Circular No.15/2018/TT-NHNN was issued to revise the regulations on the corporate bond purchases by the credit institutions and the foreign banks’ branches in order to be in line with the applicable laws and the current practices of purchasing corporate bonds.
The issuance of this new Circular is also aimed at enhancing the stringent control of the corporate bond investments conducted by the credit institutions and the foreign banks’ branches in order to ensure the safe and sound banking operations.
The main substances of Circular No.15/2018/TT-NHNN are as follows:
1. Revising point (d) and supplementing point (đ) of Item 2, Article 3 of Circular No.22/2016/TT-NHNN; accordingly, credit institutions and foreign banks’ branches that wish to purchase corporate bonds are required to have an internal credit ratings system, conduct ratings of the bond issuing corporate(s), and have issued internal regulations on corporate bond purchases in line with the regulations of this Circular and other applicable laws. The internal regulations shall contain at the minimum the following regulations:
- For point (d): The internal management regulations on corporate bond purchases, especially the bonds issued for the implementation projects and/or programs in the potentially risky areas, with a view to detecting the risks and possible violations, and ensuring the possibilities of collecting the principals and the yields of the issued corporate bonds.
- For point (đ): Specific regulations on potentially risky areas, and the credit and investment policies for these areas.
2. Supplementing Item 6 of Article 3 to include a regulation stipulating that credit institutions and foreign banks’ branches are not allowed to buy any corporate bonds issued for the purpose of restructuring a corporate’s debts.
Circular No.15/2018/TT-NHNN takes effect from August 2nd, 2018
Translated by MH