Decree No.69/2016/ND-CP Requirements for Running Debt Trading Service

DECREE

REQUIREMENTS FOR RUNNING DEBT TRADING SERVICE

Pursuant to the Law on organization of the Government dated June 19, 2015;

Pursuant to the Law on Investment dated November 26, 2014;

Pursuant to the Civil Code dated June 14, 2005;

Pursuant to the Law on Enterprises dated November 26, 2014;

Pursuant to the Law on credit institutions dated June 16, 2010;

Pursuant to the Ordinance on Foreign Exchange dated December 13, 2005 and the Ordinance dated March 18, 2013 on amendments to a number of articles of the Ordinance on Foreign Exchange;

At the request of the Governor of the State Bank of Vietnam;

The Government promulgates this Decree to provide for requirements for running debt trading service.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Decree provides for requirements for running debt trading service in the territory of the Socialist Republic of Vietnam.

2. Credit institutions and branches of foreign banks buy and sell debts in conformity with the Law on credit institutions and relevant laws.

3. Entities that trade in bonds under amendments of the Law on securities shall comply with regulations of the Law on securities.

4. Vietnam Asset Management Company shall conduct debt trading activities in conformity with the Government's regulations on the establishment, organization and operations of Vietnam Asset Management Company.

5. Vietnam Debt and Asset Trading Corporation shall buy and sell debts in conformity with the Government's and Prime Minister’s regulations on the establishment and operations of Vietnam Debt and Asset Trading Corporation.

6. Stock Exchanges shall hold market to trade securities in compliance with the Law on securities.

7. Entities (except for the entities mentioned in Clause 2, Clause 3, Clause 4, Clause 5 and Clause 6 of this Article) that buy and sell debts not for business purposes shall comply with regulations of the Civil Code.

Article 2. Regulated entities

1. Enterprises running debt trading services.

2. Entities in need of running debt trading services.

Article 3. Interpretation of terms

In this Decree, these terms shall be construed as follows:

1. Debt refers to an obligation whereby a debtor must transfer assets to a creditor as agreed upon in a contract, or an obligation that gives rise to rights and obligations referred to in laws.

2. Debt trading refers to the fact that a debt seller transfers a portion or all of the rights to collect that debt and other rights related to that debt to a debt buyer who must give money to the debt seller.

3. Creditor may be an economic organization, or individual, or a party of a civil transaction that has the right to collect debt.

4. Debtor may be an economic organization, or individual, or a party of a civil transaction that is obliged to pay a debt or incurs the obligation to pay a debt in conformity with the law.

5. Parties of a civil transaction are the entities participating in a civil transaction, except for the following entities:

a) Economic organizations and individuals;

b) Political organizations and sociopolitical organizations;

c) State agencies and people’s armed forces;

d) International organizations or governments of other countries.

6. Running of debt trading service refers to the continuous execution of one or certain activities related to the debt trading for profit purpose, including debt purchase, debt sale, debt brokerage, debt trading consultancy and debt trading floor services.

7. Debt trading not for business purpose refers to debt trading activities which are conducted by entities not for profit purpose in an interrupted manner, consisting of:

a) The sale of debts of a creditor, except for debts bought by that creditor from other creditors;

b) The purchase of debts not for reselling to other entities, including debts bought for the purpose of conversion of debts into contributed capital or share capital, debt rescheduling or settlement of collateral.

c) Other debt trading activities which are not continuously conducted and not for profit purpose.

8. Debt trading brokerage is an intermediary service provided to the parties of a debt transaction whereby a debt broker is in charge of arranging that debt transaction and enjoyed a commission as agreed. Debt brokerage activities do not include auction activities organized by professional auction organizations.

9. Debt trading consultancy refers to a service by which consultants use their professional knowledge to find out issues and propose solutions for debt trading. That service is provided in an independent and objective way at the requests of customers who must pay consulting fees as agreed.

10. Debt trading floor services include the provision of debt trading floor and organization of debt transactions; introduction and provision of information about the debts to entities that want to enter into transactions; examination of documents to ensure the eligibility to conduct debt transactions; and provision of intermediary service between the parties to communicate, negotiate and enter into a debt trading contract.

11. Debt trading floor is a place where debt transactions, debt trading consultancy and debt brokerage activities are regularly conducted.

12. Debt buyer refers to an entity that buys or receives the transfer of a debt in order to become a new creditor of that debt.

13. Debt seller refers to an entity that is a creditor of a debt and sells or transfers that debt to a debt buyer.

14. Debt broker refers to an enterprise that provides debt trading brokerage service.

15. Enterprise running debt trading service refers to an enterprise whose registered business sectors include the debt trading service (including debt and asset management companies affiliated to commercial banks).

16. Manager of an enterprise running debt trading service refers to the company’s manager or a manager of private enterprise. A manager may be a proprietor of private enterprise, or a general partner, or a Chairperson of the Board of members, or a member of the Board of members, or the Company’s President, or a Chairperson of the Executive Board, or member of the Executive Board, or Director or General Director or another individual who holds the managing position and authorized to act in the name of a company to enter into transactions conducted by that company as referred to in the company’s charter.

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 Chapter IV

IMPLEMENTATION

Article 13. Effect

This Decree comes into force as of July 01, 2016.

Article 14. Transitional provisions

Within one year from the effective date of this Decree, enterprises that have been running debt trading services before the effective date of this Decree must comply with the following regulations:

1. The enterprise that has satisfied all of requirements as prescribed in this Decree must send a written report to the business registration agency.

2. If an enterprise fails to satisfy all of requirements as prescribed in this Decree, that enterprise must send a written report to the business registration agency and implement measures for ensuring the compliance with all regulations herein, including measures for termination of debt trading services.

Article 15. Implementation

Ministers, Heads of ministerial-level agencies, Heads of affiliates of the Government, Chairpersons of people's committees of central-affiliated cities or provinces and entities of this Decree shall be responsible for implementing this Decree./.