A conference of experts from the securities industry held here on Feb.23 called for loosening of regulatory restrictions of share transfers,complaining that the regulation interfered with the ability of manyfirms to effectively raise capital.
The conference wascalled by the Vietnam Chamber of Commerce and Industry to review thefirst year of implementation of Government Decree No 01/2010/ND-CPissued in January 2010.
Under the decree, shares offeredby private placement of joint stock companies are restricted fromtransfer within one year, and the interval between two consecutiveprivate placements of shares is required to be at least six months.
Lawyer Pham Chi Cong from Khai Phong Law Co Ltd said the restrictionconsistently reduced the feasibility and attractiveness of shareplacement plans.
"Shares offered for sale aim to mobilisecapital in order to serve business purposes of joint stock companies,"Cong said. "Changes in shareholders after that don't affect theoperation of companies."
The transfer restrictionseffectively limited joint stock companies to offer to only tradingpartners, many of which were not always ready to invest for a long term,Cong said.
Meanwhile, Cao Ba Khoat, director of businessconsultancy firm K & Associates Co Ltd, agreed that the six-monthinterval between two consecutive placements was too long and haddecreased the investment opportunities of companies.
PhamKhac Nam , head of business registration for Bac Ninh province'sDepartment of Planning and Investment, said dossiers for registration ofprivate offers of shares to raise capital of many companies in Bac Ninhhad also not been processed due to the lack of guidance onimplementation of this decree.
Nam proposed the abolishsment of the decree altogether, as the work had run smoothly before the existence of the decree.
Nguyen The Tho, director of Securities Issuance Management Departmentof the State Securities Commission, said the commission would review thedecree and submit its recommendations to the Ministry of Finance in thenear future. He hoped a revised decree would be issued sometime afterJuly 1, when the amended Law on Securities takes effect./.
The conference wascalled by the Vietnam Chamber of Commerce and Industry to review thefirst year of implementation of Government Decree No 01/2010/ND-CPissued in January 2010.
Under the decree, shares offeredby private placement of joint stock companies are restricted fromtransfer within one year, and the interval between two consecutiveprivate placements of shares is required to be at least six months.
Lawyer Pham Chi Cong from Khai Phong Law Co Ltd said the restrictionconsistently reduced the feasibility and attractiveness of shareplacement plans.
"Shares offered for sale aim to mobilisecapital in order to serve business purposes of joint stock companies,"Cong said. "Changes in shareholders after that don't affect theoperation of companies."
The transfer restrictionseffectively limited joint stock companies to offer to only tradingpartners, many of which were not always ready to invest for a long term,Cong said.
Meanwhile, Cao Ba Khoat, director of businessconsultancy firm K & Associates Co Ltd, agreed that the six-monthinterval between two consecutive placements was too long and haddecreased the investment opportunities of companies.
PhamKhac Nam , head of business registration for Bac Ninh province'sDepartment of Planning and Investment, said dossiers for registration ofprivate offers of shares to raise capital of many companies in Bac Ninhhad also not been processed due to the lack of guidance onimplementation of this decree.
Nam proposed the abolishsment of the decree altogether, as the work had run smoothly before the existence of the decree.
Nguyen The Tho, director of Securities Issuance Management Departmentof the State Securities Commission, said the commission would review thedecree and submit its recommendations to the Ministry of Finance in thenear future. He hoped a revised decree would be issued sometime afterJuly 1, when the amended Law on Securities takes effect./.
