The government wants to loosen IPO conditions

On the afternoon of October 17, Minister of Finance Ngo Van Tuan, authorized by the Prime Minister, presented to the National Assembly a draft Law amending and supplementing a number of articles of the Securities Law.

The draft includes 3 articles, aiming to reduce and simplify administrative procedures, create favorable conditions for businesses, as well as meet the requirements of scientific and technological development and timely deployment of new securities models and products.

Regarding IPO conditions, the Government proposes to remove regulations on the percentage of shares sold to investors. Under current law, when IPO, a joint stock company needs to sell at least 15% of its voting shares to at least 100 investors who are not major shareholders. In case the issuing organization’s charter capital is VND 1,000 billion or more, this ratio is reduced to 10%.

With the IPO registration dossier, the drafting agency also proposed that businesses do not need to commit to the percentage of shares sold to investors as in the above clause. At the same time, the issuer may not be required to report the use of capital obtained from the most recent audited offering for 2 years up to the time of filing.

The draft also supplements the legal framework for a controlled testing mechanism in the securities sector. Specifically, the Government wants to add Article 6 stipulating general principles on the controlled testing mechanism in the securities sector and assign the Government to regulate in detail.

Examining this content, Chairman of the Economic and Financial Committee Phan Van Mai said the Committee basically agreed, but suggested linking the reduction to monitoring tools during operations, ensuring market safety and investor assets.

Regarding the controlled testing mechanism, electronic transactions and new technology, this agency noted that the Government needs to clarify specific content, avoiding duplication with legal regulations.
Law on science, technology and innovation.

“The law needs to define principles on authority and limits of testing; voluntary participation, risk warning, asset separation, data protection; monitoring and handling when testing fails. The exemption and exclusion of liability must be strict, without exemption of compensation due to errors or violations of the testing organization,” the Committee stated in the verification report.

Regarding securities depository activities, the draft abolishes specific conditions on financial capacity, capital adequacy ratio, business results and facilities for banks registering securities depository activities. However, according to the Economic and Financial Committee, the conditions for licensing banking operations and the handling mechanism under current law do not ensure a full assessment of the capacity to provide depository services, especially for banks that violate the capital adequacy ratio but are not subject to early intervention or special control.

Therefore, the inspection agency requested the Government to consider maintaining the necessary conditions of financial capacity and minimum capital adequacy ratio for banks registering securities depository activities.

The National Assembly plans to discuss this draft law in the hall on October 28 and vote to pass it on November 13. If passed, the law will take effect from March 1, 2027.