Welcome to the latest edition of our regular legal update from the APFL & Partners Vietnam office. This week, we highlight new regulations on investing in the stock market and on the grading of construction works. To learn more about one of these changes, just contact our office for more information.
New Circular to Prevent Stock Market Manipulation
From next month, foreign investors and their representatives will be required to follow new guidelines to prevent the manipulation of securities prices in Vietnam. It comes after the Ministry of Finance issued Circular No. 51/2021/TT-BTC (“Circular 51”) on foreign investment in the Vietnamese stock market.
In particular, foreign investors and their representatives must ensure that their transactions do not create artificial supply or demand, distort the securities market, or enable other acts prohibited in law. Circular 51 also introduces important regulations for the representatives of foreign investors. These include requiring them to separate the trading and investment orders of foreign and domestic customers, as well as to keep their own trading activities distinct from those of their clients.
Representatives must also ensure that the rates of foreign ownership in Vietnamese enterprises is in line with legal requirements, and follow the direct trading instructions of the investor. In other words, representatives must not make decisions on stock, prices, or number of shares on their clients’ behalf if investment instructions have not been fulfilled at the time the transaction is completed.
Circular 51 will come into effect on 16 August and replace Circular 123/2015/TT-BTC.
New regulations on the grading of construction projects
A new Circular from the Ministry of Construction will come into force next month, introducing new technical regulations on the grading of construction works and guidelines for the management of investment activities in construction.
Circular No. 06/2021/TT-BXD (“Circular 06”) was issued on 30 June. It outlines two categories which will be used to grade constructions works. The first concerns their ‘capacity and importance’ and will be applied to works listed in Appendix I of Circular 06. These include civil, industrial, infrastructure, traffic or agricultural works. The second concerns their ‘type and structural size’ and will be applied to works listed in Appendix II. These include houses, house-shaped structures, and cable cars alongside bridges and tunnels in traffic construction works.
Construction works not listed in Appendix I will be graded according to the criteria of Appendix II and vice-versa. Meanwhile, more complicated construction projects will be graded based on Appendix I if this lists the most number of individual items included in that work. However, if a complicated project has more items that are not specified in Appendix I, its grading will be based on that of the main work attached to the project.
Circular 06 will take effect on 15 August.
For more information about one of these changes, please contact our office on: firstname.lastname@example.org