Big State-owned enterprises (SOEs) that recently listed or are preparing to list on the Unlisted Public Company Market (UPCoM) have attracted a lot of investor attention. Tạ Thanh Bình, Director of Securities Market Development Department under the State Securities Commission, speaks to Việt Nam News about the new regulation on obligatory listing for equitised SOEs and its impact on the market.

Circular No 115/2016/TT-BTC, effective from November 1, requires SOEs to list stocks on the UPCoM within 20 days after the payment due date of their share sale. Why is this?

This regulation that forces equitised enterprises to list shares on the centralised securities market is not new. In 2014, the Prime Minister issued Decision 51 requiring SOEs to list and trade shares in the centralised market after equitisation. However, many companies have not followed this regulation.

There are two reasons for this. First, the old regulation did not specify an accurate timetable for how long after equitisation enterprises must list. Thus, many enterprises have relied on this loophole to put off listing. When asked, they say they are preparing to list.

The lack of punitive sanctions against these enterprises that drag their heels makes things worse.

The new regulation indicates that SOEs must include listing registration documents into their equitisation procedures to prepare for share registration at Vietnam Securities Depository Centre and trading on the UPCoM.

Regulators expect the new regulation will force enterprises to equitise and list on the stock market.

How will this affect enterprises? How will it benefit investors?

SOEs will be under pressure in terms of time.  They will not be able to delay their listing anymore.

For investors, this is good news, especially for foreign investors. Previously, many auctions of SOEs failed due to lack of investor interest. Foreign investors hesitated to bid because they worried about the listing delays.

The new regulation will ease their concerns and pull more investors to buy stakes in SOEs.

Many big corporations have yet to list shares after several years of equitisation, such as Petrolimex, Vinatex and Vietnam Airlines. What are their reasons?

There are objective and subjective reasons.

On the objective side, the current law lacks strict regulations on the specific time for listing and strong punitive sanctions.

Subjectively, some speculate that it may be in the company’s own interest to not list or for private reasons, such as concerns about being transparent, stock dilution or ownership dispersion.

What are the current sanctions against enterprises who delay listing?

In the past, there were no specific punishments for such infringements. However, according to the latest information that I have received, the Government has signed Decree No 145 replacing Decree No 108 which provides sanctioning of administrative violations on the stock market.

In the new decree, in addition to elevating the level of sanctions for common violations in the market, it also contains provisions to punish enterprises that do not comply with the law on listing shares in the centralised market within the regulated time.

There are also instructions and guidance on State management for ministries and governing bodies of the State-owned enterprises. If these enterprises continue to postpone their listing, there will be separate penalties for business leaders including administrative sanctions. – VNS