| THE PRIME MINISTER | THE SOCIALIST REPUBLIC OF VIETNAM |
| No.: 1191/QD-TTg | Hanoi, August 14, 2017 |
DECISION
APPROVING ROAD MAP FOR DEVELOPMENT OF BOND MARKET IN THE 2017 – 2020 PERIOD WITH A VISION BY 2030
THE PRIME MINISTER
Pursuant to the Law on government organization dated June 19, 2015;
Pursuant to the Law on securities dated July 12, 2006 and the Law on amendments to the Law on securities dated November 24, 2010;
Pursuant to the Law on enterprises dated November 26, 2014;
Pursuant to the Government’s Resolution No. 51/NQ-CP dated June 19, 2017 promulgating the Government’s action plan for implementation of the Poliburo’s Resolution No. 07-NQ/TW dated November 18, 2016 on policies and solutions for restructuring of state budget and debt management for the purpose of ensuring the national safe and sustainable finance;
Pursuant to the Prime Minister’s Decision No. 128/2007/QD-TTg dated August 02, 2007 approving the Road map for capital market development by 2010 with a vision by 2020;
At the request of the Minister of Planning and Investment,
DECIDES:
Article 1. The road map for development of Vietnam bond market in the 2017 – 2020 period with a vision by 2030 is approved. The road map includes the following primary contents:
1. Development viewpoints:
a) Establish and develop a bond market in conformity with the economic development and in harmony with other components of the financial market, including stock market, monetary market, credit and banking market.
b) Develop the bond market both in depth and in width so as to ensure systematic safety, gradually access international practices and standards, modernize market infrastructure and develop the bond market into an important channel of medium- and long-term capital mobilization for the economy with a rational cost of capital.
c) Enhance the development of government bond market as the basis for development of the bond market; foster the development of corporate bond market so as to facilitate enterprises' capital mobilization, especially medium- and long-term capital mobilization, and promote the efficiency of management and disclosure of profiles of enterprises.
d) Improve the public disclosure, transparency and protection of legal interests of participants in the bond market.
2. Objectives:
a) General objectives:
- Develop a stable bond market with a complete and synchronous structure in terms of supply and demand factors; expand premises of investors, improve both operating scale and quality and diversify market products and operations so as to ensure the public disclosure, transparency and effectiveness of market operation.
- Take the initiative in integrating into the international market and gradually access international standards and practices.
b) Specific objectives:
- The outstanding debt of the bond market is expected to account for approximately 45% of GDP by 2020 and 65% of GDP by 2030. To be specific: the total outstanding debt of the government bond market, government-guaranteed bond market and municipal bond market is expected to account for approximately 38% of GDP by 2020 and 45% of GDP by 2030, and that of the corporate bond market is expected to account for approximately 7% of GDP by 2020 and 20% of GDP by 2030.
- The average term of domestic government bond portfolios is expected to be 6 – 7 years in the 2017 – 2020 period and 7 – 8 years in the 2021 – 2030 period.
- The average trading volume of government bonds, government-guaranteed bonds and municipal bonds of each session is expected to be increased by 1% and 2% of the outstanding debt of listed bonds by 2020 and 2030 respectively.
- The portion of government bonds held by insurance companies, social insurance agencies, pension funds, investment funds and non-bank financial institutions is expected to account for 50% and 60% by 2020 and 2030 respectively.
3. Solutions:
a) Adopt policies on bond market:
- With regard to laws and resolutions promulgated by the National Assembly:
+ Consider promulgating regulations on facilities for preventing and dealing with public debt risks (including government debt), funding for risk management and power to approve amendments to the Law on public debt management in an appropriate manner so as to ensure the initiative of the Government, the Prime Minister and the Ministry of Finance in swapping or redeeming government bonds for the purposes of managing government debt risks and developing the bond market.
+ Consider requesting the National Assembly to allow the issuance of government bonds towards ensuring the annual average bond term in order to raise funds for state budget with a rational cost, manage government debt risks and develop the bond market.
+ Study into addition of a regulation that credit institutions are allowed to use government bonds as a part of their statutory reserves to the Law on State Bank of Vietnam and the Law on credit institutions when they are amended and supplemented.
+ Study into addition of a regulation that Vietnam Social Security Authority is allowed to invest in bonds issued by enterprises which are granted a high credit rating at a specific percentage in addition to its deposit percentage and purchase of certificates and/or bonds from credit institutions to the Law on social insurance when it is amended. Develop policies and mechanisms on selling of government bonds by the Deposit Insurance of Vietnam where necessary.
+ Consider amending the Law on securities by setting out specific requirements regarding the private placement of corporate bonds and those regarding the public offering of corporate bonds towards associating with public disclosure of information; all corporate bonds must be registered and deposited; eligible buyers of corporate bonds issued through private placement are professional investors.
- With regard to legislative documents on guidelines on laws and resolutions:
+ Promulgate a decree superseding the Decree No. 01/2011/ND-CP on issuance of government bonds, government-guaranteed bonds and municipal bonds, and its instructional documents with the aims of establishing a legal frame for establishment of market makers in secondary markets, supporting liquidity by market makers, performing operations for debt restructuring, stabilizing and developing the market as well as launching new products.
+ Promulgate decrees superseding the Decree No. 58/2012/ND-CP dated July 20, 2012, the Decree No. 60/2015/ND-CP dated June 26, 2015 and the Decree No. 90/2011/ND-CP dated October 14, 2011 on offering of corporate bonds to the public and through private placement in order to develop the corporate bond market by adopting solutions herein.
+ Promulgate policies on development of green bond market in order to facilitate issuers in mobilizing capital for their green projects by means of offering green bonds.
+ Formulate and amend legislative documents and regulations providing guidelines for implementation of the Law on taxation based on actual situation and development of the market in each period.
+ Study into formulation of decree on repo transactions in government bonds and government-guaranteed bonds so as to promote the secondary market liquidity.
+ Promulgate circulars providing guidance on development of secondary market, including bond trading and settlement system, market makers in secondary market, liquidity support for market makers and development of repo market.
+ Promulgate circulars providing guidelines for prudential ratios and limits, and bond transactions of credit institutions according to solutions laid down in this Decision.
+ Promulgate operations manual on bond issuance for bond issuers with the aims of providing information and improving knowledge for issuers when mobilizing capital in the bond market.
b) Develop primary market:
- With regard to government bonds, government-guaranteed bonds and municipal bonds:
+ Draw up and announce the schedule for issuance of government bonds in order to facilitate members’ active participation in the market, increase ability to raise funds for state budget and improve the secondary market development. Where it is necessary to issue treasury bills for implementing money policies, the State Bank of Vietnam shall cooperate with the Ministry of Finance in setting up the schedule and organizing the issuance of treasury bills so as to ensure the stability of bond market and monetary market.
+ Diversify products of government bonds, government-guaranteed bonds and municipal bonds to meet investors’ demands, establish financial products and a standard yield curve on the financial market. To be specific:
. Issue government bonds of various terms from short term to long term, including treasury bills, so as to establish a standard yield curve for financial products serving the development of both bond market and financial market.
. Periodically issue long-term government bonds with the aims of attracting investors, including insurance companies, investment funds, pension funds and non-bank financial institutions, and extending the term of the government bond debt portfolio.
. Study into feasibility of issuance of new products according to a road map conformable with the market development and investor's demands, including floating rate bonds, strip bonds and inflation-indexed bonds, etc.
. Develop bond derivatives according to the road map conformable with the market development and investors’ demands, including futures contracts, forward contracts and option contracts.
+ Focus on issuance of government bonds and government-guaranteed bonds through bidding method (including bonds issued to Vietnam Social Security Authority) so as to increase the scale and liquidity of the market; employ either fixed-rate tender or variable-rate tender subject to market conditions and characteristics of each bond product in order to raise funds with a rational cost and promote the competitiveness and liquidity of the market.
+ Perfect and develop the system of market makers with full rights, interests and obligations to facilitate their fulfillment of market making function in both primary and secondary markets with the intention of increasing the market liquidity.
+ Perform relevant bond operations such as additional bond issuance, bond swap or redemption to form standard bond codes for the purposes of increasing the market liquidity and stability and managing risks to debt portfolios regarding government bonds, government-guaranteed bonds and municipal bonds.
- With regard to corporate bonds:
+ Facilitate enterprises in raising funds by means of issuing bonds and improve the transparency in the course of raising funds by issuing bonds. To be specific:
. Consider providing for requirements and documentation regarding public offering of corporate bonds which should be separate from those regarding public offering of shares when amending the Law on securities so as to encourage enterprises to raise funds by means of public offering of bonds. In the future, the rating of enterprises that offer bonds to the public is compulsory when there are at least 02 domestic enterprises eligible to provide credit rating services.
. Review requirements regarding the private placement of corporate bonds by following the principles that the private placement of corporate bonds must be associated with information disclosure, only professional investors are eligible to buy corporate bonds issued through private placement, and corporate bonds issued through private placement must be registered and deposited.
. Formulate a mechanism that allows enterprises to issue bonds in multiple issues in order to facilitate their capital mobilization to suit the progress of investment projects.
+ Request enterprises, especially large-scale enterprises, to raise medium- and long-term finance by means of issuing corporate bonds.
+ Encourage diversifying types of corporate bonds to suit the market development level, including floating-rate valuable papers, medium- and long-term bonds, and securities converted from loans for house purchase or collaterals, etc.
+ Promulgate regulations on procedures for issuance of corporate bonds: training and instructing enterprises in raising funds via the corporate bond market. Encourage enterprises to raise their corporate governance quality, improve their accounting, bookkeeping and information disclosure activities, and proactively raise funds through issuance of corporate bonds.
c) Develop secondary market:
- Improve the market organization model and the system for trading in government bonds, government-guaranteed bonds and municipal bonds at the Stock Exchanges in conformity with characteristics of agreed transactions, ensuring timely and accurate reporting in order to develop a standard yield curve in the market; enhance the responsibility of secondary market members for reporting on transactions.
- Request market makers to provide two-way quotes (giving both the bid and the ask price) for standard government bond codes with a view to creating the market liquidity.
- The State Treasury shall consider providing loans in bonds for market makers when they offer the bid and ask prices of standard bond products with a view to increasing the market liquidity.
- Form a yield curve and government bond indexes to facilitate the assessment of the efficiency of bond investments.
- Develop a standard form contract for repo transactions conducted by bond market participants.
- Review and perfect policies on prices and fees of depository registration, listing and trading in the bond market as suitable to the nature of bond trading.
- Study into development of a specialized website on corporate bonds at the Stock Exchanges so as to provide information concerning corporate bond issuance and trading, thus promoting trading in corporate bonds in the secondary market.
- Encourage enterprises to offer corporate bonds to the public, list and trade in them via the Stock Exchanges.
d) Develop and diversify investor networks:
- For Vietnam Social Security Authority: Shift from direct provision of loans to the state budget to investment in government bonds. Invest in government bonds mainly through bidding in line with the reform of the management of cash flows and investment method of Vietnam Social Security Authority. Consider permitting Vietnam Social Security Authority to invest in corporate bonds with high credit ratings (in addition to making deposits and purchasing deposit certificates and bonds of high-performance banks) after the Law on social insurance is amended.
- Promote the formation and development of voluntary pension schemes (pension insurance products and pension funds) with appropriate solutions, including tax policies, in order to channel long-term investment capital into the bond market and diversify the social security system.
- Encourage the Deposit Insurance of Vietnam to increase its trading volumes of bonds in both the primary and secondary market with the intention of increasing the market liquidity.
- Revise policies on investment by insurance companies, especially life insurance companies, towards increasing investment in government bonds; adopt different investment policies for bonds issued by rated enterprises and those issued by unrated enterprises so as to ensure the safe operation of insurers and create sources of long-term finance to invest in the bond market.
- Diversify types of targeted investment funds, including bond investment funds. Encourage investment funds to increase investment in government bonds and corporate bonds.
- Study into pilot retail of bonds to private investors so as to form a new fundraising channel meeting people’s demand for investing in highly safe assets.
- Encourage foreign investors to make long-term investments in the bond market by means of improving information disclosure; reforming administrative procedures; reviewing and amending policies on taxes and charges for bond trading imposed on foreign investors; consider promulgating regulations on foreign exchange transactions combined with exchange rate risk prevention instruments; encourage foreign organizations to issue global depositary receipts to be listed on foreign markets with underlying assets being domestic government bonds.
- Study into amendments to the Law on State Bank of Vietnam and the Law on credit institutions, including permitting credit institutions to use government bonds as a part of their statutory reserves.
- Review and develop policies on government bond-holding rates of credit institutions towards abolishing provisions on holding rates in order to ensure the flexibility in each period suitable to the development of the bond market and the stability of the financial-monetary market; when necessary to prescribe such rates, exclude bonds used for transactions so as to truly reflect the nature of investment in government bonds by credit institutions.
dd) Develop intermediary institutions and market services:
- Step up the implementation of programs on restructuring of securities companies and fund management companies according to the principles and roadmap set out in the Prime Minister’s Decision No. 252/QD-TTg dated March 01, 2011 approving the Strategy on development of Vietnam’s securities market in the 2011-2020 period, and Decision No. 1826/QD-TTg dated December 06, 2012 approving the Scheme on restructuring of the securities market and insurance companies, and documents on amendments thereof (if any) to enhance the capacity of these institutions to participate in the bond market, especially in bond issuance, trading and market making.
- Promulgate mechanisms and policies on representatives of bond owners in order to manage bonds for investors in a professional and effective manner. Assess and review current mechanisms for establishment and operation of credit rating enterprises and voluntary pension funds to be suitable to the market development and improve the operation quality of these entities in both capital and bond markets.
- Focus on bidding for government bonds, government-guaranteed bonds and municipal bonds at the Stock Exchanges.
- Modernize information technologies in the bidding system, registration, depositing and listing of government bonds and government-guaranteed bonds towards simplifying administrative procedures and reducing the length of time from issuance to listing of bonds from T+2 in 2016 to T+1 by 2025 in order to increase the bond market liquidity.
- Step by step transfer the function of payment for bonds, including government bonds, government-guaranteed bonds, municipal bonds and corporate bonds, from commercial banks to the State Bank of Vietnam, thus promoting the secure and effective development of the market and facilitate the implementation of monetary policies.
- Set up a system to disclose information on issuance and trading of corporate bonds listed and unlisted at the Stock Exchanges for promoting the development of the corporate bond market.
e) Other solutions:
- Enhance the coordination between monetary policies and financial policies and create connectivity, balance and synchronization between the money-credit market and the bond market.
+ Increase the coordination between the Ministry of Finance and the State Bank of Vietnam in exchanging and providing information about liquidity, interest rates, monetary market, issuance of government bonds and state budget revenues and expenditures.
+ Develop a stable monetary market and form a short-term standard yield curve to promote the liquidity of the monetary market and support the development of the bond market; review and formulate a roadmap for reducing the use of short-term funds for provision of medium- and long-term loans, and minimize the provision of loans exceeding 15% of equity of credit institutions for a single client in order to reduce risks related to loan terms and funding sources for the banking system and promote the raising of funds through issuing corporate bonds.
+ Revise regulations on foreign exchange in order to create instruments for risk management, especially exchange rate risks, to attract foreign investors to the bond market while ensuring the foreign exchange management orientations of Vietnam; step by step liberalize capital transactions and increase the convertibility of Vietnamese currency according to the State’s current mechanisms and policies.
- Increase talks with market members and improve the efficiency of operation of Vietnam Bond Market Association.
+ Organize periodical talks and exchanges between the Ministry of Finance, the State Bank of Vietnam and market members to discuss and reach an agreement on bond market development solutions.
+ Provide training for market members and request them to comply with relevant regulations when participating in the bond market.
+ Encourage the Vietnam Bond Market Association to develop and promulgate bond market development standards, such as standards on ethics, transactions, methods of issuance of corporate bonds and model prospectus, in accordance with the legal framework with a view to ensuring uniform methods of calculating and listing prices and conducting transactions in the market.
+ Upgrade and improve the website on the bond market of the Ministry of Finance, aiming to publicize mechanisms and policies as well as issuance plans, timetables and issuance outcomes, facilitating investors in analysis and access to opportunities for making investments in the bond market.
- Increase the management and supervision of capital and bond markets in accordance with applicable law soft to ensure their safe, public and transparent operation and protect legal interests of market participants.
- Actively participate in international and regional cooperation programs and forums like the Association of Southeast Asian Nations (ASEAN), ASEAN + 3, Asia-Europe Meeting (ASEM), Asia-Pacific Economic Cooperation (APEC) forum, and Global Emerging Market Local Currency Bond (GEMLOC) program with a view to increasing connection with regional bond markets and developing the domestic bond market.
Article 2. Assessing implementation of road map
1. The Ministry of Finance shall play the leading role and coordinate with the State Bank of Vietnam in conducting annual assessment of the implementation of the road map for development of the bond market set out in this Decision for reporting to the Prime Minister.
2. On the periodical basis of every 05 years starting from 2020, the Ministry of Finance shall coordinate with relevant ministries and authorities in reviewing and evaluating the implementation of the Road map for development of the bond market for reporting and requesting the Prime Minister to promulgate a new road map in conformity with the 5-year socio-economic development strategy.
Article 3. Implementation
1. The Ministry of Finance shall play the leading road and coordinate with relevant authorities in:
a) Organizing the implementation of the Road map for development of the bond market during 2017-2020, with a vision by 2030, in accordance with this Decision.
b) Based on viewpoints, objectives and solutions set out herein, formulating and promulgating or submitting to competent authorities for promulgation of mechanisms and policies aiming to develop the bond market according to Article 2 hereof and the Appendix enclosed herewith.
2. The State Bank of Vietnam shall:
a) Coordinate with the Ministry of Finance in organizing the implementation of the solutions specified in Article 2 hereof and the Appendix enclosed herewith.
b) Implement monetary policies in a proactive and flexible manner in close combination with financial policies to control inflation, ensure the macro-economic stability and facilitate the development of capital and bond markets.
Article 4. Ministers, heads of ministerial-level agencies, heads of Government’s affiliates, chairpersons of people’s committees of provinces and central-affiliated cities and heads of relevant units shall implement this Decision./.
|
| THE PRIME MINISTER |
APPENDIX
THE ROAD MAP FOR ADOPTION OF SOLUTIONS FOR DEVELOPING THE BOND MARKET OF VIETNAM
(Enclosed with the Decision No. 1191/QD-TTg dated August 14, 2017 by the Prime Minister)
| No. | Contents | Responsible unit | Cooperating units | Period | Period | Period | Period | Period | ||||||||||||
|
|
|
|
| 2017 | 2018 | 2019 | 2020 | 2021 - 2030 | ||||||||||||
| I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | I. Adopt policies on bond market | ||||||||||||
| A. With regard to laws and resolutions promulgated by the National Assembly | A. With regard to laws and resolutions promulgated by the National Assembly | A. With regard to laws and resolutions promulgated by the National Assembly | A. With regard to laws and resolutions promulgated by the National Assembly |
|
|
|
|
| ||||||||||||
| 1. | Consider promulgating regulations on facilities for preventing and dealing with public debt risks (including government debt), funding for risk management and power to approve amendments to the Law on public debt management in an appropriate manner so as to ensure the initiative of the Government, the Prime Minister and the Ministry of Finance in swapping or redeeming government bonds for the purposes of managing government debt risks and developing the bond market. | The Ministry of Finance | The State Bank of Vietnam, and the Ministry of Planning and Investment |
|
|
|
|
| ||||||||||||
| 2. | Consider requesting the National Assembly to allow the issuance of government bonds towards ensuring the annual average bond term in order to raise funds for state budget, manage government debt risks and develop the bond market. | The Ministry of Finance | The State Bank of Vietnam, and the Ministry of Planning and Investment |
|
|
|
|
| ||||||||||||
| 3. | Study into the feasibility of addition of a regulation that credit institutions are allowed to use government bonds as a part of their statutory reserves to the Law on State Bank of Vietnam and the Law on credit institutions when they are amended and supplemented. | The State Bank of Vietnam | The Ministry of Finance, the Ministry of Planning and Investment, and relevant ministries |
|
|
|
|
| ||||||||||||
| 4. | - Study into addition of a regulation that Vietnam Social Security Authority is allowed to invest in bonds issued by enterprises which are granted a high credit rating at a specific percentage in addition to its deposit percentage and purchase of certificates and/or bonds from credit institutions to the Law on social insurance when it is amended. - Develop policies and mechanisms on selling of government bonds by the Deposit Insurance of Vietnam where necessary. | The Ministry of Finance | The Ministry of Planning and Investment, and relevant ministries |
|
|
|
|
| ||||||||||||
|
| Consider granting permission to the Deposit Insurance of Vietnam to sell government bonds where necessary. | The State Bank of Vietnam | The Ministry of Finance and relevant ministries |
|
|
|
|
| ||||||||||||
| 5. | Consider amending the Law on securities by setting out specific requirements regarding the private placement of corporate bonds and those regarding the public offering of corporate bonds towards associating with public disclosure of information; all corporate bonds must be registered and deposited; eligible buyers of corporate bonds issued through private placement are professional investors. | The Ministry of Finance | The Ministry of Planning and Investment, and the State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | B. With regard to legislative documents providing guidance on laws and resolutions | ||||||||||||
| 1. | Promulgate a decree superseding the Decree No. 01/2011/ND-CP on issuance of government bonds, government-guaranteed bonds and municipal bonds, and its instructional documents with the aims of establishing a legal frame for establishment of market makers in secondary markets, supporting liquidity by market makers, performing operations for debt restructuring, stabilizing and developing the market as well as launching new products. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 2. | Promulgate decrees superseding the Decree No. 58/2012/ND-CP dated July 20, 2012, the Decree No. 60/2015/ND-CP dated June 26, 2015 and the Decree No. 90/2011/ND-CP dated October 14, 2014 on offering of corporate bonds to the public and through private placement in order to develop the corporate bond market by adopting solutions herein. | The Ministry of Finance | The State Bank of Vietnam, and the Ministry of Planning and Investment |
|
|
|
|
| ||||||||||||
| 3. | Promulgate policies on development of green bond market in order to facilitate issuers in mobilizing capital for their green projects by means of offering green bonds. | The Ministry of Finance | The State Bank of Vietnam, and the Ministry of Planning and Investment |
|
|
|
|
| ||||||||||||
| 4. | Formulate and amend legislative documents and regulations providing guidelines for implementation of the Law on taxation based on actual situation and the market developments in each period. | The Ministry of Finance | The State Bank of Vietnam, and the Ministry of Planning and Investment |
|
|
|
|
| ||||||||||||
| 5. | Study into formulation of a decree on repo transactions in government bonds and government-guaranteed bonds so as to promote the secondary market liquidity. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 6. | Promulgate circulars providing guidance on development of secondary market, including bond trading and settlement system, market makers in secondary market, liquidity support for market makers and development of repo market. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 7. | Promulgate circulars providing guidelines for prudential ratios and limits, and bond transactions of credit institutions according to solutions laid down in this Decision. | The State Bank of Vietnam |
|
|
|
|
|
| ||||||||||||
| 8. | Promulgate operations manual on bond issuance for bond issuers with the aims of providing information and improving knowledge for issuers when mobilizing capital in the bond market. | Vietnam Bond Market Association (VBMA) |
|
|
|
|
|
| ||||||||||||
| II. Develop primary market | II. Develop primary market | II. Develop primary market | II. Develop primary market | II. Develop primary market | II. Develop primary market | II. Develop primary market | II. Develop primary market | II. Develop primary market | ||||||||||||
| A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | A. Government bonds, government-guaranteed bonds and municipal bonds | ||||||||||||
| 1. | Draw up and announce the schedule for issuance of government bonds in order to facilitate members’ active participation in the market, increase ability to raise funds for state budget and improve the secondary market development. Where it is necessary to issue treasury bills for implementing money policies, the State Bank of Vietnam shall cooperate with the Ministry of Finance in setting up the schedule and organizing the issuance of treasury bills so as to ensure the stability of bond market and monetary market. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 2. | Diversify types of government bonds, including treasury bills, so as to create financial products and form a standard yield curve in the financial market. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| a) | Issue government bonds of various terms from short term to long term, including treasury bills, so as to form a standard yield curve for financial products serving the development of both the bond market and the financial market. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| b) | Periodically issue long-term government bonds with the aims of attracting investors, including insurance companies, investment funds, pension funds and non-bank financial institutions, and extending the term of the government bond debt portfolio. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| c) | Study into feasibility of issuance of new products according to a road map conformable with the market development and investor's demands, including floating rate bonds, strip bonds and inflation-indexed bonds, etc. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| d) | Develop bond derivatives according to the road map conformable with the market development and investors’ demands, including futures contracts, forward contracts and option contracts. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 3. | Focus on issuance of government bonds and government-guaranteed bonds through bidding method (including bonds issued to Vietnam Social Security Authority) so as to increase the scale and liquidity of the market; employ either fixed-rate tender or variable-rate tender subject to market conditions and characteristics of each bond product in order to raise funds with a rational cost, and promote the competitiveness and liquidity of the market. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 4. | Perfect and develop the system of market makers with full rights, interests and obligations to facilitate their fulfillment of market making function in both primary and secondary markets with the intention of increasing the market liquidity. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 5. | Perform relevant bond operations such as additional bond issuance, bond swap or redemption to form standard bond codes for the purposes of increasing the market liquidity and stability and managing risks to debt portfolios regarding government bonds, government-guaranteed bonds and municipal bonds. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | B. Corporate bonds | ||||||||||||
| 1. | Facilitate enterprises in raising funds by means of issuing bonds and improve the transparency in the course of raising funds by issuing bonds | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| a) | Consider providing for requirements and documentation regarding public offering of corporate bonds which should be separate from those regarding public offering of shares when amending the Law on securities so as to encourage enterprises to raise funds by means of public offering of bonds. In the future, the rating of enterprises that offer bonds to the public is compulsory when there are at least 02 domestic enterprises eligible to provide credit rating services. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| b) | Review requirements regarding the private placement of corporate bonds by following the principles that the private placement of corporate bonds must be associated with information disclosure, only professional investors are eligible to buy corporate bonds issued through private placement, and corporate bonds issued through private placement must be registered and deposited. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| c) | Formulate a mechanism that allows enterprises to issue bonds in multiple issues in order to facilitate their capital mobilization to suit the progress of investment projects. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 2. | Request enterprises, especially large-scale enterprises, to raise medium- and long-term finance by means of issuing corporate bonds. | The Ministry of Finance | Bond issuers |
|
|
|
|
| ||||||||||||
| 3. | Encourage diversifying types of corporate bonds to suit the market development level, including floating-rate valuable papers, medium- and long-term bonds, and securities converted from loans for house purchase or collaterals, etc. | The Ministry of Finance and the State Bank of Vietnam | Bond issuers |
|
|
|
|
| ||||||||||||
| 4. | Promulgate regulations on procedures for issuance of corporate bonds: training and instructing enterprises in raising funds via the corporate bond market. Encourage enterprises to raise their corporate governance quality, improve their accounting, bookkeeping and information disclosure activities, and proactively raise funds through issuance of corporate bonds. | The Ministry of Finance | VBMA and bond issuers |
|
|
|
|
| ||||||||||||
| III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | III. Develop secondary market | ||||||||||||
| 1. | Improve the market organization model and the system for trading in government bonds, government-guaranteed bonds and municipal bonds at the Stock Exchanges in conformity with characteristics of agreed transactions, ensuring timely and accurate reporting in order to develop a standard yield curve in the market; enhance the responsibility of secondary market members for reporting on transactions. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 2. | Request market makers to provide two-way quotes (giving both the bid and the ask price) for standard government bond codes with a view to creating the market liquidity. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 3. | The State Treasury shall consider providing loans in bonds for market makers when they offer the bid and ask prices of standard bond products with a view to increasing the market liquidity. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 4. | Form a yield curve and government bond indexes to facilitate the assessment of the efficiency of bond investments. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 5. | Develop a standard form contract for repo transactions conducted by bond market participants. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 6. | Review and perfect policies on prices and fees of depository registration, listing and trading in the bond market as suitable to the nature of bond trading. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 7. | Study into development of a specialized website on corporate bonds at the Stock Exchanges so as to provide information concerning corporate bond issuance and trading, thus promoting trading in corporate bonds in the secondary market. | The Ministry of Finance | Stock Exchanges |
|
|
|
|
| ||||||||||||
| 8. | Encourage enterprises to offer corporate bonds to the public, list and trade in them via the Stock Exchanges | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| IV. Investor network | IV. Investor network | IV. Investor network | IV. Investor network | IV. Investor network | IV. Investor network | IV. Investor network | IV. Investor network | IV. Investor network | ||||||||||||
| 1. | For Vietnam Social Security Authority: Shift from direct provision of loans to the state budget to investment in government bonds. Invest in government bonds mainly through bidding in line with the reform of the management of cash flows and investment method of Vietnam Social Security Authority. Consider permitting Vietnam Social Security Authority to invest in corporate bonds with high credit ratings (in addition to making deposits and purchasing deposit certificates and bonds of high-performance banks) after the Law on social insurance is amended. | The Ministry of Finance | Vietnam Social Security Authority |
|
|
|
|
| ||||||||||||
| 2. | Promote the formation and development of voluntary pension schemes (pension insurance products and pension funds) with appropriate solutions, including tax policies, in order to channel long-term investment capital into the bond market and diversify the social security system. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 3. | Encourage the Deposit Insurance of Vietnam to increase its trading volumes of bonds in both the primary and secondary market with the intention of increasing the market liquidity. | The Deposit Insurance of Vietnam | The Ministry of Finance |
|
|
|
|
| ||||||||||||
| 4. | Revise policies on investment by insurance companies, especially life insurance companies, toward increasing investment in government bonds; adopt different investment policies for bonds issued by rated enterprises and those issued by unrated enterprises so as to ensure the safe operation of insurers and create sources of long-term finance to invest in the bond market. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 5. | Diversify types of targeted investment funds, including bond investment funds. Encourage investment funds to increase investment in government bonds and corporate bonds. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 6. | Study into pilot retail of bonds to private investors so as to form a new fundraising channel meeting people’s demand for investing in highly safe assets. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 7. | Encourage foreign investors to make long-term investments in the bond market by means of improving information disclosure; reforming administrative procedures; reviewing and amending policies on taxes and charges for bond trading imposed on foreign investors; consider promulgating regulations on foreign exchange transactions combined with exchange rate risk prevention instruments; encourage foreign organizations to issue global depositary receipts to be listed on foreign markets with underlying assets being domestic government bonds. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 8. | Study into amendments to the Law on State Bank of Vietnam and the Law on credit institutions, including permitting credit institutions to use government bonds as a part of their statutory reserves. | The State Bank of Vietnam | The Ministry of Finance |
|
|
|
|
| ||||||||||||
| 9. | Review and develop policies on government bond-holding rates of credit institutions toward abolishing provisions on holding rates in order to ensure the flexibility in each period suitable to the development of the bond market and the stability of the financial-monetary market; when necessary to prescribe such rates, exclude bonds used for transactions so as to truly reflect the nature of investment in government bonds by credit institutions. | The State Bank of Vietnam | The Ministry of Finance |
|
|
|
|
| ||||||||||||
| V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | V. Develop intermediary institutions and market services | ||||||||||||
| 1. | Step up the implementation of programs on restructuring of securities companies and fund management companies according to the principles and roadmap set out in the Prime Minister’s Decision No. 252/QD-TTg dated March 01, 2011 approving the Strategy on development of Vietnam’s securities market in the 2011-2020 period, and Decision No. 1826/QD-TTg dated December 06, 2012 approving the Scheme on restructuring of the securities market and insurance companies, and documents on amendments thereof (if any) to enhance the capacity of these institutions to participate in the bond market, especially in bond issuance, trading and market making. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 2. | Promulgate mechanisms and policies on representatives of bond owners in order to manage bonds for investors in a professional and effective manner. Assess and review current mechanisms for establishment and operation of credit rating enterprises and voluntary pension funds to be suitable to the market development and improve the operation quality of these entities in both capital and bond markets. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 3. | Focus on bidding for government bonds, government-guaranteed bonds and municipal bonds at the Stock Exchanges. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 4. | Modernize information technologies in the bidding system, registration, depositing and listing of government bonds and government-guaranteed bonds towards simplifying administrative procedures and reducing the length of time from issuance to listing of bonds from T+2 in 2016 to T+1 by 2025 in order to increase the bond market liquidity. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 5. | Step by step transfer the function of payment for bonds, including government bonds, government-guaranteed bonds, municipal bonds and corporate bonds, from commercial banks to the State Bank of Vietnam, thus promoting the secure and effective development of the market and facilitate the implementation of monetary policies. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| 6. | Set up a system to disclose information on issuance and trading of corporate bonds listed and unlisted at the Stock Exchanges for promoting the development of the corporate bond market. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| VI. Other solutions | VI. Other solutions | VI. Other solutions | VI. Other solutions | VI. Other solutions | VI. Other solutions | VI. Other solutions | VI. Other solutions | VI. Other solutions | ||||||||||||
| 1. | Enhance the coordination between monetary policies and financial policies and create connectivity, balance and synchronization between the money-credit market and the bond market. |
|
|
|
|
|
|
| ||||||||||||
| a) | Increase the coordination between the Ministry of Finance and the State Bank of Vietnam in exchanging and providing information about liquidity, interest rates, monetary market, issuance of government bonds, and state budget revenues and expenditures. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
| b) | Develop a stable monetary market and form a short-term standard yield curve to promote the liquidity of the monetary market and support the development of the bond market; review and formulate a roadmap for reducing the use of short-term funds for provision of medium- and long-term loans, and minimize the provision of loans exceeding 15% of equity of credit institutions for a single client in order to reduce risks related to loan terms and funding sources for the banking system and promote the raising of funds through issuing corporate bonds. | The State Bank of Vietnam | The Ministry of Finance |
|
|
|
|
| ||||||||||||
| c) | Revise and perfect regulations on foreign exchange in order to create instruments for risk management, especially exchange rate risks, to attract foreign investors to the bond market while ensuring the foreign exchange management orientations of Vietnam; step by step liberalize capital transactions and increase the convertibility of Vietnamese currency according to the State’s current mechanisms and policies. | The State Bank of Vietnam | The Ministry of Finance |
|
|
|
|
| ||||||||||||
| 2. | Increase talks with market members and improve the efficiency of operation of Vietnam Bond Market Association. |
|
|
|
|
|
|
| ||||||||||||
| a) | Organize periodical talks and exchanges between the Ministry of Finance, the State Bank of Vietnam and market members to discuss and reach an agreement on bond market development solutions. | The Ministry of Finance | The State Bank of Vietnam and VBMA |
|
|
|
|
| ||||||||||||
| b) | Provide training for market members and request them to comply with relevant regulations when participating in the bond market. | The Ministry of Finance | The State Bank of Vietnam and VBMA |
|
|
|
|
| ||||||||||||
| c) | Encourage the Vietnam Bond Market Association to develop and promulgate bond market development standards, such as standards on ethics, transactions, methods of issuance of corporate bonds and model prospectus, in accordance with the legal framework with a view to ensuring uniform methods of calculating and listing prices and conducting transactions in the market. | The Ministry of Finance | The State Bank of Vietnam and VBMA |
|
|
|
|
| ||||||||||||
| d) | Upgrade and improve the website on the bond market of the Ministry of Finance, aiming to publicize mechanisms and policies as well as issuance plans, timetables and issuance outcomes, facilitating investors in analysis and access to opportunities for making investments in the bond market. | The Ministry of Finance | The State Bank of Vietnam and VBMA |
|
|
|
|
| ||||||||||||
| 3. | Increase the management and supervision of capital and bond markets in accordance with applicable laws to ensure their safe, public and transparent operation and protect legal interests of market participants. | The Ministry of Finance |
|
|
|
|
|
| ||||||||||||
| 4. | Actively participate in international and regional cooperation programs and forums like the Association of Southeast Asian Nations (ASEAN), ASEAN + 3, Asia-Europe Meeting (ASEM), Asia-Pacific Economic Cooperation (APEC) forum, and Global Emerging Market Local Currency Bond (GEMLOC) program with a view to increasing connection with regional bond markets and developing the domestic bond market. | The Ministry of Finance | The State Bank of Vietnam |
|
|
|
|
| ||||||||||||
File gốc của Decision No. 1191/QD-TTg dated August 14, 2017 approving Road map for development of bond market in the 2017 – 2020 period with a vision by 2030 đang được cập nhật.
Decision No. 1191/QD-TTg dated August 14, 2017 approving Road map for development of bond market in the 2017 – 2020 period with a vision by 2030
Tóm tắt
| Cơ quan ban hành | Thủ tướng Chính phủ |
| Số hiệu | 1191/QD-TTg |
| Loại văn bản | Quyết định |
| Người ký | Nguyễn Xuân Phúc |
| Ngày ban hành | 2017-08-14 |
| Ngày hiệu lực | 2017-08-14 |
| Lĩnh vực | Chứng khoán |
| Tình trạng | Còn hiệu lực |