GuidetoVietnamSecurities2011

Guide to
Vietnam Securities
2011
About Viet Capital Securities
Viet Capital Securities (VCSC) is a leading securities rm fully licensed by the State Securities Commission
of Vietnam to provide investment banking, research and brokerage services in Vietnam to governments,
corporations, institutions and individuals worldwide.
VCSC is the largest investment bank in terms of revenues from capital markets and corporate nance
activities and has been involved in numerous landmark deals in Vietnam. Our brokerage market share is in
the Top 10 and clients include some of the largest and well-known asset management rms in Vietnam and
the world.
Recent awards by Finance Asia, Alpha Southeast Asia and The Asset emphasize our leadership in Vietnam’s
Capital Markets.
Services include:
Award winning:
Contacts:
To sign up for our research, please contact us at
Research
• 12 professional staff,
headed by 10+years CFA
• Forward looking
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Research
Marc Djandji

Research Access

• Analysts calls
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Institutional Brokerage
• Top 10 market share
• Dedicated to serving
institutions worldwide
• Brokerage: Listed & OTC
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Institutional Brokerage
Michel Tosto

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Vietnam, 2011
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Finance Vietnam, 2011
Investment banking
• Advisor to most of the top
companies

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IPOs and M&As
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Investment banking
Hoan Dinh

In-depth Relationships
• Companies
• SBV, SSC, VSD, GSO
• HSX, HNX
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Guide to Vietnam Securities
Viet Capital Securities’ Guide to Vietnam Securities covers everything investors need to understand to trade
in Vietnam. Whether listed or unlisted securities or IPOs, it’s all exposed in the nest details. No stones left
unturned. No half truths.
Content
1. Listed Securities 4
1.1. Overview 5

1.2. Placing an order 6
1.3. Trading restrictions 8
1.4. Disclosure requirements 9
1.5. Order matching and price determination 11
2. Unlisted “OTC” Securities 12
2.1. Introduction 13
2.2. Process of trading OTC securities 13
2.3. Conclusion 15
2.4. WTO and FOL for OTC securities 15
2.5. List of documents needed to trade OTC securities 16
3. IPOs 18
3.1. IPOs & auction basics 19
3.2. How to participate in an auction in Vietnam 20
3.3. Auction example 21
3.4. VCSC as an auction agent 21
3.5. Auction registration (checklist) 21
3.6. Background information on share offerings in Vietnam 22
3.7. Auction process ow (summary) 24
4. Annexes 26
4.1. Setting up to invest in Vietnam 27
4.2. List of banks offering custody services 28
4.3. Rights and obligations of investors 29
4.4. Capital ows 29
4.5. Taxes 30
4.6. Board membership 30
4.7. Legalization process 31
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Interpretation of terms
Outstanding shares: means the total amount of shares issued by the company. This number can be
different from the amount of “listed shares”, which is the amount effectively listed by the company on one
of Vietnam’s stock exchange (a company cannot list shares on both exchanges at the same time). Some
companies do not list all their shares, notably VCB and CTG.
Voting shares: Voting shares are currently the same as “outstanding shares” as Vietnam only has one
class of shares which are all entitled to the same rights and obligations. We talk about voting shares in
certain sections of this document as the law refers to that specic term on these specic occasions. The
distinction between outstanding shares and voting shares will become important as Vietnam allows different
classes of shares carrying different rights and obligations. We make the distinction at this time out of a
desire for precision.
Strategic Investor: Decision 36/2003/QD-TTG from the Ministry of Finance stipulates that “if foreign
investors desire to become strategic investors of Vietnamese enterprises, they must have the nancial
capacity and ability to support Vietnamese enterprises in developing, improving ability of administration and
management and apply of modern technology, and have close relations with enterprises on a long term
basis in terms of interests, and satisfy specic criteria set out by the enterprises”.
Disclaimer
No representation, warranty or undertaking, expressed or implied, is given as to the accuracy or completeness of the
information contained in this document by any of Viet Capital Securities, its members, employees or afliates and no
liability is accepted by such persons for the accuracy or completeness of any such information. The information is intended
for general guidance only, and it is the responsibility of any person or persons in possession of this document to inform
themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. One must understand that
the information may be change at any time without warning by Vietnam authorities. In addition, practice may be different
from the letter of the law. We did make the utmost effort to ensure that all information is accurate at the time we published.
The distribution of this document may be restricted in certain jurisdictions in which case you may not use it.
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Listed
Securities
1
Guide to Vietnam Securies
2011

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1.1. Overview
Stock exchanges
(abbr.)
Ho Chi Minh Stock Exchange
(HSX)
Hanoi Stock Exchange
(HNX)
Reference
Reuters: .VNI
Bloomberg: VNINDEX

Reuters: .HNXI
Bloomberg: VHINDEX

Currency of trade Vietnam Dong (VND)
Trading days Monday – Friday (GMT+07:00)
Holidays • January 1st – New Year
• Jan-Feb (last day of the last lunar month to the third day of the rst lunar
month inclusively) – Vietnamese (Chinese) New Year
• April (10th day of the 3rd lunar month) – King Hung Commemorations
• April 30 – Liberation Day

• May 1 – Labour Day
• September 2 – National Holiday
Boards 1) One main board only (HSX)
1) Main board (HNX)
2) “Nasdaq type” board (UpCom)
Trading hours HSX: Equities (no bonds on HSX)
Session 1: 08:30-08:45 (P.OM & PT)
Session 2: 08:45-10:30 (C.OM & PT)
Session 3: 10:30-10:45 (P.OM & PT)
Session 4: 10:45-11:00 (PT only)
Matching in session 1 and 3 is done at
the end of each session (periodic order
matching, or P.OM) while Session 2
matching is continuous throughout the
session (or C.OM). Trading hours are
expected to extend to the afternoon in 20
Feb 2012.
A Put-Through (PT) is the act of
directly matching an order with another
market participant, aka block dealing.
PT transactions can occur at anytime
during trading hours. On the HSX, any
order of 20,000 shares or more must be
matched via PT, either by nding your own
counterparty, or asking your broker to help.
Orders of less than 20,000 shares cannot
be match in PT. All PT transactions are
matched through the exchange’s system.
Note it’s possible to break large orders into
multiple smaller one to avoid PT.

HNX: Equities & Bonds
Session 1: 08:30 – 11:00
(Continuous OM and PT)
UpCom: Equities & Bonds
Session 1: 08:30 – 11:30
Session 2: 13:30 – 15:00
(Continuous OM and PT)
HNX only has one session where
matching is conducted by order matching
(OM) or put-through (PT) both for
equities and bonds. A Put-Trough (PT) is
optional if trading at least 5,000 shares
or 1,000 bonds. Order matching (OM) is
mandatory for smaller trades. Note it’s
always possible to break large orders into
multiple smaller one to avoid PT.
UpCom has two sessions where trades
are matched through OM or PT. On the
rst day of a newly listed stock, only OM
orders are accepted.
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1.2. Placing an order
Order types & validity HSX
LO: Limit order, valid the entire day
ATO: Market order valid in 1
st
session
only, matching priority over LO

ATC: Market order valid in 3
rd
session
only, matching priority over LO
MP: Market order (approved, but not
yet implemented)
HNX / UpCom
LO: Limit order, valid the entire day
Daily price change
limit (aka collar)
(price ceiling and oor
on the day)
HSX
Equities: 5% of previous day’s close,
20% if 1st day of listing
Bonds: No limit
HNX
Equities: 7% of previous day’s volume
weighted average price.
30% if 1st day of listing.
UpCom
Equities: 10% of previous day’s volume
weighted average price.
40% if 1st of listing
Bonds: No limit
Price Units / Ticks
/ aka Quote unit
(smallest multiple one
can price shares at)
Price unit

if current
price is (VND):
Equities Bonds
HSX HNX UpCom All Exch
≤ 49,900 100vnd 100vnd 100vnd None
50,000 to <100,000 500vnd 100vnd 100vnd None
≥ 100,000 1,000vnd 100vnd 100vnd None

Does not apply to PT transactions (they can be traded at any price).
Board lot
(smallest multiple
of shares one can
transact)
HSX
Equities: 10 shares
(i.e. you can transact 10, 30, 70, …,
shares, but not 22, 47, 89, …)
HNX
Equities & Bonds: 100 shares/bonds
UpCom
Equities & Bonds: No board lot,
minimum 10 shares
Does not apply to PT transactions (they can be traded in any quantities).
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Amending and

cancelling orders
HSX
Session 1: Cannot cancel any order.
Unmatched portion of ATO orders are
cancelled at the end of the session.
Session 2: Unmatched portion of any
order can be cancelled at any time.
Session 3: Can only cancel limit orders
that were placed in previous sessions.
New orders cannot be cancelled.
Session 4: N/A
It’s impossible to change the price or
quantity of an order; you must cancel
the order and then enter a new one.
HNX / UpCom
Session 1: Unmatched portion of any
order can be cancelled at any time
It is possible to change the price of any
order at any time, but to change the
quantity you must rst cancel your current
order and enter a new one.
Matching priority All exchanges (PTQ principle)
#1 – Price priority : priority to the highest price bid or the lowest ask
#2 – Time priority : for orders at same price, priority to orders that came in rst
#3 – Quantity priority : for orders at same price and time, priority is given to
orders with the highest quantity of shares
Matching principle HSX
Buy orders at higher or equal price
than sell orders are matched against
each other following the PTQ principle.

Partial lls are possible.
HNX / UpCom
Buy orders at higher or equal price to sell
orders are matched against each other
following the PTQ principle. Partial lls
are possible
See section on “order matching and price determination” further in this document
for details about how ATO and ATC orders are matched.
Settlement
(cash/stocks received
on settlement day can
only be used the day
after)
HSX
Equities: T+3 days; T+1 if transacting
over 100,000 shares by put-through
HNX
Equities: T+3 days; T+1 if transacting
over 100,000 shares by put-through
Bonds: T+3; choice of T+1,2 or 3 if
transacting over 100,000 bonds
UpCom
Equities & Bonds: T+3
Face value Equities: 10,000vnd
Bonds: 100,000vnd
Odd-lots Odd lots (shares owned in a number below 10 on the HSX and below 100 on the
HNX) may be kept, sold in a PT transaction, or sold to your broker.
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1.3. Trading restrictions
Foreign ownership
limit (FOL)
Equities: 49% of outstanding shares, 30% for banks*, and less for companies
that pledged to list a some shares offshore; note that certain companies do not
list all their shares and therefore the FOL for the shares listed would be higher
(for example, a company that lists say less than 49% of its outstanding shares,
foreigners could buy up to 100% of the listed shares). FOL is available in real-time
on Bloomberg (all stocks) and on VCSC’s price board (www.vcsc.com.vn), just
hover your mouse over any ticker (HSX only).
Bonds: No FOL
* Banks FOL is limited to maximum of 5% for any single investor, 10% for any
investor that is a bank, and 15% for any “strategic investor”. A 20% stake requires
the approval of the Prime Minster. FOL for banks include afliated persons (see
page 10 for details).
Restrictions on
newly listed shares
Applies to equities only: Shareholders that are also members of the board of
directors or board of controllers, a director, general director, deputy director or chief
accountant of a newly listed company must undertake to hold 100% of the shares
they own for a period of six (6) months from the date of listing and 50% of this
amount for the following six (6) months, excluding any shares held by individuals
acting as representative of the State.
Private equity rms who take board seats need to take note of this when planning
their exit strategy.
Other restrictions Funding requirement / short selling: Investors must have sufcient funds in their
local currency (VND) bank account if buying, or sufcient securities if selling (e.g.
short selling is not permitted). If investors have a pending FX transaction from a
foreign currency to VND, your custodian may take this into account when verifying
for funding requirement. Your custodian is the one who decides if these pending

transactions can be counted towards your funding requirement, not your broker.
Same day buy / sell: It is possible to buy and sell the same ticker on the same day
as long as you follow certain restrictions:
• You may only place a buy order if you do not have a current sell order on the
same ticker, and vice versa. If you do, you will have to cancel your current
order before placing your second order on the same ticker.
• One ticker, one broker. If you buy (or sell) shares with a broker, for the rest of
the day, you may only buy (or sell) the same ticker with the same broker.
Margin lending: Permitted for local investors only (albeit not for now as full
implementation of this new regulation is not possible yet).
Securities borrowing or lending: Not permitted.
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1.4. Disclosure requirements
Disclosure based on
insider trading
(including substantial
shareholders)
Applies to equities only: If a shareholder wishes to buy or sell shares and he
or its afliated persons* is considered an “insider”, the shareholder must declare
its intention, and how many shares are to be bought and/or sold in a given period
(maximum two months), to the SSC, the stock exchange (HSX or HNX) and the
company at least 3 days before trading any amount of shares. Upon receipt of
the notice, the stock exchange will advertise the information on its website and
the shareholder will be allowed to trade only 24h after such information has been
advertised. Should the shareholder complete its intended trades, or should the

given period expire, whichever come rst, the shareholder must declare the results
of its trades within 3 days of the date of completion or expiry, whichever come rst.
If the results differ from declared intentions, he must explain why.
Investors are solely responsible for any and all disclosures. Should clients require
assistance, VCSC will be happy to help.
* see page 10 for details
Disclosure based
on substantial
ownership
(equal or more than
5% of total voting
shares)
Applies to equities only: Anytime a shareholder acquires and amount equal to
or greater than 5% of the total number of voting shares of a company, including
the amounts held by its afliated persons*, the shareholder must declare the fact
within 5 days of the date of the transaction that brought the shareholding (including
its afliated persons) to an amount equal to or greater than 5%. The same applies
if reducing a stake below 5%.
Finally, anytime a substantial shareholder (including its afliated persons) increases
or reduces their stake by an amount equal to or more than 1% of the total amount
of voting shares of a company since their last declaration must also declare their
new ownership level each time they pass that threshold. The law is silent as to who,
between the afliated persons, must make the disclosure.
While VCSC will help its clients meet their disclosure obligations, according to
Vietnam laws, investors are solely responsible for any and all disclosures.
* see page 10 for details
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“Insider” means:

(a) Members of the board of management and board of controllers, the director or general director and the
deputy director or deputy general director of a public company; members of the committee of representa-
tives of a public fund;
(b) Major shareholders of a public company or of a public fund;
(c) Auditors of the nancial statements of a public company or of a public fund;
(d) Other persons with access to inside information of a public company or public fund;
(dd) Securities companies, securities investment fund management companies and securities practitioners
of such companies;
(e) Organizations and individuals with a business co-operation relationship with, or who provide services
to a public company or a public fund, and people working in such organizations;
(g) People who directly or indirectly obtain inside information from the subjects stipulated in sub clauses
(a) to (dd) inclusive of this clause.
“Afliated person” means:
(a) Parents, adopted parents, spouses, children, adopted children and siblings of any such individual;
(b) Organizations in which there are individuals who are staff, the director or general director, or the owner
of more than fteen (15) per cent of the voting shares in circulation;
(c) Members of the board of management or board of controllers, the director or general director and the
deputy director or deputy general director and other managerial personnel of such organization;
(d) People who in a relationship with another person directly or indirectly control or are jointly controlled
by such other person, or who jointly with another person are subject to the same control;
(dd) A parent company and its subsidiaries;
(e) A contractual relationship in which one person is the representative of the other.

“Afliated person” as it applies to bank’s FOL* (slightly different from “afliated person” under other
circumstances (as above):
(a) The parent company of that entity or any other member company that is within the same parent
company with that entity;
(b) Any person or an institution that manages the parent company or has the authority to appoint executive
ofcers in the parent company of that entity;
(c) Any member company or subsidiary of that entity;

(d) Any executive ofcer, member of the Board of Controllers, or person/ entity with authority to appoint
the executive ofcer of that entity;
(dd) Any shareholder or group of shareholders holding 10% or more of total common shares of that
entity;
(e) Spouse, parent, adoptive parent, children, adopted children, and brothers and sisters (and spouses
of these persons) of any executive ofcer, member of the Board of Controllers, or shareholder holding
10% or more of the total common shares of that entity;
(f) Spouse, parent, adoptive parent, children, adopted children, and brothers and sisters (and spouses of
these persons) of that individual;
(g) An individual authorized to represent such persons referred to in paragraphs (1), (2), (3), (4), (5),
(6), and (7) above, with respect to their authorisers and related persons of tHSX authorisers and
authorised persons.
* The “dd” in the above lists come from the translation of legal texts into English. It comes from the fact
that the Vietnamese alphabet contains both a “d” and a “d” with a bar, with the later represented as “dd”
in English.
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Periodic Order Matching (HSX only): Buy and sell orders are queued for matching at a specic time at the
single lowest price that generates the highest trading volume. For example, if person (a) buys 10 shares at
100vnd, person (b) sells 3 shares at 90, person (c) sells 3 shares at 92, person (d) sells 3 shares at 95 and
person (e) sells 4 shares at 97, the matching price will be 97, where (a) will buy 10 shares, (b), (c) and (d) will
sell all their shares, and (e) will sell 1 share only. All parties transact at 97vnd/shares. This matching method
is used to determine the opening and closing price of stocks. Orders in Periodic sessions are matched at the
end of the session only, during which ATO/ATC orders have priority over Limit Orders.
Continuous Order Matching (All exchanges): The trading systems of each exchange continuously
matches the rst buy and sell order in the queue, and at the same time, conrms each executed transaction

via the broker/trader’s terminal. As priority is given to the rst order placed, this can make a major difference
in your strategy. For example, if a person places an order to buy stock ABC at 100vnd and another person
places an order to sell the same stock at 90vnd, the matching price will depend on who rst placed the order.
If the buyer placed it rst, the matching price will be 90vnd. If the seller placed it rst, the matching price will
be 100vnd.
Put-Through: Price and quantity are negotiated directly between the buyer and the seller or their representa-
tive, but the deal is only concluded when it’s matched in the exchange trading system during any session
that allows Put-Through (PT). The trading system also allows brokers to advertise IOI’s to nd potential
buyers/sellers. The executed price must follow the price range for that particular stock on the day the trade
is executed.
FOL intraday: When the FOL of a particular stock is reached during trading hours, all current buy orders
from foreign entities will automatically be cancelled by the system. Additionally, the systems will reject any
all buy orders from foreign entities for the remainder of the day. Sell orders are always accepted however.
Shares that foreign investors sell to non-foreign parties are added to the number of shares available to
foreign investors after the settlement period (T+3). This rule also applies to Put-Through transactions. Note
it is possible for a foreign buyer to transact a PT with a foreign seller even if the FOL for that particular stock
has reached the limit.
Opening Price: On the HSX, the opening price (aka reference price) is equal to the previous day’s closing
price as determined in session 3 (not including PT transactions). In cases where the closing price couldn’t
be determined in session 3, the closing price is equal to the last price at which shares were transacted on
that day. If no shares were traded on that day, the second previous day is taken, and so on. On the HNX
and Upcom, the opening price is the volume weighted average price (VWAP) of all order-matched orders
(excluding PT) of the previous day.
Reference price of newly listed stocks: The “opening price” of newly listed stocks is determined between
the company, the advisors and the stock exchange. If the matching price of newly listed shares/investment
fund certicates cannot be determined in the rst three trading days, the issuing organization shall adjust
the expected trading price.
Ex-Dividend / Ex-Right Prices: On the ex-dividend date and/or ex-right date, the reference price shall be
determined by adjusting the last trading day’s closing price or the average price of the last few trading days,
at the company’s discretion, by the value of dividend or right accordingly.

1.5. Order matching and price determination
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Unlisted
“OTC” Securities
2