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Five-percent compensation for securities transaction payment delay

Five-percent compensation for securities transaction payment delay

The State Capital Investment Corporation (SCIC), credit institutions and insurance firms will be allowed to participate in bond markets organized by foreign stock exchanges and securities depository centers upon the approval of the State Securities Commission (SSC) for opening accounts at Vietnam Securities Depository (VSD).

Under the Ministry of Finance’s Circular No. 05/2015/TT-BTC of January 15, 2015, guiding securities registration, depository, clearing and settlement, a depository member must open one account for depositing securities at VSD to carry out transactions of securities deposited in VSD. This member may not open accounts at other depository members, except members setting aside funds for carrying out swap transactions with exchange-traded funds.

Any transaction for which payments or securities are insufficient will be picked out by VSD for prolongation of the payment deadline for maximum three working days from the day preceding the payment day of such transaction. In this case, depository members must pay compensation to organizations and individuals having entered into relevant reciprocal transactions at the level of five percent per day of payment delay.

Past the prolonged deadline for payment, if available money or securities remains insufficient to conduct the transaction, VSD may cancel payment for such transaction and require depository members to pay a compensation of up to 20 percent of the transaction’s value.

This Circular will take effect on March 15.-

Old condominium reconstruction projects opened to foreign investors

Wholly foreign-owned enterprises, joint-venture companies with foreign investors and overseas Vietnamese businesses would be permitted to implement or join hand with others in implementing projects to renovate or reconstruct old apartment buildings in the country.

This is provided in a draft decree prepared and recently unveiled by the Ministry of Construction for public opinion.

In order to be allowed to invest in, or contribute capital to, a condominium reconstruction project, a business must satisfy several conditions. Firstly, its business registration certificate or investment certificate must indicate real estate as one of its business lines or investment sectors. Secondly, it must have a sufficient legal capital as prescribed by the law on real estate business. Finally, its equity for implementation of the project must be at least equal to 15 percent of the project’s total investment capital. In addition, the business must pay sums of money as deposit for project implementation and security for residential property transactions in accordance with the laws on investment and real estate business. 

In order to encourage investment in renovation and reconstruction of old condominiums, the draft decree offers a raft of incentives for investors.

Accordingly, project owners would be exempt from land use levy, land rental and land use purpose change payment. They would also be entitled to soft loans from various sources and be permitted to change the use purposes of part of the allocated land areas for business and service activities.

 In addition, condominium reconstruction projects would be entitled to value-added tax and corporate income tax rates applicable to social housing projects. Meanwhile, apartments left after arranging accommodations for households living in re-built apartment buildings may be traded in accordance with the law applicable to commercial housing projects

 

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