MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING HANOI LAW UNIVERSITY PHAM DUC VINH 453502 LAW ON STOCKS AND BONDS IN THE U. AND VIETNAM: A COMPARATIVE PERSPECTIVE BACHELOR’S THESIS Hanoi - 2024 MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING PHAM DUC VINH 453502 LAW ON STOCKS AND BONDS IN THE U. AND VIETNAM: A COMPARATIVE PERSPECTIVE ‘Major: Comparative Law BACHELOR’S THESIS SUPERVISOR PHD. DO THI ANH HONG STATUTORY DECLARATION Therewith formally deciare that I myself have written the submitted Bachelor's Thesis independently, the conclusions and data in the Bachelor's Thesis are truthful and reliable / Confirmation of supervisor Author of Bachelor's Thesis PhD.
Do Thi Anh Hong Pham Duc Vinh Fr ACKNOWLEDGEMENTS Fst and foremost, Ievtend my deepest gratitude to my supervisor PhD. Do Thi Anh Hong for providing me with the valuable opportunty to pursue my graduation thesis on the topic “Law on stocks and bonds in the US and Vietnam: A comparative perspective Lam profoundly gratefil for her guidance and msightfil advice. Her patience, support and encouragement throughout the process of doing the thesis have been a source of great inspiration to me, making it an honor and privilege to work wider her tutelage 1 imust also express my sincere apprectation to my parents for thetr unconditional love, care, amd the sacrifices they made to ensure my education and future success. My gratitude extends to my friends for thei moral support and to my classmates, whose assistance was vital im the completion of thts thesis, Author of Bachelor's Thesis Pham Duc Vinh LIST OF ABBREVIATIONS Emerging Growth Companies EGC Hanoi Stock Exchange HNX Ho Chi Minh Stock Exchange HOSE Initial Public Offering IPO International Organization of Securities Commissions |: IOSCO Law on Enterprises 2020 LOE, Law on Securities 2019 Los Limited Liability Company LLC National Association of Securities Dealers Automated |:NASDAQ Quotation System New York Stock Exchange NYSE Retum on Equity ROE Securities Exchange Commission SEC Self Regulatory Organization SRO State Securities Commission ssc United Kingdom UK United States us United States Dollars U§D Vietnam Securities Depository and Clearing): VSDCC Corporetion.
Vietnamese Dong VND iv TABLE OF CONTENT Page SLIDE COVER i STATUTORY DECLARATION ii ACKNOWLEDGEMENTS iit LIST OF ABBREVIATIONS iv TABLE OF CONTENT v PREFACE 1 1. Rationale ofthe Thesis 1 2. Review of previous researches related to the Thesis 2 2. Scientific and practical significance ofthe Thesis 5 3.
Objectives of the Thesis 6 5. Research object and scope of research 6 5. Research object of the Thesis 6 5. Scope of research of the Thesis.
Research methods and methodology i 6. Research methods of the Thesis 7 6. Methodology ofthe Thesis a 7. Structure ofthe Thesis.
8 CHAPTER 1: THEORETICAL ISSUES REGARDING STOCKS AND BONDS 9 1. Definition of stocks 1. Concept of bonds. Definition of bonds 1.
Characteristics of bonds.3 Classifications of bonds. Concept ofsecurities law. Concept ofsecunities fraud 1.3, Concept of investor protection. Conclusion of Chapter 1 CHAPTER 2: STOCKS AND BONDS UNDER VIETNAMESE AND U.
Stocks and bonds under Vietnamese law.1, Foundation for stacks and bonds 3. Offering, listing and information disclosure 2.4, Offenses and punishments 31 3. Stocks and bonds under U. Foundation for stacks and bonds.
Offering, listing and information disclosure 4 2. Offenses and punishments 43 vi 2. Comparative overview of U. and Vietnamese law on stocks and ‘bonds 45 2.31, Foundation for stacks and bonds.
Offering, listing and information disclosure 46 2.4, Offenses and punishments 50 2.35, Reason for the similanities and differences 52 Conclusion of Chapter 2 54 CHAPTER 3: IMPLICATIONS TO IMPROVE VIETNAMESE REGULATORY SYSTEM FOR STOCKS AND BONDS. Key principles for the proposals to improve Vietnamese regulatory system for stocks and bonds. Recommendations to improve Vietnamese regulatory system for stocks and bonds 56 3. Recommendations to improve Vietnamese regulation on offering, distribution, and information disclosure.
Recommendations to improve Vietnamese supervising entities 57 3.3, Recommendations to improve Vietnamese regulation onoffenses and punishments 58 Conclusion of Chapter 3 59 CONCLUSION 60 REFERENCES 61 PREFACE 1. Rationale of the Thesis The evolution of financial markets, marked by the intricate dance ‘between risk and opportunity, has witnessed the emergence and refinement of securities such as stocks and bonds, shaping the very foundations ofthe global economic landscape. This comparative analysis delves not only into the contemporary legal frameworks governing stocks and bonds in the United States and Vietnam but also unravels the historical threads that have woven the intricate tapestry of these securities Stocks and bonds, as prevailing instruments ofinvestment, have roots that extend deep into history, reflecting the economic aspirations and challenges ofdifferent eras. The United States, with its robust financial history, has seen the development ofa sophisticated market that traces its origins back to the establishment of the New York Stock Exchange in 1792, From the iconic ‘Wall Street to the evolution of regulatory frameworks inresponse to economic crises, the history of stocks in the U.
is a testament to resilience and adaptation. In Vietnam, a nation with a rich cultural and economic heritage, the joumey ofsecurities markets has been more recent but equally transformative The development of a formal stock market in the early 2000s and the subsequent crafting of the Law on Secunities exemplify Vietnam's commitment to economic reforms and integration into the global financial system The nation's history, steeped in a trajectory of economic shifts and adaptations, provides a unique backdrop to the development of its securities markets Conceming the legal frameworks governing stocks and bonds in these ‘two nations, it is crucial to recognize that the historical underpinnings have played a pivotal role in shaping their current structures. Compared to the U., the globally leading economy, the regulations of Vietmam on the aforementioned objects still need further development andadjustments to be on par with conventional standards. Therefore, with the growth and prosperity of the Vietnamese financial scene in mind, the topic “Law on Stocks and Bonds in the U.
and Vietnam: A comparative perspective” is chosen 2. Review of previous researches related to the Thesis Regarding their exceedingly vital positions within the financial structure ofthe world, securities like stocks and bonds have been the subject of research in countless studies, both inside and outside of Vietnam 21. Poreign literature As the global economic powerhouse, the United States has been a familiar nation in numerous comparative researches regarding securities law. With its established markets and legal system, researchers, no matter their nationalities, are always willing to explore and attain new knowiedge from examining and comparing their own financial policies with American securities regulations that date back to almosta century ago.
The most notable studies are from developed economies, specifically European nations, such as Finacial Services in the United States and United Kingdom: Comparative Approaches to Securities Regulation and Dispute Resolution, Brigham Young University International Law & Management Review, 2008 by Cory Alpert, which illustrates the regulatory circumstances and dispute resolution schemes for financial services in the U. and the UK., with emphasis on procedural dissimilarities and allocation of forum choice between investors and firms Furthermore, there are also researches done by academics from less Prosperous environments, namely 4 Review and Comparative Study of Securities Regulation and the Scope of Antifraud Provisions which Protect Investors in Developing and Developed Securities Markets: A Case Study of the Tancantan and US. Securities Markets, Tilburg University, 2017 by Michaela Herack Marandu, a Tanzanian scholar This study reviews and compares the strength and standard of securities regulation in Tanzania, a third- world country with limited financial standards, with the U.S, including relevant investor-friendly antifraud provisions under the Tanzanian CMS Acts and U. Federal Securities Acts.
It only focuses on the provisions in Part IX of the Tanzanian 1994 CMS Act and certain provisions of the U §. Federal Securities Acts, no other laws were considered. In his paper, Marandu was able to present key similarities and differences of antiffaud protocols between the two countries by meticulously citing and analyzing these statutes. One noticeable example is the breakdown ofSection 10(b) of the U.
Securities Exchange Act of 1934 in Chapter 3 of the paper, where he discussed insider trading under U. law and jurisdiction of this section through the case of Morrison v. Nat'l Aust, Bank Limited 130S Ct. All inall, even though it only covers anti-fraud provisions, the knowledge from Marandu's ‘work is exceedingly beneficial, not only to the Tanzanian economic scene but also similarly emerging markets such as Vietnam.
Domestic literature Vietnam, on the other hand, still has a very modest amount of comparative legal literature, especially in the case of comparing Vietnamese securities regulations with the United States’. At the moment, there is only a handful of academic researches regarding this matter. One of which is “Protection ofMinority Stockholders in Vietnam: A Comparative Analysis University of Economics Ho Chỉ Minh City, 2018 by Nguyen Van Tri. His research focuses on an important aspect of every security, which is the protection of the investors, specifically the protection of stockholders with limited ownership in the case of this research This work compares the protective mechanisms for minority stockholders within the Law on Enterprises 2014 with relevant Legal statutes from Thailand and the U.S, thus provides valuable insights on how to implement better regulations regarding this matter Or “Comparison of la on public offering of stocks ím Vietnam and the US.”, Law School - Vietnam National University, 2023 by Le Thi Diep.
This research analyzes and clarifies general and specific issues regarding the law on public offering of stocks, including participants, requirements, and procedure for this activity, through comparison between Vietnamese regulations and U. Through this analysis, the author points out current setbacks of Vietnamese regulatory system that are not in accordance with international standards, and provides several recommendations to fumish and improve Vietnamese law on public offering of stocks Apart from the abovementioned theses, there are other several studies that although may not conduct direct comparison of Vietnam and the U.S, but still contain valuable information on this topic, namely “Vietnam corporate bond market: Current status and Development solutions”, University of Economics and Business - Vietnam National University, 2023 by Pham Nguyet Anh. This thesis analyzes and evaluates the development situation of the corporate bond market in Vietnam, identifies ongoing problems and proposes solutions to further develop the Vietnamese corporate bond market. Additionally, it has a section that provides information on foreign experiences in developing corporate bond markets, including big economies like the U.S, China, and Japan.
There is also a research named “Law on Requirements for Public Offering of Securities in Vietnam”, Law School - Hanoi National University, 2021 by Do Thao Quyen. This thesis studies current Vietnamese regulations on public offering ofsecurities, as well as their application in practice. It focuses on assessing standards, regulations, and other relevant requirements regarding public offering of securities, and comparing them with their counterparts from other Southeast Asian countries Furthermore, there is a so-called “International Experience on Law on Securities and Securities Markets Research Report” conducted in 2019 by the Ministry of Finance as part of the Law on Securities Project documents. This paper does not actually compare any existing regulations on securities of Vietnam with other nations’, but provides the collected information on 4 securities law of ch country, including the US, Japan, transitional economies such as Russia and Poland, and several other Asian nations 3.
Scientific and practical significance of the Thesis, 3. Scientific significance ‘The comparative analysis ofthe law on stocks and bonds in Vietnam and the U. offers Vietnamese scholars and researchers a unique opportunity to delve into the intricacies of global financial governance.