New guidelines issued for debt trading
New guidelines issued for debt trading
The Ministry of Finance has issued a circular to guide the implementation of Decree 69/2016/ND-CP on conditions for debt trading.
Under Circular 53/2017/TT-BTC, which will take effect from July 3, debt traders must meet regulations issued in Decree 69/2016/ND-CP, dated July 1, 2016.
As per the decree, debt traders must have at least VND100 billion (US$4.38 million) in charter or investment capital.
Besides, debt buyers and sellers must not be related parties under the Enterprise Law; and debts cannot be used as security for a civil liability at the time of debt trading.
The trading of debts must also be under written contracts, which must specify the rights and obligations of debt buyers and sellers.
Debt trading companies must not receive loans or guarantees of credit institutions and foreign bank branches to buy debts from these lenders’ other borrowers.
Finally, debt buyers and sellers and related parties must observe current regulations on foreign exchange management, in case the debt trading has a foreign lending/borrowing link and requires foreign currency in transactions.
As per the new circular, debt trading enterprises that were set up before July 1, 2016, when Decree 69/2016/ND-CP took effect, must meet the decree’s requirements before June 1, 2017, and report it to the business licensing agency. If they fail to meet the conditions, they must stop operations and report the closure to the agency.
