Local securities enterprises can now submit foreign ownership limit (FOL) increase applications to the State Securities Commission (SSC) after the Government signed Decree 60 approving the removal of the FOL on most listed companies.
Speaking to the Daily, SSC vice chairman Nguyen Thanh Long said a higher FOL would apply to securities firms from September 1 when Decree 60 takes effect.
Given the new rule, brokerages can register at the SSC to raise their foreign ownership cap to over 49% or even 100%. They are able to sell shares to foreign investors after they get approval from the agency rather than having to wait for a guidance circular.
Long said the objective is to help struggling enterprises seek new sources of capital and boost restructuring plans. This is also in line with Vietnam’s commitments to the World Trade Organization (WTO).
The new decree stipulates that foreigners can own up to 100% shares at a securities enterprise or establish a 100% foreign-owned securities firm in the country.
It replaces Decree 58, which allows foreigners to either own a 49% stake at a Vietnamese brokerage or set up a 100% foreign-owned company. The old decree prevents foreigners from holding a stake of over 49% at local securities enterprises.
According to a representative of a 49% foreign-owned brokerage, the firm is facing difficulties but the parent firm in Malaysia cannot inject capital. The reason is that it cannot acquire stakes of all shareholders to hold a 100% stake at the company.
Therefore, the new rule will enable the enterprise to revise its foreign ownership cap, the representative said.
A leader of a HCMC-based securities firm told the Daily that the company would consider selling stakes to foreigners. Earlier, a foreign company offered to buy a majority stake of over 49% at the stock brokering house but both sides failed to conclude the deal due to the old rule.
Having negotiated with the partner, the enterprise will seek approval from shareholders to raise the FOL to over 49%, the leader said.
As enterprises need time to seek partners, negotiate and prepare procedures, it is difficult for them to finish FOL increase applications by early September.
There are around 90 active securities companies, including 40 foreign-invested firms, over 10 of them with foreign holdings of 49% and one 100% foreign-owned company (Maybank Kim Eng Securities Co.).
Source: Saigontimes
Key words: Securities firms, can apply, FOL increase
