The National Assembly passed the Law on Securities (the Law) on 29 June 2006, to come into effect on 1 January 2007. The Law provides for comprehensive regulations governing activities relating to securities for the purpose of ensuring that the securities market will operate efficiently, safely, transparently, and fairly, while protecting the legitimate rights and benefits of securities investors and relevant parties. The Law contains 11 Chapters with 136 Articles, with the main content as follows:

- Scope of regulation: The Law stipulates on the offering of securities to the public, securities listing, transactions, trading, investment, services on securities and the securities market. 

- Subject of application: (i) Vietnamese organisations, individuals and foreign organisations, individuals participating in investment of securities and operating on the Vietnamese securities market, and (ii) other organisations and individuals relating to the securities activities and securities market.

- Forms of offering securities to the public: (i) initial offering to the public, (ii) additional offering shares or the offering right to buy shares to the public and others.

- Registration of offering shares to the public: The issuing organisation offering securities to the public must carry out the procedures for registration with the State Securities Commission (“SSC”), except for the following cases: offering Vietnamese government bonds, offering international financial organisations’ bonds approved by the Vietnamese Government; offering securities to the public of state enterprises being transformed into joint stock companies; offering securities according to a judgment or decision of the court or selling securities of managers or persons who receive assets in cases of bankruptcy or lost payment capabilities.

- Conditions for offering securities to the public: Under the provisions of the Law, investors must meet conditions on charter capital, healthy financial situation and feasible capital use plans. For the purpose of offering shares to the public, enterprises must have charter capital of at least VND10 billion at the time of registration; and the value of total fund certificates registered to offer shall be at least VND50 billion in case of offering fund certificates to the public.

- Regarding the public company: This is a new content of the Law on Securities in comparison with the current Decree No 144/2003/ND-CP. Accordingly, a public company shall be a joint stock company subject to one of three following forms: (i) the company which offered its shares to the public; (ii) the company whose shares have been listed in Securities Trading Centre / the Securities Exchange and (iii) the company whose shares are owned by at least 100 investors not including professional security investors, and its chartered capital is VND10 billion or more. The public company shall be required to submit its Dossier to the SSC for making public its information.

- Regarding operation forms of securities market: Similar to Decree No 144/2003, the Law on Securities regulates two operation forms of the securities market including: (i) the Securities Trading Centre, and (ii) the Securities Exchange. However, the Law regulates more sufficiently the mechanisms, operating organisation as well as supplementing rights and obligations of such organisations such as issuing regulations on securities listing, securities transaction, information disclosure and transaction member after being approved by the  State Securities Commission; temporary cessation and suspension or cancellation of securities transactions according to the securities transaction regulations of the Securities Exchange and the Securities Trading Centre if necessary for the purpose of protecting investors, etc.

- Regarding securities registration, custody, clearing and payment: All securities issued by a public company must be registered and required to perform custody at Securities Custody Centre (SCC). The SCC shall be organised under a decision of the Prime Minister and in the form of a limited liability company or shareholding company. Members of SCC include securities companies and commercial banks licensed to provide securities custodial services. The payment of securities shall be effected through the system securities accounts opened at SCC. The money payment of securities transactions shall be effected through the system money accounts opened at the bank(s) designated for payment.

- Regarding disclosure of information: Under the Law, issuing organisations, listing organisations, public companies, securities companies, fund management companies, securities investment companies, the Securities Trading Centre, and the Securities Exchange must fully, promptly and accurately make public information to competent authorities and investors by means such as periodical disclosing of information and irregularly disclosing information or disclosing information on request. These provisions aim at protecting the legitimate rights and benefits of investors as well as ensuring the safe, transparent, fair and efficient operation of the securities market.