Who is eligible to register transactions on the Upcom trading system?

The Upcom trading system (Unlisted Public Company Market) is a trading platform for unlisted securities, organized and operated by the Stock Exchange (clause 35 Article 3 of Decree No. 155/2020/ND-CP). It is a stock exchange in Vietnam, established in 2009 with the aim of developing the Vietnamese stock market by providing a platform for unlisted public joint-stock companies, and medium and small-sized joint-stock companies to publicly trade their shares. So, who is eligible to register transactions on the Upcom trading system? Viet An Law will provide the answer to this question.

What are the important features of the Upcom trading system?

Some important features that investors should know about the Upcom are as follows:

• Upcom is a stock exchange specifically for companies that are not listed on the Ho Chi Minh Stock Exchange (HOSE) or the Hanoi Stock Exchange (HNX).
• Liquidity on Upcom is fairly low. Therefore, trading stocks on Upcom may face difficulties, and transaction time can last longer.
• Companies listed on Upcom must comply with regulations on information disclosure and transparency, including the periodic publication of financial reports and important business activity information.
• On Upcom, companies may be listed with an initial price lower than on other stock exchanges.
• Stock prices on Upcom can fluctuate significantly (up to 15% compared to the reference price), and these fluctuations are unpredictable.
• Upcom is subject to management and supervision of the State Securities Commission (SSC) and the Board of Directors of the Vietnam Stock Exchange (VSD).

Who is eligible to register transactions on the Upcom trading system?

Pursuant to the provisions in clause 1 Article 133 of Decree No. 155/2020/ND-CP, the following entities are eligible to register transactions on the Upcom trading system:

• Public companies that are not listed on the stock exchanges;
• Companies that are delisted involuntarily or voluntarily but are still qualified as public companies;
• Enterprises that have undergone equitization and are required to register for trading according to the law on the transformation of state-owned enterprises, single-member limited liability companies fully owned by state enterprises, and public service units that become joint-stock companies.

What is the deadline for registering transactions?

For unlisted public companies

Public companies must complete their share registration at the Vietnam Securities Depository and Clearing Corporation, and register for trading on the Upcom trading system in accordance with the provisions in point d, đ clause 1 Article 34 of the 2019 Securities Law:

• Public companies with a contributed charter capital of 30 billion VND or above, and at least 10% of the voting shares held by at least 100 investors who are not major shareholders, must register for trading on the unlisted securities market within 30 days from the date the State Securities Commission confirms the completion of the public company registration.
• Public companies, that have successfully offered their shares to the public through registration with the State Securities Commission, must list or register their shares for trading on the securities exchange within 30 days since the end of the public offering.

For companies that have been delisted involuntarily

Within 7 working days from the effective date of the delisting, the Stock Exchange must coordinate with the Vietnam Securities Depository and Clearing Corporation to register transactions for the shares of the company that has been delisted.

For equitized enterprises

• The deadline for registering transactions for equitized enterprises follows the regulations on the transformation of state-owned enterprises, single-member limited liability companies fully owned by state enterprises, and public service units transforming into joint-stock companies.
• Equitized enterprises registering for trading on the Upcom trading system, must fulfill their information disclosure obligations as prescribed by law and the regulations of the Stock Exchange.

What are included in the application for trading on the Upcom trading system?

For unlisted public companies

The application for a public company on with a charter capital of from 30 billion VND above, and at least 10% of the voting shares held by at least 100 investors who are not major shareholders, includes as follows:

• (1) The request letter for registering shares for trading, according to Form No. 36 in the Appendix of Decree No. 155/2020/ND-CP;
• (2) The company’s charter;
• (3) The Certificate of Business registration;
• (4) The information disclosure of the public company, including a summary of the organizational structure, business activities, management structure, shareholder structure, assets, financial situation, and other relevant information;
• (5) The latest audited financial report of the joint-stock company, audited by an independent audit organization.
• (6) The confirmation letter from the State Securities Commission regarding the completion of public company registration.
• (7) The Securities Registration Certificate from the Vietnam Securities Depository and Clearing Corporation, and a notice to the Corporation about the date of the shareholder list cutoff for registration.

For public companies that successfully conducted an initial public offering (IPO) of shares, the application includes:

• Documents no.1, 2, 3, 6, and 7 as mentioned above;
• The prospectus, along with the Certificate on public offering registration and report on the results of the public securities offering.

For equitized enterprises:

• If the equitized enterprise has completed its transformation into a joint-stock company, the application includes the same documents as for a public company with charter capital of from 30 billion VND above, and at least 10% of the voting shares held by at least 100 investors who are not major shareholders.
• If the equitized enterprise is associated with registration, depository, and trading registration, the application for the Upcom trading system must comply with the law on the transformation of state-owned enterprises, single-member limited liability companies fully owned by state enterprises, and public service units transforming into joint-stock companies.

How long does it take to complete the registration process for trading on the Upcom system?

Pursuant to Article 135 of Decree No. 145/2020/ND-CP, the procedure for registering transactions on the Upcom trading system is as follows:

• Within 5 working days from the date of receiving complete and valid documents or from the date of receiving the Securities Registration Rertificate, the Stock Exchange will issue a decision to approve the registration for trading and simultaneously make the information public in the market.
• Within 10 days from the date the stock exchange issues the decision to approve the registration for trading, the issuing organization is responsible for bringing the shares into trading on the Upcom trading system.

For equitized enterprises associated with registration, depository, and trading registration, the procedure for registering transactions on the Upcom trading system must comply with the regulations on the transformation of state-owned enterprises, single-member limited liability companies fully owned by state enterprises, and public service units transforming into joint-stock companies.

When shall changes in trading registration on the Upcom system be made?

Pursuant to Article 136 of Decree No. 145/2020/ND-CP, the registering organization must change the registration when there is a change in the number of shares registered for trading on the Stock Exchange.

In this case, within 30 days from the date of being issued an amended Certificate of Business Registration from the end of the offering, issuance, or from the date the number of shares registered for trading changes, the registering organization must submit documents to change the registration.

This is the advisory from Viet An Law regarding “Who is eligible to register for trading on the Upcom trading system?” If you have further questions, please feel free to contact Viet An Law for the best support!