Legal Basis Regulating Information Disclosure Activities of Public Companies on the Vietnamese Stock Market

Damages occur due to failure to obtain accurate and timely information. Therefore, information disclosure must ensure accuracy, even if it is detrimental to the company itself; at the same time, public companies must comply with the principle of timeliness in information disclosure. This regulation aims to prevent the market from being affected by rumors, distorting the formation of stock prices, and contributing to protecting investors.

The law regulating the information disclosure activities of public companies contributes to limiting the risk of abuse of power by corporate administrators:

The nature of public companies always has a conflict of interest between the company and the investing public, specifically between management personnel and investors in terms of information disclosure. Companies often do not want to disclose information about the board of directors or information related to the production and business process. On the contrary, investors want to know this information as much as possible. Strict implementation of the reporting and information disclosure regime can prevent the huge impacts of information concealment, fraud or insider trading, while ensuring the right to access information equally for the investing public. Requiring public companies to periodically and irregularly disclose information also helps the company operate more transparently, avoiding profiteering and abuse of power by key personnel because information disclosure requires honesty, investors and management agencies will check the authenticity of the information. In addition, through the published information, shareholders grasp the situation of the business, thereby making decisions suitable for the development of the company itself.

Create conditions for management agencies to effectively monitor the operations of public companies:

Along with the development of the stock market, the management agency needs to focus on monitoring securities transactions, improving the transparency and fairness of the market, detecting unusual transactions, and protecting the rights of investors. One of the bases for the State Securities Commission to monitor the activities of public companies is through the work of inspecting and evaluating the accuracy and timeliness of

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with the information published by the company to the market. The inspection and supervision process helps the management agency to amend and supplement legal regulations in accordance with market requirements, and at the same time have specific solutions to develop a transparent and sustainable stock market.

Meeting the requirements and goals of building and perfecting the stock market as well as being consistent with the process of international economic integration:

Vietnam is in the process of international economic integration and the need for indirect investment from foreign investors in Vietnam is very large. To attract this capital, first of all, the investment environment and Vietnamese enterprises themselves must be transparent because foreign investors always invest based on information analysis about the investment environment and business situation to assess risks. Usually, companies with large capitalization and high transparency such as Vinamilk (VNM), Masan (MSN) ... are always given priority by them. In addition, Vietnam is also participating in the connection program with ASEAN Stock Exchanges, which means that to participate in this common playground, we will have to comply with common standards as well as meet the requirements of public disclosure and information transparency like countries in the region, including very developed stock markets such as Singapore or Malaysia.

1.2.4. Legal basis for regulating information disclosure activities of public companies on the Vietnamese stock market

Information transparency plays a particularly important role in the development of the stock market. To meet the development needs of the market, the law on securities and the stock market in general and the law on information disclosure on the stock market in particular have undergone many changes.

In the first document, Decree No. 48/1998/ND-CP dated July 11, 1998 of the Government on securities and the stock market, legal regulations on information disclosure on the stock market were scattered in different chapters and articles. Until Decree No. 144/2003/ND-CP dated November 28, 2003 of the Government replaced Decree No.

Decree 48/1998/ND-CP has a separate Chapter (Chapter VI from Article 51 to Article 64) regulating specific information disclosure obligations for each market participant. To implement Decree 144/2003/ND-CP, the Ministry of Finance issued Circular 57/2004/TT-BTC dated June 17, 2004 guiding information disclosure on the stock market. This Circular has strongly impacted the implementation of information disclosure obligations, raising awareness of market participants about the obligation to provide and be informed; at the same time, it also contributes to the timely detection and handling of violations of the law on information disclosure, establishing and ensuring market order, helping the stock market develop transparently and sustainably [13, p11].

On June 29, 2006, the Securities Law No. 70/2006/QH11 was passed by the 11th National Assembly, contributing to the completion of the legal system in general and the stock market in particular, overcoming shortcomings and inadequacies in the previous legal framework on securities and the stock market. Regarding the issue of information disclosure, the Securities Law of 2006 has made a great step forward in improving the transparency of the market and has devoted a separate chapter (Chapter VIII) to regulate information disclosure. In particular, an important content has been legalized, which is the concept of "public company" and requires these companies to disclose information [16, Article 101], while previously this obligation only belonged to listed companies, thereby creating a wave of listing of public companies from the end of 2006 to 2011.

To specify the provisions on information disclosure in the Securities Law 2006, on April 18, 2007, the Ministry of Finance issued Circular No. 38/2007/TT-BTC guiding the information disclosure on the stock market. However, during this period, the Vietnamese stock market had sudden changes and developments in both scale and types of goods from the wave of listing, thus leading to difficulties in controlling the activities of market participants and requiring changes in the information disclosure system on the stock market. In addition, the newly formed and considered young stock market of Vietnam in these years was strongly affected by the global financial crisis in 2008 and the complex fluctuations of the domestic economy. The fluctuations

That action inevitably leads to changes in legal regulations in general and the law on the stock market in particular. The birth of Circular No. 09/2010/TT-BTC dated January 15, 2010 of the Ministry of Finance guiding the disclosure of information on the stock market (hereinafter referred to as Circular 09/2010/TT-BTC) replacing Circular 38/2007/TT-BTC is evidence of that change. Circular 09/2010/TT-BTC added the subject of disclosure of information as "organizations registering for transactions" and initially required these organizations to disclose information, and at the same time required public companies to establish websites with full sections on shareholder relations, including the Company Charter, internal governance regulations, Annual Reports, Financial Reports and issues related to the General Meeting of Shareholders. This is the basis for public companies to apply the electronic information disclosure system, thereby ensuring the timeliness and dissemination of disclosed information. Regarding financial statements, in addition to inheriting the regulation that listed organizations must disclose audited annual financial statements and quarterly financial statements, Circular 09/2010/TT-BTC also adds a regulation that listed companies must disclose semi-annual financial statements (first 6 months of the year) that have been reviewed by an approved auditing organization. In addition, the Circular also adds many cases where public companies must disclose information, especially information that must be disclosed irregularly within 24 hours; at the same time, it stipulates the principle that the State Securities Commission approves the temporary postponement of information disclosure in cases where information disclosure entities cannot comply with the deadline due to force majeure reasons and forces the company to make the disclosure immediately after the force majeure event has been resolved. It can be said that the birth of Circular 09/2010/TT-BTC marks a comprehensive change in the information disclosure regime on the stock market in response to the demand for market transparency as well as meeting the information needs of investors [2, p7]. This Circular, together with other legal documents such as Decree 84/2010/ND-CP dated August 2, 2010 of the Government detailing the implementation of a number of articles of the Securities Law (replacing Decree No. 14/2007/ND-CP) ; Decree 85/2010/ND-CP dated August 2, 2010 of the Government on administrative sanctions in the field of securities and the stock market (replacing Decree No. 36/2007/ND-CP) and then the Law amending and supplementing the Law on Securities.

Amendments and supplements to a number of articles of the Securities Law dated November 24, 2010 have created a synchronous legal corridor to regulate information disclosure activities on the stock market in general and information disclosure activities of public companies in particular.

In an effort to publicize and make the stock market more transparent and better protect investors' rights, on April 5, 2012, the Ministry of Finance issued Circular No. 52/2012/TT-BTC guiding information disclosure on the stock market ( hereinafter referred to as Circular No. 52/2012/TT-BTC ) replacing Circular No. 09/2010/TT-BTC with many new provisions. In this Circular, for the first time, the information disclosure regime for public companies is applied according to the company's scale. The term "large-scale public company" is specifically regulated, and at the same time, these companies (companies with contributed charter capital of VND 120 billion or more and the number of shareholders is not less than 300 shareholders) regardless of whether they are listed on the stock exchange or not must fulfill information disclosure obligations like listed companies. In addition, the deadline for financial statements of public companies is also shortened, in accordance with accounting and auditing regulations. In addition, the obligation to disclose information of major shareholders, internal shareholders of public companies and the obligation to disclose information of securities companies are also adjusted in a stricter direction. In Circular 52/2012/TT-BTC, the principle of criminal handling of violations of information disclosure obligations is also recorded for the first time.

In addition to Circular No. 52/2012/TT-BTC, other legal documents such as Circular No. 121/2012/TT-BTC dated June 26, 2012 of the Ministry of Finance guiding the governance of public companies (hereinafter referred to as Circular No. 121/2012/TT-BTC) , which stipulates the obligations of public companies to disclose information related to corporate governance, and Decree No. 108/2013/ND-CP dated September 23, 2013 of the Government on administrative sanctions in the securities sector (replacing Decree No. 85/2010/ND-CP) have specifically stipulated the forms of sanctions for violations of the reporting and disclosure regime. These documents have created a unified and synchronous system of documents regulating the information disclosure activities of market participants, including public companies.

In addition, for public companies - a type of joint stock company that is more developed in terms of capital scale and public nature, in addition to complying with the regulations on information disclosure under the securities law, these companies must also comply with the enterprise law on information disclosure obligations for joint stock companies. In many countries, including Japan, the information disclosure regime of joint stock companies is very strictly regulated. However, in Vietnam, the 2005 Enterprise Law almost does not stipulate the information disclosure obligations of joint stock companies, except for the requirement to disclose Financial Statements in Article 129. Currently, the draft amended Enterprise Law has included many disclosure obligations for joint stock companies, closer to international practice. However, when the amended Enterprise Law has not been promulgated, public companies must mainly conduct information disclosure according to the provisions of the securities law and the stock market.

Thus, the current legal basis regulating the information disclosure activities of public companies on the stock market is the Securities Law 2006 and the Law amending and supplementing a number of articles of the Securities Law. The provisions of the Securities Law have been specified in Circular No. 52/2012/TT-BTC. In addition, a number of other legal documents such as Circular 121/2012/TT-BTC, Decree 108/2013/ND-CP... have created a relatively complete legal framework regulating the information disclosure activities of public companies on the stock market.

CONCLUSION OF CHAPTER 1

Information disclosure or information disclosure (Information Disclosure) plays an important role in helping the stock market operate healthily and is a measure reflecting the level of development of any stock market. Timely, comprehensive and quality implementation of information disclosure contributes to limiting insider trading, ensuring fairness among investors, helping them make accurate investment decisions, thereby creating public confidence in the market. This is the fundamental driving force for the development of the stock market because when market confidence is built, the stock market will increasingly attract the attention of many investors, capital mobilization for businesses will be easier and the market will develop sustainably. For these reasons, the laws of all countries pay special attention to building and perfecting the information disclosure regime on the stock market.

As the subject providing "goods" on the stock market, information about public companies is therefore always of interest to investors and accounts for the majority of information on the market. According to the legal practices of many countries, public companies must disclose financial or non-financial information, arising periodically or irregularly, having an important impact on the company's operations and this information has a direct or indirect impact on the price of securities. Countries can choose to specify in detail the information that public companies must disclose or stipulate the principles of disclosure of important information, but all require public companies to ensure timeliness, completeness and accuracy in information disclosure. Performing the obligation to disclose information is both an obligation and a right of public companies because information transparency is the key to competition between businesses, especially in the current process of international economic integration.

Chapter 2

CURRENT STATUS OF LAWS REGULATING INFORMATION DISCLOSURE ACTIVITIES OF PUBLIC COMPANIES ON THE STOCK MARKET

2.1. Laws regulating information disclosure activities of public companies on the Vietnamese stock market

2.1.1. Public companies and classification of public companies according to Vietnamese securities law

Concept of public company:

Currently, the concept of a public company is approached by Vietnamese law quite closely to international practice, according to which the public nature of a joint stock company is considered in terms of capital scale, number of shareholders as well as activities of issuing and listing shares. Specifically, according to Clause 1, Article 25 of the 2006 Securities Law, a public company is a joint stock company belonging to one of the following three types:

“a) The Company has conducted a public offering of shares;

b) A company whose shares are listed on the Stock Exchange or Securities Trading Center;

c) A company whose shares are owned by at least one hundred investors, excluding professional securities investors, and whose contributed charter capital is from ten billion Vietnamese Dong or more”.

In Vietnam, public companies are mainly joint stock companies with capital of over 10 billion and the number of shareholders of over 100 shareholders, excluding professional securities investors.

Classification of public companies:

In Vietnam, the classification of public companies has changed over time. Before June 1, 2012 (before Circular No. 52/2012/TT-BTC took effect), public companies were only classified according to listing criteria, including: (i) listed companies (companies with securities

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