Rights and obligations of investors when buying bonds

When buying bonds, investors are guaranteed clear benefits, including the right to receive periodic interest payments and the right to request information about the financial situation of the issuing enterprise. Additionally, understanding your obligations will help investors protect their capital and optimize profits effectively. Long Phan will help you understand your rights and obligations when purchasing these bonds through the following article.

What are bonds?

Pursuant to Clause 3, Article 4 of the Law on Securities 2019, bonds are a type of security that confirms the legal rights and interests of the owner of a portion of the debt of the issuing organization.

Bond offering conditions

Pursuant to Clause 1, Clause 2 and Clause 3, Article 9 of this Decree, that enterprise must also meet the following conditions:

1. For offerings of non-convertible bonds without warrants (excluding bond offerings of securities companies and securities investment fund management companies that are not public companies), enterprises must meet the following requirements: meet the following conditions:

• Is a joint stock company or limited liability company established and operating under Vietnamese law.
• Pay in full both principal and interest of issued bonds or pay all debts due for 3 consecutive years before the bond issuance (if any); except in the case of offering bonds to creditors who are selected financial institutions.
• Meet financial safety ratios and operational safety ratios according to specialized laws.
• Have a bond issuance plan approved and accepted according to the provisions of Article 13 of this Decree.
• Have the financial statements of the immediately preceding year of the year of issuance audited by a qualified auditing organization according to the provisions of this Decree.
• Subjects participating in the offering as prescribed in Point a, Clause 1, Article 8 of this Decree.

2. For the offering of non-convertible bonds without warrants of a securities company or a securities investment fund management company that is not a public company: the enterprise must meet the conditions specified in point a, Point c, point d, point đ and point e, Clause 1, Article 9 of this Decree.
3. For offering convertible bonds or bonds with warrants:

• The issuing enterprise is a joint stock company.
• Subjects participating in the offering as prescribed in Point b, Clause 1, Article 8 of this Decree.
• Meet the offering conditions specified in Points b, c, d and đ, Clause 1, Article 9 of this Decree.
• Individual convertible bond offerings and bonds with individual warrants must be at least 6 months apart from the date of completion of the most recent offering.
• Conversion of bonds into stocks and exercise of warrants must meet the regulations on the ownership ratio of foreign investors according to the provisions of law.

The rights and obligations of investors when buying bonds

Investor rights

Pursuant to Clause 3, Article 8, Decree 153/2020/ND-CP (amended by Clause 6, Article 1, Decree 65/2022/ND-CP), investors’ rights when buying bonds are:

• Have full information disclosed by the issuing enterprise according to the provisions of this Decree; have the right to access bond offering documents upon request.
• Have the issuing enterprise fully and punctually pay interest and principal of the bond upon maturity, and exercise accompanying rights (if any) according to the terms and conditions of the bond and agreements with the issuing enterprise.
• To request the issuing enterprise to buy back bonds before maturity according to the provisions of Clause 3, Article 7 of this Decree.
• Bond sellers are required to provide full information disclosure content of the issuing enterprise according to the provisions of this Decree when purchasing bonds on the secondary market.

Obligations of investors

Pursuant to Clause 2, Article 8 of Decree 153/2020/ND-CP (amended by Clause 6, Article 1 of Decree 65/2022/ND-CP), the investor’s obligation when buying bonds is:

• Full access to the information disclosure content of the issuing enterprise; Understand clearly the bond conditions and terms and other commitments of the issuing enterprise before deciding to buy and trade bonds.
• Understand clearly the risks arising in investing and trading bonds; Understand and ensure compliance with regulations on investors and individual corporate bond transactions according to the provisions of this Decree and relevant laws.
• Self-evaluate, take responsibility for your investment decisions and bear the risks arising in investing and trading bonds. The State does not guarantee that bond-issuing enterprises will fully and promptly pay interest and bond principal upon maturity and other rights to investors who buy bonds.
• Before buying bonds (both on the primary and secondary markets), investors must sign a document confirming their implementation and are responsible for their decision to buy bonds after signing the confirmation document. The confirmation document must be stored in the offering documents when issuing bonds or at the securities company where the investor conducts bond transactions.
• Carry out bond transactions according to the provisions of Article 16 of this Decree; Do not sell or contribute capital to invest in bonds with investors who are not professional securities investors in any form. The mobilization of capital and the purchase and investment of corporate bonds by credit institutions, foreign bank branches and fund management companies are carried out in accordance with specialized laws.
• When selling bonds on the secondary market, the issuing enterprise must provide full information disclosure content according to the provisions of this Decree to investors buying bonds.

Consulting services on the rights and obligations of investors when buying bonds

To protect your rights and optimize profits, you need to clearly understand your rights and obligations when participating in bond investments. Consulting services on the rights and obligations of investors when buying bonds at Long Phan will help you master information, thereby making smart and safe investment decisions.

Our services include:

• Consulting on the rights of bond investors.
• Consulting on investor obligations.
• Instructions on the process of checking and assessing the risks of bonds.
• Advise on how to manage bond portfolios to achieve optimal efficiency and minimize risks.
• Support you in completing bond transfer procedures, ensuring the transfer is quick, safe and in accordance with regulations.
• Providing information about legal regulations related to bonds, helping you understand changes in the law and investor protection rights.
• Evaluate the safety of bond investments through market analysis and the issuing company’s financial situation.

Long Phan always accompanies you in your investment journey, bringing absolute transparency and peace of mind. Please contact us immediately via the hotline 0906735386 for detailed advice and dedicated support in protecting your interests when investing in bonds!