The Unlisted Public Company Market (UPCoM) is a significant platform in the Vietnamese stock market, providing a venue for trading securities of public companies that are not listed on the Ho Chi Minh Stock Exchange (HOSE) or the Hanoi Stock Exchange (HNX). Below is a detailed discussion of the characteristics, trading regulations, and requirements for companies registered on the UPCoM trading system.
- Key Characteristics of the UPCoM Trading System
Investors should be aware of several important characteristics of the UPCoM trading system:
- Target companies: UPCoM is specifically designed for unlisted public companies that are not registered on HOSE or HNX. It serves as a transitional platform for companies preparing for future listing or those that wish to remain unlisted while still participating in the securities market.
- Liquidity levels: Liquidity on UPCoM is generally lower compared to HOSE and HNX. As a result, trading shares on UPCoM can sometimes be challenging, with longer transaction times.
- Disclosure and transparency requirements: Companies listed on UPCoM are required to comply with strict regulations on information disclosure and transparency. These include periodic financial reporting and the disclosure of significant operational updates.
- Initial listing prices: The initial price of stocks listed on UPCoM is often lower compared to those on other stock exchanges, making it an attractive option for investors seeking lower entry costs.
- Price volatility: Stock price fluctuations on UPCoM can be significant, with a daily price limit of ±15% compared to the reference price. This high volatility introduces both opportunities and risks for investors.
- Regulatory oversight: UPCoM is overseen by the State Securities Commission (SSC) and the Board of Directors of the Vietnam Securities Depository (VSD), ensuring compliance with legal and regulatory frameworks.
- Entities Eligible for Registration on the UPCoM Trading System
According to Clause 1, Article 133 of Decree 155/2020/ND-CP, the following entities are eligible to register for trading on the UPCoM trading system:
- Unlisted Public Companies: Public companies that are not listed on HOSE or HNX are eligible to participate in UPCoM trading.
- Delisted Companies: Companies subject to mandatory or voluntary delisting from HOSE or HNX may register for trading on UPCoM, provided they continue to meet the criteria for being a public company.
- Equitized Enterprises: Enterprises undergoing equitization, including state-owned enterprises, one-member limited liability companies wholly owned by the state, and public service units transitioning into joint-stock companies, must register for trading as per legal requirements.
- Deadlines for Registration on the UPCoM Trading System
The registration deadlines for different types of companies are specified as follows:
- Unlisted Public Companies
Public companies must complete the registration of their shares with the Vietnam Securities Depository (VSD) and register for trading on UPCoM as stipulated in Points (d) and (đ), Clause 1, Article 34 of the 2019 Securities Law.
Specifically:
- Public companies with a charter capital of at least 30 billion VND and at least 10% of voting shares held by at least 100 non-major shareholders must register for trading within 30 days from the date the SSC confirms their public company status.
- Public companies that have successfully conducted an initial public offering (IPO) must list or register their shares for trading on the UPCoM system within 30 days from the completion of the IPO.
- Companies Subject to Delisting
Within 7 working days from the effective date of delisting, the stock exchange must coordinate with the VSD to facilitate the registration of shares for trading on the UPCoM system.
- Equitized Enterprises
- Equitized enterprises must register for trading on UPCoM according to the timeline set forth in regulations concerning the conversion of state-owned enterprises or public institutions into joint-stock companies.
- Enterprises undergoing equitization and registering for trading on UPCoM must fulfill their obligations of information disclosure under applicable laws and the regulations of the relevant stock exchange.
The UPCoM trading system plays a vital role in Vietnam’s securities market by providing a platform for unlisted public companies, delisted firms, and equitized enterprises to access capital markets and trade securities. While it offers unique opportunities, investors should be aware of its lower liquidity, potential price volatility, and specific regulatory requirements. At the same time, companies participating in UPCoM must ensure compliance with stringent transparency and disclosure standards, contributing to the overall integrity of the Vietnamese securities market.
Contact Our Legal Experts
At TLA, our experienced attorneys specialize in diverse legal fields, including criminal, civil, corporate, and family law. We provide comprehensive legal support and personalized advice.
For Expert Legal Consultation, Contact Us:
1. Lawyer Vu Thi Phuong Thanh – Director of TLA Law Firm, Hanoi Bar Association.
Email: vtpthanh@tlalaw.vn
2. Lawyer Tran My Le – Chairwoman of TLA Law Firm’s Members’ Council, Hanoi Bar Association.
Email: tmle@tlalaw.vn
Address: Floor 7, No. 6 Duong Dinh Nghe Street, Yen Hoa, Cau Giay, Hanoi
Website: https://tlalaw.vn/
Hotline: 0906246464
Dinh Phuong Thao