5. Issuing securities Issuing securities is the sale of securities to the general public (both big and small investors).

They are listed in the exchange market. The methods used to issue securities are normally classified into one of two categories: Public offerings or private placements. a. Private placement Definition Private placement (non-public offering) is the sale of securities to a relatively small number of select investors as a way of raising capital. The non-public offering securities are not listed as well as trading. Reasons

A company chooses this issuing method because of some following reasons - Below standard of public placement - Small mobilized capital - Relationships maintenance - Staff motivation Restrictions

Difficult private placement requirements make it difficult for a company to issue new shares to shareholders: Each private placement must occur after a 6-month period New shares are subject to 1-year lock up period Private placement must be registered with relevant authority.

Decree 01 is still applicable although the amended Securities Law has taken effect from 1 July 2011. Private placement restriction should be applied to public companies in accordance with Securities Law only. b. Public placement Definition

Opposite of a private placement, the sales of securities is sold to the general public for both big and small investors. They are listed and traded widely in the exchange market. Reasons

A company chooses this issuing method because of some following reasons

- Large mobilized capital - Company promotion - Copartner finding Types

There are two types of security issues such as IPO and SPO Initial Public Offering (IPO)

It is the first sale of stock by a company to the public. Companies offering an IPO are sometimes new, young companies, or sometimes companies which have been around for many years but are finally deciding to go public. IPOs are often risky investments, but often have the potential for significant gains. A company has to meet following standards before IPO: - The companys charter capital is greater than 5 billions VND - Its business continues - Total value of issuing is curtained scope - It must have experienced managers - Companys structure is reasonable - It must have underwriters help Seasoned Public Offering (SPO)

It describes a company publishes share after carrying out IPO. In other way, IPO is the first time enterprise issue stock, while SPO is the follow times. Restrictions

There are no regulations yet on Vietnamese companies issuing shares overseas and foreign companies doing so in Viet Nam. It is a major obstacle to the fund-raising plans of many large companies. Government should promptly issue a regulation for issuing securities outside Vietnam.

References Guide to Vietnam Securities 2011, Viet Capital Securities (VCSC) Tran Anh Duc, 2011. Restrictions for fund raising in Vietnam, VILAF (Vietnam International Law Firm) [online] 1 December 2011. Available at: <http://vilaf.com.vn/en/finance/327-restrictionsfor-fund-raising-in-vietnam.html> [Accessed 2 April 2012].