Corporate bond investors in domestic market - Legal framework and recommendations

Abstract

Issuing bonds in domestic market is one of the permitted capital mobilisation methods to increase cash flow for business purposes. For issuing bonds to be truly effective, there need to be solutions to develop the lending market, and one of those solutions is to improve the regulations on corporate bond investors. The article analyses the current Vietnamese law on conditions for investors to buy privately issued corporate bonds, highlights some inadequacies in the current legal provisions, and provides some recommendations aimed at improving the regulations on investors in privately issued corporate bonds. These recommendations include: 1) increasing financial conditions for private corporate bond investors; 2) allowing Vietnam Social Insurance and deposit insurance to invest in privately issued corporate bonds; and 3) empowering the Vietnam Securities Depository Centre to verify the qualifications of bond investors.