Vietnam Securities Depository and Clearing Corporation (VSDC) latterly issued Decision No. 37/QD-HDTV dated April 29, 2025, on the guidelines on securities registration and title transfer at VSDC (Decision 37). Singularly, the rules on the transfer of title are delineated to streamline the procedures for security realization outside the centralized trading system in respect of securities of the obligors used as collateral in security transactions.
In principle, regarding the title transfer of securities, the parties must work with securities firms serving the parties to check and verify the validity of the parties’ information, securities amount, types of securities, deduct applicable taxes and temporarily lock the proposed securities during the title transfer process.
Provided that there is no dispute over the securities before court or arbitral tribunals, the transfer of title in case of collateral realization must satisfy the conditions (i) the securities, shares, bonds, fund certificates, and so forth – collaterals have been registered for the security interest at VSDC and (ii) decidedly, the parties must agree to the enforcement method of transferring the title to the secured parties or third parties in lieu of fulfillment of obligations by the securing parties in accordance with regulations in the Civil Code. Though Decision 37 does not determinately provide the formality of the agreements, in practice, it should always be put in writing.
The application dossier for the title transfer at VSDC must include (i) the secured party’s written request for the transfer of ownership of securities and rights and interests originated from such securities (if any) to the secured party or third party designated by the secured party; (ii) valid copy of the security agreement; (iii) document proving that the obligor fails to fulfill their obligations under the security agreement, resulting in the collateral realization; and (iv) undertaking document of the secured party or the third party designated by the secured party to take responsibility under the law for any dispute (if any).
In unidealized cases, there might be disputes over the securities as collateral where VSDC will carry out the transfer following the courts’ judgments, arbitration awards, and the enforcement agencies’ decisions. The application for title transfer must enclose the requests, judgments, awards, or decisions of the corresponding authorities/dispute resolution bodies and the auction documents or decisions on property handover, property handover records for enforcement of judgments/awards.
The procedures for title transfer will take 05 working days from the receipt of the proper application dossier by VSDC. VSDC will then notify the relevant registered issuers and send the MT544 message to the securities firm to complete the process.
