1 GUIDE TO HANOI STOCK EXCHANGE

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1 1 GUIDE TO HANOI STOCK EXCHANGE

2 2 GUIDE TO HANOI STOCK EXCHANGE 3 CONTENTS OVERVIEW 4 MARKETS AT HNX 5 SECURITIES TRADING MECHANISM 9 HNX INDICES 10 INFORMATION SERVICES 12 SUPPORT FOR LISTED AND REGISTERED COMPANIES 14 SUPPORT FOR MEMBER FIRMS 16 SUPPORT FOR INVESTORS 17 Development history 18 )Updated as of 30th June 2016(

4 GUIDE TO HANOI STOCK EXCHANGE 5 OVERVIEW MARKETS AT HNX HNX PRIMARY MARKET SECONDARY MARKET Share auctions G-bond auctions Listed market UPCoM G-bond market Hanoi Stock Exchange (HNX) is in charge

and regulations and the assignment of the owner; Supervising the compliance to legal regulations regarding securities and securities market of trading members, listed organizations and investors

trading members through mediation and reconciliation upon requested by trading members; Contributing to developing the market through providing technical infrastructure, information, education and

3 4 GUIDE TO HANOI STOCK EXCHANGE 5 OVERVIEW MARKETS AT HNX HNX PRIMARY MARKET SECONDARY MARKET Share auctions G-bond auctions Listed market UPCoM G-bond market Hanoi Stock Exchange (HNX) is in charge of organizing and operating securities market, performing the below functions: Organizing the listing, trade registration and trading of securities, share auctions and bond auctions following laws and regulations and the assignment of the owner; Supervising the compliance to legal regulations regarding securities and securities market of trading members, listed organizations and investors trading at HNX in line with laws and regulations and the delegation of the State Securities Commission (SSC); Resolving or acting as the lead in resolving disputes related to trading activities of trading members through mediation and reconciliation upon requested by trading members; Contributing to developing the market through providing technical infrastructure, information, education and literacy activities. HNX organizes the trading of securities that meet the criteria for listing and registration at HNX according to regulations on securities and securities market. The securities traded on HNX include shares of listed companies, shares of registered public companies, corporate bonds, Government bonds (G-bond), and Exchange Traded Fund (ETF) certificates. HNX operates 03 trading markets on a modern technical infrastructure, including Listed stock market, G-bond market and Unlisted public company market (UPCoM). As of 30th June 2016, the market capitalization of the 03 markets reaches over USD 51 billion, average trading value is over USD 269 million/session. In addition, HNX is assigned by the Government to organize share auctions and G-bond auctions, supporting the equitization of Stateowned enterprises (SOEs) and investments for development. In 2016, HNX is preparing for the launch of the derivatives market and completing the Plan to develop the corporate bond market in 2017.

6 GUIDE TO HANOI STOCK EXCHANGE 7 MARKETS AT HNX Primary market Secondary market Share auctions G-bond auctions Listed stock market Unlisted public company market (UPCoM) From 2005, HNX started

From April 2007, auctions are organized in a two-tier model, in which securities firms that are auction agents of HNX directly receive registrations and deposits, inform results to and receive

4 6 GUIDE TO HANOI STOCK EXCHANGE 7 MARKETS AT HNX Primary market Secondary market Share auctions G-bond auctions Listed stock market Unlisted public company market (UPCoM) From 2005, HNX started organizing auctions for State-owned enterprise equitization, Stateowned capital divestments and initial public offerings (IPOs) following the Public Offering Certificate issued by SSC. From April 2007, auctions are organized in a two-tier model, in which securities firms that are auction agents of HNX directly receive registrations and deposits, inform results to and receive payments from investors. The modern auction system of HNX can process up to 30,000 orders per day, providing various utilities such as sending results to each investor, integrating functions of receiving registration, extracting report data and accountancy functions, directly connecting to market members. In addition to share auctions, the HNX system also organizes auctions for convertible bonds, warrants, full lot shares From 2006, HNX was appointed the only agent to organize all G-bond auctions by the Government. The G-bond auctions are organized via auction members annually approved of by the Ministry of Finance (MoF). Individuals and institutions who are not auction members can place bids through auction members. From 2013, the auction system changed to electronic auction, whereby auction members submit their bids online, issuers and the MoF observe and manage the auctions through the system. The auction results are determined quickly and G-bonds right after issuance are traded on the specialized G-bond trading system. As of 30th June 2016, the listed stock market has 378 listed companies with total listing value at USD 5 billion. Inaugurated on 14th July 2005, the listed stock market is the central trading place for stocks of companies meeting the listing requirements regarding equity, performance, shareholder structure for public company and compliance to information disclosure in the market. The listed stock market is operated on the basis of an advanced trading system with suitable trading requirements, effective surveillance mechanism and information disclosure, ensuring the transparency, openness and equality of transactions in the market, protecting investors rights. The listed stock market of HNX introduced listed certificates of ETF - a fund investing in a portfolio of stocks emulating an index in December A new product in Vietnam stock market with such benefits as portfolio diversification, risk limitation, low costs and transparent information disclosure, ETF has enriched products in the market and offering more choices to investors. As of 30th June 2016, the UPCoM market of HNX has 311 registered companies with total registered value of over USD 3.2 billion. Inaugurated on 24th June 2009, the UPCoM market is the central trading place of unlisted public companies, in order to narrow down the unregulated market, enhancing the management of securities trading of public companies. UPCoM market is the play field for many companies with simple registration procedures, being managed with effective trading and transparent information disclosure mechanism, and thus protecting investors rights. The public companies consider registering at UPCoM an opportunity to get acquainted with listing in the regulated market.

8 GUIDE TO HANOI STOCK EXCHANGE 9 SECURITIES TRADING MECHANISM Securities trading is conducted via the trading system of HNX, which is connected to the system of member securities company and Vietnam

5 8 GUIDE TO HANOI STOCK EXCHANGE 9 SECURITIES TRADING MECHANISM Securities trading is conducted via the trading system of HNX, which is connected to the system of member securities company and Vietnam Securities Depository (VSD), performing the placing, matching and clearing for all orders input into the system in a fast, accurate and stable manner. The trading results from the trading system are automatically forwarded to the surveillance and information system, efficiently supporting market surveillance and transparent information disclosure to the market. HNX is currently operating share trading system version 5 (Core I5) developed under HNX s charge, marking its mastery of technology. The Core I5 system makes use of advanced technological solutions applied by stock exchanges in the world, processing capacity at 30 million orders per session, adding up-to-date trading and management techniques in line with international practice, providing trading convenience to investors (various trading orders, trading of odd lots, order amendments/cancellation ) G-bond trading market As of 30th June 2016, the G-bond trading market has 567 listed bonds with total listing value of USD 39 billion and average G-bond trading value in 2016 of over USD 230 million/session. Inaugurated on 24th September 2009, the G-bond market is the trading place for G-bond, Government guaranteed bonds, municipal bonds and Treasury bills (T-bills) to create liquidity for issued G-bonds and provide safe investment products for investors. HNX is the sole agency appointed to organize and operate the G-bond market. G-bonds are traded via such channels as the trading system for members, the electronic bond trading system (E-BTS) and the international information portal of Bloomberg and Reuters. The E-BTS was developed in 2015 basing on the Internet technology with various utilities for bond trading. Members and investors only need to download and install the trading software on the HNX website and register for digital signature to connect to the HNX trading system to conduct trading and search information. The connection between the E-BTS and the international information portal of Bloomberg and Reuters makes it easier for foreign investors to check information on and invest in Vietnam G-bond market. INVESTORS Orders CORE SECURITIES COMPANIES Phone calls Remote trading software FIX Gateway Order inputs at trading floor Orders Information system HNX Trading results CORE Surveillance system Trading results VSD Clearing system Clearing results Order processing on HNX system

10 GUIDE TO HANOI STOCK EXCHANGE 11 HNX INDICES Index is the indication of stock price fluctuation, providing information for investors to evaluate and analyze the market, and at the same time being

6 10 GUIDE TO HANOI STOCK EXCHANGE 11 HNX INDICES Index is the indication of stock price fluctuation, providing information for investors to evaluate and analyze the market, and at the same time being the premise to develop trading products based on indices. SECONdARy MARKET HNX Index HNX 30 Index HNX Large Cap Index HNX Mid/Small Cap Index Sector Indices TRI UPCoM Index G-bond Index 1. HNX Index: First launched in 2005, since January 2015 HNX Index is calculated based on the capitalization with adjustments on the free float rate of all listed stocks on HNX with the free float rate at 5% or more. HNX Index has the base date as 14th July 2005 and base point as HNX 30 Index: the price index of top 30 listed stocks on HNX selected on the basis of liquidity. HNX 30 Index is calculated based on the market capitalization with adjustments on free float rate and the market capitalization capped at 15%. HNX 30 Index s base date is 3rd January 2012 and base point is HNX Large Cap Index: being one of the market capitalization indices and the index of 50 stocks with the 6-month average market capitalization being the highest and realized equity from VND 120 billion (~USD 6 million) or more based on the audited yearly financial report or the latest issuance result. The base date is 2nd December 2013 and the base point is HNX Mid/Small Cap Index: being one of the market capitalization indices, including stocks meeting criteria of the market capitalization indices but do not belong to HNX Large Cap Index, having base date as 2nd December 2013 and base point as Sector Indices: the set of indices based on market capitalization with adjustments on free float rate of companies in the same sector following HNX Standard Industrial Classification (HaSIC), currently including 3 indices of 3 sectors: HNX Manufacturing Index, HNX Construction Index and HNX Financial Index. The sector indices have base date as 2nd December 2013 and base point as Total Return Index (TRI) HNX 30: the total return index based on the original index which is HNX 30 that is calculated with the assumption that all dividend payments will be reinvested to the stocks in the index. HNX 30 TRI s base date is 3rd January 2012 and base point is UPCoM Index: indicating the price fluctuation of all registered stocks which are traded in UPCoM. UPCoM Index s base date is 24th June 2009 and base point is G-Bond Indices: G-Bond Indices include a composite index that indicates the price fluctuation of the G-bond market as a whole and several indices of short term and medium term bonds, which are the market segments with the highest liquidity in Vietnam bond market. The G-Bond Indices have indices of clean price, gross price and total returns. The price indices indicate fluctuation of bond price under such influence as the interest rates and macro economic factors. The total return index indicate the returns from price changes, coupons and the interests gained from reinvesting the coupons. The G-Bond Indices have base date as 18th March 2013 and base point as 100.

7 12 GUIDE TO HANOI STOCK EXCHANGE 13 INFORMATION SERVICES In order to meet the need to get updated information on securities and the securities market of domestic and international investors, besides information disclosure according to the law, HNX offers information supply services. Clients registered for this service will be provided with information in a sufficient, fast and accurate manner. Information packages supplied by HNX Market Products Description Listed market UPCoM Real-time trading data Information disclosure End-of-day (EOD) trading data Historical data Real-time trading data Information disclosure EOD trading data Historical data Real-time trading data of all listed stock and ETF certificates on HNX Real-time data of Indices: - HNX Index - HNX Large Cap Index - HNX Mid/Small Cap Index Sector indices: - HNX Manufacturing Index - HNX Construction Index - HNX Financial Index Information on listed corporate actions (record date for dividend payment, bonus shares, issuance notice, annual general meeting/board resolution, annual report, financial statements, transactions of persons discharging managerial responsibility and connected persons, personnel appointment ) EOD trading summary of overall market and trading result of a single stock/etf certificate on HNX EOD data of indices, including TRI HNX 30 Trading data Information on listed corporate actions Real-time trading data of all registered stock Real-time data of UPCoM Index Information on UPCoM corporate actions: record date for dividend payment, bonus shares, issuance notice, annual general meeting/board resolution, annual report, financial statements, transactions of persons discharging managerial responsibility and connected persons, personnel appointment EOD trading summary of overall market and trading result of a single stock Trading data Information on UPCoM corporate actions Market Products Description G-bond market Real-time trading data EOD trading data Information on primary market Historical data Trading statistics Real-time trading data of G-bonds (including bonds in foreign currency) Real-time trading data of T-bills Information disclosure of trading members and issuers EOD trading data of G-bonds EOD trading data of T-bills Yield curve data Data of Bond Indices Foreign investors trading on G-bonds and T-bills Information on G-bond auctions Trading data Information disclosure of trading members and issuers Information on bond auctions G-bonds/T-bills portfolio Detailed portfolios of G-bonds/T-bills Trading statistics of G-bonds/T-bills by issuers Trading statistics of G-bonds/T-bills by remaining maturity Trading statistics of G-bonds/T-bills by investors Market Products Description Share auction EOD data Historical data Information on share auctions of the day Information on share auctions in the past Information at

14 GUIDE TO HANOI STOCK EXCHANGE 15 SUPPORT FOR LISTED AND REGISTERED COMPANIES Support in information disclosure: Since 2010, HNX developed and operated the Corporate Information Management System

In addition, HNX regularly updates companies with regulations on information disclosure and related legal documents, providing instructions for companies to disclose information properly.

8 14 GUIDE TO HANOI STOCK EXCHANGE 15 SUPPORT FOR LISTED AND REGISTERED COMPANIES Support in information disclosure: Since 2010, HNX developed and operated the Corporate Information Management System (CIMS) to facilitate companies in making full, accurate and prompt information disclosure, reducing time and costs. In addition, HNX regularly updates companies with regulations on information disclosure and related legal documents, providing instructions for companies to disclose information properly. Promote the quality of corporate governance (CG): HNX organizes a lot of activities to promote CG best practices to its listed/registered companies. The most remarkable activitiy is the annual CG assessment to honor the most transparent companies of the year. In addition, HNX frequently holds conferences and forums on CG with domestic and international experts in the field, organize overseas study trips and consult on CG regulations for listed/registered companies. Connect the corporate community: HNX organizes the Corporate Conference and Public Company Conference annually to create exchanges and connection among companies and receive their feedback and suggestions to make suitable recommendations to regulators on regulations and policies. Support on image promotion: HNX actively supports listed/registered companies on publicity via its media contacts, events and relations. Newly listed/registered companies are featured on the HNX website, facebook and media releases. HNX s listed/registered companies can organize investor meetings at HNX to disclose information and introduce themselves. HNX also helps companies reach out to international market in HNX international cooperation activities such as study trips to international stock exchanges, nominating companies to ASEAN Stars - the list of most attractive blue-chip stocks of ASEAN Stock Exchanges... Critieria for share listing/registering on HNX: For share listing: Company has charter capital of VND 30 billion (~USD 1.5 million) and above at book value at the time of application for listing; Company has operated as a joint-stock company for at least 1 year until the time of application for listing (except for SOEs equitizing and listing at the same time); Return on Equity of the year before listing is 5% or more; no overdue debts over one year; no accumulated loss at the time of application; having observed legal regulations regarding financial report accounting; 15% shares with voting right of the company is held by at least 100 shareholders who are not major shareholders (except for SOEs equitizing as prescribed by the Prime Minister); Persons discharging managerial responsibilities (PDMRs) and connected persons commit to hold 100% shares they own in 6 months from the listing day and 50% of those shares in the next 6 months, excluding the shares under State s ownership that they represent; Having valid registration dossier for listing. For share registering: Company having specifications of a public company as specified at Article 25 of Securities Law, or being a delisted stock at a stock exchange; Being under custody at Vietnam Securities Depository.

16 GUIDE TO HANOI STOCK EXCHANGE 17 SUPPORT FOR MEMBER FIRMS Promote the operation quality of member firms: From 2013, HNX organizes the annual assessment of member firms and honor the distinguished

In addition, HNX works with and supports member firms to develop new products and utilities, supports members who need software upgrades or online support.

9 16 GUIDE TO HANOI STOCK EXCHANGE 17 SUPPORT FOR MEMBER FIRMS Promote the operation quality of member firms: From 2013, HNX organizes the annual assessment of member firms and honor the distinguished members that positively contributing to the market, thus encouraging member firms to enhance their operation quality. In addition, HNX works with and supports member firms to develop new products and utilities, supports members who need software upgrades or online support... Connect the member firm community: HNX organizes the Member Conference annually to promote the exchanges and connections among its member firms, receive their feedback and suggestions to make suitable recommendations to regulators on regulations and policies. Apart from that, HNX also organizes seminars and conferences for member firms on risk management, IT security... to share knowledge and improve the skills of member firms staffs. Support in information disclosure: Similar to the listed/registered companies, HNX implements the Corporate Information Management System (CIMS) for member firms to facilitate them in making full, accurate and prompt information disclosure. In addition, HNX regularly updates members with regulations related to their operation and give instruction on information disclosure. Support on image promotion: HNX frequently works with member firms to organize conferences for investors on securities knowledge and investment opportunities, which helps promote the firm s image to the public. HNX also supports member firms approach international markets via international cooporation activities such as investment fairs, ASEAN Broker Networking, forums and conferences organized by the ASEAN Exchanges and the Great Mekong Sub-region Exchanges. SUPPORT FOR INVESTORS Information and support: Investors can contact HNX via various channels such as directly at HNX Investor Corner, indirectly on the phone, or at HNX facebook. Supply of research material on securities knowledge: HNX Investor Corner is equipped with abundant and updated specialized newspapers, books, publications and a computer system with electronic materials. The facilities are open to public in opening hours. Organizing the Introduction to HNX program: Upon investors registration, HNX will organize the program introducing basic information of the Vietnam securities market in general and of HNX activities in particular. The program is free of charge and open to the public. Investor education: HNX regularly organizes seminars and conferences on new products, trading instructions, market updates... freeof-charge for the public. In addition, the HNX website and facebook also published materials to disseminate securities knowledge and information to investors. CONTACT DETAILS HNX INVESTOR CORNER Opening hours: 9h00-12h00 AM 1h30-4h30 PM Tel: (+84) hnx@hnx.vn Facebook:

18 GUIDE TO HANOI STOCK EXCHANGE 19 Development history 8th March 2005 Hanoi Securities Trading Center (HaSTC) was officially opened, started to organize share auctions for companies 2nd November

10 18 GUIDE TO HANOI STOCK EXCHANGE 19 Development history 8th March 2005 Hanoi Securities Trading Center (HaSTC) was officially opened, started to organize share auctions for companies 2nd November 2005 Upgrated the share trading system to version 2, adding continuous order matching along with negotiation 14th July 2005 Launched the listed stock trading market with 6 companies; officially operated the share trading system version 1 using negotiation trading method 30th October 2008 Operated the share trading system version 3, enabling the connection from securities companies to the server at HaSTC to perform remote order input for investors 15th January 2012 The grand opening of HNX new office building 23rd September 2014 Launched the bond trading system version 3, connecting with Bloomberg international information system 26th June 2015 HNX launched the electronic bond trading system (E-BTS), which enables investors to connect to HNX s trading system to conveniently make transactions and search information anytime and anywhere. 20th June 2006 The Ministry of Finance issued Decision to organize all G-bond auctions at HaSTC 2nd January 2009 Established Hanoi Stock Exchange (HNX) by re-organizing HaSTC 24th June 2009 The Unlisted Public Company Market was officially open 24th September 2009 The G-bond trading market was officially operated; the bond trading system version 1 was launched 8th February 2010 Launched the share trading system version 4 with online trading technology, allowing investors to input orders directly to HNX system 18th March 2013 Launched the bond trading system version 2, integrating auctions, trading of G-bonds and T-bills and information disclosure and connecting primary and secondary debt markets 29th July 2013 Launched the share trading system version 5, applying advanced technological solutions and features similar to those at developed securities markets

11 20 GUIDE TO HANOI STOCK EXCHANGE HANOI STOCK EXCHANGE 2 Phan Chu Trinh, Hoan Kiem, Hanoi, Vietnam Tel: Fax: hnx@hnx.vn

Vietnam s Securities Market - 16 years of establishment and development ( )

HUONG THI THANH NGUYEN THUY THI THANH NGUYEN State Securities Commission of Vietnam State Securities Commission of Vietnam Vietnam s Securities Market - 16 years of establishment and development (2-216)