Marketing Ppt

PROJECT REPORT OPERATIONS MANAGEMENT GUIDED BY:PRESENTED BY: Prof. T. T. NIRANJANNITIN BANSAL 129278039 RANJAN SAHU 129278041 ROHIT MANGAL 129278053 SAURABH SINHA 129278057 Project Report On| | | | Taxonomy of Implementation Problems in VMI| | Contents Executive summary3 Introduction4 Under the typical business model:4 Vendor Managed Inventory model:4 Consignment Inventory:4 Vendor Managed Inventory and Stakeholder’s Challenges5 Challenges faced in implementation of Vendor Managed Inventory7 Analysis of Cases of implementing Vendor Managed Inventory9 Conclusion11 References12 Executive summaryThe goal of Vendor Managed Inventory is to provide a mutually beneficial relationship where both sides Customer and Vendor will be able to control the availability and flow of goods more smoothly and accurately. In  VMI  a manufacturer or distributor assumes the role of inventory planning for the customer. Extensive information sharing is required so that the manufacturer/distributor can maintain a high degree of visibility of its goods at the customer’s location. Instead of the customer reordering when its supply has been exhausted, the supplier is responsible for replenishing and stocking the customer at appropriate levels.Wal-Mart has mastered  VMI  and is the company against which many other organizations benchmark themselves. This report covers various issues that are to be considered to implement the Vendor Managed Inventory. It is realized in the report that several risks are to be considered while executing VMI. The proper analysis is done in seeking the scenarios where one issue becomes a key factor in deciding to implement VMI or not. Both Marketers and Distributors have their own issues to challenge the implementation of VMI. Focus of the report is to determine taxonomy of implementation problems in VMI.Introduction A means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributorâ€℠¢s inventory levels. The manufacturer has access to the distributor’s inventory data and is responsible for generating purchase orders. We can see the differences in maintain inventory as: Under the typical business model: When a distributor needs product, they place an order against a manufacturer. The distributor is in total control of the timing and size of the order being placed. The distributor maintains the inventory plan.Vendor Managed Inventory model: The manufacturer receives electronic data (usually via EDI or the internet) that tells him the distributor’s sales and stock levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer generates the order*, not the distributor. *Note: VMI does not change the â€Å"ownership† of inventory. It remains as it did prior to VMI. Consignment Inventory:When the supplier places inventory at a customer’s location and retains ownership of the inventory. Payment is not made until the item is actually sold. A VMI relationship may or may not involve consignment inventory. Vendor Managed Inventory and Stakeholder’s Challenges Vendor Managed Inventory primarily have various stakeholder’s involved which includes Vendor/Manufacturer or distributor and retailer. Let us examine challenges faced by each: Challenges in VMI Implementation from vendor’s side High administrative costs: – Suppliers would have to face higher administrative costs.They will have to allocate additional staff resources to properly manage the replenishment activities that were previously managed by the retailer. So to overcome these additional costs, vendors must have to save enough money from the inventory costs and sufficient sales volumes and gross margins Loss of market share due to less shelf coverage: – VMI would help in reducin g the inventory which could lead to the less coverage of the shelf space on the retailer’s shop which might lead to the reduction in the market share for that product.To resolve this issue, vendor can provide more stock keeping units of the same product to fill the shelf space and to maintain the market share. Challenges in VMI Implementation from retailer’s side Loss of Control: – If VMI is implemented, then there is always a fear in the mind of the retailer that he would loose his control over the operations management. All the decisions like when to order, how much to keep as inventory and when to sell the product would be managed by the vendor now which can also have some impact on the profit margin of the retailer.Eg. In many cases, Vendor gives discounts to the retailer if they buy in bulk and hence above mentioned questions become crucial for the retailer from financial point of view. In case of products with high shelf life, he might want to order in bul k once, instead of ordering in small lots. Danger of being replaced: – Retailer would be afraid that after implementing of VMI, when almost all the operations management related decisions are taken by the vendor, then the vendor might also think of forward integrating.Hence he would not be fully cooperative in sharing of the data and he would always try to make his presence felt in decision making to show the importance of his role. Fear of losing other vendors: – The retailer would be afraid of losing other vendors, since in the FMCG business; retailers get products from a lot of vendors to maintain variety for the customers. It would be difficult to choose the vendor who will manage the inventory, because the same vendor would be biased towards his products.This would lead to the development of bad relationship between the retailer and the other vendors. After implementation of VMI, forecasting of demand is done by the manufacturer, not by the retailers or distributo rs and it might hit back, if manufacturer is not competent in judging the patterns of the consumer demand. Challenges faced in implementation of Vendor Managed Inventory Personal Factors Trust: – One of the most important factors which can contribute to the success of the VMI is trust and good relationship between the vendor and the downstream retailer.But in the FMCG sector, where there are a lot of products in the same segment, most of the retailers are unwilling to share their data related to their sales with anyone, even with their supplier. This leads to the ineffective communication between them and both have to incur huge inventory and management costs. Work ethics and cultural differences: – Each company has its set of work ethics and work culture and if the difference is huge for a vendor and the retailer, then their decisions would not be aligned. Technical IssuesTechnology is one of the most critical factors in facilitating the implementation of VMI which ca n also stand as a challenge in the implementation of VMI. A lot of technical systems would have to be installed for the effective working of the VMI. Some of the technical solutions that can facilitate an effective VMI arrangement include: †¢ Electronic data exchange (EDI). EDI transactions can enable suppliers to efficiently manage customer inventory levels remotely. †¢ Replenishment software. These applications allow customers to accurately assess projected service levels (i. . the percentage of requests that can be filled from stock) based on various inventory investments. †¢ Bar coding or radio frequency identification (RFID). These technologies â€Å"tag† products for tracking purposes and can dramatically improve the speed and integrity of the collection and reporting of consumption data. †¢ Forecasting software. These applications gather and analyze information from sales, accounting, order entry, and other business systems, using sophisticated algo rithms and predictive modeling techniques to generate fast, accurate demand forecasts.Investment- A lot of investment would be required to install and maintain any of these systems. Properly equipped manpower would be required to operate these tools. Investment would also be required to integrate these tools with each other for efficient functioning of the VMI operations. All this cost would have to be incurred by the vendor and to compensate this cost, he must get returns from the efficient inventory management and higher sales volume due to less stock-outs. Testing- It requires a lot of time and money in testing the various VMI systems after installing them.An extensive testing has to be done for the EDI system before giving it a final green flag for the VMI system. Analysis of Cases of implementing Vendor Managed Inventory Let’s discuss some cases where VMI is implemented: Barilla Spa Case Barilla is largest manufacturer of â€Å"fresh† and â€Å"dry† pasta p roducts with more than 1000 SKUs. It has sales of around $2B and very stable demand at retail level. Challenges it was facing are as under: Retailers didn’t have large inventories to accommodate new products introduced from time to time.Stock outs are quiet frequent at DO’s. Thin margins for both manufacturers and retailers are adding to the problem. Solution offered through VMI: Downstream distribution Center (DC) reports inventory and sales data electronically to Barilla on a daily basis. Barilla is managing the inventory of DC and decides how much to ship to them. According to  Industry Week's Best Plants 2006 Statistical Profile, 56% of the top 25 plants between 2002 and 2006 have used â€Å"resident suppliers† to manage or replenish inventory.However, the average percentage of purchased materials and components (dollar volume) managed by on-site suppliers is only 13. 7%. So, it seems, there is a time and place for vendor-managed inventory. For example, if you've got an expensive manufacturing line and you ask one of your key suppliers to put in the systems and develop the expertise to supply the goods you need on a just-in-time basis, they will do that if they receive a significant portion of their revenues from you, says Steve Banker, service director of supply chain management at ARC Advisory Group, Dedham, Mass. However, you may have a lot of suppliers where you are only 1% of their total revenue — you are not their biggest priority,† Banker says. â€Å"The chances that they will take on added responsibility and costs to manage your inventory is low. † So we can see that size of the business does matter in determining the feasibility of implementing VMI.In addition, there is a certain amount of IT integration that has to go on in order to make the VMI relationship work. For suppliers, they need to be able to get your forecasts on a regular basis, make intelligence out of them and have visibility into your inve ntory levels on an ongoing basis,† says Banker. â€Å"Turning that into useable intelligence is kind of difficult. Small and midsized companies often don't have the dedicated IT resources to make that happen, so they struggle. † â€Å"Resident Suppliers† Manage/Replenish Inventory (% Of Plants) Year| No| Yes| 2002| 44| 56| 2003| 52| 48| 2004| 48| 52| 2005| 32| 68| 2006| 44| 56| 2002-2006| 44| 56| Source: Industry Week's Best Plants 2006 Statistical ProfilePercentage Of Purchased Materials And Components (Dollar Volume) Managed By On-Site Suppliers Year| Median| Mean| Minimum| Maximum| 2002| 5. 0| 24. 4| 0. 0| 100. 0| 2003| 0. 0| 12. 2| 0. 0| 100. 0| 2004| 4. 0| 15. 2| 0. 0| 70. 0| 2005| 6. 0| 13. 8| 0. 0| 67. 0| 2006| 4. 2| 15. 1| 0. 0| 95. 0| 2002-2006| 3. 0| 13. 7| 0. 0| 100. 0| Source: Industry Week's Best Plants 2006 Statistical Profile Similarly, we have case of P&G which successfully employed Vendor managed Inventory while ODLO isn’t so successful in implementing the same.Also companies like RUAG aren’t having any financial or strategic benefit out of implementing VMI and hence didn’t go for it. If we analyze the sector in which they operates we come to know, RUAG which is in Airlines sector involves comparatively simpler inventory to maintain while the risk involved in giving away the details was higher. On the other hand, with the scale of business P&G is in, it is beneficial for both manufacturer (vendor) as well as distributor (or Retailer) to implement VMI. It can be seen both scale and sector favors P&G.GRENDENE, one of the world's largest footwear manufacturers, implemented Agentrics' Vendor Managed Inventory (VMI) solution and aligned its product replenishment process with the real demand of regional distributors/customers, thus increasing service level, optimizing stocks and boosting sales. ACHIEVED RESULTS: Increase of accuracy in sales forecasts; Increase of sales by 47% for participating retailers; Imp roved management of a product mix, by reducing or discontinuing low-performance and low-turnover products;   Streamlined replenishment of high-performance products;Excellent overall result with customers using the solution. VONPAR With Agentrics' VMI solution, acquired a full, web-based supply chain KPI tool. Vonpar Refrescos, Brazil's fourth largest Coca-Cola bottling company with products reaching 14 million consumers, implemented Agentrics' Vendor Managed Inventory (VMI) solution and with it acquired a complete web-based KPI tool. KPI's track internal and client stock levels, demand planning, order administration, as well as automation of Vonpar's product replenishment process, improving service and optimizing stock levels, while improving customer relationships.ACHIEVED RESULTS : Average sales increase of 26 percent in the first 12 months after the solution's implementation; Significant increase in sales of juices, tea and beer, which reflects improved stock planning for great er availability of products at store level; Maximized speed in the exchange of sales information at store level; Stock optimization allowing Vonpar to have the right product at the right time in the right place; Commercial team freed up to focus on avoiding out-of-stocks. SYNGENTA Implemented Agentrics' VMI solution to manage stock jointly with its suppliers.Syngenta, a world-leading agri-business committed to sustainable agriculture through innovative research and technology, implemented Agentrics' Vendor Managed Inventory (VMI) solution to manage stock in conjunction with its suppliers ACHIEVED RESULTS: Reduction of communication errors through process automation and visibility to inventories. â€Å"Today, our customers say that for the first time in the agricultural market, a company is able to co-manage inventory demand like large retail chains,† says Marcos Mazza, Supply Chain Manager. NeoGrid has a solution that perfectly suits our business model; Syngenta did not have to adapt to the tool, as the solution metall our needs. † Marcos Mazza, Supply Chain Manager. Conclusion The main purpose of this report is to highlight the taxonomy of implementation problems in VMI. From the cases visited, we can deduce that various factors play key roles in determining whether to go for Vendor Managed Inventory as there are lot of issues and cost involved in implementing the same.Size of the business, Sector of the business in operation, inter-relationship among stakeholders all plays equally important role in the actual decision making. Though there is no clear cut understanding on whether to implement VMI or not but one can easily concur with increasing role of technology and with dynamic demand it is only going to rise.References Williams, M. (1998). Making Consignment and Vendor-Managed Inventory Work For You. APICSInternational Conference. Schreibfeder, J. (1997). Vendor Managed Inventory: there’s more to it than just sell products. Effective In ventory. com Collaborative Planning, Forecasting, and Replenishment Committee. (1998)  Jointly Managed Inventory Approach Provides a Lower Level of Detail. CPFR. Org http://www. scm. ethz. ch/publications/Practitioner_publications/Niranjan_etal_2011_Are_you_ready_for_VMI. pdf http://www. emeraldinsight. com/journals. htm? articleid=1620974;show=abstract http://openarchive. cbs. dk/handle/10398/8229 http://www. supplyon. com/vendor-managed-inventory_at_zf. html http://www. industryweek. com/procurement/vendor-managed-inventory-size-matters

The Securities Market in Vietnam

The Securities Market in Vietnam – 14 March 2007 This article is an introduction to the legal framework that governs the securities market in Vietnam, in particular public offers, listing, public companies and buying shares. This article focuses on the provision of Law 70-2006QH11 of the National Assembly on Securities (Law 70) and Decree 14-2007-ND-CP of the Government dated 19 January 2007 Providing Detailed Regulations for Implementation of a Number of Articles of the Law on Securities (Decree 14) .The MOF is to shortly issue a regulation to further provide guidance to the SSC on regulating and establishing investment funds, securities companies and fund management companies. An update will be provided once the regulation has been promulgated. 1. 1. 1 Relevant bodies The State Securities Commission (SSC) The SSC is the official regulator of the stock exchange, and is overseen by the Ministry of Finance (MOF). The HCMC Securities Trading Centre (HCMCSTC) The HCMCSTC is an ad ministrative unit of the SSC.It is a securities trading and listing market and offers and official mechanism through which new government bonds are issued and is the secondary markets for several existing bonds. Currently, the HCMCSTC is an administrative unit under the SSC. Under Law 70 it is to covert to either a Stock Exchange or a Securities Trading Centre in the form of a limited liability company or a shareholding company by July 2008. It is expected that the HCMCSTC will be converted into a Stock Exchange. 1. 2 1. 3 The Hanoi Securities Trading Centre (HASTC) The HASTC is an administrative unit of the SSC.It is a securities trading and listing market and offers and is also Vietnam’s official over-the-counter market for securities. Under Law 70 it is to covert to either a Stock Exchange or a Securities Trading Centre in the form of a limited liability company or a shareholding company by July 2008. It is expected that the HASTC will be converted into a Securities Tradin g Centre. 2. Public offer (PO) In Vietnam the processes of a public offer (PO) and listing are different, although companies may do the two simultaneously.A PO is an offer to sell shares, bonds or fund certificates via the mass media, or to at least 100 investors excluding institutional investors or to an unspecified number of investors. 2. 1 Participants (a) The issuer or issuing organization. This is the enterprise making the PO. The securities may be listed or unlisted. Underwriters. Securities in a PO may be distributed by underwriters. Underwriters must be securities companies authorized to underwrite issues of securities or a commercial banks approved by the SSC to underwrite issues of bonds, on conditions regulated by the MOF.The role of the underwriter is to assist the issuer to complete procedures prior to the PO, to purchase the securities for resale or the unsold portion of the securities from the issuer, and to assist the issuer to distribute the securities to the public . Custodian banks. These are commercial banks that are either domestic or foreign invested (that is, not an offshore licensed bank) and are licensed to carry out securities depository activities including the keeping and maintaining of securities.  © Allens Arthur Robinson – Vietnam Laws (b) (c) (d) Investors. Investors who wish to purchase securities may be Vietnamese or foreign investors but foreign investor must first apply for a securities trading code. Foreign investment is also subject to limitations (discussed below). 2. 2 Currency and par value Securities offered by a PO must be denominated in Vietnamese dong. The par value for shares and fund certificates is VND10,000 and the minimum par value for bonds is VND100,000. Conditions for a PO (a) Shares.An issuer of shares must be a shareholding company with paid-up capital of at least VND10 billion at the time of registration of the PO, must have made a profit in the year prior to the PO and must not have accumulated l osses as at the year of registration of the offer. The general meeting of shareholders1 of the issuer must pass an issue plan and plan for utilization of the proceeds earned. 2. 3 Under Decree 14 other specific conditions apply to newly established enterprises conducting an initial public offer if the enterprise is in the infrastructure or high-tech sectors.These conditions include the obligation for there to be an underwriter, and the obligation for there to be a bank supervising utilization of the proceeds earned from the offer. (b) Bonds. An issuer of bonds must have paid-up capital of at least VND10 billion at the time of registration of the PO, must have made a profit in the year prior to the PO, must not have accumulated losses as at the year of registration of the offer and must not have more than 100 overdue debts payable. The board of management or members’ council of the issuer (as applicable) must pass an issue plan and plan for utilization and repayment of the pro ceeds earned.The issuer of bonds must also give an undertaking to investors to discharge it obligations. In the case of convertible bonds the issue plan and plan for utilization proceeds must also have a plan for issuance of the shares for conversion and all plans must be passed by the general meeting of shareholders (not the board of management). (c) Fund Certificates. Issued fund certificates must have total value of at least VND50 billion. There must also be an issue plan and a plan for investment of the capital funds earned. 2. 4Prospectus Issuers of a PO must prepare a prospectus. The main contents for a prospectus are prescribed in Law 70 and the MOF has been delegated the task of creating a sample form prospectus. Among other things, the prospectus must include the financial statements of the issuer for the 2 years prior to the issue of the PO. The prospectus must be signed by the chairman of the board of management, the general director, the financial director/accountant (on ly in the case of shares and bonds) and the legal representative of the underwriter. . 5 Registration The issuer must register the PO with the SSC. To register, the issuer must submit a request for registration and attach those documents that are required by Law 70 (and which will be given more detail in specific regulations of the MOF). The documents required include the prospectus, the charter (or in the case of a PO of fund certificates, the proposed charter of the securities investment fund) and relevant resolutions and undertakings by the issuer. In the case of a PO for fund certificates the 1In the case of a enterprise with foreign owned capital that is converting to a shareholding company in combination with making a public offer of shares, Decree 14 clarifies that the issue plan and plan for utilization is passed by the owner of the enterprise with 100% foreign owned capital and the board of management of a joint venture enterprise. 2  © Allens Arthur Robinson – Vie tnam Laws contract for supervision between the custodian bank and the securities investment fund must also be submitted. The SSC has 30 days from receipt of the registration statement to certify registration. . 6 Announcement Within 7 days from certification of registration the issuer must make a public announcement in 3 consecutive newspaper issues. The announcement must stipulate the time in which investors have to register to purchase the securities. The time limit can be set by the issuer but must be a minimum of 20 days. Registration to purchase and payment of monies When an investor registers to purchase the securities it must pay the purchase price into an escrow bank account and this money will remain in escrow until completion of the PO.Allocation and delivery The issuer must allocate the securities within 90 days from the SSC’s certificate of acceptance, and physically deliver the securities to investors within 30 days from the date the offer ends. 2. 7 2. 8 3. List ing Listing is the process of taking a privately-owned organisation including an equitized or equitizing State owned enterprise (SOE) and making the transition to a publicly-owned entity whose shares can be traded on the HCMCSTC or HASTC. 3. Conditions, application and procedures for listing The regulations on the conditions, application files and procedures for listing a company are not contained in Law 70, they are contained in Decree 14. The conditions for listing on the stock exchange (of which there are currently none in Vietnam) are different from the conditions to list on a securities trading centre. However, in anticipation of the HCMCSTC converting to a stock exchange, new registrations for listing on the HCMCSTC must satisfy the conditions applicable for stock exchange listings, while existing listed companies on the HCMCSTC have two years to satisfy these conditions.Companies failing to meet these requirements will have their listing moved to the HASTC. Conditions, applic ation and procedures for listing on the Stock Exchange/HCMCSTC (a) Shares. The listing company must be a shareholding company with paid-up capital of at least VND80 billion at the time of registration for listing, must have made a profit in the two years prior to year of listing and must not have accumulated losses as at the year of registration for listing.There must not be overdue debts payable (unless a lawful reserve has been made for them) and there must be public disclosure of all debts owed to the company by officers2 and major shareholders. At least 100 shareholders must own 20% of the voting shares of the listing company, and there must be an undertaking from shareholders who are also officers of the company to hold 100% of their shares for 6 months from the date of listing and 50% of their shares for the following 6 months. Bonds.The listing company or SOE must have paid-up capital of at least VND80 billion at the time of registration for listing, must have made a profit i n the two years prior to year of listing and must not have overdue debts of more than 1 year. There must be at least 50 bondholders in any one bond issue. 3. 2 (b) 2 Officers are the members of the board of management, members of the board of controllers, director, general director, deputy director, deputy general director and chief accountant.  © Allens Arthur Robinson – Vietnam Laws (c) Fund Certificates. Issued fund certificates must have total value of at least VND50 billion. There must be an undertaking from the initial shareholdings and members of the committee of representatives of the fund to hold 100% of their shares for 6 months from the date of listing and 50% of their shares for the following 6 months. There must be at least 100 owners of fund certificates. 3. 3 Conditions, application and procedures for listing on the HASTC (a) Shares.The listing company must be a shareholding company with paid-up capital of at least VND10 billion at the time of registration fo r listing, must have made a profit in year prior to year of listing and must not have overdue debts of more than 1 year (with no current debts or financial obligations to the State). There must be at least 100 shareholders with voting shares, and there must be an undertaking from shareholders who are also officers of the company to hold 100% of their shares for 6 months from the date of listing and 50% of their shares for the following 6 months.The conditions relating to profitable business operations and overdue debts do not apply to newly established enterprises in infrastructure and high-tech sectors or equitizing SOEs. (b) Bonds. The listing company or SOE must have paid-up capital of at least VND10 billion at the time of registration for listing, and all bonds in the issue must have the same maturity date. Other types of securities. The task of stipulating conditions for listing other types of securities has been delegated to the MOF. (c) 3. 4 Registration The listing enterpris e must register with the relevant exchange or trading centre.To register the listing enterprise must submit a registration slip and attach those documents that are required by Law 70 (and which will be given more detail in specific regulations of the exchange/trading centre). The documents required include the prospectus, relevant corporate resolutions, register of shareholders/bondholders and required undertakings. The exchange/trading centre has 30 days from receipt of the registration slip to approve or refuse the application. 3. 5 Trading Current guidelines on securities, membership of the HCMCSTC/HASTCand trading in securities are contained in Circular 583 implementing Decree 1444.In time, Circular 58 should also be repealed by a new circular implementing Law 70 and Decree 14. In the interim the HCMCSTC and the HASTC continue to apply the day to day trading rules contained in the Circular 58. In addition, under Law 70, the HCMCSTC and the HASTC each are given the responsibility to issue regulations on the trading of listed securities within their respective centres. 3. 6 Other trading Securities listed on a Stock Exchange cannot be traded outside the Stock Exchange, unless otherwise stipulated in the trading rules of the Stock Exchange.In comparison, securities listed on a securities trading centre (STC) can be traded at a securities company which is a trading member of the STC. 3. 7 Taxation holidays – almost over Previously, to encourage investment in Vietnam’s securities market, various incentives were offered, 3 4 Circular 58-2004-TT-BTC of the Ministry of Finance dated 17 June 2004. Both Circular 58 and Decree 144 were issued before Law 70 and Decree 14, and must be read down to the extent of the inconsistency. 4  © Allens Arthur Robinson – Vietnam Laws ncluding preferential corporate income tax rates to companies upon listing. However, this preferential tax treatment ceased on 1 January 2007. Dividends from shares have been fr ee of personal income tax since 1994. However this very long â€Å"temporary exemption† is expected to come to an end under the proposed Law on Personal Income Tax, which was considered by the National Assembly in October-November 2006 and is expected to be passed in 2007. If passed in its current draft form, dividends from shares will be subject to personal income tax at a proposed rate of 5% from 1 January 2009. . Public companies A public company is a newly introduced concept in Vietnam. A public company is a shareholding company with any of the following characteristics: †¢ †¢ †¢ Shares have been issued via a PO. Shares are listed on the HCMCSTC or the HASTC. Shares are owned by 100 or more investors, excluding professional securities investors, and have a paid-up charter capital of VND10 billion or more. Importantly, a company does not have to be listed to be deemed a public company. New rules introduced for public companies include: 4. Filing A public com pany must lodge the public company file with the SSC within 90 days of becoming a public company. The public company files comprises the company’s charter and business registration certificate, the most recent financial statement and summarized information on its business operations scale, management organization and shareholding structure. Major shareholders A shareholder of a public company is deemed to be a major shareholder when it holds directly or indirectly (undefined) 5% or more of the voting shares the company.Upon becoming a major shareholder, the shareholder must report to the SSC and the HCMCSTC or HASTC (depending on where the shares of the public company are listed/offered). The information that must be reported is not extensive: only details of the investor (name, address) and details of the shares (number, percentage). However, important changes to this information, including a change of the number of shares in excess of 1%, must also be reported. Takeovers An offer to purchaser 25% or more of the voting shares in a public company must be made by a â€Å"public offer to acquire†.The public offer to acquire must be registered with and approved by the SSC (the law does not detail any criteria or basis for the approval) and must be announced in the mass media. Of note, if after implementation of the public offer to acquire, the acquirer holds 80% or more in the public company, the acquirer must, if the remaining shareholders so request, acquire the remaining shares at the announced price of the offer to acquire. 4. 4 Disclosure requirements A public company must publicly disclose certain information and report it to the SSC.Annually, a public company must disclose its audited financial statements. In addition, it must disclose information within a short period (24 hours, or 72 hours) upon the happening of a prescribed event, for example if an account of the public company is frozen (within 24 hours) or if a decision is made to borrow bonds with a value of 30% or more of the company’s equity (within 72 hours). 4. 2 4. 3 5  © Allens Arthur Robinson – Vietnam Laws 5. 5. 1 Foreign investors – how to purchase sharesUnlisted shares To contribute capital or purchase shares in Vietnamese enterprises, foreign investors must open a Vietnamese dong capital contribution and share purchase account (Account) at a commercial bank operating in Vietnam. All transfers of funds for the purpose of contributing capital, purchasing and selling shares, transferring capital contribution, receiving and using dividends or profits distribution, or purchasing foreign currency from authorised banks for remittance abroad and other transactions relating to any activity of capital contribution or purchase of shares inVietnamese enterprises by foreign investors must be performed through this Account. Further, this Account may only be used for capital contributions and share purchase activities. Within 2 working days from the date of opening the Account at a commercial bank, the foreign investor must register the Account with the State Bank (Department of Foreign Exchange Control). Under law, the State Bank must certify registration of the account within 5 working days, or otherwise provide written notice of its reasons for refusing to provide certification.A foreign investor is only allowed to perform receipt or payment transactions through the Account after obtaining a document on certification of account registration from the State Bank. Therefore it is important for potential investors to organize this account well in advance of the relevant share purchase date. Other than the controls over the Account, trading in unlisted shares is largely unregulated. 5. 2 Listed shares The foreign investor must apply for a securities trading code from the HCMCSTC/HASTC.The application consists of an application form and supporting documents. Unfortunately, the supporting documents that originate outside Vietn am (for example the constitution and establishment documents of the foreign investor) are subject to the tedious requirements of notarization and certification. Investors must then open a VND securities trading account with a registered broker in accordance with Decision 15505 to service activities of the purchase and sale of securities.The following accounts must be opened by the broker at an authorized bank in Vietnam: (a) a specialized, on-call foreign currency deposit account, into which foreign currency of the foreign investor is deposited (i) for the purpose of conversion into VND for purchase of securities or (ii) after conversion from VND for the purpose of remittance overseas or other authorized foreign currency remittances in Vietnam; and (b) a specialized, on-call VND deposit account, into which all VND amounts (after conversion from foreign currency) and all VND income from securities nvestment is transferred and from which all VND remittances for purchase of securities or for conversion into foreign currency is made. Listed share certificates must be centrally deposited at the Vietnam Securities Depository (VSD). This happens in two steps: first, the owner deposits the certificates with a depository member (for example, the broker or depository bank) and second, the depository member in turn deposits the certificates at the VSD. Cash settlement is made via the settlement bank, which is the BIDV. 6. 6. 1Foreign investors – restrictions Prohibited and conditional sectors Four prohibited sectors are listed in the 2005 Law on Investment. These sectors apply equally to foreign and local investors. Nine conditional sectors are listed in the 2005 Law on Investment. These sectors also apply equally to foreign and local investors. In addition foreign investment is conditional in 13 sectors specified in Decree 108 and ‘other investment sectors in international treaties of which Vietnam is a member and which restrict the opening of the 5Decision 1550-2004-QD-NHNN of the State Bank of Vietnam dated 6 December 2004. 6  © Allens Arthur Robinson – Vietnam Laws market to foreign investors’. It is not yet clear what the conditions are, and whether they may include restrictions on indirect investment. 6. 2 Other restrictions The current (to the extent that they have not been specifically repealed) laws of Vietnam consist of the following restrictions: (a) (b) (c) There is a cap on total foreign shareholdings in or capital contributions to any one unlisted domestic business of 30% of the charter capital (30% rule).The range of unlisted companies in which foreign investors may purchase shares is also restricted by sector (only 35 business lines are permitted). Foreign investors may hold a maximum of 49% of the total shares of any one company listed at a stock exchange or registered for trading at a securities trading centre (49% rule). Although not yet specifically repealed these restrictions may be affected by the 2005 Law on Investment which stipulates â€Å"investors must be permitted to invest in all sectors and in all industries and trades which are not prohibited by law†.Therefore under this general rule foreign investors should be (in theory) permitted to invest in all sectors and all industries provided that they are not in a prohibited or conditional sector (as above). It is not clear if the authorities will interpret the 30% rule and the 49% rule as being repealed by or alternatively, qualifying the Law on Investment. We consider that the better view is that these rules should be repealed by the Law on Investment. This view is consistent with the WTO principle of national treatment.However, we understand that in a meeting held on 18 January 2007 between the Government Office, the Ministry of Finance and the SSC the Government Office expressed the Prime Minister’s opinion that the 49% rule would continue to be applied ‘temporarily’. In any event, specific re strictions will continue to apply to conditional sectors (for example, banks) in accordance with commitments made under international agreements. 7. 7. 1 Securities Industry Players General Securities companies and fund management companies are the key players in the Vietnamese securities industry.This section provides an overview of the scope of activities under Law 70 of these companies Securities company As at 29 December 2006, the SSC has issued 55 operational licenses to securities companies under the previous securities law regime. After the effective date of Law 70, being 1 January 2007, there have not been any operational licenses issued and the most likely reason is that the implementing regulations for Law 70 have not been promulgated to guide the SSC in its work.Under Law 70, securities companies are permitted to engage in any or all of the following activities (the minimum legal capital is listed along side each of the activity): (a) (b) securities brokerage (VND 25 bill ion); securities self-trading (if the securities company engages in this activity it can only conduct the other activity of underwriting) (VND 100 billion); underwriting issues of securities (VND 165 billion); securities investment consultancy (VND 10 billion); financial consultancy services; and other financial services. . 2 (c) (d) (e) (f) The permitted areas of activity are limited compared to the business areas permitted under the old securities law regime. The prescribed minimum legal capital has also increased. This explains why there was a rush towards the end of 2006 to obtain a securities company license from the SSC. 7  © Allens Arthur Robinson – Vietnam Laws 7. 3 Fund Management Company Prior to the effective date of Law 70, eighteen operational licenses were issued by the SSC to fund management companies.Again there was a rush to obtain a license towards the end of 2006 because the scope of business activities has been restricted under Law 70. A fund management company can only engage in fund management and portfolio management and the minimum legal capital for establishment is VND 25 billion. 8. Funds This section provides a brief overview of investment funds as this is the subject of a detailed paper which will be released once the MOF has settled the regulation on investments funds and other related matters. Investment funds have been driving the bullish Vietnamese stock market.There have been a growing number of offshore and onshore investment funds established in recent years. At least 25 investment funds are operating in the market with an objective of investing in Vietnam. The Prime Minister has reportedly indicated that regulations on capital controls would be tightened to prevent capital flight which probably means that the MOF’s soon to be released regulations would introduce further regulatory controls on the operation of Funds. In brief, Law 70 sets the framework for the establishment of onshore public and membersâ€℠¢ funds.Public funds and members’ funds must have at least VND 50 billion in start up capital and managed by a fund management company. A public fund may be an open or closed ended fund with at least 100 investors. A members’ fund must have up to 30 investors. Assets of a fund are to be held by a custodian bank. The MOF’s future regulation is expected to contain other operational requirements. This article was written by Julia Howes, a lawyer with Allens Arthur Robinson who has been practicing in Vietnam for 3 years.Allens Arthur Robinson is one of the largest international law firms in Asia, with more than 900 lawyers, including 179 partners. Allens Arthur Robinson has been providing legal services for clients in Australia for more than 180 years and in Asia for the past 30 years. Our Vietnam practice is managed by partners Bill Magennis in Hanoi and Nigel Russell in Ho Chi Minh City, both of whom joined the Allens Arthur Robinson partnership from 1 January 200 7. The Vietnam practice was established in 1993 and is one of the largest and most successful among foreign law firms in the country.For further information, please contact: Bill Magennis Partner, Hanoi Ph: +84 4 936 0990 Bill. [email  protected] com. au Nigel Russell Partner, Ho Chi Minh City Ph: +84 8 822 1717 Nigel. [email  protected] com. au Steve Pemberton Partner, Singapore Ph: +65 6535 6622 Steve. [email  protected] com. au Jim Dunstan Executive Partner – Banking & Finance and Asia offices, Sydney Ph: +61 2 9230 4571 Jim. [email  protected] com. au Simon Lynch Partner, Melbourne Ph: +61 3 9613 8922 Simon. [email  protected] com. au Jeremy Low Partner, Sydney Ph: +61 2 9230 4041 Jeremy. [email  protected] com. au This publication is copyright.Except as permitted under relevant laws, no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner.  © Allens Arthur Robinson 8  © Allens Arthur Robinson – Vietnam Laws The material contained in Vietnam Client Updates is intended to inform you of recent legal developments in Vietnam. It is not intended, and should not be relied upon, as legal advice. Should you wish further information in relation to any legal instrument or matter mentioned in this issue, please do not hesitate to contact one of our offices.Ho Chi Minh City Suite 605 Saigon Tower 29 Le Duan Boulevard District 1 Ho Chi Minh City,Vietnam Tel +84 8 822 1717 Fax +84 8 822 1818 nigel. [email  protected] com. au Hanoi Suite 401 Hanoi Tower 49 Hai Ba Trung Hanoi, Vietnam Tel +84 4 936 0990 Fax +84 4 936 0984 bill. [email  protected] com. au Allens Arthur Robinson – a leading international law firm with lawyers in: Bangkok | Beijing | Brisbane | Hanoi | Ho Chi Minh City | Hong Kong | Jakarta | Melbourne | Perth | Phnom Penh | Port Moresby | Shanghai | Singapore | Sydney 9  © Allens Arthur Robinson – Vietnam Laws The Securities Market in Vietnam The Securities Market in Vietnam – 14 March 2007 This article is an introduction to the legal framework that governs the securities market in Vietnam, in particular public offers, listing, public companies and buying shares. This article focuses on the provision of Law 70-2006QH11 of the National Assembly on Securities (Law 70) and Decree 14-2007-ND-CP of the Government dated 19 January 2007 Providing Detailed Regulations for Implementation of a Number of Articles of the Law on Securities (Decree 14) .The MOF is to shortly issue a regulation to further provide guidance to the SSC on regulating and establishing investment funds, securities companies and fund management companies. An update will be provided once the regulation has been promulgated. 1. 1. 1 Relevant bodies The State Securities Commission (SSC) The SSC is the official regulator of the stock exchange, and is overseen by the Ministry of Finance (MOF). The HCMC Securities Trading Centre (HCMCSTC) The HCMCSTC is an ad ministrative unit of the SSC.It is a securities trading and listing market and offers and official mechanism through which new government bonds are issued and is the secondary markets for several existing bonds. Currently, the HCMCSTC is an administrative unit under the SSC. Under Law 70 it is to covert to either a Stock Exchange or a Securities Trading Centre in the form of a limited liability company or a shareholding company by July 2008. It is expected that the HCMCSTC will be converted into a Stock Exchange. 1. 2 1. 3 The Hanoi Securities Trading Centre (HASTC) The HASTC is an administrative unit of the SSC.It is a securities trading and listing market and offers and is also Vietnam’s official over-the-counter market for securities. Under Law 70 it is to covert to either a Stock Exchange or a Securities Trading Centre in the form of a limited liability company or a shareholding company by July 2008. It is expected that the HASTC will be converted into a Securities Tradin g Centre. 2. Public offer (PO) In Vietnam the processes of a public offer (PO) and listing are different, although companies may do the two simultaneously.A PO is an offer to sell shares, bonds or fund certificates via the mass media, or to at least 100 investors excluding institutional investors or to an unspecified number of investors. 2. 1 Participants (a) The issuer or issuing organization. This is the enterprise making the PO. The securities may be listed or unlisted. Underwriters. Securities in a PO may be distributed by underwriters. Underwriters must be securities companies authorized to underwrite issues of securities or a commercial banks approved by the SSC to underwrite issues of bonds, on conditions regulated by the MOF.The role of the underwriter is to assist the issuer to complete procedures prior to the PO, to purchase the securities for resale or the unsold portion of the securities from the issuer, and to assist the issuer to distribute the securities to the public . Custodian banks. These are commercial banks that are either domestic or foreign invested (that is, not an offshore licensed bank) and are licensed to carry out securities depository activities including the keeping and maintaining of securities.  © Allens Arthur Robinson – Vietnam Laws (b) (c) (d) Investors. Investors who wish to purchase securities may be Vietnamese or foreign investors but foreign investor must first apply for a securities trading code. Foreign investment is also subject to limitations (discussed below). 2. 2 Currency and par value Securities offered by a PO must be denominated in Vietnamese dong. The par value for shares and fund certificates is VND10,000 and the minimum par value for bonds is VND100,000. Conditions for a PO (a) Shares.An issuer of shares must be a shareholding company with paid-up capital of at least VND10 billion at the time of registration of the PO, must have made a profit in the year prior to the PO and must not have accumulated l osses as at the year of registration of the offer. The general meeting of shareholders1 of the issuer must pass an issue plan and plan for utilization of the proceeds earned. 2. 3 Under Decree 14 other specific conditions apply to newly established enterprises conducting an initial public offer if the enterprise is in the infrastructure or high-tech sectors.These conditions include the obligation for there to be an underwriter, and the obligation for there to be a bank supervising utilization of the proceeds earned from the offer. (b) Bonds. An issuer of bonds must have paid-up capital of at least VND10 billion at the time of registration of the PO, must have made a profit in the year prior to the PO, must not have accumulated losses as at the year of registration of the offer and must not have more than 100 overdue debts payable. The board of management or members’ council of the issuer (as applicable) must pass an issue plan and plan for utilization and repayment of the pro ceeds earned.The issuer of bonds must also give an undertaking to investors to discharge it obligations. In the case of convertible bonds the issue plan and plan for utilization proceeds must also have a plan for issuance of the shares for conversion and all plans must be passed by the general meeting of shareholders (not the board of management). (c) Fund Certificates. Issued fund certificates must have total value of at least VND50 billion. There must also be an issue plan and a plan for investment of the capital funds earned. 2. 4Prospectus Issuers of a PO must prepare a prospectus. The main contents for a prospectus are prescribed in Law 70 and the MOF has been delegated the task of creating a sample form prospectus. Among other things, the prospectus must include the financial statements of the issuer for the 2 years prior to the issue of the PO. The prospectus must be signed by the chairman of the board of management, the general director, the financial director/accountant (on ly in the case of shares and bonds) and the legal representative of the underwriter. . 5 Registration The issuer must register the PO with the SSC. To register, the issuer must submit a request for registration and attach those documents that are required by Law 70 (and which will be given more detail in specific regulations of the MOF). The documents required include the prospectus, the charter (or in the case of a PO of fund certificates, the proposed charter of the securities investment fund) and relevant resolutions and undertakings by the issuer. In the case of a PO for fund certificates the 1In the case of a enterprise with foreign owned capital that is converting to a shareholding company in combination with making a public offer of shares, Decree 14 clarifies that the issue plan and plan for utilization is passed by the owner of the enterprise with 100% foreign owned capital and the board of management of a joint venture enterprise. 2  © Allens Arthur Robinson – Vie tnam Laws contract for supervision between the custodian bank and the securities investment fund must also be submitted. The SSC has 30 days from receipt of the registration statement to certify registration. . 6 Announcement Within 7 days from certification of registration the issuer must make a public announcement in 3 consecutive newspaper issues. The announcement must stipulate the time in which investors have to register to purchase the securities. The time limit can be set by the issuer but must be a minimum of 20 days. Registration to purchase and payment of monies When an investor registers to purchase the securities it must pay the purchase price into an escrow bank account and this money will remain in escrow until completion of the PO.Allocation and delivery The issuer must allocate the securities within 90 days from the SSC’s certificate of acceptance, and physically deliver the securities to investors within 30 days from the date the offer ends. 2. 7 2. 8 3. List ing Listing is the process of taking a privately-owned organisation including an equitized or equitizing State owned enterprise (SOE) and making the transition to a publicly-owned entity whose shares can be traded on the HCMCSTC or HASTC. 3. Conditions, application and procedures for listing The regulations on the conditions, application files and procedures for listing a company are not contained in Law 70, they are contained in Decree 14. The conditions for listing on the stock exchange (of which there are currently none in Vietnam) are different from the conditions to list on a securities trading centre. However, in anticipation of the HCMCSTC converting to a stock exchange, new registrations for listing on the HCMCSTC must satisfy the conditions applicable for stock exchange listings, while existing listed companies on the HCMCSTC have two years to satisfy these conditions.Companies failing to meet these requirements will have their listing moved to the HASTC. Conditions, applic ation and procedures for listing on the Stock Exchange/HCMCSTC (a) Shares. The listing company must be a shareholding company with paid-up capital of at least VND80 billion at the time of registration for listing, must have made a profit in the two years prior to year of listing and must not have accumulated losses as at the year of registration for listing.There must not be overdue debts payable (unless a lawful reserve has been made for them) and there must be public disclosure of all debts owed to the company by officers2 and major shareholders. At least 100 shareholders must own 20% of the voting shares of the listing company, and there must be an undertaking from shareholders who are also officers of the company to hold 100% of their shares for 6 months from the date of listing and 50% of their shares for the following 6 months. Bonds.The listing company or SOE must have paid-up capital of at least VND80 billion at the time of registration for listing, must have made a profit i n the two years prior to year of listing and must not have overdue debts of more than 1 year. There must be at least 50 bondholders in any one bond issue. 3. 2 (b) 2 Officers are the members of the board of management, members of the board of controllers, director, general director, deputy director, deputy general director and chief accountant.  © Allens Arthur Robinson – Vietnam Laws (c) Fund Certificates. Issued fund certificates must have total value of at least VND50 billion. There must be an undertaking from the initial shareholdings and members of the committee of representatives of the fund to hold 100% of their shares for 6 months from the date of listing and 50% of their shares for the following 6 months. There must be at least 100 owners of fund certificates. 3. 3 Conditions, application and procedures for listing on the HASTC (a) Shares.The listing company must be a shareholding company with paid-up capital of at least VND10 billion at the time of registration fo r listing, must have made a profit in year prior to year of listing and must not have overdue debts of more than 1 year (with no current debts or financial obligations to the State). There must be at least 100 shareholders with voting shares, and there must be an undertaking from shareholders who are also officers of the company to hold 100% of their shares for 6 months from the date of listing and 50% of their shares for the following 6 months.The conditions relating to profitable business operations and overdue debts do not apply to newly established enterprises in infrastructure and high-tech sectors or equitizing SOEs. (b) Bonds. The listing company or SOE must have paid-up capital of at least VND10 billion at the time of registration for listing, and all bonds in the issue must have the same maturity date. Other types of securities. The task of stipulating conditions for listing other types of securities has been delegated to the MOF. (c) 3. 4 Registration The listing enterpris e must register with the relevant exchange or trading centre.To register the listing enterprise must submit a registration slip and attach those documents that are required by Law 70 (and which will be given more detail in specific regulations of the exchange/trading centre). The documents required include the prospectus, relevant corporate resolutions, register of shareholders/bondholders and required undertakings. The exchange/trading centre has 30 days from receipt of the registration slip to approve or refuse the application. 3. 5 Trading Current guidelines on securities, membership of the HCMCSTC/HASTCand trading in securities are contained in Circular 583 implementing Decree 1444.In time, Circular 58 should also be repealed by a new circular implementing Law 70 and Decree 14. In the interim the HCMCSTC and the HASTC continue to apply the day to day trading rules contained in the Circular 58. In addition, under Law 70, the HCMCSTC and the HASTC each are given the responsibility to issue regulations on the trading of listed securities within their respective centres. 3. 6 Other trading Securities listed on a Stock Exchange cannot be traded outside the Stock Exchange, unless otherwise stipulated in the trading rules of the Stock Exchange.In comparison, securities listed on a securities trading centre (STC) can be traded at a securities company which is a trading member of the STC. 3. 7 Taxation holidays – almost over Previously, to encourage investment in Vietnam’s securities market, various incentives were offered, 3 4 Circular 58-2004-TT-BTC of the Ministry of Finance dated 17 June 2004. Both Circular 58 and Decree 144 were issued before Law 70 and Decree 14, and must be read down to the extent of the inconsistency. 4  © Allens Arthur Robinson – Vietnam Laws ncluding preferential corporate income tax rates to companies upon listing. However, this preferential tax treatment ceased on 1 January 2007. Dividends from shares have been fr ee of personal income tax since 1994. However this very long â€Å"temporary exemption† is expected to come to an end under the proposed Law on Personal Income Tax, which was considered by the National Assembly in October-November 2006 and is expected to be passed in 2007. If passed in its current draft form, dividends from shares will be subject to personal income tax at a proposed rate of 5% from 1 January 2009. . Public companies A public company is a newly introduced concept in Vietnam. A public company is a shareholding company with any of the following characteristics: †¢ †¢ †¢ Shares have been issued via a PO. Shares are listed on the HCMCSTC or the HASTC. Shares are owned by 100 or more investors, excluding professional securities investors, and have a paid-up charter capital of VND10 billion or more. Importantly, a company does not have to be listed to be deemed a public company. New rules introduced for public companies include: 4. Filing A public com pany must lodge the public company file with the SSC within 90 days of becoming a public company. The public company files comprises the company’s charter and business registration certificate, the most recent financial statement and summarized information on its business operations scale, management organization and shareholding structure. Major shareholders A shareholder of a public company is deemed to be a major shareholder when it holds directly or indirectly (undefined) 5% or more of the voting shares the company.Upon becoming a major shareholder, the shareholder must report to the SSC and the HCMCSTC or HASTC (depending on where the shares of the public company are listed/offered). The information that must be reported is not extensive: only details of the investor (name, address) and details of the shares (number, percentage). However, important changes to this information, including a change of the number of shares in excess of 1%, must also be reported. Takeovers An offer to purchaser 25% or more of the voting shares in a public company must be made by a â€Å"public offer to acquire†.The public offer to acquire must be registered with and approved by the SSC (the law does not detail any criteria or basis for the approval) and must be announced in the mass media. Of note, if after implementation of the public offer to acquire, the acquirer holds 80% or more in the public company, the acquirer must, if the remaining shareholders so request, acquire the remaining shares at the announced price of the offer to acquire. 4. 4 Disclosure requirements A public company must publicly disclose certain information and report it to the SSC.Annually, a public company must disclose its audited financial statements. In addition, it must disclose information within a short period (24 hours, or 72 hours) upon the happening of a prescribed event, for example if an account of the public company is frozen (within 24 hours) or if a decision is made to borrow bonds with a value of 30% or more of the company’s equity (within 72 hours). 4. 2 4. 3 5  © Allens Arthur Robinson – Vietnam Laws 5. 5. 1 Foreign investors – how to purchase sharesUnlisted shares To contribute capital or purchase shares in Vietnamese enterprises, foreign investors must open a Vietnamese dong capital contribution and share purchase account (Account) at a commercial bank operating in Vietnam. All transfers of funds for the purpose of contributing capital, purchasing and selling shares, transferring capital contribution, receiving and using dividends or profits distribution, or purchasing foreign currency from authorised banks for remittance abroad and other transactions relating to any activity of capital contribution or purchase of shares inVietnamese enterprises by foreign investors must be performed through this Account. Further, this Account may only be used for capital contributions and share purchase activities. Within 2 working days from the date of opening the Account at a commercial bank, the foreign investor must register the Account with the State Bank (Department of Foreign Exchange Control). Under law, the State Bank must certify registration of the account within 5 working days, or otherwise provide written notice of its reasons for refusing to provide certification.A foreign investor is only allowed to perform receipt or payment transactions through the Account after obtaining a document on certification of account registration from the State Bank. Therefore it is important for potential investors to organize this account well in advance of the relevant share purchase date. Other than the controls over the Account, trading in unlisted shares is largely unregulated. 5. 2 Listed shares The foreign investor must apply for a securities trading code from the HCMCSTC/HASTC.The application consists of an application form and supporting documents. Unfortunately, the supporting documents that originate outside Vietn am (for example the constitution and establishment documents of the foreign investor) are subject to the tedious requirements of notarization and certification. Investors must then open a VND securities trading account with a registered broker in accordance with Decision 15505 to service activities of the purchase and sale of securities.The following accounts must be opened by the broker at an authorized bank in Vietnam: (a) a specialized, on-call foreign currency deposit account, into which foreign currency of the foreign investor is deposited (i) for the purpose of conversion into VND for purchase of securities or (ii) after conversion from VND for the purpose of remittance overseas or other authorized foreign currency remittances in Vietnam; and (b) a specialized, on-call VND deposit account, into which all VND amounts (after conversion from foreign currency) and all VND income from securities nvestment is transferred and from which all VND remittances for purchase of securities or for conversion into foreign currency is made. Listed share certificates must be centrally deposited at the Vietnam Securities Depository (VSD). This happens in two steps: first, the owner deposits the certificates with a depository member (for example, the broker or depository bank) and second, the depository member in turn deposits the certificates at the VSD. Cash settlement is made via the settlement bank, which is the BIDV. 6. 6. 1Foreign investors – restrictions Prohibited and conditional sectors Four prohibited sectors are listed in the 2005 Law on Investment. These sectors apply equally to foreign and local investors. Nine conditional sectors are listed in the 2005 Law on Investment. These sectors also apply equally to foreign and local investors. In addition foreign investment is conditional in 13 sectors specified in Decree 108 and ‘other investment sectors in international treaties of which Vietnam is a member and which restrict the opening of the 5Decision 1550-2004-QD-NHNN of the State Bank of Vietnam dated 6 December 2004. 6  © Allens Arthur Robinson – Vietnam Laws market to foreign investors’. It is not yet clear what the conditions are, and whether they may include restrictions on indirect investment. 6. 2 Other restrictions The current (to the extent that they have not been specifically repealed) laws of Vietnam consist of the following restrictions: (a) (b) (c) There is a cap on total foreign shareholdings in or capital contributions to any one unlisted domestic business of 30% of the charter capital (30% rule).The range of unlisted companies in which foreign investors may purchase shares is also restricted by sector (only 35 business lines are permitted). Foreign investors may hold a maximum of 49% of the total shares of any one company listed at a stock exchange or registered for trading at a securities trading centre (49% rule). Although not yet specifically repealed these restrictions may be affected by the 2005 Law on Investment which stipulates â€Å"investors must be permitted to invest in all sectors and in all industries and trades which are not prohibited by law†.Therefore under this general rule foreign investors should be (in theory) permitted to invest in all sectors and all industries provided that they are not in a prohibited or conditional sector (as above). It is not clear if the authorities will interpret the 30% rule and the 49% rule as being repealed by or alternatively, qualifying the Law on Investment. We consider that the better view is that these rules should be repealed by the Law on Investment. This view is consistent with the WTO principle of national treatment.However, we understand that in a meeting held on 18 January 2007 between the Government Office, the Ministry of Finance and the SSC the Government Office expressed the Prime Minister’s opinion that the 49% rule would continue to be applied ‘temporarily’. In any event, specific re strictions will continue to apply to conditional sectors (for example, banks) in accordance with commitments made under international agreements. 7. 7. 1 Securities Industry Players General Securities companies and fund management companies are the key players in the Vietnamese securities industry.This section provides an overview of the scope of activities under Law 70 of these companies Securities company As at 29 December 2006, the SSC has issued 55 operational licenses to securities companies under the previous securities law regime. After the effective date of Law 70, being 1 January 2007, there have not been any operational licenses issued and the most likely reason is that the implementing regulations for Law 70 have not been promulgated to guide the SSC in its work.Under Law 70, securities companies are permitted to engage in any or all of the following activities (the minimum legal capital is listed along side each of the activity): (a) (b) securities brokerage (VND 25 bill ion); securities self-trading (if the securities company engages in this activity it can only conduct the other activity of underwriting) (VND 100 billion); underwriting issues of securities (VND 165 billion); securities investment consultancy (VND 10 billion); financial consultancy services; and other financial services. . 2 (c) (d) (e) (f) The permitted areas of activity are limited compared to the business areas permitted under the old securities law regime. The prescribed minimum legal capital has also increased. This explains why there was a rush towards the end of 2006 to obtain a securities company license from the SSC. 7  © Allens Arthur Robinson – Vietnam Laws 7. 3 Fund Management Company Prior to the effective date of Law 70, eighteen operational licenses were issued by the SSC to fund management companies.Again there was a rush to obtain a license towards the end of 2006 because the scope of business activities has been restricted under Law 70. A fund management company can only engage in fund management and portfolio management and the minimum legal capital for establishment is VND 25 billion. 8. Funds This section provides a brief overview of investment funds as this is the subject of a detailed paper which will be released once the MOF has settled the regulation on investments funds and other related matters. Investment funds have been driving the bullish Vietnamese stock market.There have been a growing number of offshore and onshore investment funds established in recent years. At least 25 investment funds are operating in the market with an objective of investing in Vietnam. The Prime Minister has reportedly indicated that regulations on capital controls would be tightened to prevent capital flight which probably means that the MOF’s soon to be released regulations would introduce further regulatory controls on the operation of Funds. In brief, Law 70 sets the framework for the establishment of onshore public and membersâ€℠¢ funds.Public funds and members’ funds must have at least VND 50 billion in start up capital and managed by a fund management company. A public fund may be an open or closed ended fund with at least 100 investors. A members’ fund must have up to 30 investors. Assets of a fund are to be held by a custodian bank. The MOF’s future regulation is expected to contain other operational requirements. This article was written by Julia Howes, a lawyer with Allens Arthur Robinson who has been practicing in Vietnam for 3 years.Allens Arthur Robinson is one of the largest international law firms in Asia, with more than 900 lawyers, including 179 partners. Allens Arthur Robinson has been providing legal services for clients in Australia for more than 180 years and in Asia for the past 30 years. Our Vietnam practice is managed by partners Bill Magennis in Hanoi and Nigel Russell in Ho Chi Minh City, both of whom joined the Allens Arthur Robinson partnership from 1 January 200 7. The Vietnam practice was established in 1993 and is one of the largest and most successful among foreign law firms in the country.For further information, please contact: Bill Magennis Partner, Hanoi Ph: +84 4 936 0990 Bill. [email  protected] com. au Nigel Russell Partner, Ho Chi Minh City Ph: +84 8 822 1717 Nigel. [email  protected] com. au Steve Pemberton Partner, Singapore Ph: +65 6535 6622 Steve. [email  protected] com. au Jim Dunstan Executive Partner – Banking & Finance and Asia offices, Sydney Ph: +61 2 9230 4571 Jim. [email  protected] com. au Simon Lynch Partner, Melbourne Ph: +61 3 9613 8922 Simon. [email  protected] com. au Jeremy Low Partner, Sydney Ph: +61 2 9230 4041 Jeremy. [email  protected] com. au This publication is copyright.Except as permitted under relevant laws, no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner.  © Allens Arthur Robinson 8  © Allens Arthur Robinson – Vietnam Laws The material contained in Vietnam Client Updates is intended to inform you of recent legal developments in Vietnam. It is not intended, and should not be relied upon, as legal advice. Should you wish further information in relation to any legal instrument or matter mentioned in this issue, please do not hesitate to contact one of our offices.Ho Chi Minh City Suite 605 Saigon Tower 29 Le Duan Boulevard District 1 Ho Chi Minh City,Vietnam Tel +84 8 822 1717 Fax +84 8 822 1818 nigel. [email  protected] com. au Hanoi Suite 401 Hanoi Tower 49 Hai Ba Trung Hanoi, Vietnam Tel +84 4 936 0990 Fax +84 4 936 0984 bill. [email  protected] com. au Allens Arthur Robinson – a leading international law firm with lawyers in: Bangkok | Beijing | Brisbane | Hanoi | Ho Chi Minh City | Hong Kong | Jakarta | Melbourne | Perth | Phnom Penh | Port Moresby | Shanghai | Singapore | Sydney 9  © Allens Arthur Robinson – Vietnam Laws

A Medication Daivonex Essay Example | Topics and Well Written Essays - 1000 words

A Medication Daivonex - Essay Example Daivonex is not recommended for children under 6 years of age. Children 6-12 years of age cannot be given more than 50g a week of the medication, and for children over 12 years of age, no more than 75g a week of the medication may be given to them. This medicine should also not be used in patients who have the allergy to calcipotriol or to any other components of the medication. Patients with disorders of calcium metabolism should not use this product. Those with severe widespread psoriasis cannot be given this medication. Patients with high blood calcium levels or who are taking calcium and/or Vitamin D supplements cannot take this medication. For breastfeeding women, this medication should not be applied to their breasts. Proper consultation with the doctor should be done before this medication is to be prescribed and used on children (Medsafe Consumer Information, 2004). In adults, not more than 100 grams of cream or ointment should be used in a week and not more than 60ml of scalp solution can be used in a week. In cases where there is a need to use the combination of the preparations for psoriasis, not more than 60ml of the solution plus one 30 gram of the ointment or cream tubes may be used in a week or the limit is 30 ml of the solution and two 30g tubes of Daivonex. The medicine must be applied on the psoriasis plaques forming the visible coating over the affected area. Accidental application of the medicine on the normal skin must be washed with water because it can cause irritation in the unaffected area. It must not be applied on skin folds, on the face, and on the genitalia (Medsafe Consumer Information, 2004). The recommended dosages are set in place because more than 100g weekly of Daivonex can cause elevated serum calcium. The use of scalp and cream solutions in children has yet to be fully established; hence ointment is the preferred formulation of the medication in children.  

Spanish and American War Research Paper Example | Topics and Well Written Essays - 1500 words

Spanish and American War - Research Paper Example   Cuba was at war with Spain for ten years that lasted till 1878. In that year, Spain assured the Cubans of colonial reforms, many of which never happened. Then in 1895, war broke out again and the three years of the war completely devastated the island. The idea of the Cuban insurgents was to make Cuba so unproductive that the Spanish would leave the island on their own accord. On the other side, Spain’s strategy was to get a quick victory by defeating the Cuban rebels, who were poorly armed and fought in groups. When this strategy failed, Spain separated the peasant population from the rebels. The Spanish army destroyed cattle and crops in the villages in order to sever the food supply of the Cuban rebels. Thus, during the war both Cubans and Spanish were responsible for the devastation of the island (Offner 50-51). After the Spanish-Cuban war, trade relations between US and Cuba deteriorated. The import-export firms and shipping lines began to pressure the government to n egotiate with the Spanish for peace in Cuba. However, there was another group who invested heavily Cuban industries and sugarcane mills; they wanted an alliance with the Spanish to end the war. When McKinley became president in 1897, the US was recovering from economic depressions, and the businessmen felt that economic stability would be hampered by wars. Till the last moment of McKinley’s declaration of war, the government was cautioned against entering into a costly war. Then there was the general public of America who was instilled with an adverse opinion of Spain. They considered the Spanish as tyrannical rulers and hence supported the Cuban’s rebellion against the Spanish. The administration of Grover Cleveland believed that the Cuban insurgents would not stop their violence. He initially was in diplomatic favor of the Cubans but changed his attitude once the latter started destroying American property. He turned in favor of the war ending and Spanish control of the island. On the other hand, the Republican Party favored Cuban independence, and so when McKinley became the president, he was expected to work towards liberating Cuba from Spain. McKinley, however, was not in favor of taking any decision that would endanger the country’s economy. During that time, he became aware of Cuba’s depressing situation. The island’s agricultural economy was devastated. The Cuban civilians, including women and children, were in near death conditions. Cuba was in dilemma about evicting Spanish rule since the Cubans were not confident about self-governance. During this moment, McKinley decided that non-interference would not solve the problem (Offner 52-54). McKinley was in favor of sending shipments of arms to the Cuban insurgents at the risk of deteriorating relations with Spain. To avoid a war with Spain, McKinley then took a diplomatic step by warning the Spanish to end their tyrannical rule over Cuba. He gave them three months†™ time, although he did not expect the Spanish to agree. Eventually, McKinley was almost prepared for a potential war. During this time, Praxedes Sagasta became the prime minister of Spain.  

Endometriosis Case Study Example | Topics and Well Written Essays - 500 words

Endometriosis - Case Study Example However, the growth is less likely to be found in other areas such as the lungs. The misplaced tissues develop into growths that respond to the menstrual periods in a similar way as the uterine lining. Consequently, this allows blood to flow from these endometrial growths but cannot leave the body. Such an aspect subjects the person to internal bleeding, tissue breakdown and inflammations that can even cause infertility and bowel problems (Watson, 2007). Endometriosis differs from endometritis in various ways ranging from its causal effect, and the pathophysiology and its presentation on the affected organs. For instance, endometritis is an infection that occurs in the endometrium lining that may occur during a prolonged labor pains, uterine instrumentation or even a C-Section. It can be also be caused by sexually transmitted diseases such as gonorrhoea, chlamydia or a mix of the vaginal bacteria. These aspects make it differ from endometriosis that occurs as a response to hormones for tissue growth on the peritoneal cavity (Burrage and BSMO, 2013). The causal factor of endometriosis has remained unknown, however, for the endometritis it is caused by infections on the uterus. An individual with endometriosis may feel pain in their intestines, pelvic or even at their lower back. Additionally, they may experience pain during and after sexual play at the inner vaginal walls that may appear swollen. On the other hand, they may experience heavy menstrual cycles, or bleeding or spot between periods. This differs from endometritis in that the individual experiences abnormal vaginal discharges, with discomfort, swelling of their abdomen and pain in the pelvic region (Burrage and BSMO, 2013). While there is cure for endometritis that is subjected to antibiotics, endometriosis has no cure but there different treatments. The treatment for this female victim depends on the age and the intense of the pain associated with the endometriosis. If the patient

An evaluation of the effectiveness of security program for sensitive Dissertation

An evaluation of the effectiveness of security program for sensitive government buildings - Dissertation Example Some interesting cases studies as National Assembly for Wales, Cardiff , Corporation of London and Cabot Circus Shopping Center. Those examples proved the efficiency of the RIBA guidance in counter-terrorism measures. As recommended by RIBA architects and engineers should develop efficient security features with minimal cost extra. Therefore is important to valuate the security program costs. Kovacich and Halibozek in their book: â€Å" Security Management: How to manage the cost of an assets protection program† developed a powerful tool for security professionals setting out to design cost-effective programs. Finally and based on the previous research were suggested recommendations to improve the security of sensitive government buildings in OMAN. Risk Factors Abkowitz defines risk factors as the elements which are at the source of the disasters. These elements are classified in 10 basic risk factors: . Design and construction flaws: these flaws are related to the design spec ification in building or major facilities construction. . Deferred maintenance: related to the use of the operation/building. Flaws during this stage should be prevented. Unfortunately it doesn’t happen so often. ... . Schedule constraints: the control of the project schedule is also very important. Sometimes in order to accomplish a deadline some tasks are eliminated or some details are devalued. It can lead to error and sometimes to destructive outcome. . Inadequate training: In some kind of tasks the individual training is critical for a correct performance. Some organizations don’t invest as they should in the training of the employees. Therefore some flaws can occur. . Not following the procedures: this risk factor relates to the failing to follow procedure. In some organization the individual task is very well defined and documented by a procedure. When the procedure is not accomplished it can cause operational flaws. . Communication failure: this flaw is related to the communication between members of the same organization, between different organizations or between the organization and the public. . Arrogance: can lead into human flaw by underestimating the risk and can drive to in secure situations. Arrogance can appear also at the institutional level. At this level the arrogance is reflected in the culture of the organization. . Stifling political agendas: The governmental policies can lead into some risk. The political agendas are associated with the Terrorism. But the risk is not limited to the terrorist attacks. (Abkowitz, 2008). Contemporary Threats and Risk Management Nowadays the concept of security has been developed to a complex arena, including issues of health and safety, and components of risk evaluation and management, paying attention to a broader array of risks (forgeries, terrorism, emergency situations). Button in his work identifies the the pluralisation of security as one of the main trends security management ( Button, 2008).

Family of murdered schoolgirl meets UK gov't Article

Family of murdered schoolgirl meets UK gov't - Article Example The report revealed that Dowler family members of a murdered 13-year old girl named Milly Dowler in 2002 met with Britain’s Deputy Prime Minister, Nick Clegg, and was demanding the resignation of News International's chief executive, Rebekah Brooks, who was spearheading the report of the incident during that time. The gist of the report indicates that â€Å"the scandal exploded last week when it was reported that the newspaper had hacked the phone of the 13-year-old murder victim in 2002 -- even as her family were frantically searching for her. The tabloid's operatives reportedly deleted some messages from the phone's voicemail, giving the girl's parents false hope that she was still alive†. The article likewise provided information that Brooks had no knowledge of the alleged phone hacking. The scandal paved the way for the closure of the New of the World weekly paper after a remarkable 168 years’ span. Further, the Associated Press was revealed to advise that th e $19 billion negotiations currently being forged to take full control of the British Sky Broadcasting, a satellite broadcaster, has been jeopardized by the incident. As acknowledged, â€Å"Culture Secretary Jeremy Hunt, who is responsible for dealing with the proposed bid, said he would seek advice as to whether the scandal raises questions over whether News Corp. is "fit and proper" to hold a broadcasting license†. ... news sites have reported the scandal and the public is entitled to be given full transparency to issues that touch on ethical dilemmas and corporate social responsibility. The Associated Press was cited to aver that â€Å"the 80-year-old Murdoch, the News Corp. CEO, has publicly backed News International's chief executive, Rebekah Brooks, who led News of the World when its reporters committed some of the most egregious ethical lapses† (Associated Press, 2011, par. 16). The news organizations are expected to adhere to the highest standards of adherence to ethical codes and moral discipline due to the nature of the service they provide to the public. Transparency and truth are the ultimate considerations when reporting incidents, despite the controversial natures of the events. Not only do the public expect reports to be delivered in the most objective manner, free of biases; but more importantly, all personnel connected with news organizations must be committed to ethical codes of conduct and responsibility to society. There is some disagreement in terms of Murdoch’s public view of support for Brooks who is still being questioned and investigated in terms of full knowledge on the phone hacking incident. As the Chairman and CEO of News Corporation, Murdoch should have exercised objectivity and maintained a neutral stance while the case is being investigation. By initially publicly supporting Brooks, despite their years of business relationship as colleagues, any compromising outcome could add injury to the situation. Further, I agree to the need to closely evaluate the move of according full control for Murdoch to own and operate the BSB. Crucial stakeholders such as investors and the public are more entitled to a corporate governance health-check of the board in the

Knowledge Intensive Firms and Knowledge Workers Research Paper

Knowledge Intensive Firms and Knowledge Workers - Research Paper Example Southern power continues to find opportunities to implement its strategy of creating value through its numerous transactions such as asset acquisition and selling, establishment of novel power plants, entrance into Power Plants Associations mostly with other investor-owned utilities, municipalities, independent power producers, and electric cooperatives (Google Finance, 2015, p. 1). In Southern Co’s operations, FERC plays the crucial role of providing the operation regulations instead of following traditionally defined state regulations like any other traditional operating company. Though operating as one large company, the Southern Company operates under several leveraged leases such as Southern LINC Wireless that offers digital wireless communications for Southern Co.’s uses. For purposes of this paper, the evaluation Southern Company is limited to company’s proactive approach to preparing for disaster recovery. For a long time, Hurricane Katrina has been known for its numerous complex challenges such as 100% loss of power for customers, 65% of power delivery system damages, 97% loss of power generation capacity, approximately 9,000 damaged or damaged power poles, transformer damages, 100% dilapidated corporate offices, and more than half of the residents suffering noteworthy damages for their homes (Ward, 2006, pp. 7-13). Other challenges experienced during the Katrina hurricane are communication loss and devastation infrastructure. Through its investment and prioritization of knowledge base management, Southern Co. effectively planned on eliminating the challenges associated with the Katrina Hurricane through approaches such as a reduction in the time duration required to restore power to its customers, provision of family services, assisting emp loyees with personal losses, and daily provision of thousands of fuel gallons daily.

Ethical Systems Essay Example for Free

Ethical Systems Essay Ethical systems form the basis of moral beliefs; they are the moral philosophies that order moral principles systematically. (Thomson and WardSworth, 2005) Ethical systems can be broadly classified into deontological and teleological ethical systems. A deontological system concerns itself with the nature of an act that is under judgment, if an act is good but results in bad consequences than if it still considered a good act. Teleological systems judge consequences of an act, if an act is bad but results in beneficial consequences then it is considered moral. Ethical formulism judges the intent of the author thus, it is a deontological system. If a person performs an action from goodwill and it results in bad consequences, it is a moral action. This system also uses predetermined principles to judge goodness: that people should not be used as a means to an end, that behavior is moral when it is freely chosen and autonomous (someone worked to do a good thing is not really moral. ) and that actions should be based on behavior being universal. Utilitarianism is a teleological system whose goal is judged by consequences of an action. In this case when an action contributes much to the good of majority it is moral, regardless of the individual or minority who may have suffered because of the action. Following this system, Winston Churchill by allowing Coventry to be bombed in World War II so the Germans would not know the Allies had cracked their military code did a moral thing even though hundreds of English people were killed, when they might have been saved had they been warned. A smaller group was sacrificed for the sake of the greater good in this case, ending the war earlier and saving thousands more. Religion is a frequently used ethic system based on a willful a rational God. For believers there is no reason to question the authority of God’s will. The controversial issue is the interpretation of God’s will. According to Barry when is a dilemma; God’s will can be found in 3 ways; if one feels uncomfortable about a certain action, it is probably wrong. Religious authorities can provide guidance on right and wrong and thirdly the scripture provides answers to moral dilemmas. (Thomson and Wadsworth, 2005) The natural law ethical system proposes that ‘what is good is natural and what is natural is good’. These are innate instincts for example self-preservation is inborn, natural and basic and all actions related to it such as self-defense, prohibition of murder are moral acts. The basic problem with this system is where it is difficult to identify what is consistent and congruent with human nature. Focus on basic inclinations make this a teleological system because an action like killing may be wrong but if it is done in self-defense then it is considered a moral act since it is line with the self-preservation instinct. The ethics of virtue is a system that focuses on defining a good person as opposed to a ‘good action’. Here reason cannot be used to find out what is good. This system is teleological as it conserved with achieving a good end and more specifically happiness. One does good because of one’s character, if one has a bad character they will usually choose the immoral path. For example, a person who is broke and sees a stranger drop money without realizing calls the strangers back and gives him his money, he has performed a moral act because he has a habit of integrity. Someone else would steal because it is in his or her character to do so. The ethics of care system emphasizes human relationships and needs. It has been referred to as a feminine morality as it is founded on the natural human response to care for unborn child, ill and hurt. Some Eastern religious like, reject a rule-based form of ethics preferring instead to lead an individual in caring for needs. Braswell et al, 2002). The ethic behind rehabilitation is another illustration of ethics of care system. (Thomson and Wardsworth, 2005) This system is in line with teleological system of ethics because it does not simply classify action as wrong or right, rather it is concerned with the needs of others and effects of the actions on them, which learns more towards judging consequences corporations rather than the actions themselves. Egoism proposes that what is moral is what is good for one’s survival and personal happiness. This premise in its extreme directs that people should do whatever is beneficial to them. This disregards other people, using them as means to ensure happiness and in effect it means they have no meaning or rights (Thomson and Wadsworth, 2005) Egoism, sees an individual who performs a completely selfish act as immoral even impossible as it is not in line with true nature of human beings who like all other species have instincts for survival, self preservation and self in trust which is merely part of this natural instinct. This position is neither logical nor flexible single it would be in support of exploitation of the weak by the strong, which by all other systems is wrong. The system that closely matches my own beliefs is the religious ethical system. This is because the basis for ethics provided is rational since it can be identified wit a perfect God-figure. In addition, the similarity of the principles of these ethics in most of the religious are an indicator that they are acceptable to a wide majority hence they cover the needs of most of mankind adequately. In addition, scripture provides answers to ethical problems in all circumstances, something that most other ethical systems do not. The issue of say the birth contradicting only comes up when there is failure to understand the context of scripture. Belief in a God means that we do not have the responsibility of determining what is right, or wrong, since an unquestionable authority has determined them already.

The Economic Crisis Essay Example for Free

The Economic Crisis Essay Right now in America, we are in an economic crisis that is slowly tearing the seams that holds the countrys banking system together. This recession affects everyone from single families to giant corporations because of the nature of the crisis. It began slowly with it quickly picking up the pace, and now with all the new policies in effect the end is now in sight. It seems that everyone in America played their part in a tedious game that only took a matter of time to come crashing down around all of us. Because of the unstable economy, companies were forced to downsize their employee work force or close their doors. The loss of a job threatened many working class and middle class families with the threat of bankruptcy, because of the increasing accumulation of consumer debt. Jobs were hard to find; in addition, many people without a choice, were forced to sell their homes; many of them moved to states where the cost of living was lower. Most of them took low paying jobs to support their family. The unfortunate ones took from seven months to a year before they could find a decent job. Others who were fortunate could sit and wait or started their own business, and the rest either took out a home equity loan or refinance to lower their mortgage payment. In this paper I will discuss the causes of the economic crisis in depth, the key players in the implementing new policies to pull the United States from the recession, and the different policies that are now affecting not just the U.S. economy but the world economy as well. This crisis was years in the making, but because of the dot com assets many people were not noticing the downward spiral that had started before September 2001. Some of the key factors that caused the economic crisis are: a glut of savings from Asia, bad loans, boom and bust of the housing market, lack of capital reserves, and the reselling of bad loans. These factors not only affect the US, but have been felt by countries all over the world because of bad lending practices by financial institutions. As each factor is explained the new policies address each one of them in a different manner. As the US economy was booming in the late 1990s the countries in Asia decided to plow the US with a glut of their savings (Krugman, 2009). This helped to create the dot com bubble and keep the interest rates at low percentage. This encouraged high levels of consumer spending in US. It also encouraged a large current account deficit in the US. It also encouraged an asset bubble, because it was cheap to borrow and this encouraged unsustainable lending. After the events of September 11, 2001, Federal Reserve was able to use this money to keep interest rates below 5%. Prior to September 11, 2001 the dot com bubble burst then the events at the World Trade Center lead to the US heading to a recession. But, to keep the US out of a recession the Federal Reserve responded with by cutting interest rates to 1% this was the lowest level of interest rates for a long time (Samuelson, 2010). Low interest rates encouraged people to get loans from financial intuitions. Because people were more inclined to buy a house with their loans, this led to the boom and the bust of the housing market. As house prices began to rise, mortgage companies relaxed their lending criteria and tried to capitalize on the booming property market. Mortgage companies actively sold mortgages to people with bad credit, low incomes often first generation immigrants. This is called subprime mortgage. By definition subprime mortgage is giving loans to borrowers who typically are not qualified because of their higher risks: income level, work status, and credit history. This also puts the borrowers into a higher rate category than the prime rate (BAJAJ, 2008). Prior to 2006, the housing market seemed to be going up for long time. Noticing this trend, borrowers thought that everything was fine and refinancing will solve any future problems. In 2006-2007, the housing market moderately cooled down. Many unable to refinance because of higher interest rate of Adjustable Rate Mortgages (ARM), found themselves in a deep bind. Massive defaults and foreclosures soon followed. In March 2007, the U.S value subprime mortgage is about $1.3 trillion; $7.5 million of that is bad. The subprime mortgage is what eventually caused the housing market to crash. The crash of the housing market was due to borrowers unable to pay mortgages, millions of borrowers houses face repossession. Another problem includes many homeowners were not willing to sell at a lower market prices (BAJAJ, 2008). High-risk borrowers ability to obtained easy credit and speculation of the then rising housing market, fueled the housing boom. Financial institutions are mostly to blame for the housing market crash. Eager to grow their industry in the name of profits, they were willing to provide high-risk loan options and incentives. Another part of the cause of the housing crisis is consumerism. Elevated by yours truly, President George W. Bush who ask Americans to spend more to get out of economic slowdown. Another main cause of the economic crisis is lack of capital reserves. The banks thought that they could use credit creation to process loans to borrowers. Credit creation is when banks employ what is termed a fractional reserve policy, meaning they can literally take in $1 on deposit and lend out $10 (L Jacobo Rodriguez, 2003). Basically the bank creates money supposedly up to 10 times what they have on deposit and capital. In the boom years, banks pursued a reckless dash for growth. This meant lending a high % of deposits. Therefore, when they suffered bad losses, they had no reserves to call upon. This led to a dramatic drop in bank loans which had ripple effects throughout the economy. Its fraudulent because banks are lending out money held on deposit which is supposed to be on demand and are effectively making money on money they do not have, and have no right to use. Due to this fraudulent behavior most banks have failed because depositors suddenly show up to withdraw all their money which the bank does not have. The final thing that caused the economic crisis is reselling of bad loans. Mortgage companies and banks were left with a series of bad debts they had to write off. Most of the bad loans originated in the US subprime mortgage market. Then the US mortgage companies and banks thought it was a good idea to sell these bad loans to different banks around the world. However, these were bundled and repackaged into collaterized debt obligations. They were given triple a ratings and bought by banks around the world. Therefore, when mortgage defaults occurred in the US, the losses were felt by the whole global banking system because most banks had some exposure to these bad loans. During the aftermath of the economic crisis there were some key players and each had a role to get the economy back on track. The key players that affect the policies that are implemented after the economic crisis are the President, the Congress, the Secretary of the Treasury, and the Chairman of the Federal Reserve. Each of these people or group will affect the policies and how they are enforced to the citizens. As the election day of 2008 was approaching the citizens made some changes that may be for the best or could hinder the overall effect of the plan to get out of this crisis. With the unemployment rate climbing higher, and as the election for some of the key players in Washington on the line, many voters were ready for a change. As voters cast their vote and the votes were counted the new President was announced. The 44th President of the United States was named Barack Obama, with his new position he put a lot of legislations into play within his first couple weeks of taking over the Oval Office. The president is responsible for the concern of such things as unemployment, high prices, taxes, business profits, and the general prosperity of the country. The president does not control the economy, but is expected to help it run smoothly. In regards to the economy the president only has the constitutional authority to select the individuals that will be making the policies that affect the economy directly, has the power to determine the new fiscal year budget and how the money is divided, and has the authority to enforce new laws that Congress has made in regards to the economy. The president also has the authority to make suggestion to the Congress in regards to any new bills or laws that he feel should be passed (Constitutional Powers, 2003). President Obamas central focus is on stimulating economic recovery and helping America emerge a stronger and more prosperous nation. The current economic crisis is the result of many years of irresponsibility, both in government and in the private sector. President Obamas role in repairing the economy is to enforce the new policies that have been made and to make sure that all parties involved are abiding by the new regulations. As the new President took office the Congress was gearing up to make some new policy changes. The Congress only has the responsibility to write new bills and laws that will affect how the economy is ran in the future. The Congress has the constitutional authority to change any legislation that will help put the economy back on track. Currently the economy is top priority for all Congress members and they are making sure all relevant legislation gets passed in a timely manner. Upon the election of President Obama his first act was to appoint a new Secretary of the Treasury. The new Secretary is Tim Geithner (Secretary, n.d.). He is responsible for promoting economic prosperity and ensuring the financial security of the United States. The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions (Roles of the Treasury, n.d.). The Secretary of the Treasury does not really have any constitutional authority as far as making new policies that will affect the economy. Mr. Geithner has the position to oversee the United States Treasury and the money that is allocated to bring the U.S. out of a recession. The current chairman of the Federal Reserve is Ben Bernanke, he is jointly responsible for the conducting the nations monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices (Chairman, n.d.). He also supervises and regulates banking institutions to ensure the safety and soundness of the nations banking and financial system and to protect the credit rights of consumers. Mr. Bernanke also maintains the stability of the financial system and containing systemic risk that may arise in financial markets, and providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nations payments systems (Responsibilities, n.d.). Mr. Bernanke has no constitutional authority, however his opinion on the economy and the value of the U.S. dollar or assets are valued greatly up on Capitol Hill (Hamilton, 2010). Immediately after the new administration took over the White House, there were several acts that were passed by the Congress, and signed by the new President. These legislations will help keep the economy on track and reverse the years of irresponsibility of the federal government and the banks (Economy, n.d.). These acts will also help average citizens keep their homes and their current jobs. Most of these acts will help create millions of jobs and help small business by giving them tax breaks. They will also monitor the Wall Street and banks to make sure they are being held accountable for their actions to the average citizen. As each of the key players had their own opinions about the different policies that make up the way they run the economy, they came together to form amendments to the monetary policy, fiscal policy, and laws governing businesses since the collapse of the economy. The only change that was made to the monetary policy is that they will reinvest principal payments from its securities holdings. The changes to the fiscal policy include tax cuts for some and freezing the pay of government employees. There were many laws that were put into effect to govern businesses and their hiring practices and other items as far as how they were ran. Each of the key actors are responsible for the enforcement of these acts or bills and monitoring of the other key people to make sure that no one taking advantage of the system and the new bills. Each of these acts, I feel are strong and will help to give the economy the boost that is required to help it get stable. I know that a lot of people feel that it is not helping, but I like to remind people it took us more than 10 years to get into the mess that we are in. No one can expect for the current situation to be gone in less than 2 years. I do however; believe that the federal government should not have bailed out the homeowners. These individuals knew that they could not afford the homes before they bought them, and after the economy got bad they expected someone to give them a handout. The only thing that I can see as a weakness for any of these policies is the enforcement of them. Each policy is unique, but each has to be enforced in a certain way. Although I am glad to see the economy doing a bounce back, I am more concerned that the citizens will not give our government enough time to make sure it is stable again. Everyone is so set in blaming the President for the economy, when the only people that really need to be blamed are we. In conclusion, I feel that each key player has their own set goals on where they would like to see the economy, but are willing to do whatever is necessary to stabilize the economy. I also think that each policy has been set up to help boost the economy back to its original place since if the U.S. economy is experiencing difficulties then the world economy will be faced with its own problems. References BAJAJ and LOUISE STORY, V. (2008, February 12). MORTGAGE CRISIS SPREADS BEYOND SUBPRIME LOANS. New York Times, the (NY) (Late Edition Final ed.), 1. Retrieved March 18, 2012, from News Bank on-line database (Access World News) Chairman. (n.d.). Board Members. Retrieved March 18, 2012, from The Federal Reserve website: http://www.federalreserve.gov/?aboutthefed/?bios/?board/?bernanke.htm Constitutional Powers of the President. (2003). Constitutional Powers of the President. Retrieved March 18, 2012, from CQ Encyclopedia of American Government database. Economy. (n.d.). Retrieved March 18, 2012, from The White House website: http://www.whitehouse.gov/?issues/?economy Hamilton, J. (2010, January 1). Bernanke grades the Fed. Newstex Blogs (USA) n.pag. Retrieved March 18, 2012, from News Bank on-line database (Access World News) Krugman, P. (2009, March 3). Revenge of the Glut. Record-Journal (Meriden, CT) 18. Retrieved March 18, 2012, from News Bank on-line database (Access World News) OConnor, Karen and Larry J. Sabato. (Eds.) (2011). American government: Roots and reforms. New York: Pearson Longman. Responsibilities. (n.d.). The Structure of the Federal Reserve System. Retrieved March 18, 2012, from The Federal Reserve website: http://www.federalreserve.gov/?pubs/?frseries/?frseri.htm Rodriguez, L Jacobo. (2003). Banking stability and the Basel capital standards. Cato Journal, 23(1), 115-126. Retrieved March 18, 2012, from ABI/INFORM Global. (Document ID: 410173241). Roles of the Treasury. (n.d.). Retrieved March 18, 2012, from The U.S. Treasury website: http://www.treasury.gov/?about/?role-of-treasury/?Pages/?default.aspx Samuelson, Robert J. (2010, September). March 18, 2012, from ABI/INFORM Global. (Document ID: 2142217461). Secretary. (n.d.). Retrieved March 18, 2012, from The U.S. Treasury website: http://www.treasury.gov/?about/?Pages/?Secretary.aspx