A major shareholder is a shareholder owning 5% or more of the voting shares of an issuer (Clause 18, Article 4 of the Law on Securities 54/2019/QH14). Once that status is reached, every change crossing a 1% threshold triggers a disclosure duty. The 5% and 1% figures are the two most confused thresholds — this article explains each one, the deadlines, and the penalties.
1. Two easily confused thresholds: 5% vs 1%
Article 127 of the Law on Securities sets two independent disclosure duties:
- The 5% threshold — the “first-time” duty: when a shareholder becomes or ceases to be a major shareholder (Article 127.1). This is when the duty is first triggered.
- The 1% threshold — the “ongoing” duty: once a major shareholder, every change crossing a 1% threshold in shareholding must be reported (Article 127.2). Example: moving from 5.2% to 6.1% crosses the 6% line and must be reported; moving from 5.2% to 5.7% crosses no whole threshold and triggers nothing.
2. Cases that look reportable but are not
Article 127.3 excludes holding-ratio changes not caused by the shareholder own transactions: when a public company repurchases its own shares or issues additional shares, and cases involving exchange-traded funds. These changes do not trigger major-shareholder reporting.
3. The 5-working-day checklist
Under Article 31 of Circular 96/2020/TT-BTC:
- Deadline: within 05 working days from becoming/ceasing to be a major shareholder or from a 1% threshold change, counted from the transaction completion date.
- Recipients — all four: the public company, the fund management company (if any), the State Securities Commission, and the Stock Exchange for listed/registered shares. Omitting the Stock Exchange is a common mistake.
- Forms: Appendix VII (becoming/ceasing to be a major shareholder) and Appendix VIII (1% threshold changes) issued with Circular 96/2020/TT-BTC.
- Company re-disclosure: within 03 working days of receiving the report, the public company must publish it on its website.
4. Related persons: aggregated holdings
Major shareholders and related persons holding 5% or more of a public company are all subject to disclosure (Article 118 of the Law on Securities). Holdings are aggregated: an individual plus related persons reaching 5% together share the duty. Foreign investors should note the separate rules for groups of related foreign investors.
5. Penalties
Under Article 33 of Decree 156/2020/ND-CP (as amended by Decree 128/2021/ND-CP), fines for organizations are as follows (half for individuals):
- Late reporting of a 1% threshold change: VND 25–35 million.
- Failure to report a 1% threshold change: VND 50–70 million.
- Late disclosure upon reaching 5% or ceasing to be a major shareholder: VND 50–70 million.
- Failure to disclose in the above cases: VND 100–140 million.
6. Scope and what Law 56/2024 changed
- Scope: major-shareholder reporting applies only to public companies and public securities investment companies — not to every joint stock company.
- Law 56/2024/QH15 (effective 01/01/2025) added public-company conditions (owner equity of VND 30 billion or more) but did not change the 5% threshold or major-shareholder reporting duties.
Frequently asked questions
Selling down from 6.1% to 5.7% — reportable? No — no whole 1% threshold was crossed (still within 5%–6%). But selling below 5% (ceasing to be a major shareholder) must be reported under Article 127.1.
Do public holidays count in the “05 working days”? The law does not detail how holidays are excluded. To be safe, file early rather than counting down to the last day.
What about unlisted public companies? The duty still applies to public companies (including registered-for-trading ones); only the recipients differ — no Stock Exchange filing for unlisted shares.
Conclusion
Remember two thresholds: 5% triggers the first-time duty, 1% keeps it ongoing; and one deadline: 05 working days from transaction completion. Quietly trading through thresholds without disclosure can cost VND 100–140 million. Institutional and individual investors holding significant stakes should build threshold monitoring into their internal compliance process.
Legal basis
- Law on Securities 54/2019/QH14 (effective 01/01/2021) — Clause 18 Article 4; Articles 118, 127
- Law 56/2024/QH15 amending the Law on Securities (effective 01/01/2025)
- Circular 96/2020/TT-BTC on securities market disclosure (effective 01/01/2021) — Article 31; Appendices VII, VIII
- Decree 156/2020/ND-CP (amended by Decree 128/2021/ND-CP) on securities administrative sanctions — Article 33
This article is for general reference only and does not constitute legal advice for any specific case.
Transparency note: This content was prepared with AI assistance and will undergo quality review by the FLAW AI Legal Council before publication approval; it is not legal advice from a human lawyer.
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