What are the requirements for issuing the securities trading license to branches in Vietnam of foreign securities companies?
- What are the requirements for issuing the securities trading license to branches in Vietnam of foreign securities companies?
- What documents do a branch in Vietnam of a foreign securities company need to prepare to apply for a license for establishment and securities operation?
- What are the conditions for a foreign organization to hold 100% charter capital of a securities company by contributing capital or buying shares/stakes?
What are the requirements for issuing the securities trading license to branches in Vietnam of foreign securities companies?
According to Clause 1, Article 76 of the 2019 Law on Securities of Vietnam, the requirements for issuing the securities trading license to branches in Vietnam of foreign securities companies:
Requirements for issuing the securities trading license to branches in Vietnam of foreign securities companies and foreign fund management companies
1. A foreign securities company may establish a branch in Vietnam when the following requirements are satisfied:
a) The company fully satisfies the requirements specified in Clause 2 Article 77 of this Law and is not holding more than 49% of charter capital of any securities company or fund management company in Vietnam;
b) The capital provided for the branch in Vietnam satisfies the requirements in Clause 1 Article 74 of this Law;
c) The branch in Vietnam satisfies the infrastructural and personnel requirements specified in Clause 4 and Clause 5 Article 74 of this Law.
Thus, a branch in Vietnam of a foreign securities company needs to meet the above requirements in order to be issued with the securities trading license.
What are the requirements for issuing the securities trading license to branches in Vietnam of foreign securities companies? (Image from the Internet)
What documents do a branch in Vietnam of a foreign securities company need to prepare to apply for a license for establishment and securities operation?
Pursuant to the provisions of Article 176 of Decree No. 155/2020/ND-CP, an application for issuance of the license for establishment and securities operation includes:
- The application form No. 64 in the Appendix hereof.
- The written agreement on establishment of the company of the shareholders, contributing members or the decision of the company owner which specifies: the company’s name (full name, business name in Vietnamese and English, abbreviated name), headquarters address; business operations; charter capital; ownership structure; approval of the draft charter of the company; the legal representative cum authorized representative who completes the company establishment procedures.
- The premises lease contract; documents proving the right to own or use the premises; description of property according to Form No. 65 in the Appendix hereof.
- The list of personnel, personal information sheets according to Form No. 66 and Form No. 67 in the Appendix hereof enclosed with the judicial records of members of the Board of Directors, President of the Member assembly, President of the company; General Director/Director that are issued within 06 months before the application is submitted.
- The list of shareholders and contributing members according to form No. 68 in the Appendix hereof:
+ For individuals: the personal information sheet according to Form No. 67 in the Appendix hereof; judicial records issued within 06 months before the application is submitted of the founding shareholders and members that are individuals who contribute more than 5% of charter capital;
+ For organizations: the Certificate of Enterprise Registration or an equivalent document; the company's charter; the decision issued by a competent authority according to the company's charter on contribution of capital to establish the company and appointment of the authorized representative; the authorized representative’s personal information sheet according to Form No. 67 in the Appendix hereof; the audited financial statements of the last 02 years preceding the year in which the license is applied for of the contributing organizations. The contributing organization that is the parent company shall also include the audited consolidated financial statement; the written approval issued by SBV (for commercial banks) or by the Ministry of Finance (for insurers) for the contribution of capital to establish the company (if any);
+ The written declarations of the organizations and individuals of fulfillment of the requirements specified in Point c Clause 2 Article 74 and Point c Clause 2 Article 75 of the 2019 Law on Securities of Vietnam.
- The decision issued by a competent authority on operational, internal control, risk management processes.
- The draft charter of the company.
- The application for replacement of the license in the case specified in Clause 2 Article 135 of the 2019 Law on Securities of Vietnam shall include the application form mentioned in Clause 1 of this Article, the original copy of the establishment and operation license and the revised licenses that were previously issued.
What are the conditions for a foreign organization to hold 100% charter capital of a securities company by contributing capital or buying shares/stakes?
According to Clause 2, Article 77 of the 2019 Law on Securities of Vietnam as follows:
Foreign investment in securities companies and fund management companies
…
2. In order to hold 100% charter capital of a securities company or fund management company by contributing capital or buying shares/stakes, a foreign organization shall:
a) Be licensed and has been continuously operating in the field of banking, securities, insurance for 02 years before the year in which capital is contributed or shares/stakes are purchased.
b) The home country’s licensing authority and SSC has entered into a mutual or multilateral agreement on information exchange, management, inspection, supervision of securities activities and securities market;
c) The organization’s business has profit in 02 years prior to the year in which capital is contributed or shares/stakes are purchased, and the latest annual financial statement has been audited and received unqualified opinions.
Thus, in order to hold 100% charter capital of a securities company or fund management company by contributing capital or buying shares/stakes, a foreign organization must satisfy the conditions as prescribed above.
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