What are the conditions for provision of securities clearing and settlement services in Vietnam?
- What are the conditions for provision of securities clearing and settlement services in Vietnam?
- Regulations on documentation and procedures for issuance of the certificate of eligibility to provide securities clearing and settlement services in Vietnam?
- What is the application form for the Certificate of eligibility to provide securities clearing and settlement services in Vietnam?
What are the conditions for provision of securities clearing and settlement services in Vietnam?
According to the provisions of Article 151 of Decree No. 155/2020/ND-CP, an organization wishing to provide securities clearing and settlement services must satisfy the following conditions:
Conditions for provision of securities clearing and settlement services
1. The service provider must be a securities company, commercial bank or foreign bank branch that is granted the certificate of securities depository registration by State Securities Commission. The commercial bank or foreign bank branch shall also satisfy conditions for provision of securities clearing and settlement services under credit institution laws.
2. Charter capital and equity requirements:
a) A direct clearing member shall have charter capital or equity of at least 1000 billion VND (for commercial banks and foreign bank branches) or at least 250 billion VND (for securities companies);
b) A general clearing member shall have charter capital or equity of at least 7000 billion VND (for commercial banks and foreign bank branches) or at least 900 billion VND (for securities companies);
3. Liquidity ratio requirements:
a) For securities companies: fully make provisions as per regulations, ratio of debt to equity according to the latest annual financial statement must not exceed 05 and liquidity ratio must be at least 260% in 12 consecutive months before the month in which the application for the certificate of eligibility to provide securities clearing and settlement services is submitted;
b) For banks and foreign bank branches: satisfy the capital adequacy ratio requirements according to credit institution laws in the last 12 months before the month in which the application for the certificate of eligibility to provide securities clearing and settlement services is submitted.
4. The provision of securities clearing and settlement services must be approved by the General Meeting of Shareholders or Board of Members or the company’s owner.
5. The service provider is not undergoing reorganization, dissolution, bankruptcy, put under control, special control, suspension or termination under decision of a competent authority.
Thus, a prerequisite to provide securities clearing and settlement services is that the subject must be a securities company, commercial bank or foreign bank branch that is granted the certificate of securities depository registration by State Securities Commission, concurrently satisfying the following conditions:
+ Charter capital and equity requirements
+ Liquidity ratio requirements;
+ Approved by the General Meeting of Shareholders or Board of Members or the company’s owner.
+ Not undergoing reorganization, dissolution, bankruptcy, put under control, special control, suspension or termination.
What are the conditions for provision of securities clearing and settlement services in Vietnam?
Regulations on documentation and procedures for issuance of the certificate of eligibility to provide securities clearing and settlement services in Vietnam?
According to the provisions of Article 152 of Decree No. 155/2020/ND-CP, the procedures for issuance of the certificate of eligibility to provide securities clearing and settlement services are prescribed as follows:
- Organizations providing securities clearing and settlement services must prepare dossiers of application for the Certificate of eligibility to provide securities clearing and settlement services.
Within 15 working days from the receipt of the satisfactory application, State Securities Commission shall issue the certificate of eligibility to provide securities clearing and settlement services. In case the application is rejected, State Securities Commission shall issue a written rejection and provide explanation.
An application for the certificate of eligibility to provide securities clearing and settlement services shall contain:
+ The application form No. 45 in the Appendix hereof;
+ A decision of the General Meeting of Shareholders, Board of Members or the company’s owner to provide securities clearing and settlement services;
+ The latest audited annual financial statement and examined half-year financial statement; the report on liquidity ratio of the last 12 months (for securities companies) or written commitment to maintain a minimum capital adequacy ratio under credit institution laws in the last 12 months (for commercial banks and foreign bank branches);
+ A written approval issued by the State Bank of Vietnam for provision of securities clearing and settlement services by the commercial bank or foreign bank branch under credit institution laws.
What is the application form for the Certificate of eligibility to provide securities clearing and settlement services in Vietnam?
According to the provisions in the Appendix attached to Decree No. 155/2020/ND-CP, the form of application for the Certificate of eligibility to provide securities clearing and settlement services specifies the following contents:
- Information of the organization: Name of securities company/Commercial bank/Foreign bank branch
- License for establishment and operation
- Certificate of registration of securities depository activities
- Authorized capital
- Equity
- Head office address
See detailed sample of application form for Certificate of eligibility to provide securities clearing and settlement services: Click here.
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