Vietnam: What is the liquid capital and liquid capital ratio of the securities company? How is the liquid capital of the securities company determined?
What are the liquid capital and the ratio of liquid capital of the securities company in Vietnam?
Pursuant to Article 2 of Circular 91/2020 / TT-BTC, the regulations on liquid capital and the ratio of liquid capital are understood as follows:
- “liquid capital” means the equity which can be converted into cash within ninety (90) days.
- “liquid capital ratio” means a percentage of the liquid capital value to the total risk value.
Vietnam: What are the liquid capital and liquid capital ratio of the securities company? How is the liquid capital of the securities company determined?
How is the liquid capital of the securities company determined in Vietnam?
According to the provisions of Clause 1 Article 4 of Circular 91/2020 / TT-BTC, the liquid capital of the securities company is determined according to the provisions of Appendix VI issued together with Circular 91/2020 / TT-BTC, specifically as follows:
- Owner's contributed capital, excluding refundable preferred share capital (if any);
- Surplus of share capital excluding refundable preferred share capital (if any);
- Bond conversion option - Capital component (for securities companies that issue convertible bonds);
- Other capital of the owner;
- Difference in asset assessment at fair value;
- Exchange rate differential;
- Reserve fund to supplement charter capital;
- Financial provision fund and professional risk;
- Other funds belonging to equity are set aside in accordance with the provisions of law;
- Undistributed profits;
- Provision balance for deterioration of asset value;
- Fifty percent (50%) of the added value of fixed assets is revalued in accordance with the law (in case of increased valuation), or subtracted from the entire portion of reduced value (in case of falling valuation);
- Deductions as prescribed in Article 5 of Circular 91/2020 / TT-BTC;
- Additional amounts as prescribed in Article 7 of Circular 91/2020 / TT-BTC;
- Other capital (if any).
How does a securities company implement the reporting regime on the ratio of liquid capital in Vietnam?
Pursuant to Article 12 of Circular 91/2020/TT-BTC, there are regulations on the reporting regime of securities trading organizations including securities companies to perform periodically and irregularly as follows:
Article 12. Liquid capital reporting
1. Periodic reporting
a) The securities-trading organization shall submit monthly reports on prudential indicator made using the form provided in the Appendix V or VI enclosed herewith to the SSC. Electronic reports shall be sent via the database system within 07 working days from the end of the month.
b) The securities-trading organization must submit prudential indicator reports of 30 June and 31 December made using the form provided in the Append ix V or VI enclosed herewith and publish the reports on its website after they have been examined and audited by an accredited audit organization. These reports shall be sent to SSC via the database system and disclosed together with the examined biannual financial statements and audited annual financial statements.
2. Unscheduled reporting
a) Since its liquid capital ratio falls below 180%, a securities-trading organization shall submit an liquid capital ratio report made using the form provided in the Appendix V or VI enclosed herewith to the SSC twice a month (on the 15th and 30th). Reports shall be sent electronically via the database system within 03 working days after the 15th and 30th every month.
b) Since its liquid capital ratio falls below 150%, a securities-trading organization shall submit a weekly report on liquid capital ratio made using the form provided in the Appendix V or VI enclosed herewith to the SSC. Reports shall be sent electronically via the database system before 16:00 every Friday.
c) Since its liquid capital ratio falls below 120%, a securities-trading organization shall submit a weekly report on liquid capital ratio made using the form provided in the Appendix V or VI enclosed herewith to the SSC. Reports shall be sent electronically via the database system before 16:00 every day.
3. The securities-trading organization may prepare periodic reports as prescribed in Clause 1 of this Article when its liquid capital ratio reaches or surpasses 180% during the reporting periods for three (3) consecutive months.
Thư Viện Pháp Luật
