Addition of 06 acts considered as securities market manipulation to the Securities Law 2019

Addition of 06 acts considered as securities market manipulation to the Securities Law 2019

According to the provisions in Clause 1, Article 1 of the Law on Amendments to the Securities Law, Accounting Law, Independent Auditing Law, State Budget Law, Law on Management and Use of Public Assets, Tax Administration Law, Personal Income Tax Law, National Reserve Law, Law on Handling of Administrative Violations 2024, 06 acts considered as securities market manipulation have been added to the Securities Law 2019:

Article 1. Amendments and Supplements to Certain Articles of the Securities Law

1. Add Clause 49 following Clause 48, Article 4, as follows:

"49. securities market manipulation refers to performing one of the following acts:

a) Using one or more trading accounts of oneself or others, or collusion to continuously buy and sell securities to create artificial supply and demand;

b) Placing buy and sell orders of the same type of securities on the same trading day or colluding to trade securities without actual transfer of ownership, or the ownership only revolves among group members to create securities prices, artificial supply, and demand;

c) Continuously buying or selling securities with large volumes at market opening or closing to manipulate securities prices;

d) Trading securities by colluding, persuading others to continuously place buy and sell orders significantly affecting supply, demand, and securities prices, manipulating securities prices;

e) Directly or indirectly expressing opinions through mass media about a type of security, or the organization issuing securities to influence the price of that type of security after making transactions and holding positions on that security;

f) Using other methods or trading acts, or combining spreading false rumors, providing misleading information to the public to create artificial supply and demand, manipulating securities prices."

Currently, Clause 2, Article 3 of Decree 156/2020/ND-CP regulates that securities market manipulation is the performance of acts prohibited in securities and securities market activities as follows:

Article 3. Glossary Definitions

According to this Decree, the following terms are understood as follows:

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2. "securities market manipulation" refers to performing acts prohibited in securities and securities market activities stipulated in Clause 3, Article 12 of the Securities Law, including one, several, or all of the following acts:

a) Using one or more trading accounts of oneself or others, or colluding to continuously buy and sell securities to create artificial supply and demand;

b) Placing buy and sell orders of the same type of securities on the same trading day or colluding to trade securities without actual transfer of ownership, or ownership only revolves among the group members to create securities prices, artificial supply, and demand;

…

Thus, from January 1, 2025, 06 acts of securities market manipulation will be officially supplemented to Article 4 of the Securities Law 2019. These acts include creating artificial supply and demand through colluding transactions, placing buy and sell orders without actual transfer, manipulating prices in trading sessions, colluding to significantly impact prices, making statements to manipulate prices after holding positions, and spreading rumors or providing misleading information...

What are the fines for securities market manipulation in Vietnam?

According to the provisions of Article 36 of Decree 156/2020/ND-CP (amended by Clause 30, Article 1 of Decree 128/2021/ND-CP) regarding violations on securities market manipulation:

Article 36. Violations of securities market Manipulation

1. Fines of 10 times the illegal proceeds but not lower than the maximum fine prescribed in Clause 2, Article 5 of this Decree for securities market manipulation acts not amounting to criminal responsibility. If there are no illegal proceeds or the fine calculated on illegal proceeds is lower than the maximum fine prescribed in Clause 2, Article 5 of this Decree, the maximum fine prescribed in Clause 2, Article 5 of this Decree will be applied to penalize.

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Furthermore, organizations or individuals committing administrative violations in the field of securities and securities markets may be subjected to one or several of the following remedial measures:

- Additional penalty forms:

+ Suspension of securities business and service activities from 01 month to 03 months for securities companies, fund management companies, branches of foreign securities firms, or foreign fund management companies in Vietnam violating provisions in Clause 1, Article 36 of Decree 156/2020/ND-CP;

+ Revocation of securities practice certificates from 18 months to 24 months for securities practitioners committing violations specified in Clause 1, Article 36 of Decree 156/2020/ND-CP.

- Remedial measures: Compulsory payment of illegal proceeds obtained by performing acts in violation of provisions in Clause 1, Article 36 of Decree 156/2020/ND-CP.

Note: The above fine levels apply to organizations; for individuals committing similar violations to organizations, the fine level is 1/2 of the fine level for organizations.

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