What are regulations on risk management culture of securities companies in Vietnam?

What are regulations on risk management culture of securities companies in Vietnam?

Pursuant to Article 10 of the Circular 70/2022/TT-BTC (takes effect from 01/01/2023) stipulating risk management culture of securities companies in Vietnam as follows:

1. Insurance companies, reinsurance companies and foreign branches shall build their risk culture by issuing and complying with the codes of professional ethics; internal rules and regulations on risk management; and reward and sanction regulations.

2. Each code of professional ethics shall conform to the following principles:

a) Staff members shall honestly perform assigned tasks and authority for the benefit of the insurance companies, reinsurance companies or foreign branches that they are working for; shall avoid performing the act of abusing their position and information of their employers to seek personal gain, harm the interests of insurance companies, reinsurance companies or foreign branches as their employers;

b) Individuals and departments must promptly report to competent authorities on the acts of violation specified in point a of this clause and those against regulatory provisions and internal rules and regulations of insurance companies, reinsurance companies or foreign branches as their host entities.

3. Internal rules and regulations on risk management shall be in accordance with clause 2 of Article 5 herein.

4. Reward and sanction regulations must ensure accuracy, public access, transparency, fairness and timeliness. Nomination for a reward or imposition of a sanction shall be subject to assigned functions and duties of relevant departments or individuals of insurance companies, reinsurance companies or foreign branches.

What are requirements of technical procedures for internal control of securities companies in Vietnam?

Pursuant to Article 11 of the Circular 70/2022/TT-BTC (takes effect from 01/01/2023) stipulating requirements of technical procedures for internal control of securities companies in Vietnam as follows:

1. In order to ensure successful internal controls, insurance companies, reinsurance companies or foreign branches shall develop technical procedures: These technical procedures shall include but not limited to the following: Insurance product costing and development procedures; insurance offering and underwriting procedures; insurance claim settlement, indemnification or compensation and payout procedures; reinsurance procedures and internal control procedures.

2. Those sets or subsets of technical procedures shall be built on the practice of decentralizing and delegating approval-granting authority in a clear manner, ensuring that they are aligned with functions and tasks of individuals and departments in charge of implementing these procedures; Such approval-granting authority shall be determined based on the transaction size, risk limits and other restrictions as stipulated in internal rules and regulations of insurance companies, reinsurance companies and foreign branches.

What are internal control activities of securities companies in Vietnam?

Pursuant to Article 12 of the Circular 70/2022/TT-BTC (takes effect from 01/01/2023) stipulating internal control activities of securities companies in Vietnam as follows:

The following principles shall be obeyed when carrying out internal control activities:

1. All operations, technical procedures and departments of insurance companies, reinsurance companies and foreign branches shall be subject to the internal control requirement.

2. Compliance control department shall be independent of other functional departments.

3. A staff member of an insurance company, reinsurance company or foreign branch shall not be allowed to hold positions or be assigned duties concurrently if aims or interests resulting from these positions or duties conflict or overlap.

4. Staff members of insurance companies, reinsurance companies and foreign branches shall not be allowed to use information of their employers for personal purposes; conceal violations against laws and internal rules and regulations of their employers.

5. In the course of implementation of technical procedures, cross examination or supervision shall be required.

6. Financial information systems needed for internal controls shall ensure integrity, rationality, completeness, accuracy and timeliness.

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