Can shareholders of one securities company own the charter capital of another securities company in Vietnam?

Can shareholders of one securities company own the charter capital of another securities company in Vietnam?

Pursuant to Article 6 of Circular 121/2020/TT-BTC regulations on shareholders and members as follows:

1. Shareholders and/or capital contributing members of a securities company must observe regulations laid down in subparagraphs c, d of paragraph 2 of Article 74 in the Law on Securities.

2. Shareholders and/or capital contributing members owning at least 10% of a securities company's charter capital are not allowed to improperly use their position to harm the rights and interests of the company and other shareholders and/or members.

3. Shareholders, capital contributing members owning at least 10% of a securities company's charter capital must fully notify the securities company within 24 hours after receiving information about the following situations:

a) The number of their shares or contributed capital is frozen, pledged or otherwise encumbered according to the court's decisions;

b) Shareholders and/or members that are entities decide to change their names, or are split up, split off, dissolved or bankrupted.

4. Securities companies must report to the State Securities Commission on the situations specified in Clause 3 of this Article within 05 days after receiving notices from their shareholders and/or members.

Points c and d Clause 2 Article 74 of the Securities Law 2019 stipulates as follows:

2. Shareholders and contributing members:

a) Shareholders and contributing members that are individuals are qualified for establishment and management of enterprises in Vietnam as prescribed by the Law on Enterprises;

b) Shareholders and contributing members that are organizations shall be lawfully operating juridical persons that have profitable business in 02 years prior to the year in which the license is applied for; the latest annual financial statement has been audited and received unqualified opinions;

c) Shareholders and contributing members holding at least 10% of charter capital of 01 securities company; their related persons (if any) do not hold more than 5% of charter capital of another securities company;

d) Shareholders and contributing members that are foreign investors shall satisfy the requirements specified in Article 77 of this Law.

Thus, shareholders contributing capital to a securities company can still own the charter capital of another securities company in Vietnam if they meet the conditions specified in Point c, Clause 2, Article 74 of the Securities Law 2019.

Can shareholders of one securities company own the charter capital of another securities company in Vietnam? (Image from the Internet)

Do securities companies have to hold an annual General Meeting of Shareholders within 04 months from the end of fiscal year in Vietnam?

Pursuant to Article 7 of Circular 121/2020/TT-BTC regulating General Meeting of Shareholders, Members’ Council and Owner(s) as follows:

1. A securities company must develop processes and procedures for convening and voting at the General Meeting of Shareholders or the meeting of the Members’ Council, and these processes and procedures must be submitted to seek approval from the General Meeting of Shareholders, the Members’ Council.

2. If a securities company is a joint stock company, it must hold the annual General Meeting of Shareholders within 4 months after the end of the fiscal year. In case of failure to do so within that time limit, the securities company must report to the State Securities Commission in writing, clearly stating the reasons, and must hold the annual General Meeting of Shareholders within the next 2 months.

3. If a securities company is a public company, it must announce the decision of the General Meeting of Shareholders in accordance with the law on securities and securities markets in terms of information disclosure.

4. The securities company must submit a post-meeting report to the General Meeting of Shareholders, the Members' Council and/or the Owner(s), enclosing the meeting resolution and relevant documents, to the State Securities Commission within 05 working days after the General Meeting of Shareholders or the meeting of the Members' Council or the Owner(s) is closed.

5. The General Meeting of Shareholders, the Members’ Council or the Owner(s) can hire an authorized auditing body to audit the company’s financial statement, and make a report on prudential ratios. In the same financial year, the securities company shall not change the authorized auditing body, except as the parent company changes the authorized auditing body, or the authorized auditing body is subject to suspension of their services or cancellation of their status of authorization for auditing services.

Thus, for securities companies that are joint stock companies, they must hold an annual General Meeting of Shareholders within 04 months from the end of the fiscal year in Vietnam.

In the above case, you can invest in another securities company with 2% of charter capital in case you already own less than 10% of the charter capital of a securities company, or you already own more than 10% of the charter capital of a securities company and a person related to you invests a total of no more than 5% of the charter capital of another securities company in Vietnam.

Best regards!