What are operations of securities companies in Vietnam?

What are operations of securities companies in Vietnam?

There is a new regulation on securities activities, may I ask what are operations of securities companies under this regulation? Thank you!

Answer: Pursuant to Article 72 of the Law on Securities 2019 stipulates that a securities company shall be licensed to perform one, some or all of the following operations:

1. A securities company shall be licensed to perform one, some or all of the following operations:

a) Securities brokerage;

b) Proprietary trading;

c) Securities underwriting;

d) Securities investment consultancy.

2. A securities company shall only be licensed for proprietary trading when it is licensed for securities brokerage.

3. A securities company shall only be licensed for securities underwriting when it is licensed for proprietary trading.

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What are contents of the securities trading license in Vietnam?

I heard that the National Assembly has just passed a new Law on Securities, may I ask what are contents of the securities trading license under the new law? Thank you!

Answer: Pursuant to Article 81 of the Securities Law 2019, contents of the securities trading license are as follows:

1. The securities trading license of a securities company or fund management company shall have the following contents:

a) The company’s name;

b) Addresses of the headquarters;

c) Business operations;

d) Charter capital;

dd) The legal representative.

2. The securities trading license of the branch of a foreign securities company or foreign fund management company shall have the following contents:

a) Name, address and operations of the branch;

b) The parent company’s name;

c) The parent company’s address;

d) Capital provided for the branch;

dd) The branch manager.

3. Changes to the securities trading license mentioned in Clause 1 and Clause 2 of this Article are subject to approval by SSC.

4. Within 10 days from the day on which SSC approves the changes mentioned in Clause 3 of this Article, the license holder shall inform the changes to the business registration authority in accordance with enterprise laws.

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What are requirements for issuing the securities trading license to a securities company in Vietnam? 

Please ask: According to the new regulations, what are requirements for issuing the securities trading license to a securities company? Ask for help!

Answer: Pursuant to Article 74 of the Securities Law 2019 stipulates requirements for issuing the securities trading license to a securities company as follows:

1. The capital contributed shall be VND. The minimum charter capital for each operation of the securities company is conformable with regulations of the Government.

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.

3. Quantities of shareholders and contributing members:

a) At least 02 founding shareholders and contributing members shall be organizations. The owner of the securities company that is a single-member limited liability company shall be an insurer or commercial bank or foreign organization that satisfies the requirements specified in Clause 2 Article 77 of this Law.

b) Total capital contributed by organizations shall be at least 65% of charter capital; capital contributed by insurers and commercial banks shall be at least 30% of charter capital.

4. Infrastructural requirements:

a) The premises are adequate for securities trading;

b) Available equipment and technologies are adequate for securities trading processes.

5. Personnel requirements:

There is a General Director (Director), at least 03 employees having suitable securities trading certifications for the licensed operations, and at least 01 employee in charge of compliance management. The General Director (Director) shall:

a) Not be facing criminal prosecution, serving an imprisonment sentence or being banned from securities trading as prescribed by law;

b) Have at least 02 years’ experience of working in specialized departments of finance, securities, banking, insurance organizations or in finance, accounting, investment departments of other organizations;

c) Have the practising certificate for financial analysis or asset management;

g) Not incur any administrative penalties for securities-related offences in the last 06 months prior to the application date.

The Deputy General Directors (Deputy Directors) in charge of specific operations shall satisfy the requirements specified in Points a, b, d of this Clause and have practising certificates suitable for their operation.

6. A draft charter conformable with Clause 1 Article 80 of this Law.

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