What conditions must foreign securities company meet to establish a branch in Vietnam?

What conditions must foreign securities company meet to establish a branch in Vietnam?

Hello, may I ask what conditions must foreign securities company meet to establish a branch in Vietnam according to the new regulations on securities? Thank you!

Answer: Pursuant to Clause 1, Article 76 of the Securities Law 2019 stipulates that a foreign securities company may establish a branch in Vietnam when the following requirements are satisfied:

a) The company fully satisfies the requirements specified in Clause 2 Article 77 of this Law and is not holding more than 49% of charter capital of any securities company or fund management company in Vietnam;

b) The capital provided for the branch in Vietnam satisfies the requirements in Clause 1 Article 74 of this Law;

c) The branch in Vietnam satisfies the infrastructural and personnel requirements specified in Clause 4 and Clause 5 Article 74 of this Law.

Specifically, Clause 2, Article 77 of the Securities Law 2019 is as follows: In order to hold 100% charter capital of a securities company or fund management company by contributing capital or buying shares/stakes, a foreign organization shall:

a) Be licensed and has been continuously operating in the field of banking, securities, insurance for 02 years before the year in which capital is contributed or shares/stakes are purchased.

b) The home country’s licensing authority and SSC has entered into a mutual or multilateral agreement on information exchange, management, inspection, supervision of securities activities and securities market;

c) The organization’s business has profit in 02 years prior to the year in which capital is contribute or shares/stakes are purchased, and the latest annual financial statement has been audited and received unqualified opinions.

- The capital allocated to the branch in Vietnam meets the provisions of Clause 1, Article 74 of the Securities Law 2019.

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.

- Ensure the conditions on facilities and personnel specified in Clauses 4 and 5, Article 74 of the Securities Law 2019, for the branch to be established in Vietnam. Specifically:

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.

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What are contents of the securities trading license of the branch in Vietnam of a foreign securities company?

My side is a securities company established in a foreign country, in the near future my company will set up a branch in Ho Chi Minh City, may I ask if it is licensed for establishment and operation, what content will the license of the branch have? Ask for help!

Answer: Pursuant to Clause 2, Article 81 of the Securities Law 2019 stipulates that 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.

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

May I ask what are requirements for issuing the securities trading license to a fund management company according to the new regulations on securities? Thank you!

Answer: Pursuant to Article 75 of the Securities Law 2019 stipulates requirements for issuing the securities trading license to a fund management company as follows:

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

2. Shareholders and contributing members:

a) Shareholders and contributing members shall satisfy the requirements specified in Point a and Point b Clause 2 Article 74 of this Law;

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

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

3. Quantities of shareholders and contributing members:

a) At least 02 founding shareholders and contributing members shall be organizations. The owner of the fund management 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 05 employees having asset management certifications, 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 04 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 asset management or equivalent as prescribed by the Government;

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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Best Regards!