A fine of VND 100.000.000 for trading securities before the official inauguration date in Vietnam

According to Point b Clause 2 Article 24 of the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, trading securities before the official inauguration date is considered as a violations against regulations on license for establishment and operation:

A fine ranging from VND 70.000.000 to VND 100.000.000 shall be imposed upon a securities company, securities investment fund management company, securities investment company or branch of foreign securities company or foreign fund management company in Vietnam for committing one of the following violations:

a) Failing to revise the application for issuance or modification of the license/certificate when finding inaccurate or inadequate information, or any new information related to the submitted application;

b) Trading securities before the official inauguration date.

This is a new provision at the Decree No. 156/2020/NĐ-CP. Moreover, according to Clause 3 Article 24 of the Decree No. 156/2020/NĐ-CP, a fine ranging from VND 100.000.000 to VND 150.000.000 shall be imposed upon a founding shareholder or capital contributor during establishment of a securities company or securities investment fund management company for transferring their shares or stakes within the transfer restriction period, which is also a new provision compared to the Decree No. 108/2013/NĐ-CP.

Concurrently, the Decree No. 156/2020/NĐ-CP also amends some fine levels as follows:

- A fine ranging from VND 150.000.000 to VND 200.000.000 shall be imposed for committing one of the following violations:

+ Erasing or altering contents of the license;

+ Borrowing, hiring or receiving transfer of license, or lending, leasing or transferring the license; failing to trade securities or provide securities services in its own name; using the names of others or allowing others to use its name to trade securities or provide securities services (Previously, the fine was VND 100.000.000 - VND 150.000.000);

- A fine ranging from VND 400.000.000 to VND 500.000.000 shall be imposed for committing one of the following violations:

+ Preparing or certifying the application for issuance or modification of the license for establishment and operation which contains forged documents or false information or conceals true information;

+ Preparing or certifying the application for certificate of eligibility to trade derivatives or provide clearing services or derivatives payment services which contains forged documents or false information (Previously, the fine was VND 200.000.000 - VND 300.000.000).

More details at the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, effective from January 01, 2021.               

Phuong Thanh

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