Heavy fines for using clients’ names or accounts for registering or trading securities in Vietnam

According to the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, a fine ranging from VND 150.000.000 to VND 200.000.000 shall be imposed for committing one of the following violations:

- Using clients’ names or accounts for registering or trading securities;

- Buying or selling securities on trust trading accounts beyond the scope of entrustment or value of trust assets or against investment objectives of trustors; making investments on behalf of clients, except in case of the authorized management of individual investors’ trading accounts;

- Acting as a broker for asset borrowing or lending transactions between clients or between a client and a third party, except for borrowing of securities for correction of transaction errors or conducting exchange transactions of Exchange Traded Funds.

Concurrently, a fine ranging from VND 400.000.000 to VND 500.000.000 shall be imposed for committing one of the following violations:

- Using clients’ accounts or assets without their entrustment or beyond the scope of entrustment; using clients’ accounts or money or securities on their accounts without authorization from the securities company according to the trust agreement made between the client and the securities company;

- Selling or allowing clients to sell securities while they do not own such securities or lending securities to clients in case such lending of securities is prohibited.

Thus, according to the above provisions, using clients’ names or accounts for registering or trading securities shall be fined up to VND 200 million. Particularly, the acts of using clients’ accounts or assets without their entrustment or beyond the scope of entrustment; using clients’ accounts or money or securities on their accounts without authorization from the securities company according to the trust agreement made between the client and the securities company shall be fined up to VND 500 million (Note: The fine imposed upon an individual shall be a half of the fine imposed upon an organization for committing the same violation).

Moreover, The securities professional certificate shall be suspended for a period of 01 - 03 months in case of commission of the violation mentioned above.

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

Ty Na

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE