Requirements for securities companies to provide clearing and settlement services in Vietnam

According to Article 9 of the Decree No. 158/2020/NĐ-CP of the Vietnam’s Government, securities companies, commercial banks and foreign branch banks (FBB) are allowed to provide clearing and settlement services only after obtaining certificate of eligibility to provide clearing and settlement services from the State Securities Commission of Vietnam (SSC). In order to be issued with certificate of eligibility to provide clearing and settlement services, a securities company is required to meet the following requirements:

- It has been issued with certificate of securities depository registration;

- It has been licensed to provide derivative brokerage;

- Meet the following charter capital and equity requirements:

+ For a direct clearing member: Maintain the charter capital or equity of at least VND 900 billion;

+ For a general clearing member: Maintain the charter capital or equity of at least VND 1.200 billion; 

- It has maintained a working capital ratio of at least 260% in the last continuous 12 months; a debt-to-equity ratio shown in the latest financial statements of not exceeding 05 times; and have sufficiently contributed to provisions as prescribed by law;

- It has incurred no loss in the last 02 years;

- Its latest audited annual financial statements and latest reviewed financial statements (in case an application for certificate of eligibility to provide clearing and settlement services is submitted after June 30) have received unqualified opinions from the accredited audit organizations;

- It has met internal control and risk management requirements in accordance with regulations of law on operations of securities companies;

- It is not following procedures for reorganization, dissolution or bankruptcy; it is not subject to any decision on suspension of business operations issued by competent authorities.

Previously, the Decree No. 42/2015/NĐ-CP of the Vietnam’s Government did not stipulate the minimum working capital ratio in the last continuous 12 months and the requirement of no loss in the last 02 years.

Thus, it can be seen that the Decree No. 158/2020/NĐ-CP of the Vietnam’s Government has supplemented more requirements for securities companies to provide clearing and settlement services.

More details at the Decree No. 158/2020/NĐ-CP of the Vietnam’s Government, effective from January 01, 2021.

Ty Na

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