Supplementing more violations against regulations on operation of securities companies in Vietnam from 2021

On December 31, 2020, the Government of Vietnam issued the Decree No. 156/2020/NĐ-CP prescribing penalties for administrative violations against regulations on securities and securities market.

hoạt động của công ty chứng khoán, Nghị định 156/2020/NĐ-CP

According to Article 26 of the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, more violations against regulations on operation of securities companies and branches of foreign securities companies in Vietnam are supplemented as follows:

(1) The following fines shall be imposed for violations against regulations on margin trading:

- A fine ranging from VND 50.000.000 to VND 70.000.000 shall be imposed for violating regulations on opening of margin trading accounts, marginable securities and lending term for margin trading;

- A fine ranging from VND 70.000.000 to VND 100.000.000 shall be imposed for violating regulations on lending limits for margin trading and suspension of margin trading;

- A fine ranging from VND 100.000.000 to VND 150.000.000 shall be imposed for violating regulations on initial margin requirement, maintenance margin requirement, restrictions on margin trading, allowing clients to conduct margin trading or withdraw more cash than the current buying power on his/her margin account;

- A fine ranging from VND 150.000.000 to VND 200.000.000 shall be imposed for failing to manage margin trading accounts separately from ordinary trading accounts and accounts using money borrowed from credit institutions, day trading accounts and secured short selling accounts.

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

- Failing to separately manage assets of each client, assets of clients and assets of the securities company or branch of a foreign securities company in Vietnam;

- Directly receiving and making payments for securities transactions of clients; receiving authorization from clients for carrying out internal transfer of money between their accounts;

- Violating regulations on management of securities of clients;

- Violating regulations on restrictions on borrowing or restrictions on lending;

- Violating regulations on contribution of capital to establish or purchase of shares/stakes of other securities companies in Vietnam.

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

- Misusing or appropriating clients’ securities or money or keeping their securities by depositing under the securities company’s name;

- Lending money or securities on clients’ accounts;

- Using clients’ securities for pledging.

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

Ty Na

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