Vietnam: Failing to protect confidentiality of information about clients’ securities holdings shall be fined up to VND 150 million

According to Clause 3 Article 39 of the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, a fine ranging from VND 100.000.000 to VND 150.000.000 shall be imposed upon the Vietnam Securities Depository and Clearing Corporation (VSDCC), depository member, clearing member or a fine ranging from VND 50.000.000 to VND 75.000.000 shall be imposed upon an employee of depository member or clearing member for committing one of the following violations:

- Failing to accurately record assets, rights to assets and interests relevant to assets deposited by clients; making incorrect accounting on securities depository accounts, position accounts or margin accounts; making late payments or failing to transfer the ownership of registered securities through VSDCC;

- Trading securities before they are recorded by VSDCC on members’ securities trading accounts;

- Failing to protect database and retain original documents about registration, depositing, clearing and payment of securities in accordance with regulations of law;

- Failing to protect confidentiality of information about clients’ securities holdings;

- Failing to separately manage depository accounts and margin accounts keeping money and securities of clients at VSDCC, depository members, and clearing members and their assets; failing to open depository accounts and margin accounts for each client, and separately manage assets and positions of each client, and assets and positions of clients and clearing members;

- Failing to separately manage accounts and assets of clearing members and VSDCC; failing to separately manage accounts and assets of each clearing member or failing to separately manage margin accounts and assets of each clearing member and his/her clients; failing to separately manage margin assets, deposits for derivatives trading and deposits for underlying securities trading;

- Failing to collect sufficient margins from clients to fulfill payment obligations.

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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