Vietnam: Handling of securities companies that fail to achieve prudential indicators

Circular No. 87/2017/TT-BTC of the Ministry of Finance of Vietnam takes effect from October 10, 2017 and replaces Circular No. 226/2010/TT-BTC dated December 31, 2010.

According to Circular No. 87/2017/TT-BTC, securities-trading organizations that fail to achieve prudential indicators will be subject to three measures: warning, control, or special control. Specifically, a securities-trading organization shall be put under warning in the following cases: the liquid capital ratio reaches from 150% to below 180% during the reporting periods for 03 consecutive months; or the liquid capital ratio that has been examined or audited by an accredited audit organization reaches from 150% to below 180%.

A securities-trading organization shall be put under control in the following cases: the liquid capital ratio reaches from 120% to below 150% during the reporting periods for 03 consecutive months; or the liquid capital ratio that has been examined or audited by an accredited audit organization reaches from 120% to below 150%. The control period must not exceed 12 months from the day on which the securities-trading organization is placed under control.

Similarly, a securities-trading organization shall be put under special control in the following cases: the liquid capital ratio that is calculated by the securities-trading organization itself or has been examined or audited by an accredited audit organization is below 120%; or the securities-trading organization fails to take remedial actions against the special control within 12 months.

The special control period must not exceed 04 months from the day on which the securities-trading organization is placed under special control. A securities-trading organization may have the warning, control or special control lifted if its liquid capital ratio reaches at least 180% for 03 consecutive months.

Source: CafeF

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