Vietnam: Method for calculation of illegal proceeds obtained from the act of using internal information for purchase and sale of stock

According to Clause 5 Article 3 of the Circular No. 117/2020/TT-BTC of the Ministry of Finance of Vietnam, method for calculation of illegal proceeds obtained from the act of using internal information for purchase and sale of stock is specified as following:

- In case where the public disclosure of internal information causes the stock price to increase, the illegal proceeds are calculated on the basis of the spread between the average selling price and the average buying price multiplied by total volume of securities sold within 30 days from the date on which internal information is publicly disclosed after taking away all taxes and fees payable. The period for calculation of the average buying price is determined from the time the violator uses internal information to buy stocks to the time internal information is disclosed;

- In case where the public disclosure of internal information causes the stock price to decrease, the illegal proceeds are calculated on the basis of the spread between the average selling price and the average closing price within 10 consecutive days from the date on which internal information is publicly disclosed, multiplied by total selling volume after taking away all taxes and fees payable. The period for calculation of the average buying price is determined from the time the violator uses internal information to buy stocks to the time internal information is disclosed.

The time internal information is disclosed is the time the information appears on one of the communications media as prescribed in the Circular of the Minister of Finance of Vietnam, providing instructions about the public disclosure of information on the stock market.

More details at the Circular No. 117/2020/TT-BTC of the Ministry of Finance of Vietnam, effective from February 15, 2021.

Thuy Tram

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