Vietnam: Prudential indicators of the liquid capitals of a securities company

According to Article 4 of the Circular No. 91/2020/TT-BTC of the Ministry of Finance of Vietnam, the liquid capitals of a securities company shall be determined according to Appendix VI enclosed herewith. To be specific:

- Equity, excluding refunded preferred equity (if any);

- Share capital surplus, excluding refunded preferred equity (if any);

- Options on – conversion from bond to stake (for the securities company issuing convertible bond);

- Other equity;

- Differences upon asset valuation according to the reasonable value;

- Foreign exchange differences;

- Additional reserve fund of charter capital;

- Operational risk and financial reserve funds;

- Other funds which are established in accordance with regulations of law;

- Undistributed profits;

- Provision for impairment of assets;

- Fifty percent (50%) of the increase in value of fixed assets which are revalued in accordance with regulations of law (in case the value of these assets is increased), or the whole decrease in value (in case the value of these assets is reduced);

- Deductions specified in Article 5 of this Circular;

- Increases specified in Article 7 of this Circular;

- Other capitals (if any).

The liquid capitals of a fund management company shall be determined according to Appendix V enclosed herewith. To be specific:

- Paid-in capital, excluding refunded preferred equity (if any);

- Share capital surplus, excluding refunded preferred equity (if any);

- Additional reserve fund of charter capital;

- Investment and development fund (if any);

- Operational risk and financial reserve funds;

- Other funds which are established in accordance with regulations of law;

- Undistributed profit after tax;

- Fifty percent (50%) of the increased value of fixed assets which are revalued in accordance with regulations of law (in case the value of these assets is increased), or subtraction of the entire decrease in value (in case the value of these assets is reduced);

- Foreign exchange differences;

- Deductions specified in Article 6 of this Circular;

- Increases specified in Article 7 of this Circular;

- Other capitals (if any).

Note: The liquid capitals specified above shall be adjusted to reduce treasury stock (if any).

View more details at the Circular No. 91/2020/TT-BTC of the Ministry of Finance of Vietnam, effective from January 01, 2021.

Le Vy

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