Application for securities depository registration in Vietnam

Application for securities depository registration in Vietnam (Internet image)

1. What is securities depository?

According to Clause 34, Article 4 of the Law on Securities 2019, securities depository services include the depositing, storage, transfer of securities for clients, assisting the clients in exercising their rights relevant to the deposited securities.

2. Requirements for securities depository registration in Vietnam

According to  Clause 1, Article 57 of the Law on Securities 2019, a commercial bank or FBB may apply for securities depository registration when it:

- Has the license for establishment and operation in Vietnam which allows provision of securities depository services;

- Has satisfactory capital adequacy ratios prescribed by banking laws and has profit in the last year; and

- Has the premises and equipment serving the depositing and payment of securities.

3. Application for securities depository registration in Vietnam

Specifically, in Clause 1, Article 58 of the Law on Securities 2019, a commercial bank’s or FBB’s application for securities depository registration shall consist of:

- The application form;

- The applicant’s license for establishment and operation;

- The description of the applicant’s premises and equipment serving the depositing and payment of securities;

- Documents proving the applicant’s satisfactory capital adequacy ratios prescribed by banking law;

- The latest audited annual financial statement.

4. Cases of revocation of the certificate of securities depository registration in Vietnam

According to  Clause 2, Article 60 of the Law on Securities 2019, SSC will revoke the certificate of securities depository registration from a securities company, commercial bank or FBB if:

- The certificate holder fails to rectify the violations mentioned in Clause 1 of 60 of the Law on Securities 2019 by the end of the suspension period;

- The securities depository operation is not initiated within 12 months from the issuance date of the certificate;

- The certificate holder’s has its license for establishment and operation revoked;

- The certificate holder no longer exists or is converted as prescribed by the Law on Enterprises;

- The certificate holder wishes to terminate its securities depository operation and the termination is accepted by SSC;

- The requirements for registration of securities depository operation specified in Article 57 of the Law on Securities 2019 are not fully satisfied.

5. Rights and obligations of members of VSDCC in Vietnam

Depository members include securities companies, commercial banks, FBBs licensed to provide securities depositing services by SSC and accepted by VSDCC as depository members;

(Point a, Clause 1, Article 56 of the Law on Securities 2019)

5.1. Rights of members of VSDCC in Vietnam 

Specifically, in Clause 2, Article 56 of the Law on Securities 2019, depository members have the rights to:

- Provide securities depositing and payment services for clients;

- Exercise other rights prescribed by law and VSDCC’s charter.

5.2. Obligations of members of VSDCC in Vietnam

Depository members have the obligations to:

- Fulfill the obligations specified in Points  b, d, dd, g, h, i, l, m Clause 2 Article 55 of the Law on Securities 2019;

- Ensure availability of premises and equipment serving the securities depositing and payment;

- Contribute to the compensation fund as prescribed by law;

- Separately manage assets of clients and assets of depository members; promptly and accurately record assets, rights to assets and interests relevant to assets deposited by clients;

- Maintain fulfillment of conditions for provision of securities depository services;

- Report and fulfill other obligations prescribed by law and VSDCC’s charter.

(Clause 3, Article 56 of the Law on Securities 2019)

Thanh Rin

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