Methods of supervising securities transactions on the stock market in Vietnam

Methods of supervising securities transactions on the stock market in Vietnam (Internet image)

1. The subject of supervision of securities transactions on the stock market in Vietnam

According to Clause 1, Article 2 of Circular 95/2020/TT-BTC, supervising entities include:

- State Securities Commission (SSC);

- Vietnam Exchange (VNX);

- Subsidiary companies of VNX: Hanoi Stock Exchange (HNX), Ho Chi Minh City Stock Exchange (HOSE) (hereinafter referred to as “Stock Exchanges”);

- Vietnam Securities Depository and Clearing Corporation (VSDCC);

- Trading members (excluding special trading members on the derivatives and government bond market).

2. Methods of supervising securities transactions on the stock market in Vietnam

2.1. Methods for securities transaction supervision by SSC

Methods of supervising securities transactions on the stock market of the State Securities Commission according to Article 6 of Circular 95/2020/TT-BTC are as follows:

- Supervision according to information from the following sources:

+ Supervision reports submitted by VNX and its subsidiary companies, VSDCC and its members;

+ Reports submitted by listed and registered public companies;

+ Information provided by organizations and individuals participating in the securities market;

+ Information on the media and securities-related rumors;

+ Other sources of information.

- Pursuant to the reports and information mentioned in Clause 1 of Article 6 of Circular 95/2020/TT-BTC, transaction data of VNX, its subsidiary companies and VSDCC, SSC shall analyze the transactions that are suspected of violating regulations of law on securities and the securities market.

- Carry out ad hoc inspections of supervised entities through discovery of suspicious transactions reported by VNX, its subsidiary companies, trading members, VSDCC, its members, organizations and individuals that participate in transactions and provide securities transaction-related services.

2.2. Method of Securities transaction supervision by VNX and its subsidiary companies in Vietnam

Article 10 of Circular 95/2020/TT-BTC stipulates the method of Securities transaction supervision by VNX and its subsidiary companies as follows:

- VNX shall carry out supervision through reports of the Stock Exchanges.

- Stock Exchanges shall supervise in-day transactions of listed and registered securities in real time on their supervision system in order to detect suspicious transactions.

- Stock exchanges shall supervise swing trading based on one or some of the following sources:

+ Securities transactions database;

+ Information provided by trading members, listed and registered public companies and investors which is disclosed in accordance with regulations of law on securities and the securities market;

+ Relevant information from VSDCC as prescribed in Article 19 of Circular 95/2020/TT-BTC;

+ Information on the media and securities-related rumors;

+ Other sources of information.

- Requesting organizations and individuals that are relevant to unusual transactions to provide information and explanation.

2.3. Methods of supervision by VSDCC in Vietnam

Methods of supervising securities transactions on the stock market of the Vietnam Securities Depository and Clearing Corporation according to Article 18 of Circular 95/2020/TT-BTC are as follows:

- VSDCC shall formulate and promulgate its regulations on position limits and supervision thereof by investors’ accounts, thresholds for supervision of AR or time and method for margin depositing, and supervise individual accounts of investors trading in derivatives; specify time and method of margin depositing and supervise individual clearing members for primary securities market in its operating regulations after they are approved by SSC.

- The contents and thresholds of supervision shall be specified and adjusted according developments of the securities market; ensure effective supervision by VSDCC.

- Supervise violations against regulations on securities payment and clearing; violations against regulations on position limits for derivatives; violations against regulations on AR or initial margin depositing based on one or some of the following sources of information:

+ Data about position and clearing margin of clearing members and investors;

+ Periodic reports and information provided by members of VSDCC and other participants in the derivatives market;

+ Information on the mainstream media;

+ Other sources of information.

- Request members that are supervised by VSDCC to provide information and explanation to clarify the unusual signs mentioned in Clause 2 Article 16 of Circular 95/2020/TT-BTC.

- Cooperate with SSC in carrying out periodic and ad hoc inspections of entities supervised by VSDCC.

Quoc Dat

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