Service requirements for online securities transaction in Vietnam

Service requirements for online securities transaction in Vietnam (Internet image)

1. What is online securities transaction?

According to Clause 1, Article 3 of Circular 134/2017/TT-BTC, online securities transaction means a securities transaction carried out through information technology system and Internet, telecommunications network or other open networks, including:

- Securities transactions between investors and providers of online securities transaction services;

- Securities transactions between transaction members and se;

- Securities-related transactions between depository participants, clearing members and vsd.

2. Service requirements for online securities transaction in Vietnam

Specifically, in Article 5 of Circular 134/2017/TT-BTC, service requirements for online securities transaction are as follows:

- SE and VSD shall:

+ Make and promulgate regulations on connection of online securities transaction system, procedures for breakdown handling, system backup and management of risks during online securities transactions in accordance with the Law on E-Transactions, Law on Cyberinformation Security, guiding documents and regulations of Circular 134/2017/TT-BTC;

+ Provide online securities transaction services in a public, equal, transparent, safe and effective manner for members using the same service.

- Securities company providing online securities transaction services shall:

(i) Directly provide online securities transaction services for investors;

(ii) Design a website with the domain name registered through Internet to provide online securities transaction services. Programs and applications used for online securities transaction shall be published or integrated on such website;

(iii) Issue procedures for carrying out online securities services, including:

+ Procedures for daily operation, supervision and management; procedures for registration and cancellation of online securities transaction;

+ Procedures for handling breakdowns;

+ Procedures for data and system backup;

+ Procedures for control of risks during provision of online securities transaction services for investors and other procedures in accordance with the law on e-transactions, law on cyberinformation security, guiding documents and regulations of circular 134/2017/tt-btc. Responsibilities of entities adopting the procedures shall be specified.

(iv) Provide personnel that have degrees or certificates of software administration, information system and security administration in order to manage and supervise operations of online securities transaction system to ensure continuity;

(v) Put the provision and use of online securities transaction services by investors in a contract or clause of the contract for opening a securities transaction account, specifying methods of carrying out online securities transactions, risks incurred during online securities transactions, which are specified in Clause 1, Article 15 of Circular 134/2017/TT-BTC, responsibilities of each party for compensation for risks and other responsibilities related to online securities transactions;

(vi) Record information on investor’s transaction request in online securities transaction system. Such information shall be stored so that it may be retrieved by time, session, transaction results and investor’s account balance arising before and after the transaction;

(vii) Report results of execution of transaction order to the investor after the order is matched in online securities transaction system.

- Asset management companies and fund certificate distributors that provide online securities transaction services shall comply with the requirements specified in Points a, b, c, dd, e and g, Clause 2 of Article 5 of Circular 134/2017/TT-BTC.

3. Applicants for provision of online securities transaction services in Vietnam

The applicant for provision of online securities transaction services is a securities company affiliated to SE, has been connected to SE’s transaction system and shall not:

- Be under dissolution or bankruptcy process, have its operation or transaction suspended to terminate membership status at SE.

- Have its brokerage operation terminated or be following the procedures for terminating brokerage operation.

- Be under control or special control.

- Other cases where its operation is terminated in accordance with regulations of law.

(Article 10 of Circular 134/2017/TT-BTC)

Thanh Rin

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE