Recently, the Prime Minister of Vietnam has issued the Decision No. 37/2020/QĐ-TTg on establishment, organization and operation of Vietnam Exchange. LAWNET would like to give Customers and Members 5 basic information about the Vietnam Exchange that everyone should know.
Article table of contents
1. What is the Vietnam Exchange?
Legally, it can be understood that the Vietnam Exchange is a form of organizing a stock market, creating a place and means for the purchase and sale of securities. It is the place where securities trading activities take place and is the agency that maintains the transaction order and serves transactions on the centralized securities trading market.
According to Clause 1 Article 1 of the Decision No. 37/2020/QĐ-TTg of the Prime Minister of Vietnam, Vietnam Exchange is a parent company organized in the model of a single-member limited liability company with the following characteristics:
- 100% charter capital is held by the State;
- Has the status of legal person and separate seal;
- Is entitled to open VND and foreign currency accounts at the State Treasury and domestic commercial banks;
- Follows independent accounting and complies with regulations on finance, statistical reporting, accounting, auditing and financial obligations in force.
Note: International name is Vietnam Exchange (abbreviated name is VNX) and headquarters is in Hanoi. Vietnam Exchange and its subsidiaries shall follow procedures for enterprise registration in accordance with the Law on enterprises.
Currently, Vietnam Exchange holds 100% of charter capital of the following companies at the time of establishment include: Hanoi Stock Exchange (HNX), Ho Chi Minh Stock Exchange (HSX).
2. The charter capital of Vietnam Exchange
According to Article 3 of the Decision No. 37/2020/QĐ-TTg of the Prime Minister of Vietnam, the charter capital of Vietnam Exchange is VND 3.000 billion, including:
- The charter capital at the time of commencement of operations which is the sum of the equity of HNX and that of HSX as shown on the audited financial statements prepared before Vietnam Exchange is issued with the enterprise registration certificate;
- Capital additionally allocated during its operations as prescribed by law.
Particularly, Vietnam Exchange shall decide the charter capital of HNX and that of HSX after obtaining approval from the Ministry of Finance.
3. Organizational structure of Vietnam Exchange
According to Article 4 of the Decision No. 37/2020/QĐ-TTg of the Prime Minister of Vietnam, the organizational structure of Vietnam Exchange is comprised of:
- Board of Members;
- General Director;
- Control Board;
- Professional departments.
Chairperson of the Board of Members and General Director of Vietnam Exchange shall be appointed and dismissed by the Minister of Finance at the request of the Board of Members.
Besides, the organizational structure of HNX or HSX is comprised of:
- Company’s President;
- General Director;
- Control Board;
- Professional departments.
Thus, the Vietnam Exchange, HNX and HSX all have an organizational structure in the form of a State-owned one-member limited liability company.
4. Charter on organization and operation of Vietnam Exchange
According to Article 5 of the Decision No. 37/2020/QĐ-TTg of the Prime Minister of Vietnam, the Minister of Finance shall promulgate and amend the Charter on organization and operation of Vietnam Exchange at the request of the Board of Members of Vietnam Exchange and according to opinions given by Chairperson of the State Securities Commission of Vietnam (SSC) instead of the Vietnam Exchange itself issues its Charter.
Besides, according to Clause 2 Article 45 of the Law on Securities 2019 of Vietnam (effective from January 01, 2021), the Charter of Vietnam Exchange shall have the following contents:
- Names and addresses of the headquarters, subsidiaries and branches;
- Objectives, operating scope and available services;
- Charter capital; method for increasing, decreasing of charter capital and stake transfer;
- Names, addresses and basic information of the founding shareholders, capital contributors or owners;
- Stakes or shares and capital contributed by the founding shareholders, capital contributors or owners;
- The legal representative;
- The organizational structure;
- Rights and obligations of Vietnam Exchange;
- Rights and obligations the shareholders, capital contributors or owners;
- Rights and obligations of the Board of members, Board of Directors, General Director (Director), the Board of Controllers (Controllers);
- Formalities for approving decisions of Vietnam Exchange;
- Formalities for amending the charter;
- Applied accounting and audit regulations;
- Establishment and use of funds; rules for use of profits, settlement of losses and other financial regulations;
- Rules for internal dispute settlement.
Charters of HXN and HSX shall be considered for approval by the Vietnam Exchange.
5. Members of Vietnam Exchange
According to Clause 1 Article 47 of the Law on Securities 2019 of Vietnam, members of Vietnam Exchange include:
- Securities companies recognized as trading members by Vietnam Exchange;
- Commercial banks, foreign branch banks (FBBs) and other organizations recognized as special trading members by Vietnam Exchange.
Besides, according to Clause 2 and 3 Article 47 of the Law on Securities 2019 of Vietnam, members of Vietnam Exchange have the specific rights and obligations as follows:
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- Key word:
- Law on Securities 2019
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