Vietnam: Compulsory principles when constructing charter of securities company from 2021

Vietnam: Compulsory principles when constructing charter of securities company from 2021
Nguyễn Trinh

On December 31, 2020, the Ministry of Finance of Vietnam issued Circular 121/TT-BTC stipulating the operation of securities companies.

Instead of promulgating a Charter Model like Vietnam's Circular 210/2012/TT-BTC, Vietnam's Circular 121/TT-BTC only stipulates the principles of securities companies when developing the company's charter, specifically as follows:

  • Its corporate Charter is not in breach of regulations of Vietnam's Law on Securities and the Law on Enterprises.
  • If it is a public company, it must consult regulations of Vietnam's Law on Securities, the Law on Enterprises and this Circular to draw up its corporate Charter. When formulating its corporate Charter, it must refer to the sample Charter applicable to public companies under regulations of corporate governance laws applied to public companies.   

  • If it is a joint stock business not yet going public, or a limited liability company, when formulating its corporate Charter, it must ensure that its corporate Charter is conformable to Vietnam's Law on Securities and the Law on Enterprises.

  • When drawing up its corporate Charter, it must consult clause 2 and 3 of this Article.  In addition, the corporate Charter must contain the following details:

    • Operating network;

    • Business scope;

    • Operating principles;

    • Licenses for establishment and operation of securities business activities;

    • Governing Board/Members’ Council; eligibility requirements or standards of its members;

    • Board of General Directors (Board of Directors), eligibility or qualification requirements or standards of its members;

    • ...

More details can be found in Vietnam's Circular 121/TT-BTC in 2020 effective from February 15, 2021.

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