Conditions for becoming exchange members in Vietnam

Conditions for becoming exchange members in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Conditions for becoming exchange members in Vietnam 

Conditions for becoming exchange members according to Article 97 of Decree 155/2020/ND-CP are as follows:

- The securities company is a clearing member or depository member and has a contract for clearing, payment authorization with a general clearing member; registers as exchange member that trades in debt instruments; The securities company is a depository member and is licensed to perform all securities trade operations as prescribed in Clause 1 Article 72 of the Law on Securities.

- Requirements in terms of information technology infrastructure, professional processes and personnel under regulations of the Stock Exchange are fulfilled.

- It is not put under control or special control as prescribed by law.

2. Conditions for becoming special exchange members in Vietnam

According to Clause 1, Article 99 of Decree 155/2020/ND-CP, in order to become a special exchange member, an applicant shall:

- Be a commercial bank or FBB that has a contributed or provided charter capital not lower than the legal capital and is not put under special control as prescribed by regulations of law on credit institutions;

- Be a depository member or open an account directly at VSDCC;

- Fulfill the requirements in terms of information technology infrastructure, professional processes and personnel under regulations of the Stock Exchange.

3.  Application for exchange membership

 Application for exchange membership according to Article 98 of Decree 155/2020/ND-CPP includes:

- The application form No. 25 in the Appendix of Decree 155/2020/ND-CP.

Form No 25

- The license for establishment and securities operation.

- The certificate of clearing membership (if the applicant is a clearing member)

Or certificate of depository membership and the contract for clearing, payment authorization with a general clearing member (if the applicant is not a clearing member)

Or the certificate of depository membership (for trading debt instruments).

- The description of information technology infrastructure, professional processes and personnel.

4. Suspension of members from transaction in Vietnam

According to Article 105 of Decree 155/2020/ND-CP, the suspension of members from transaction as follows:

- The Stock Exchange shall suspend some or all transactions of a member in the following cases:

+ The member is suspended from securities brokerage or proprietary trading; suspended from securities depository, clearing, payment for securities transactions;

+ The member fails to eliminate the causes for being put under control or special control as prescribed by law;

+ The conditions specified in Clause 2 Article 97, Article 99 of Decree 155/2020/ND-CP are not satisfied by the deadline imposed by the Stock Exchange;

+ The member is permitted by SSC to suspend securities brokerage or proprietary trading;

+ The certificate of clearing membership is revoked without a contract for clearing, payment authorization with the general exchange member (if the exchange member is a clearing member);

+ There is no contract or unexpired contract for clearing, payment authorization with the general exchange member (if the exchange member is a non-clearing member);

+ Other cases specified in the regulations of the Stock Exchange.

- The scope and duration of suspension shall be determined in accordance with regulations of the Stock Exchange.

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