Regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam

 Regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam
Lê Trương Quốc Đạt

The regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam are specified in Law on Securities 2019.

 Regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam

 Regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam (Internet image)

1. Regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam

Regulations on maintenance of fulfillment of requirements for issuance of the securities trading license in Vietnam under Article 85 of the Law on Securities 2019 are as follows:

- Maintenance of fulfillment of requirements for issuance of the securities trading license:

+ Securities companies shall maintain fulfillment of the licensing requirements specified in Clause 1, Point c and Point d Clause 2, Clause 4 and Clause 5 Article 74 of the Law on Securities 2019;

+ Branches in Vietnam of foreign securities companies shall maintain fulfillment of the licensing requirements specified in Point b and Point c Clause 1 Article 76 of the Law on Securities 2019;

+ Fund management companies shall maintain fulfillment of the licensing requirements specified in Clause 1, Point b and Point c Clause 2, Clause 4 and Clause 5 Article 75 of the Law on Securities 2019;

+ Branches in Vietnam of foreign fund management companies shall maintain fulfillment of the licensing requirements specified in Points c, d and dd Clause 2 Article 76 of the Law on Securities 2019.

- Within 30 days from the day the requirements mentioned in Clause 1 of Article 85 of the Law on Securities 2019 are no longer satisfied or the equity falls below the minimum charter capital, the Board of Directors, the Board of members or the owner of the securities company, fund management company, branch of the foreign securities company or fund management company shall approve the rectification plan and send a report to SSC. The time limit for rectification shall be 06 months for equity and 03 months for other requirements from the day on which the requirements are no longer fulfilled.

- During the rectification period:

+ a securities company must not: expand its business; distribute profit; repurchase shares except employees’ shares under the employees’ shares issuance regulations or for correction of error correction;

+ a fund management company must not: add new securities activities; distribute profits; raise capital to establish funds; establish investment companies; increase charter capital of closed-end funds, private funds and investment companies under its management; sign new investment management contracts; extend or receive additional capital from existing clients; establish branches or representative offices; make overseas investment;

+ a branch in Vietnam of a foreign securities company or fund management company must not transfer its profit overseas.

2. Regulations on obligations of securities companies and branches of foreign securities companies in Vietnam

Regulations on obligations of securities companies and branches of foreign securities companies in Vietnam according to Article 89 of the Law on Securities 2019 are as follows:

- Establish systems for internal control, risk management, supervision and preventing of conflict of interests within the company and in transactions with relevant persons.

- Make sure employees in specialized departments have appropriate securities professional certifications.

- Separately manage assets of each client, assets of clients and assets of the company.

- Sign written service provision contracts with clients; provide adequate and accurate information for clients.

- Give priority to execution of clients’ orders over the company’s orders.

- Collect information about financial status, investment purposes, risk tolerance of clients; make sure the recommendations and consultancy given by the company are appropriate for financial status, investment purposes, risk tolerance of each client, unless information is not provided or not fully and accurately provided by the client.

- Update and fully information about the clients; documents bout transactions of the clients and the company.

- Comply with regulations of law on accounting, audit, statistics, financial obligations.

- Disclose information and report fully, punctually and accurately as prescribed by law.

- Develop a information technology system and backup database to ensure safe and continuous operation.

- Supervise securities transactions in accordance with regulations of the Minister of Finance.

- Perform other obligations prescribed by this Law and relevant laws.

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