Requirements for issuing the securities trading license to a securities company in Vietnam

Requirements for issuing the securities trading license to a securities company in Vietnam (Internet image) 

Regarding this issue, LawNet answers as follows:

1. Requirements for issuing the securities trading license to a securities company in Vietnam

Conditions for granting a License for establishment and securities business operations of a securities company according to Article 74 of the Law on Securities 2019 are as follows:

- The capital contributed shall be VND. The minimum charter capital for each operation of the securities company is conformable with regulations of the Government.

- Shareholders and contributing members:

+ Shareholders and contributing members that are individuals are qualified for establishment and management of enterprises in Vietnam as prescribed by the Law on Enterprises 2020;

+ Shareholders and contributing members that are organizations shall be lawfully operating juridical persons that have profitable business in 02 years prior to the year in which the license is applied for; the latest annual financial statement has been audited and received unqualified opinions;

+ Shareholders and contributing members holding at least 10% of charter capital of 01 securities company; their related persons (if any) do not hold more than 5% of charter capital of another securities company;

+ Shareholders and contributing members that are foreign investors shall satisfy the requirements specified in Article 77 of the Law on Securities 2019.

- Quantities of shareholders and contributing members:

+ At least 02 founding shareholders and contributing members shall be organizations. The owner of the securities company that is a single-member limited liability company shall be an insurer or commercial bank or foreign organization that satisfies the requirements specified in Clause 2 Article 77 of the Law on Securities 2019.

+ Total capital contributed by organizations shall be at least 65% of charter capital; capital contributed by insurers and commercial banks shall be at least 30% of charter capital.

- Infrastructural requirements:

+ The premises are adequate for securities trading;

+ Available equipment and technologies are adequate for securities trading processes.

- Personnel requirements:

There is a General Director (Director), at least 03 employees having suitable securities trading certifications for the licensed operations, and at least 01 employee in charge of compliance management. The General Director (Director) shall:

+ Not be facing criminal prosecution, serving an imprisonment sentence or being banned from securities trading as prescribed by law;

+ Have at least 02 years’ experience of working in specialized departments of finance, securities, banking, insurance organizations or in finance, accounting, investment departments of other organizations;

+ Have the practising certificate for financial analysis or asset management;

+ Not incur any administrative penalties for securities-related offences in the last 06 months prior to the application date.

The Deputy General Directors (Deputy Directors) in charge of specific operations shall satisfy the requirements specified in Points a, b, d of Clause 5 of Article 74 of the Law on Securities 2019 and have practising certificates suitable for their operation.

- A draft charter conformable with Clause 1 Article 80 of the Law on Securities 2019.

2. Operations of securities companies

Operations of securities companies according to Article 72 of the Law on Securities 2019 are as follows:

- A securities company shall be licensed to perform one, some or all of the following operations:

 Securities brokerage;

+ Proprietary trading;

+ Securities underwriting;

+ Securities investment consultancy.

- A securities company shall only be licensed for proprietary trading when it is licensed for securities brokerage.

- A securities company shall only be licensed for securities underwriting when it is licensed for proprietary trading.

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