Requirements for securities depository registration in Vietnam

Requirements for securities depository registration in Vietnam (Internet image) 

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

1. Requirements for securities depository registration in Vietnam 

According to Article 57 of the Law on Securities 2019, the requirements for securities depository registration are as follows:

- A commercial bank or FBB may apply for securities depository registration when it:

+ has the license for establishment and operation in Vietnam which allows provision of securities depository services;

+ has satisfactory capital adequacy ratios prescribed by banking laws and has profit in the last year; and

+ has the premises and equipment serving the depositing and payment of securities.

- A securities company may apply for securities depository registration when it is licensed for securities brokerage.

2. Application for securities depository registration in Vietnam

According to Article 58 of the Law on Securities 2019, the application for securities depository registration include:

- A commercial bank’s or FBB’s application for securities depository registration shall consist of:

+ The application form;

+ The applicant’s license for establishment and operation;

+ The description of the applicant’s premises and equipment serving the depositing and payment of securities;

+ Documents proving the applicant’s satisfactory capital adequacy ratios prescribed by banking law;

+ The latest audited annual financial statement.

- A securities company’s application for securities depository registration shall consist of the documents specified in Point a and Point c Clause 1 of Article 58 of the Law on Securities 2019.

3. Time limit for issuance of the certificate of securities depository registration in Vietnam

According to Article 59 of the Law on Securities 2019, the time limit for issuance of the certificate of securities depository registration is as follows:

- Within 15 days from the receipt of the satisfactory application, SSC shall decide whether to issue the certificate of securities depository registration, or reject the application and provide explanation in writing.

- Within 12 months from the issuance date of the certificate, the certificate holder shall complete the procedures for depository member registration at Vietnam Securities Depository and Clearing Corporation and initiate the securities depository operation.

4. Regulations on suspension of securities depository operation, revocation of the certificate of securities depository registration in Vietnam

Regulations on suspension of securities depository operation, revocation of the certificate of securities depository registration according to Article 60 of the Law on Securities 2019 are as follows:

- Vietnam Securities Depository and Clearing Corporation will suspend a depository member for up to 90 days if such member:

+ Regularly fails to fulfill its obligations specified in the Law on Securities 2019 and Vietnam Securities Depository and Clearing Corporation’s charter; or

+ Causes heavy damage to its clients.

- SSC will revoke the certificate of securities depository registration from a securities company, commercial bank or FBB if:

+ The certificate holder fails to rectify the violations mentioned in Clause 1 of Article 60 of the Law on Securities 2019 by the end of the suspension period;

+ The securities depository operation is not initiated within 12 months from the issuance date of the certificate;

+ The certificate holder’s has its license for establishment and operation revoked;

+ The certificate holder no longer exists or is converted as prescribed by the Law on Enterprises 2020;

+ The certificate holder wishes to terminate its securities depository operation and the termination is accepted by SSC;

+ The requirements for registration of securities depository operation specified in Article 57 of the Law on Securities 2019 are not fully satisfied.

- After the certificate of securities depository registration is revoked, the depository member shall finalize its securities depository account in accordance with regulations of Vietnam Securities Depository and Clearing Corporation.

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