Rules for rendering services and business lines of securities companies in Vietnam

Rules for rendering services and business lines of securities companies in Vietnam (Internet image) 

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

1. Rules for rendering services and business lines of securities companies in Vietnam

According to Article 4 of Circular 121/2020/TT-BTC, when rendering their core business functions, securities companies must adhere to the following principles:

- Designing and putting to use processes and procedures.

- Issuing and adopting codes of ethics or practice.

- Both securities companies and their employees are not allowed to make investments on behalf of their customers, except in case of the authorized custody of investors’ personal accounts as prescribed in Article 19 of Circular 121/2020/TT-BTC.

- Being honest with their customers, avoiding any infringement upon their customer’s assets, other rights and interests.  Managing each customer’s assets, assets of their customers' and theirs separately.

- Entering into contracts with customers when providing services to them; providing complete and authentic information to customers.

- Unless otherwise provided by law, when providing services to customers, they are not allowed to perform, whether directly or indirectly, the following acts:

+ Deciding to invest in securities on behalf of customers;

+ Agreeing with customers on sharing of profits or losses;

+ Advertising or declaring that contents, effectiveness or methods of their analyses on securities are of greater value than those of other securities companies; 

+ Providing false information to seduce or pester customers to buy and sell a certain type of securities;

+ Giving false, fraudulent or misleading information to customers;

+ Performing other acts in contravention of laws.

- Carrying out accounting, auditing, statistics regimes and financial obligations in accordance with laws.

- Making public disclosure of information and reports in a timely, adequate and accurate manner in accordance with laws.

- Setting up stand-by information technology systems and databases to ensure safety, prudence and continuity for their business activities.

- Supervising securities trades or transactions according to regulations of the Minister of Finance.

- Securities companies must set up specialized departments in charge of communicating with customers and dealing with customer's inquiries and complaints.

- Discharging other obligations prescribed by the securities law and other relevant laws.

2. Rules for internal or intracorporate audit of securities companies in Vietnam

According to Clause 3, Article 9 of Circular 121/2020/TT-BTC, the internal or intracorporate audit must adhere to the following principles:

- Independence: The internal audit department or division must be independent from other departments of the securities company, including the executive board; internal audit activities must be independent from the corporate operations and business services or lines of the securities company; officers tasked with internal audit engagements are not allowed to undertake the audited work or hold multiple office at departments performing services or core business functions, such as investment brokerage, proprietary trading, investment analysis and consultancy, underwriting and risk management;

- Objectivity: The internal audit and its staff must have an impartial, equal and unbiased attitude when performing their assigned duties. The securities company must ensure that the internal audit is free from any interference in duly performing their duties;

Internal audit staff must be impartial in the collection, assessment and communication of information about audited operations, processes, procedures or systems.    Internal audit staff should give a fair assessment of all relevant issues and not be influenced by their own interests or goals or by anyone else when giving their comments or opinions;

- Integrity: Internal audit staff must perform their duties in an honest, discreet and responsible manner; must comply with laws and perform works in an overt manner in accordance with laws and professional ethics;

- Confidentiality: Internal audit staff should respect the value and ownership of information received, not disclosing information without valid authorization, unless they are obligated to disclose information as required by laws and the company’s internal rules and regulations.

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