THE NATIONAL ASSEMBLY
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness ---------- |
No: 70/2006/QH11
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Hanoi, June 29, 2006
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LAW
Pursuant to the 1992
Constitution of the Socialist Republic of Vietnam, which was amended and
supplemented under Resolution No. 51/2001/QH10 of December 25, 2001, of the Xth
National Assembly, the 10th session;
This Law provides for securities and securities market.
This Law provides for securities and securities market.
GENERAL PROVISIONS
Article 1.-
Scope of regulation
This Law provides for
public offering of securities, securities listing, trading and investment, and
provision of securities and securities market services.
1. Vietnamese and
foreign organizations and individuals engaged in securities investment and
operating in Vietnam's securities market.
2. Other
organizations and individuals involved in securities activities and securities
market.
1. Activities of
public offering of securities, securities listing, dealing, trading and
investment, and provision of securities and securities market services shall
comply with this Law and other relevant laws.
2. When a treaty to
which the Socialist Republic of Vietnam is a contracting party contains
provisions different from those of this Law, the provisions of that treaty
prevail. The Government shall specify the implementation of treaties in
compatibility with the international integration roadmap and commitments.
1. Respect for
organizations' and individuals' rights to freedom of securities purchase, sale
and trading as well as securities service provision.
2. Fairness,
publicity and transparency.
3. Protection of
legitimate rights and benefits of investors.
4. Accountability for
risks.
5. Compliance with
law.
1. The State shall
adopt policies to encourage and create favorable conditions for organizations
and individuals of all economic sectors and people of all social strata to
invest in and operate on the securities market, aiming to mobilize long-term
and medium-term capital sources for development investment.
2. The State shall
adopt policies to manage and supervise the securities market in order to ensure
its fair, public, transparent, safe and efficient operation.
3. The State shall
adopt policies to invest in the modernization of infrastructure for the
operation of the securities market, the development of human resources for
securities activities, and the dissemination and popularization of securities
and securities market knowledge.
In this Law, the
terms below are construed as follows:
1. Securities
means instruments evidencing their holders' legitimate rights and benefits to
the assets or capital shares of issuing organizations. Securities take the form
of certificates, book entries or electronic data, and are divided into the
following types:
a/ Stocks, bonds,
fund certificates;
b/ Rights, warrants,
call option, put option, futures, securities classes or indexes.
2. Stock means
a type of securities certifying their holders' legitimate rights and benefits
to a portion of equity of an issuing organization.
3. Bond means
a type of securities certifying their holders' legitimate rights and benefits
to a portion of liabilities of an issuing organization.
4. Fund
certificate means a type of securities certifying investors' ownership over
a portion of contributed capital of a public fund.
5. Right means
a type of securities issued by a joint-stock company along with an additional
issuance of stocks to ensure that its existing shareholders can buy new stocks
under specified conditions.
6. Warrant
means a type of securities issued along with the issuance of bonds or preferred
stocks, entitling securities holders to buy a stated amount of common stocks at
a designated price within a given period.
7. Call option,
put option mean an option stated in a contract, entitling the buyer to opt
for the purchase or sale of a stated amount of securities at a designated price
within a given period.
8. Futures
means commitments to buy or sell certain securities types, classes or indexes,
in a specified amount, at a designated price and on a given date in the future.
9. Majority
shareholder means a shareholder directly or indirectly owning at least five
percent or more of voting stocks of an issuing organization.
10. Investor
means a Vietnamese or foreign organization or individual participating in
investment on the securities market.
11. Professional
securities investor means a commercial bank, financial company, financial
leasing company, insurance business organization or securities trading
organization.
12. Public
offering of securities means the offering of securities for sale by any of
the following modes:
a/ On the mass media,
including the Internet;
b/ Offering of
securities to one hundred investors or more, excluding professional securities
investors;
c/ Offering of
securities to an unspecified number of investors.
13. Issuing
organization means an organization which issues securities to the public.
14. Issuance-underwriting
organization means a securities company licensed to operate in the domain
of underwriting securities issuance or a commercial bank licensed by the State
Securities Commission to underwrite the issuance of bonds under the conditions
specified by the Finance Ministry.
15. Accredited
audit organization means an independent audit company on the list of audit
companies accredited by the State Securities Commission for audit under the
conditions specified by the Finance Ministry.
16. Prospectus
means a document or electronic data disclosing accurate, truthful and objective
information related to the offering or the listing of securities of an issuing
organization.
17. Listing of
securities means the putting of qualified securities in trading at the
Stock Exchange or the Securities Trading Center
18. Securities
trading market means a place or mode of information exchange where/whereby
buy and sell orders are rallied and securities transactions are conducted.
19. Securities
business means the performance of such professional operations as
securities brokerage, securities dealing, securities issuance underwriting,
securities investment consultancy, securities depository, securities investment
fund management or portfolio management.
20. Securities
brokerage means an operation of a securities company acting as an
intermediary to buy or sell securities for its customers.
21. Securities
dealing means buying or selling securities by a securities company for
itself.
22. Securities
issuance underwriting means a commitment made by an issuance underwriting
organization with an issuing organization to carry out procedures before the securities
offering, undertaking to buy whole or part of the securities amount of the
issuing organization for resale or to buy the amount of undistributed
securities of the issuing organization or to assist the issuing organization in
distributing securities to the public.
23. Securities
investment consultancy means the supply of analysis results, the disclosure
of analysis reports and the provision of securities-related recommendations by
securities companies to investors.
24. Securities
depository means the receipt of securities for deposit, preservation or
transfer to customers, and the assistance rendered to customers for exercise of
the rights relating to the securities ownership.
25. Securities
registration means the acknowledgement of ownership right and other rights
of a securities owner.
26. Securities
portfolio management means the management by a securities fund management
company of the securities purchase, sale or holding of each investor under the
latter's entrustment.
27. Securities
investment fund means a fund formed from investors' contributed capital for
the purpose of earning profits from the securities investment or other types of
investment asset, including real estate, though such investors do not have the
right to daily control of the fund's investment decisions.
28. Public fund
means a securities investment fund which conducts public offering of fund
certificates.
29. Member fund
means a securities investment fund which consists of at most thirty
capital-contributing members being legal persons.
30. Open-end fund
means a public fund whose certificates, which have undergone a public offering,
should be bought back at the request of investors.
31. Closed fund
means a public fund whose certificates, which have undergone a public offering,
should not be bought back at the request of investors.
32. Inside
information means undisclosed information on a public company or a public
fund, which may, once disclosed, greatly affect the price of securities of such
public company or public fund.
33. Insiders
include:
a/ Members of the
Board of Directors, the Control Board, the Director or the General Director,
the Deputy Directors or the Deputy General Directors of the public company;
members of the Representative Committee of the public fund;
b/ Majority
shareholders of the public company or the public fund;
c/ Persons who audit
financial statements of the public company or the public fund;
d/ Other persons who
have access to inside information of the public company or the public fund;
e/ Securities companies,
securities investment fund management companies and their securities
practitioners;
f/ Organizations or
individuals that have business cooperation or service provision relations with
the public company or the public fund and individuals working in such
organizations;
g/ Organizations or
individuals that directly or indirectly get inside information from the
subjects defined at Points a, b, c, d, e and f of this Clause.
34. Affiliated
persons means individuals or organizations that are interrelated in the
following cases:
a/ Fathers, adoptive
fathers, mothers, adoptive mothers, spouses, children, adopted children or
blood siblings of individuals;
b/ Organizations of
which individuals are staff members, directors or general directors, or owners
of over ten percent of outstanding voting stocks;
c/ Members of boards
of directors or control boards, directors or general directors, deputy
directors or deputy general directors, and other management titles of such
organizations;
d/ Persons who, in
relations with others, directly or indirectly control or are controlled by the
latter, or submit, together with the latter, to the same control;
e/ Parent companies
and affiliate companies;
f/ Contractual
relations in which one party represents the other party.
1. The Government
shall perform the unified state management of securities and securities market.
2. The Finance
Ministry is answerable to the Government for the performance of state
management of securities and securities market and has the following tasks and
powers:
a/ To submit to the
Government and the Prime Minister for promulgation strategies, planning and
policies on development of securities market;
b/ To submit to
competent authorities for promulgation or promulgate according to its
competence legal documents on securities and securities market;
c/ To direct the
State Securities Commission in materializing strategies, planning and policies
on development of securities market as well as policies and regimes for
management and supervision of securities and securities market activities.
3. Ministries and
ministerial-level agencies shall, within the ambit of their tasks and powers,
coordinate with the Finance Ministry in performing the state management of
securities and securities market.
4. People's
Committees of all levels shall, within the ambit of their tasks and powers,
perform the state management of securities and securities market in their
respective localities.
1. The State
Securities Commission is attached to the Finance Ministry and has the following
tasks and powers:
a/ To grant, extend,
withdraw licenses and certificates related to securities activities and
securities market; to approve changes related to securities activities and
securities market;
b/ To manage and
supervise operations of stock exchanges, securities trading centers, securities
depository centers and assistant organizations; to suspend trading or
depositing activities of stock exchanges, securities trading centers,
securities depository centers in cases where they show signs of affecting the
legitimate rights and benefits of investors;
c/ To inspect,
supervise and handle administrative violations and settle complaints and denunciations
in securities activities and securities market;
d/ To make statistics
and forecasts on securities activities and securities market; to modernize
information technology in the domain of securities and securities market;
e/ To organize and
coordinate with concerned agencies and organizations in training and retraining
the contingent of securities officials, civil servants and staffs; to
popularize securities and securities market knowledge to the public;
f/ To guide
professional procedures for securities and securities market and relevant set
forms;
g/ To conduct
international cooperation on securities and securities market.
2. The organization,
managerial and executive apparatus of the State Securities Commission shall be
defined by the Government.
1. Directly or
indirectly tricking, swindling, fabricating untruthful information or omitting
necessary information, thus causing serious misunderstanding which badly
affects the public offering of securities, securities listing, trading or
investment, securities and securities market service provision.
2. Disclosing
misleading information in order to entice and instigate others to buy or sell
securities, or disclosing untimely and insufficient information on occurrences
which greatly affect securities prices on the market.
3. Using inside
information to buy or sell securities for oneself or for others; disclosing or
supplying inside information or advising others to buy or sell securities based
on inside information.
4. Conniving in
buying or selling securities in order to create sham supply and demand; trading
in securities by mode of colluding with or enticing others to continuously buy
and sell securities back and forth to manipulate securities prices; combining
or employing other trading modes to manipulate securities prices.
PUBLIC OFFERING OF SECURITIES
Article 10.-
Securities par values
1. Securities offered
for sale to the public in the territory of the Socialist Republic of Vietnam
are denominated in Vietnam dong (VND).
2. The par value of
stocks and fund certificates offered for the first-time sale to the public is
VND 10,000. The par values of bonds offered for sale to the public are VND
100,000 and multiples of VND 100,000.
1. Forms of public
offering of securities include the first-time public offering of securities,
additional offering of shares or rights to buy shares to the public, and other
forms.
2. The Government
shall specify the forms of public offering of securities.
1. Conditions for
public offering of stocks include:
a/ The offering
enterprise has a charter capital contributed at the time of offering
registration of VND 10 billion or more accounted according to the book value;
b/ Its business
operation in the year preceding the year of offering registration is profitable
and, at the same time, it has no accrued loss up to the year of offering
registration;
c/ Its issuance plan
and plan on the use of capital generated from the sale offering are adopted by
the Shareholders' General Assembly.
2. Conditions for
public offering of bonds include:
a/ The offering
enterprise has a charter capital contributed at the time of offering
registration of VND 10 billion or more accounted according to the book value;
b/ Its business
operation in the year preceding the year of offering registration is
profitable, and at the same time it has no accrued loss up to the year of
offering registration and has no payable debt which has been overdue for more
than one year;
c/ Its issuance plan
and plan on use and repayment of capital generated from the sale offering are
adopted by the Board of Directors, the Council of Members or its owner;
d/ It undertakes to
perform the obligation of an issuing organization towards investors in terms of
issuance and payment conditions, assurance of legitimate rights and benefits of
investors and other conditions.
3. Conditions for
public offering of fund certificates to the public include:
a/ The total value of
fund certificates registered for offering is at least VND 50 billion;
b/ There are an
issuance plan and a plan on investment of capital amount generated from the
offering of fund certificate in accordance with this Law.
4. The Government
shall provide the conditions for public offering of securities which must be
satisfied by state enterprises, foreign-invested enterprises transformed into
joint-stock companies, newly established enterprises in the fields of
infrastructure construction or high technologies; for the offering for sale of
securities overseas and other specific cases.
1. Issuing
organizations making the public offering of securities must register it with
the State Securities Commission.
2. In the following
cases, public offering of securities is not subject to registration:
a/ Offering of bonds
of the Vietnamese Government;
b/ Offering of bonds
of international financial institutions approved by the Vietnamese Government;
c/ Public offering of
stocks of state enterprises transformed into joint-stock companies;
d/ Sale of securities
under court judgments or rulings, or sale of securities of property managers or
recipients in case of bankruptcy or insolvency.
1. A dossier of
registration of public offering of stocks comprises:
a/ A written
registration of public offering of stocks;
b/ A prospectus;
c/ The issuing
organization's charter;
d/ The decision of
the shareholders' general assembly adopting the issuance plan and the plan on
use of capital generated from the public offering of stocks;
e/ An issuance
underwriting commitment (if any).
2. A dossier of
registration of public offering of bonds comprises:
a/ A written
registration of public offering of bonds;
b/ A prospectus;
c/ The issuing
organization's charter;
d/ The decision of
the Board of Directors, the Council of Members or the company's owner, adopting
the issuance plan and the plan on use and repayment of capital generated from
the public offering of bonds;
e/ A commitment to
perform the obligation of an issuing organization towards investors in terms of
issuance and payment conditions, assurance of legitimate rights and benefits of
investors and other conditions;
f/ An issuance
underwriting commitment (if any).
3. A dossier of
registration of public offering of fund certificates comprises:
a/ A written
registration of public offering of fund certificates;
b/ A prospectus;
c/ The securities
investment fund's draft charter;
d/ A supervision
contract between the supervisory bank and the securities investment fund
management company;
e/ An issuance
underwriting commitment (if any).
4. Dossiers of
registration of public offering of stocks or bonds must be accompanied with
decisions of Boards of Directors or Councils of Members or owners of companies
approving those dossiers. For the public offering of securities of credit
institutions, those dossiers must be approved in writing by the State Bank of
Vietnam.
5. When dossiers of
registration of public offering of securities are wholly or partially certified
by concerned organizations or individuals, the issuing organizations shall send
written certifications of such organizations or individuals to the State
Securities Commission.
6. Information in
dossiers must be accurate and truthful, cause no misleading and have adequate
important contents which exert an impact on investors' decisions.
7. The Finance
Ministry shall specify the dossiers of registration of public offering of
securities applicable to state enterprises, foreign-invested enterprises
transformed into joint-stock companies, newly established enterprises in the
domain of infrastructure or high technologies; of overseas offering of securities
and other specific cases.
1. For public
offering of stocks or bonds, a prospectus has the following contents:
a/ Brief information
on the issuing organization, including its organizational apparatus, business
operation, assets, financial status, Board of Directors or Council of Members
or owner, director or general director, deputy director or deputy general
director and structure of shareholders (if any);
b/ Information on the
offering and securities to be offered, including offering conditions, risks,
tentative plan on profits and dividends of the year following the issuance of
securities, the issuance plan and the plan on the use of proceeds from the
offering;
c/ The issuing
organization's financial statements for the last two years as specified in
Article 16 of this Law;
d/ Other information
specified in the model prospectus.
2. For public
offering of fund certificates, a prospectus has the following contents:
a/ Type and size of
the securities investment fund;
b/ Investment objectives,
strategy, methods and process, investment limitations and risks of the
securities investment fund;
c/ Summarized
principal contents of the securities investment fund's draft charter;
d/ Plans on issuance
of fund certificates and information guiding investors to invest in the
securities investment fund;
e/ Summarized
information on the securities investment fund management company, the
supervisory bank and regulations on transactions with affiliated persons of the
securities investment fund management company and the supervisory bank;
f/ Other information
specified in the model prospectus.
3. Signatures in the
prospectus:
a/ For the public
offering of stocks or bonds, a prospectus must contain signatures of the
chairman of the Board of Directors or the Council of Members or the company
president, the director or the general director, the financial director or the
chief accountant of the issuing organization and the representative at law of
the issuance-underwriting organization or the principal issuance underwriting
organization (if any). For signatures of persons authorized by the aforesaid
persons, the power of attorney is required.
b/ For the public
offering of fund certificates, a prospectus must contain signatures of the
chairman of the Board of Directors or the Council of Members or the company
president, the director or the general director of the securities investment
fund management company and the representative at law of the
issuance-underwriting organization (if any). For signatures of persons
authorized by the aforesaid persons, the power of attorney is required.
4. The Finance
Ministry shall promulgate the model prospectus.
1. A financial
statement consists of an accounting balance, a report on business or production
results, a cash flow report and an explanation.
2. An issuing
organization being a parent company shall submit a consolidated financial
statement according to the accounting law.
3. Annual financial
statements must be an audited by accredited audit organization.
4. If the dossier is
submitted before March 1 of a year, the annual financial statement of the
preceding year in the initial dossier may be an unaudited one, which, however,
must be accompanied with the audited financial statements of the two previous
years.
5. If the accounting
period of the latest financial statement ends more than ninety days after the
date of submission of the valid dossier of securities public offering
registration to the State Securities Commission, the issuing organization shall
make an additional financial statement for the latest month or quarter.
Article 17.- Responsibilities of organizations and
individuals related to dossiers of registration of public offering of
securities
1. Issuing
organizations shall take responsibility for the accuracy, truthfulness and
completeness of their dossiers of registration of public offering of
securities.
2. Issuance
consultancy organizations, issuance-underwriting organizations, accredited
audit organizations, persons who sign audit reports and any organizations and
individuals that certify dossiers of registration of public offering of
securities shall take responsibility for matters related to such dossiers.
Article 18.- Modification or supplementation of dossiers
of registration of public offering of securities
1. During the
examination of dossiers of registration of public offering of securities,
issuing organizations are obliged to modify or supplement such dossiers if
inaccurate information is detected in, or important information is omitted
from, such dossiers, or if they find it necessary to explain matters which
might be misunderstood.
2. In the course of
examining dossiers of registration of public offering of securities, the State
Securities Commission may request issuing organizations to modify or supplement
such dossiers in order to ensure that the disclosed information is accurate,
truthful and complete and able to help protect legitimate rights and benefits
of investors.
3. After the State
Securities Commission grants certificates of public offering of securities, if
arises any important information related to dossiers of registration of public
offering of securities, the issuing organizations shall, within seven days,
disclose such information by the modes specified in Clause 3, Article 20 of
this Law and concurrently modify or supplement such dossiers.
4. Written
modifications or supplementations submitted to the State Securities Commission
must be signed by persons who have signed the dossiers of registration of public
offering of securities or by persons holding the same position.
5. The time limit for
dossier examination in the cases specified in Clauses 1 and 2 of this Article
is counted from the date the State Securities Commission receives written
modifications or supplementations.
During the
examination of dossiers of registration of public offering of securities by the
State Securities Commission, issuing organizations, issuance-underwriting organizations
and concerned organizations and individuals may only use information in the
prospectuses already submitted to the State Securities Commission in an honest
and accurate manner for market survey, clearly stating that information on date
of issuance and securities selling prices are non-official. The market survey
may not be conducted on the mass media.
1. Within thirty days
after receiving the valid dossiers, the State Securities Commission shall
consider and grant certificates of public offering of securities. In case of
refusal, the State Securities Commission shall reply in writing, clearly
stating reasons for the refusal.
2. Certificates of
public offering of securities granted by the State Securities Commission serve
as written certifications that the dossiers of registration of public offering
of securities fully satisfy the conditions and procedures required by law.
3. Within seven days
after a certificate of public offering of securities becomes effective, the
issuing organization shall publish an issuance announcement on an electronic or
printed newspaper for three consecutive issues.
4. Securities may
only be publicly offered after they are published according to the provisions
of Clause 3 of this Article.
1. The distribution
of securities shall only be made after the issuing organization assures that
securities buyers have accessed the prospectus in the dossier of registration
of public offering of securities posted up at places indicated in the issuance
announcement.
2. The issuing
organization, the issuance underwriting organization or the issuance agent
shall distribute securities in a fair and open manner and ensure a period of at
least twenty days for investors to register to buy securities. Such a period
must be stated in the issuance announcement.
If the amount of
securities registered to be bought exceeds that allowed to be issued, the
issuing organization or the issuance-underwriting organization shall fully
distribute the amount of securities allowed to be issued to investors in
proportion to their registered amounts of securities.
3. Securities
purchase money shall be transferred into bank accounts which are frozen until
the offering is completed and reported to the State Securities Commission.
4. The issuing
organization shall complete the distribution of securities within ninety days
after the certificate of public offering of securities becomes effective. If
the issuing organization cannot complete the distribution of securities within
this time limit, the State Securities Commission may consider and prolong the
distribution of securities but for no more than thirty days.
For the registration
of securities offering to be made in installments, the interval between two
offering installments must not exceed twelve months.
5. The issuing
organization or the issuance-underwriting organization shall send a report on
the results of the offering to the State Securities Commission within ten days
after the completion of the offering, accompanied with a written certification
by the bank where the frozen account is opened of the proceeds from the
offering.
6. The issuing
organization, the issuance underwriting organization or the issuance agent
shall deliver securities or securities ownership certificates to buyers within
thirty days after the completion of the offering.
1. The State
Securities Commission may suspend the public offering of securities for no more
than sixty days in the following cases:
a/ Dossiers of
registration of public offering of securities are detected having contained
untruthful information or lacked important information, which might affect
investment decisions and cause damage to investors.
b/ The distribution
of securities fails to comply with the provisions of Article 21 of this Law.
2. Within seven days
after the public offering of securities is suspended, the issuing organization
shall announce the suspension of public offering of securities by the modes
specified in Clause 3, Article 20 of this Law and call the issued securities
when investors so request and, at the same time, refund the received money to
investors within fifteen days after the latter so request.
3. After the errors
leading to the suspension of the public offering of securities are addressed,
the State Securities Commission shall issue a written notice on suspension
cancellation and the offering of securities may be resumed.
4. Within seven days
after the notice on suspension cancellation is issued, the issuing organization
shall publish the suspension cancellation by the modes specified in Clause 3,
Article 20 of this Law.
1. After the
suspension duration specified in Clause 1, Article 22 of this Law, if errors
leading to the suspension of the public offering of securities remain
unaddressed, the State Securities Commission shall cancel the offering and ban
the sale of such securities.
2. Within seven days
after the public offering of securities is cancelled, the issuing organization
shall announce the cancellation of the public offering of securities by the
modes specified in Clause 3, Article 20 of this Law and call the issued securities
and concurrently refund the received money to investors within fifteen days
after the offering is cancelled. Past this time limit, the issuing organization
shall pay damages to investors according to agreements reached with investors.
1. Issuing
organizations that have completed the public offering of stocks become public
companies and, therefore, have to fulfill the obligations of a public company
specified in Clause 2, Article 27 of this Law. Dossiers for registration of
public offering of securities shall be regarded as public company dossiers and
issuing organizations are not required to submit public company dossiers
defined in Clause 1, Article 26 of this Law to the State Securities Commission.
2. Issuing
organizations that have completed the public offering of bonds shall perform
the information disclosure obligation specified in Article 102 of this Law.
PUBLIC COMPANIES
Article 25.-
Public companies
1. A public company
is a joint-stock company that:
a/ Has already
conducted the public offering of its stocks;
b/ Has its stocks
listed at the Stock Exchange or the Securities Trading Center; or,
c/ Has its stocks
owned by at least one hundred investors, excluding professional securities
investors, and has a contributed charter capital of VND 10 billion or more.
2. Joint-stock
companies defined at Point c, Clause 1 of this Article shall submit public
company dossiers specified in Clause 1, Article 26 of this Law to the State
Securities Commission within ninety days after they become public companies.
1. A public company
dossier comprises:
a/ The company's
charter;
b/ A copy of the
company's business registration certificate;
c/ Brief information
on the model of business organization, management apparatus and shareholders'
structure;
d/ The latest year's
financial statement.
2. Within seven days
after receiving valid dossiers, the State Securities Commission shall publicly
announce the names and business operations of and other information related to
public companies on the State Securities Commission's media.
1. Public companies
have the rights as provided for by the Enterprise Law and other relevant laws.
2. Public companies
have the following obligations:
a/ To disclose
information according to the provisions of Article 101 of this Law;
b/ To adhere to the
corporate governance principles defined in Article 28 of this Law;
c/ To conduct the
concentrated securities registration and depository at the Securities Trading
Center according to the provisions of Articles 52 and 53 of this Law;
d/ Other obligations
as provided for by the Enterprise Law and other relevant laws.
1. Public companies
shall comply with the provisions of the Enterprise Law regarding corporate
governance.
2. The Finance
Ministry shall specify the corporate governance applicable to public companies
which have their stocks listed at stock exchanges or securities trading
centers.
1. Organizations and
individuals that become majority shareholders of a public company shall report
their stock ownership to such public company, the State Securities Commission
and stock exchanges or securities trading centers where stocks of such public
company are listed within seven days after they become majority shareholders.
2. A report on a
majority shareholder's ownership covers the following contents:
a/ The name, address
and business lines, for majority shareholders being organizations; the full
name, age, nationality, place of residence and occupation, for majority
shareholders being individuals;
b/ The number and
percentage of stocks owned by the organization or individual or jointly owned
by such organization or individual and other organizations or individuals to
the total number of outstanding stocks.
3. In case of a
material change in information stated in reports defined in Clause 2 of this
Article or a change in the number of stocks owned by a majority shareholder
which exceeds one per cent of the total number of outstanding stocks, that
majority shareholder shall, within seven days after such change occurs, submit
an amended and supplemented report to the public company, the State Securities
Commission and stock exchanges or securities trading centers where the stocks
are listed.
4. The provisions of
Clauses 1, 2 and 3 of this Article also apply to affiliated persons who own
five percent or more of an issuing organization's voting stocks.
1. When redeeming
their own stocks, public companies that have no stocks listed at stock
exchanges or securities trading centers shall comply with the provisions of
Articles 90, 91 and 92 of the Enterprise Law.
2. When redeeming
their own stocks, public companies that have stocks listed at stock exchanges
or securities trading centers shall disclose information on the redemption at
least seven days before conducting it. Disclosed information covers:
a/ Redemption
purpose(s);
b/ Number of stocks
to be redeemed;
c/ Capital source(s)
for redemption;
d/ Redemption
duration.
The redemption by
public companies of their own stocks and the resale of stocks they have
purchased shall comply with the Finance Ministry's regulations.
1. Public companies
are entitled to recover all profits earned by members of their Boards of
Directors, directors or general directors, deputy directors or deputy general
directors, finance or accounting managers and other managers in their
management apparatus from the arbitrage or reverse arbitrage of their
securities within six months after the date of purchase or sale.
2. Public companies
or their shareholders are entitled to initiate lawsuits at a court for recovery
of profits earned from unfair transactions defined in Clause 1 of this Article.
1. Cases subject to
public bid:
a/ Bids for voting
stocks which lead to the ownership of twenty five percent or more of
outstanding stocks of a public company;
b/ Bids the parties
that are offered with which are compelled to sell stocks they own.
2. Organizations or
individuals that make public bid of stocks of public companies shall send their
public bid registrations to the State Securities Commission. Within seven days
after receiving public bid registrations, the State Securities Commission shall
reply in writing. In case of disapproval, it shall clearly state the reasons
therefor.
3. The public bid is
conducted only after it is approved by the State Securities Commission and
announced in advance by bid-making organizations or individuals on the mass
media.
4. A public bid
registration contains the following information:
a/ Name and address
of the bid-making organization or individual;
b/ Type of stock
subject to bid;
c/ The number of
stocks subject to bid and currently held by such organization or individual;
d/ The projected
number of stocks subject to bid;
e/ Bid duration;
f/ Bid price;
g/ Bid conditions.
5. In the course of
public bid, bid-making organizations and individuals may not take the following
acts:
a/ Directly or
indirectly buying or committing to buy stocks currently subject to bid outside
a bid drive;
b/ Selling or
committing to sell stocks for which they are making bids;
c/ Unfairly treating
owners of the same type of stock subject to bid;
d/ Supplying private
information to a certain number of shareholders or supplying information to
shareholders neither on the same scale nor at the same time. This regulation is
also applicable to issuance-underwriting organizations whose stocks are subject
to bid.
6. The duration for
conducting a public bid must be between thirty days and sixty days after the announcement
of that public bid. The bid covers also the additional bid or adjusted bid as
compared with the initial registration. An additional bid or adjusted bid as
compared with the initial registration must be conducted with terms not less
preferential than those for previous bids.
7. Stock-owning
organizations and individuals that have made margins for stocks under a public
bid are entitled to withdraw stocks at any time within the bid time limit.
8. If the number of
stocks subject to bid is smaller than that of outstanding stocks of a company
or the number of stocks put on sale is larger than that of stocks subject to
bid, stocks shall be bought on the basis of the corresponding ratio.
9. After conducting
the public bid, a bid maker that holds eighty percent or more of outstanding
stocks of a public company shall buy within thirty days stocks of the same type
held by other shareholders at the announced bid price, if these shareholders so
request.
10. Public companies
whose stocks are subject to a public bid shall announce their consents to or
refusals of the bid. In case of refusal, such companies shall reply in writing,
clearly stating the reasons therefor. Written replies of those companies must
bear signatures of at least two thirds of members of their Boards of Directors.
11. Within ten days
after the end of a public bid, bid-making organizations or individuals shall
report in writing to the State Securities Commission on the result of the
public bid.
SECURITIES TRADING MARKET
Article 33.- Organization
of securities trading market
1. A stock exchange
shall organize a securities trading market for securities of issuing
organizations qualified for listing at such stock exchange.
2. A securities
trading center shall organize a securities trading market for securities of
issuing organizations unqualified for listing at a stock exchange.
3. Organizations or
individuals other than stock exchanges and securities trading centers shall not
be licensed to organize a securities trading market.
1. Stock exchanges
and securities trading centers are legal persons established and operating
after the model of limited liability companies or joint-stock companies in
accordance with this Law.
2. The Prime Minister
shall decide on the establishment, dissolution, transformation of the
organizational structures and ownership forms of stock exchanges and securities
trading centers at the proposal of the Finance Minister.
3. Stock exchanges
and securities trading centers have the function of organizing and supervising
the trading of securities listed at such stock exchanges and securities trading
centers.
4. The operation of
stock exchanges and securities trading centers shall comply with the provisions
of this Law and their own charters.
5. Stock exchanges
and securities trading centers shall submit to the management and supervision
by the State Securities Commission.
1. Stock exchanges
and securities trading centers have their own Boards of Directors, directors,
deputy directors and Control Boards.
2. Chairmen of Boards
of Directors and directors of stock exchanges or securities trading centers are
approved by the Finance Minister at the proposal of the Boards of Directors
after obtaining the opinions of the Chairman of the State Securities
Commission.
3. Rights and duties
of Boards of Directors, directors, deputy directors and Control Boards are
specified in the charters of stock exchanges or securities trading centers.
1. Charters of stock
exchanges or securities trading centers shall be approved by the Finance Ministry
at the proposal of their Boards of Directors after obtaining the opinions of
the Chairman of the State Securities Commission.
2. The Charter of a
stock exchange or a securities trading center covers the following principal
contents:
a/ Its name and
address;
b/ Its operation
objectives;
c/ Its charter
capital; methods of increasing, reducing or transferring its charter capital;
d/ Names, addresses
and tips of its founding shareholders or capital contributing members or
owners;
e/ Capital
contributions or numbers of shares of stock and values of capital contributions
of its founding shareholders or capital contributing members;
f/ Its representative
at law;
g/ Its organizational
and managerial apparatus;
h/ Rights and
obligations of its capital contributing members or shareholders;
i/ Rights and duties
of its Board of Directors, director, deputy directors and Control Board;
j/ Mode of adoption
of its decisions;
k/ Mode of amendment
and supplementation of its charter;
l/ Applicable
accounting and audit regime;
m/ Setting up of
funds and mechanism for use thereof; principles for use of profits, handling of
losses and other financial regimes;
n/ Principles for
settlement of internal disputes.
1. To promulgate
regulations on securities listing, securities trading, information disclosure
and trading members after such regulations are approved by the State Securities
Commission.
2. To organize and
administer securities trading activities at their places.
3. To suspend, stop
or cancel securities transactions according to their securities trading
regulations in case of necessity to protect investors.
4. To list or delist
securities and supervise the maintenance of conditions for listing of securities
of listed organizations at their places.
5. To approve or
revoke the status of trading members; to supervise securities trading
activities of trading members at their places.
6. To supervise the
information disclosure by listed organizations and trading members at their
places.
7. To supply market
information and information related to listed securities.
8. To act as a
conciliation intermediary at the request of trading members upon the appearance
of a dispute related to securities trading activities.
9. To collect charges
according to the Finance Ministry's regulations.
1. To ensure public,
fair, orderly and efficient securities trading in the market.
2. To observe the
accounting, audit and statistical regimes, and fulfill financial obligations in
accordance with law.
3. To disclose
information according to the provisions of Article 107 of this Law.
4. To supply
information to and coordinate with competent state agencies in investigating,
preventing and combating acts of violating the law on securities and securities
market.
5. To coordinate with
one another in the propagation and dissemination of securities and securities
market knowledge to investors.
6. To pay damages to
trading members if they cause damage to those members, except in force majeure circumstances.
1. Trading members at
stock exchanges or securities trading centers are securities companies approved
by such stock exchanges or securities trading centers to become their trading
members.
2. Conditions and
procedures for becoming trading members at stock exchanges or securities
trading centers are specified in the regulations on trading members of such
stock exchanges or securities trading centers.
3. A trading member
has the following rights:
a/ To use the trading
system and services provided by the stock exchange or the securities trading
center;
b/ To receive
information on securities trading market from the stock exchange or securities
trading center;
c/ To request the
stock exchange or the securities trading center to act as a conciliation
intermediary for disputes related to its securities trading activities;
d/ To propose and
recommend matters related to the operation of the stock exchange or the
securities trading center;
e/ Other rights
provided for in the regulation on trading members of the stock exchange or
securities trading center.
4. A trading member
has the following obligations:
a/ The obligations
specified in Article 71 of this Law;
b/ To submit to the
supervision by the stock exchange or the securities trading center;
c/ To pay membership
fee, trading charge and other service charges prescribed by the Finance
Ministry;
d/ To disclose
information according to the provisions of Article 104 of this Law and the
regulation on information disclosure of the stock exchange or the securities
trading center;
e/ To assist other
trading members at the request of the stock exchange or the securities trading
center when necessary;
f/ Other obligations
specified in the regulation on trading members of the stock exchange or the
securities trading center.
1. When listing their
securities at stock exchanges or securities trading centers, the issuing
organizations shall satisfy the conditions on capital, business activities and
financial capability, number of shareholders or securities owners.
2. Issuing
organizations submitting listing dossiers are responsible for the accuracy,
truthfulness and completeness of their dossiers. Listing consultancy
organizations, accredited audit organizations, persons who sign audit reports
and any organizations or individuals certifying listing dossiers are
responsible therefor within the relevant scope.
3. The Government
shall specify the conditions, dossiers and procedures for listing securities at
stock exchanges or securities trading centers and for listing securities at
foreign stock exchanges.
1. Securities trading
at stock exchanges:
a/ Stock exchanges
organize the trading of listed securities by concentrated order matching and
other trading modes defined in their securities trading regulations.
b/ Securities listed
at stock exchanges may not be traded outside the stock exchanges, unless it is
provided for in the securities trading regulations of stock exchanges.
2. Securities trading
at securities trading centers:
a/ Securities trading
centers organize the trading of listed securities by mode of agreement and
other trading modes defined in their securities trading regulations.
b/ Securities listed
at securities trading centers may be traded at securities companies being
trading members of the securities trading centers according to the securities
trading regulations of such securities trading centers.
3. Stock exchanges
and securities trading centers shall obtain approval of the State Securities
Commission when they wish to organize the trading of securities of new types,
replace existing trading modes with new ones, or put to operation new trading
systems.
SECURITIES REGISTRATION, DEPOSITORY, CLEARING
AND PAYMENT
Article 42.-
Organization and operation of securities depository centers
1. Securities
depository centers are legal persons established and operating after the model
of limited liability companies or joint-stock companies in accordance with this
Law.
2. The Prime Minister
shall decide on the establishment, dissolution, transformation of
organizational structure or ownership form of securities depository centers at
the proposal of the Finance Minister.
3. Securities
depository centers have the function of organizing and supervising securities
registration, depository, clearing and payment activities.
4. Operation of
securities depository centers shall comply with the provisions of this Law and
their charters.
5. Securities
depository centers shall submit to the management and supervision by the State
Securities Commission.
1. A securities
depository center has its Board of Directors, director, deputy directors and
Control Board.
2. The chairman of
the Board of Directors and the director of a securities depository center are
approved by the Finance Minister at the proposal of the Board of Directors
after obtaining the opinions of the Chairman of the State Securities
Commission.
3. Rights and duties
of the Boards of Directors, directors, deputy directors and Control Boards are
specified in the charters of securities depository centers.
1. Charters of
securities depository centers shall be approved by the Finance Ministry at the
proposal of their Boards of Directors after obtaining the opinions of the
Chairman of the State Securities Commission.
2. The Charter of a
securities depository center covers the following principal contents:
a/ Its name, address
of its head office, its branches;
b/ Its operation
objectives;
c/ Its charter
capital; methods of increasing, reducing or transferring its charter capital;
d/ Names, addresses
and tips of its founding shareholders or capital contributing members or
owners;
e/ Capital
contributions or numbers of shares and values of capital contributions of its
founding shareholders or capital contributing members;
f/ Its representative
at law;
g/ Its organizational
and managerial apparatus;
h/ Rights and
obligations of its capital contributing members or shareholders;
i/ Rights and duties
of its Board of Directors, director, deputy directors and Control Board;
j/ Mode of adoption
of its decisions;
k/ Mode of amendment
and supplementation of its Charter;
l/ Applicable
accounting and audit regimes;
m/ Setting up of
funds and mechanism for use thereof; principles for use of profits, handling of
losses and other financial regimes;
n/ Principles for
settlement of internal disputes.
1. To promulgate
regulations on securities registration, depository, clearing and payment after
such regulations are approved by the State Securities Commission.
2. To approve or
revoke the status of depository members; to supervise the observance of their
regulations by their depository members.
3. To provide
securities registration, depository, clearing and payment services and other
services related to the securities depository at the request of customers.
4. To collect charges
under the Finance Ministry's regulations.
1. To ensure physical
and technical foundations in service of securities registration, depository,
clearing and payment activities.
2. To elaborate the
process of operation and risk management applicable to each operation.
3. To separately
manage assets of customers.
4. To pay damages to
customers in case of failure to fulfill their obligations, thus causing damage
to legitimate interests of such customers, except in force majeure circumstances.
5. To operate in the
interest of securities depositors or securities owners.
6. To take measures
to protect their databases and keep original vouchers on securities
registration, depository, clearing and payment according to the provisions of
law on accounting and statistics.
7. To set aside hedge
funds to offset customers' losses caused by technical failures or staff
mistakes in the course of operation. Hedge funds shall be set aside from
revenues from professional operations according to the Finance Ministry's
regulations.
8. To supply
information related to customers' securities ownership at the request of public
companies and issuing organizations.
9. To observe the
accounting, audit and statistical regimes and fulfill financial obligations as
provided for by law; and to report on securities depository activities
according to the Finance Ministry's regulations.
10. To be responsible
for depository and payment activities at their head offices or branches
registered for depository activities.
1. Depository members
being securities companies or commercial banks operating in Vietnam are granted
securities depository registration certificates by the State Securities
Commission and approved by securities depository centers to become their
respective depository members.
2. Depository members
have the following rights:
a/ To provide
depository services and pay securities transactions for their customers;
b/ To collect charges
according to the Finance Ministry's regulations;
c/ Other rights
provided for by law and by the securities depository centers in their
regulations.
3. Depository members
have the following obligations:
a/ To fulfill the
obligations specified in Article 46 of this Law;
b/ To contribute to
payment assistance funds according to the regulations of securities depository
centers;
c/ Other obligations
specified by law and by the securities repository centers in their regulations.
1. For a commercial
bank, the conditions for registration of securities depository activities
include:
a/ Having a license
for establishment and operation in Vietnam;
b/ Having overdue
debts not exceeding five percent of its total debit balance, and being in the
black in the last year;
c/ Having a place,
facilities and equipment in service of securities registration and depository
and securities transaction payment activities.
2. For a securities
company, the conditions for registration of securities depository activities
include:
a/ Having a license
for establishment and performance of securities brokerage or dealing operation;
b/ Having a place,
facilities and equipment in service of securities registration and depository
and securities transaction payment activities.
1. Written request
for registration of securities depository activities.
2. A copy of the
establishment and operation license.
3. Written
explanation of physical and technical foundations for performance of securities
depository activities.
4. Audited financial
statement of the last year, except for newly established securities companies.
1. The time limit for
grant of securities depository registration certificates is fifteen days after
the State Securities Commission receives valid dossiers. In case of refusal to
grant certificates, the State Securities Commission shall reply in writing,
clearly stating the reasons therefor.
2. Within twelve
months after being granted securities depository registration certificates,
securities companies or commercial banks shall carry out procedures for
registration of depository members at securities depository centers and
commencement of operation.
1. A depository
member shall be suspended from securities depository operation for a maximum
duration of ninety days in the following cases:
a/ It frequently
breaches the depository members' obligations specified by the securities
depository center;
b/ It lets errors occur,
causing heavy losses to its customers.
2. A depository
member has its securities depository registration certificate revoked in the
following cases:
a/ Upon the
expiration of the depository suspension duration, it still fails to remedy
breaches specified in Clause 1 of this Article;
b/ It fails to
commence securities depository operation within twelve months after it is
granted a securities depository registration certificate.
c/ It has its
establishment and operation license revoked;
d/ It is divided,
split, merged, consolidated, transformed, dissolved or bankrupt;
e/ It voluntarily
terminates the securities depository operation after obtaining consent of the
State Securities Commission.
3. When having their
securities depository registration certificates revoked, depository members
shall carry out procedures for finalizing their securities depository accounts
according to regulations of securities depository centers.
1. Securities of
public companies must be registered in a concentrated manner at securities
depository centers.
2. Securities of
other issuing organizations, which authorize securities depository centers to
act as their transfer agents, must be registered at those securities depository
centers.
3. Public companies
and issuing organizations defined in Clauses 1 and 2 of this Article shall
register types of their securities and information on securities owners with
securities depository centers.
1. Securities of
public companies must be deposited in a concentrated manner at securities
depository centers before being traded.
2. Securities must be
deposited at securities depository centers by mode of general depository.
Securities owners are co-owners of securities in general depository according
to proportions of their deposited securities.
3. Securities
depository centers may take into separate depository registered securities and
other assets at the request of owners.
1. The transfer of
securities ownership over securities already registered at securities
depository centers shall be made through those securities depository centers.
2. The effect of the
transfer of securities ownership at securities depository centers is provided
as follows:
a/ If securities are
already deposited in a concentrated manner at a securities depository center,
the transfer of securities ownership becomes effective on the date of taking
book entries on securities depository accounts at such securities depository
center;
b/ If securities are
not yet deposited in a concentrated manner at a securities depository center,
the transfer of securities ownership becomes effective on the date those
securities are recorded in registers managed by such securities depository
center.
1. Clearing and
payment of securities transactions are made according to regulations of
securities depository centers.
2. Securities payment
is made through securities depository centers, while payment of securities
transaction money is made through payment banks and in compliance with the
principle that securities transfer is conducted simultaneously with monetary
payment.
1. Securities in
physical or non-physical forms, and other assets of customers managed by
securities depository centers or depository members are property of their
owners and may not be treated as property of those securities depository
centers or depository members.
2. Securities
depository centers or depository members shall not use securities deposited by
customers at their places for payment of their debts.
1. Securities
depository centers and depository members shall protect confidentiality of
information related to customers' securities ownership, and deny investigation,
blockade, seizure, appropriation and transfer of customers' assets without the
latter's consents.
2. The provisions of
Clause 1 of this Article do not apply to:
a/ Auditors audit
financial statements of securities depository centers or financial statements
of depository members;
b/ Customers of
securities depository centers or depository members who wish to be informed of
their own securities ownership;
c/ Information that
is supplied at the request of competent state agencies.
1. Payment assistance
funds are formed from contributions of depository members for making payments
on depository members' behalf in case they are temporarily insolvent to pay
securities transactions.
2. Payment assistance
funds are managed by securities depository centers separately from the latter's
assets.
3. Levels of
contribution to payment assistance funds, payment assistance modes, modes of
management and use of payment assistance funds shall comply with regulations of
securities depository centers.
SECURITIES COMPANIES AND SECURITIES
INVESTMENT FUND MANAGEMENT COMPANIES
Article 59.-
Establishment and operation of securities companies and securities investment
fund management companies
1. Securities
companies and securities investment fund management companies (below referred
to as fund management companies) shall be organized in the form of limited
liability companies or joint-stock companies in accordance with the Enterprise
Law.
2. The State
Securities Commission shall grant establishment and operation licenses to
securities companies and fund management companies. Such a license concurrently
serves as a business registration certificate.
1. Securities
companies may conduct one, several or all of the following business operations:
a/ Securities
brokerage;
b/ Securities
dealing;
c/ Securities
issuance underwriting;
d/ Securities investment
consultancy.
2. Securities
companies may conduct the securities issuance underwriting operation only when
they conduct the securities dealing operation.
3. Apart from the
business operations specified in Clause 1 of this Article, securities companies
may provide financial consultancy services and other financial services.
1. Fund management
companies may conduct the following business operations:
a/ Management of
securities investment funds;
b/ Management of
securities portfolios.
2. The business
operations specified in Clause 1 of this Article shall all be stated in the
establishment and operation license of a fund management company.
3. Apart from the
business operations specified in Clause 1 of this Article, fund management
companies may mobilize and manage foreign investment funds intended to invest
in Vietnam.
Article 62.- Conditions for grant of establishment and
operation licenses to securities companies and fund management companies
1. Conditions for
grant of an establishment and operation license to a securities company or a
fund management company include:
a/ Having a head
office and facilities and equipment to serve securities trading activities.
Particularly for securities issuance-underwriting and securities investment
consultancy operations, the condition on facilities and equipment is not
compulsory;
b/ Having sufficient
legal capital as prescribed by the Government;
c/ Its director or
general director and staff members conducting securities business operations
specified in Clause 1, Article 60 and Clause 1, Article 61 of this Law possess
securities practice certificates.
2. Founding
shareholders or founding members being individuals must have full civil act
capacity and not be currently serving imprisonment sentences or banned by court
from doing business. Those being legal persons must be lawfully operating and
financially capable of making capital contributions. Founding shareholders or
founding members shall use their own capital sources to contribute capital for
establishment of securities companies or fund management companies.
Article 63.- Dossier of application for establishment and
operation license of a securities company or a fund management company
1. An application for
establishment and operation license of the securities company or fund
management company.
2. A written
explanation of material and technical foundation for performance of securities
business operations.
3. A bank's
certification of the legal capital deposited on a frozen account at that bank.
4. A tentative list
of the director or the general director and staff members conducting securities
business operations, enclosed with copies of their securities practice
certificates.
5. A list of founding
shareholders or founding members, enclosed with copies of their identity cards
or passports, for individuals, or business registration certificates, for legal
persons.
6. Copies of the last
year's financial statements, which are audited by an independent audit organization,
of founding shareholders or founding members being legal persons that have
contributed ten percent or more of the license applicant's contributed charter
capital.
7. The draft Charter
of the company.
8. A tentative plan
on business operation for the first three years suitable to business operations
requested to be licensed, enclosed with professional processes, internal
control process and risk management process.
1. The Charter of a
securities company or a fund management company must have the following
principal contents:
a/ The contents
specified in Article 22 of the Enterprise Law;
b/ The rights and
obligations of securities companies or fund management companies which are not
contrary to the provisions of this Law;
c/ The prohibitions
and limitations for the securities company or the fund management company and
for its director or general director and securities practitioners.
2. The Finance
Ministry shall promulgate a model charter of securities companies or fund
management companies.
1. Within thirty days
after receiving valid dossiers, the State Securities Commission shall grant
establishment and operation licenses to securities companies or fund management
companies. If refusing to grant licenses, the State Securities Commission shall
reply license applicants in writing, clearly stating the reasons therefor.
2. When it is
necessary to clarify matters related to dossiers of application for
establishment and operation licenses of securities companies or fund management
companies, the State Securities Commission may request representatives of
founding members or founding shareholders or persons expected to be appointed
or recruited to be directors or general directors of license applicants to
explain such matters verbally or in writing.
1. Within seven days
after being granted establishment and operation licenses, securities companies
or fund management companies shall publish those licenses on the State
Securities Commission's media and on an online newspaper or a printed newspaper
for three consecutive issues.
2. The publication of
an establishment and operation license mentioned in Clause 1 of this Article
covers the following principal details:
a/ The name of the
securities company or the fund management company;
b/ The addresses of
the company's head office, branches and representative offices (if any);
c/ The serial number
of the establishment and operation license, date of issue, and business
operations licensed to be conducted;
d/ The charter
capital;
e/ The representative
at law.
1. When adding its
securities business operations, a securities company granted an establishment
and operation license shall request the supplementation of its establishment
and operation license.
2. A dossier of
request for supplementation of establishment and operation license comprises:
a/ The written
request for supplementation of establishment and operation license;
b/ The documents
specified in Clauses 2, 3 and 8, Article 63 of this Law;
c/ The amended and
supplemented charter which has been adopted by the shareholders' general
assembly or the members' council or the company's owner;
d/ The decision of
the shareholders' general assembly and the board of directors or the decision
of the members' council or the company's owner on addition of securities
business operations.
3. Within twenty days
after receiving valid dossiers, the State Securities Commission shall grant
supplemented establishment and operation licenses. If refusing to grant such a
license, the State Securities Commission shall reply the license applicant in
writing, clearly stating the reasons therefor.
4. Securities
companies granted supplemented establishment and operation licenses shall
publish those licenses within the time limit and by the mode specified in
Clause 1, Article 66 of this Law.
1. A securities
company or a fund management company shall obtain the State Securities
Commission's written approval before making the following changes:
a/ Setting up or
shutdown of its branches, representative offices or transaction offices;
b/ Change of its
name; or relocation of its head office, branch, representative office or
transaction office;
c/ Change in the
ownership of shares or capital contribution portions accounting for ten percent
or more of its contributed charter capital due to transactions, except when its
stocks have been listed at the stock exchange or the securities trading center;
d/ Suspension of
operation, except when the operation suspension is caused by force majeure circumstances.
2. Dossiers and
procedures for approval of changes shall comply with the Finance Ministry's
regulations.
3. The time limit for
approving a change is fifteen days after the State Securities Commission
receives a valid dossier. In case of disapproval, the State Securities
Commission shall reply in writing, clearly stating the reasons therefor.
Article 69.- Division, separation, merger, consolidation
or transformation of securities companies and fund management companies
1. Securities
companies and fund management companies that are divided, separated, merged,
consolidated or transformed must obtain approval of the State Securities
Commission. The time limit for approving the division, separation, merger,
consolidation or transformation is thirty days after the State Securities
Commission receives a valid dossier. In case of disapproval, the State
Securities Commission shall reply in writing, clearly stating the reasons
therefor.
2. Dossiers and
procedures for approving division, separation, merger, consolidation or
transformation shall comply with the Finance Ministry's regulations.
3. Securities
companies and fund management companies shall carry out the division,
separation, merger, consolidation or transformation in accordance with the
Enterprise Law.
4. Companies newly
formed from the division, separation, merger, consolidation or transformation
shall carry out procedures of application for re-grant of establishment and
operation licenses according to the provisions of Article 63 of this Law.
Article 70.- Suspension and revocation of
establishment and operation licenses of securities companies or fund management
companies
1. A securities
company or a fund management company is suspended from operation in the following
cases:
a/ Its dossier of
application for grant or supplementation of establishment and operation license
contains untruthful information;
b/ Upon the
expiration of the warning time limit specified in Article 74 of this Law, it
still fails to redress the warned situation and has an accumulated loss equal
to fifty percent of its charter capital or it no longer satisfies the condition
on capital for securities business activities.
c/ It operates for
improper purposes or not in accordance with the contents in its establishment
and operation license;
d/ It fails to
maintain the conditions for grant of establishment and operation license
specified in Article 62 of this Law.
2. A securities
company or a fund management company has its establishment and operation
license revoked in the following cases:
a/ It fails to
commence its securities business operation within twelve months after being
granted the establishment and operation license;
b/ It fails to
redress the situation mentioned at Point b, Clause 1 of this Article within six
months after its operation is suspended
c/ It fails to remedy
violations specified at Points a, c and d, Clause 1 of this Article within
sixty days after its operation is suspended;
d/ It dissolves or
goes bankrupt.
3. For the case of
revocation of establishment and operation license specified at Point b, Clause
2 of this Article, the State Securities Commission may designate another
securities company to complete transactions and contracts of the company whose
establishment and operation license is revoked. In this case, the relation of
proxy is automatically established between the two companies.
4. When having its
establishment and operation license revoked, a securities company or a fund
management company shall promptly terminate all operations stated in such
license and publish a notice on an online newspaper or a printed newspaper for
three consecutive issues. The State Securities Commission shall announce the
revocation of establishment and operation licenses of securities companies or
fund management companies on its media.
1. To establish a
system for internal control, management of risks and supervision and prevention
of interest conflicts within the companies and arising from transactions with
related persons.
2. To manage
separately securities of each investor, and to separate money and securities of
investors from their own money and securities.
3. To sign written
contracts with customers for provision of services to the latter; to supply
full and truthful information to customers.
4. To prioritize the
execution of customers' orders before their own orders.
5. To collect and
scrutinize information on customers' financial status, investment purposes and
risk-offsetting capability; to ensure that investment recommendations and
consultations they provide to customers are suitable with such customers.
6. To comply with the
Finance Ministry's regulations on maintenance of liquidity capital.
7. To purchase
insurance for professional liability for securities business operations at the
companies, or set aside investor protection funds to pay compensations to
investors for damage caused by technical failures and mistakes of their staffs.
8. To keep all
vouchers and accounts which reflect in detail and truthfully customers'
transactions and their transactions.
9. To sell or allow
customers to sell securities without securities ownership, and lend securities
to customers for sale according to the Finance Ministry's regulations.
10. To comply with
the Finance Ministry's regulations on securities business operations.
11. To observe the
accounting, auditing and statistical regimes and perform financial obligations
as provided for by law.
12. To disclose
information according to the provisions of Article 104 of this Law and make
reports according to the Finance Ministry's regulations.
1. To fulfill the
obligations specified in Clauses 1, 3, 4, 5, 6, 7, 9, 10, 11 and 12, Article 71
of this Law.
2. To manage
securities investment funds and portfolios according to the provisions of this
Law, charters of securities investment funds, contracts signed with
investment-entrusting customers and contracts signed with supervisory banks.
3. To determine values
of net assets of securities investment funds according to the provisions of
Article 88 of this Law, charters of securities investment funds and contracts
signed with investment-entrusting customers.
1. To refrain from
making assessments or assuring customers of incomes or profits to be earned
from their investments or assuring customers of no loss, except for investment
in droplock securities.
2. To refrain from
disclosing information on customers, except where such disclosure is consented
to by the customers or requested by competent state management agencies.
3. To refrain from
taking acts which mislead customers and investors as to securities prices.
4. To refrain from providing
loans to customers for buying securities, unless otherwise provided for by the
Finance Ministry.
5. Founding
shareholders or founding members of a securities company or a fund management
company are not allowed to transfer their shares of stock or capital
contributions within three years after the grant of establishment and operation
licenses, except for transfer to other founding shareholders or founding
members of the same company.
Securities companies
and fund management companies are warned if their liquidity capital is reduced
to under one hundred and twenty percent of the level specified in Clause 6,
Article 71 of this Law. Securities companies and fund management companies
shall redress the warned situation within thirty days after the warning is
made.
1. The dissolution of
securities companies and fund management companies shall comply with the
provisions of the Enterprise Law. If a securities company or a fund management
company dissolves itself before the expiration of its operation duration, the
State Securities Commission's approval is required.
2. The bankruptcy of
securities companies or fund management companies must comply with the
provisions of law on bankruptcy regarding enterprises operating in the
financial or banking domain.
Article 76.- Grant of establishment and operation
licenses of foreign-invested securities companies and fund management companies
in Vietnam
1. Foreign-invested
securities companies and fund management companies in Vietnam which are
established in form of joint-ventures, joint-stock companies or companies with
100% foreign capital shall be granted establishment and operation licenses by
the State Securities Commission.
2. Conditions for
grant of establishment and operation licenses of foreign-invested securities
companies and fund management companies in Vietnam shall comply with the
provisions of Article 62 of this Law.
3. Dossiers and
procedures for grant of establishment and operation licenses of
foreign-invested securities companies and fund management companies in Vietnam
shall be specified by the Government.
Article 77.- Grant of establishment and operation
licenses of Vietnam-based branches of foreign securities companies or fund
management companies
1. Conditions for
grant of establishment and operation licenses of Vietnam-based branches of
foreign securities companies or fund management companies include:
a/ Being securities
business organizations lawfully operating in foreign countries;
b/ The conditions
specified in Clause 1, Article 62 of this Law.
2. Dossiers and
procedures for grant of establishment and operation licenses of Vietnam-based
branches of foreign securities companies or fund management companies shall be
specified by the Government.
Article 78.- Vietnam-based representative offices of
securities companies or fund management companies
1. Foreign securities
companies and fund management companies may set up their own Vietnam-based
representative offices after registering operation with the State Securities
Commission.
2. A dossier for
operation registration of a Vietnam-based representative office of a foreign
securities company or fund management company comprises:
a/ A written
registration of operation of the representative office;
b/ A copy of the
operation license of the foreign securities company or fund management company;
c/ A copy of the
Charter of the foreign securities company or fund management company;
d/ The resume of the
person expected to be appointed as the chief representative in Vietnam and the
list of staff members working in the representative office (if any).
3. Within seven days
after receiving the valid dossiers, the State Securities Commission shall grant
certificates of registration of operation of Vietnam-based representative
offices of foreign securities companies or fund management companies. If
refusing to grant certificates, the State Securities Commission shall reply
certificate applicants in writing, clearly stating the reasons therefor.
4. The scope of
operation of representative offices covers one, several or all of the following
activities:
a/ Functioning as
liaison and market survey offices;
b/ Proceeding with
the formulation of cooperation projects in the domain of securities and
securities market in Vietnam;
c/ Urging and
supervising the performance of contracts and agreements already signed between
foreign securities companies or fund management companies and Vietnamese
economic organizations;
d/ Urging and
supervising the execution of projects funded by foreign securities companies or
fund management companies in Vietnam.
5. Representative
offices may not conduct securities business operations.
6. Representative
offices shall submit to the management and supervision by the State Securities
Commission.
1. Securities
business practice certificates are granted to individuals who satisfy the
following conditions:
a/ Having full civil
act capacity; neither serving imprisonment sentences nor being banned by court
from business practice;
b/ Possessing
university degrees; having professional qualifications in the field of
securities and securities market;
c/ Having passed the
examinations organized by the State Securities Commission; for foreigners who
possess certificates of professional qualifications in securities market or who
have lawfully practiced securities business in foreign countries, only tests of
Vietnam's securities law are required.
2. A dossier of
application for a securities business practice certificate comprises:
a/ A written
application for a securities business practice certificate;
b/ The applicant's
resume certified by the administration of the locality where he/she resides;
c/ Copies of
professional diplomas and certificates.
3. For foreigners
defined at Point c, Clause 1 of this Article, a dossier of application for a
securities business practice certificate comprises:
a/ A written
application for a securities business practice certificate;
b/ The applicant's
resume certified by a competent authority of the country of his/her
nationality, accompanied with a copy of his/her passport;
c/ Copies of
professional certificates or documents evidencing his/her lawful securities
practice in the foreign country.
4. Within seven days
after receiving valid dossiers, the State Securities Commission shall grant
securities business practice certificates. If refusing to grant certificates,
the State Securities Commission shall reply the applicants in writing, clearly
stating the reasons therefor.
5. A securities
business practice certificate is valid only when the certificate holder works
in a securities company or a fund management company and is notified by that
company to the State Securities Commission.
6. Within two days
after a securities business practice certificate grantee no longer works for a
securities company or a fund management company, that company shall notify such
to the State Securities Commission.
1. Securities
practitioners have their practice certificates revoked in the following cases:
a/ They no longer
satisfy the conditions for grant of securities business practice certificates
specified at Point a, Clause 1, Article 79 of this Law;
b/ They violate the
provisions of Article 9, Clause 1 and Clause 3, Article 81 of this Law;
c/ They have failed
to practice securities business for three years in a row.
2. Securities
practitioners who have their securities business practice certificates revoked
in the cases specified at Point b, Clause 1 of this Article shall not be
re-granted those certificates.
1. A securities
practitioner may not:
a/ Concurrently work
for another organization having an ownership relation with the securities
company or the fund management company where he/she is working;
b/ Concurrently work
for another securities company or fund management company;
c/ Concurrently act
as the director or the general director of an organization conducting the
public offering of securities or a listing organization.
2. When working for
securities companies, securities practitioners are entitled to open securities
trading accounts for themselves at the very securities companies.
3. Securities
practitioners may not use money and securities on customers' accounts without
being entrusted by such customers.
4. Securities
practitioners shall attend training courses on securities law, new trading
systems and securities types, which are organized by the State Securities
Commission, stock exchanges or securities trading centers.
SECURITIES INVESTMENT FUNDS, SECURITIES
INVESTMENT COMPANIES AND SUPERVISORY BANKS
Section I. GENERAL
PROVISIONS ON SECURITIES INVESTMENT FUNDS
Article 82.-
Types of securities investment funds
1. Securities
investment funds include public funds and member funds.
2. Public funds
include open-end funds and closed funds.
1. The establishment
and public offering of fund certificates of public funds shall be conducted by
fund management companies according to the provisions of Article 90 of this Law
and registered with the State Securities Commission.
2. The establishment
of member funds shall be conducted by fund management companies according to
the provisions of Article 95 of this Law and reported to the State Securities
Commission.
1. Investors have the
following rights:
a/ To enjoy benefits
from investment activities of securities investment funds in proportion to
their capital contributions;
b/ To enjoy benefits
and assets lawfully divided from the liquidated assets of securities investment
funds;
c/ To request fund
management companies or supervisory banks to buy back open-end fund
certificates;
d/ To initiate
lawsuits against fund management companies, supervisory banks or related
organizations which infringe upon their legitimate rights and interests;
e/ To exercise their
rights through the investors' congress;
f/ To transfer fund
certificates according to charters of securities investment funds;
g/ Other rights
specified in charters of securities investment funds.
2. Investors have the
following obligations:
a/ To abide by
decisions of the investors' congress;
b/ To pay in full
money amounts for purchase of fund certificates;
c/ Other obligations
specified in charters of securities investment funds.
1. The investors'
congress of a securities investment fund, which is attended by all investors,
is the highest decision-making body of that securities investment fund.
2. The investors'
congress of a securities investment fund has the following rights and duties:
a/ To elect, dismiss
or remove from office the chairman and members of the Representative Committee
of that securities investment fund;
b/ To decide on
remuneration and operation expenditure of the Representative Committee of that
securities investment fund;
c/ To change rates of
charges to be paid to the fund management company and the supervisory bank;
d/ To examine and
handle violations by the fund management company, the supervisory bank and the
fund's Representative Committee, which cause damage to the securities
investment fund;
e/ To decide on
amendments and/or supplements to the Charter of the securities investment fund
and the supervision contract; to decide on the listing of closed fund
certificates;
f/ To decide on basic
changes in investment policies, profit distribution plans and investment
objectives of the securities investment fund, and the dissolution of the
securities investment fund;
g/ To decide on
change of the fund management company or the supervisory bank;
h/ To request the
fund management company or the supervisory bank to present books or transaction
documents at the investors' congress;
i/ To adopt annual
reports on financial status, assets and operation of the securities investment
fund;
j/ To approve the
selection of accredited audit organizations to audit annual financial
statements of the securities investment fund;
k/ The rights and
duties specified in the Charter of the securities investment fund.
3. The investors'
congress of securities investment funds is annually or extraordinarily held to
consider and decide on matters falling under the competence of the investors'
congress. The holding and proceeding mode of the investors' congress and
adoption of its decisions shall comply with the Finance Ministry's regulations
and the charters of securities investment funds.
1. The Charter of a
securities investment fund shall be drafted by the fund management company and
adopted by the investors' congress.
2. The Charter of a
securities investment fund must have the following principal contents:
a/ The names of the
securities investment fund, the fund management company and the supervisory
bank;
b/ The date of
establishment of the securities investment fund;
c/ The operation
objectives, investment domains and operation duration of the securities
investment fund;
d/ The contributed
capital and provisions on increase of capital of the securities investment
fund;
e/ Rights and
obligations of the fund management company and the supervisory bank; cases of
change of the fund management company or the supervisory bank; provisions on
authorization for the fund management company to sign supervision contracts
with supervisory banks;
f/ Provisions on the
securities investment fund's Representative Committee and investors' congress;
g/ Investment
limitations of the securities investment fund;
h/ Provisions on
registration of ownership of fund certificates and archive of the fund's
register of investors;
i/ Provisions on
selection of the supervisory bank; selection and change of accredited audit
organizations;
j/ Provisions on
transfer, distribution and buyback of open-end fund certificates; provisions on
listing of close fund certificates;
k/ Assorted expenses
and incomes of the securities investment fund; charge rates and bonus levels
applicable to the fund management company and the supervisory bank; cases and
methods of dividing incomes of the securities investment fund to investors;
l/ The method of
determining the net assets value of the securities investment fund and that of
each fund certificate;
m/ Provisions on
settlement of interest conflicts;
n/ Provisions on
reporting regime;
o/ Provisions on
dissolution of the securities investment fund;
p/ The commitments of
the supervisory bank and the fund management company to fulfill their
obligations toward the securities investment fund and investors, and to abide
by the charter of the securities investment fund;
q/ The mode of
amending and supplementing the Charter of the securities investment fund.
3. The model charter
of securities investment funds shall be provided for by the Finance Ministry.
1. A securities
investment fund is dissolved in the following cases:
a/ The operation
duration stated in its charter expires;
b/ The investors'
congress decides to dissolve it before the expiration of the operation duration
stated in its Charter.
2. At least three
months before the planned date of dissolution, the fund's Representative
Committee shall convene the investors' congress to adopt the plan on
dissolution of the securities investment fund.
3. The fund
management company and the supervisory bank shall complete the liquidation and
division of the fund's assets to the investors under the plan adopted by the
investors' congress.
4. The proceeds from
the liquidation of the securities investment fund's assets and assets remaining
after its dissolution must be settled in the following order:
a/ To fulfill
financial obligations toward the State;
b/ To pay amounts
payable to the fund management company and the supervisory bank, other payables
and expenses for dissolution of the securities investment fund;
c/ To be divided to
investors in proportion to their capital contributions to the fund.
5. Within five days
after the completion of the dissolution of the securities investment fund, the
fund management company and the supervisory bank shall report to the State
Securities Commission on the result of the dissolution of the securities
investment fund.
1. The determination
of the net asset value of a securities investment fund shall be conducted by
the fund management company and certified by the supervisory bank.
2. The determination
of the net asset value of a securities investment fund must adhere to the
following principles:
a/ For securities
listed at the Stock Exchange or the Securities Trading Center, their prices are
determined to be the closing prices or the average price of the trading day
preceding the date of valuation;
b/ For assets other
than securities specified at Point a of this Clause, the determination of their
value must be based on the procedures and method of asset valuation clearly
stated in the Charter of the securities investment fund. The procedures and
method of valuation must be explicit and rational for uniform application,
certified by the supervisory bank and approved by the fund's Representative
Committee or investors' congress. Parties taking part in the asset valuation
must be independent from the fund management company and the supervisory bank
or the depository bank;
c/ Monetary assets
include dividends and interests calculated according to their booked values at
the time of valuation.
3. The net asset
value of the securities investment fund must be periodically and publicly
notified according to Article 105 of this Law.
1. The fund
management company shall periodically or extraordinarily report to the State
Securities Commission on the investment portfolio, investment activities and
financial status of the securities investment fund.
2. The Finance
Ministry shall specify the regime of reporting on securities investment funds.
Article 90.-
Mobilization of capital for establishment of public funds
1. The mobilization
of capital of a public fund shall be conducted by the fund management company
within ninety days after the certificate of public offering of fund
certificates takes effect. A public fund is established when at least one
hundred investors, excluding professional securities investors, buy fund
certificates and the total value of sold fund certificates reaches at least VND
50 billion.
2. Total capital
amount contributed by investors must be frozen at a separate account controlled
by the supervisory bank and must not be used until the capital mobilization
completes. The fund management company shall report to the State Securities
Commission on capital mobilization results certified by the supervisory bank
within ten days after the completion of the capital mobilization.
3. When the public
fund's capital mobilization fails to satisfy the condition specified in Clause
1 of this Article, the fund management company shall refund all contributed
amounts to investors within fifteen days after the completion of the capital
mobilization. The fund management company shall bear all expenses and fulfill
financial obligations arising from the capital mobilization.
1. The Representative
Committee of the public fund represents the benefits of investors and is
elected by the investors' congress. The rights and obligations of the Representative
Committee of the public fund shall be provided in the securities investment
fund Charter.
2. Decisions of the
Representative Committee of the public fund are adopted by voting at its
meetings, gathering its members' written opinions or by other modes prescribed
in the securities investment fund charter. Each member of the Representative
Committee of the public fund has one vote.
3. The Representative
Committee of the public fund consists of between three and eleven members, of
which at least two-thirds are independent members who are not affiliated
persons of the fund management company and the supervisory bank.
4. Term of office,
criteria, number, appointment, dismissal, removal from office and addition of
members of the fund's Representative Committee, the chairman of the fund's
Representative Committee, conditions and mode of meeting and adoption of
decisions of the fund's Representative Committee shall be provided in the
securities investment fund Charter.
1. The fund
management company may not use the capital and assets of the securities
investment fund for the following activities:
a/ Investing in fund
certificates of the very public fund or another investment fund;
b/ Investing in
securities of an issuing organization in excess of fifteen percent of the total
value of outstanding securities of such organization;
c/ Investing more
than twenty percent of the total asset value of the fund in outstanding
securities of an issuing organization;
d/ Investing more
than ten percent of the total asset value of a closed fund in real estate;
investing capital of an open-end fund in real estate;
e/ Investing more
than thirty percent of the total asset value of the public fund in companies of
the same group which have ownership interrelations;
f/ Providing loans or
guarantees for any loans.
2. The fund
management company may not borrow loans to finance activities of the public
fund, except for short-term loans to pay necessary expenditures of the public
fund. The total value of short-term loans of the public fund must not exceed
five percent of its net asset value at any time and the maximum loan term is
thirty days.
3. Except for the
case specified at Point f, Clause 1 of this Article, the investment structure
of the public fund may vary but by not more than fifteen percent compared with
the investment restrictions specified in Clause 1 of this Article. Variants
must result from an increase or decrease in the market value of invested assets
and lawful payments of the public fund.
4. The fund
management company is obliged to report to the State Securities Commission and
disclose information on the above-said variants. Within three months after such
a variant arises, the fund management company shall readjust the investment
portfolio to assure the investment limits specified in Clause 1 of this
Article.
1. For the redemption
from investors and resale or additional issuance of an open-end fund's
certificates within its maximum paid-in capital by the fund management company
or the supervisory bank on the fund's behalf, a decision of the investors'
congress is not required.
2. The frequency and
specific time of redemption of open-end fund certificates shall be provided in
detail in the fund Charter.
3. The fund
management company is not required to redeem open-end fund certificates on the
fund's behalf upon the occurrence of one of the following events:
a/ It is unable to
redeem open-end fund certificates as requested due to force majeure circumstance;
b/ It is unable to
determine the net asset value of the open-end fund on the date of fixing
redemption prices of open-end fund certificates due to the fact that the Stock
Exchange or the Securities Trading Center decides to stop securities
transactions in the fund's portfolio;
c/ Other events
specified by the fund's charter.
4. The fund
management company shall report to the State Securities Commission within
twenty four hours after the occurrence of any of the events specified in Clause
3 of this Article and continue the redemption of open-end fund certificates
after such event terminates.
5. The Finance
Ministry shall specify the issuance and redemption of open-end fund
certificates.
1. The increase of
the capital of a closed fund must be approved by the State Securities
Commission and satisfy the following conditions:
a/ The fund's Charter
provides for the increase of its capital;
b/ The fund's profit
in the year preceding the year of request for capital increase is in positive
figures;
c/ The fund
management company has not been sanctioned for administrative violations in
securities activities and securities market within two years up to the time of
request for capital increase;
d/ The plan on
additional issuance of closed fund certificates is adopted by the investors'
congress.
2. Closed fund
certificates are issued to the fund's existing investors only by means of
distribution of the right to buy transferrable closed fund certificates.
3. Dossiers and
procedures for requesting the increase of capital of closed funds shall be
specified by the Finance Ministry.
1. A member fund is
established by capital-contributing members on the basis of a capital
contribution contract and the fund's charter.
2. The establishment
of a member fund must satisfy the following conditions:
a/ The fund's minimum
contributed capital is VND 50 billion;
b/ There are at most
thirty capital-contributing members being legal persons;
c/ The fund is
managed by a fund management company;
d/ The fund's assets
are deposited at a depository bank independent from the fund management
company.
Article 96.-
Securities investment companies
1. Securities
investment companies shall be organized in the form of joint-stock companies in
accordance with the Enterprise Law to invest in securities.
2. The State
Securities Commission shall grant establishment and operation licenses of
securities investment companies. Such a license concurrently serves as a
business registration certificate.
1. Conditions for
grant of establishment and operation license of a securities investment company
include:
a/ It has a minimum
capital of VND 50 billion;
b/ Its director or
general director and management staffs possess securities practice certificates
in case the securities investment company manage its own investment capital.
2. Securities
investment companies shall comply with the following regulations:
a/ The investment
limitations specified in Article 92 of this Law;
b/ The provisions on
asset valuation and reporting regime in Articles 88 and 89 of this Law;
c/ The obligations of
public companies specified in Clause 2, Article 27 of this Law;
d/ Money and assets
of a securities investment company must be wholly deposited at a supervisory
bank.
3. The Government
shall specify the establishment, organization and operation of securities
investment companies.
Article 98.-
Supervisory banks
1. Supervisory banks
are commercial banks having certificates of registration of securities
depository activities and the function of providing depository services and
supervising the management of public funds and securities investment companies.
2. A supervisory bank
has the following obligations:
a/ To perform the
obligations specified in Clause 3, Article 47 of this Law;
b/ To keep in
depository assets of public funds or securities investment companies; to manage
assets of public funds or securities investment companies independently from
its own assets.
c/ To supervise and
ensure that the fund management companies manage the public funds, the
directors or general directors of securities investment companies manage the
company assets in compliance with this Law and the charters of securities
investment funds or securities investment companies;
d/ To conduct revenue
and expenditure, payment, and money and securities transfer activities related
to operation of public funds or securities investment companies upon lawful
requests of the fund management companies or directors or general directors of
securities investment companies;
e/ To certify reports
made by the fund management companies or securities investment companies on
public funds or securities investment companies;
f/ To supervise the
observance of the reporting and information disclosure regime by the fund
management companies or securities investment companies in accordance with this
Law;
g/ To report to the
State Securities Commission on detected violations of law or charters of
securities investment funds or securities investment companies committed by the
fund management companies, securities investment companies or concerned
organizations or individuals;
h/ To coordinate with
fund management companies or securities investment companies in periodically
comparing accounting books, financial statements and trading activities of
public funds or securities investment companies;
i/ Other obligations
specified in charters of securities investment funds or securities investment
companies.
1. Supervisory banks,
members of Boards of Directors, executive officers and staff members of
supervisory banks personally supervising the operation of public funds and
preserving fund assets of supervisory banks must not be affiliated persons of,
or persons having the ownership, borrowing or lending relations with, fund
management companies or securities investment companies or vice versa.
2. Supervisory banks,
members of Boards of Directors, executive officers and staff members of
supervisory banks personally supervising and preserving assets of public funds
or securities investment companies must not be trading partners in transactions
of buying or selling assets of public funds or securities investment companies.
DISCLOSURE OF INFORMATION
Article 100.-
Information disclosure subjects and modes
1. Issuing
organizations, listing organizations, public companies, securities companies,
fund management companies, securities investment companies, stock exchanges and
securities trading centers are obliged to disclose information in a sufficient,
accurate and timely manner in accordance with this Law.
2. When disclosing
information, the subjects specified in Clause 1 of this Article shall
concurrently report to the State Securities Commission on disclosed information
contents.
3. The disclosure of
information shall be conducted by directors or general directors or their
authorized persons.
4. Information is
disclosed on the mass media, publications of organizations or companies and
communication media of the Stock Exchange or the Securities Trading Center.
5. The Finance
Ministry shall specify the information contents to be disclosed and the modes
of information disclosure by subjects specified in Clause 1 of this Article.
1. Within ten days
after having their annual financial statements audited, public companies shall
disclose periodical information on such annual financial statements according
to the provisions of Clauses 1 and 2, Article 16 of this Law.
2. A public company
shall disclose extraordinary information within twenty four hours after the
occurrence of one of the following events:
a/ Its bank account
is frozen or is permitted to resume after a freezing period;
b/ It temporarily
ceases its business operation;
c/ It has its
business registration certificate or its establishment and operation license or
its operation license revoked;
d/ Its shareholders'
general assembly's decisions as specified in Article 104 of the Enterprise Law
are adopted;
e/ Its Board of
Directors makes decisions on redemption of its own stocks or resale of bought
stocks, on the date of exercise of the right to buy stocks by owners of
warranted bonds or the date of conversion of convertible bonds into stocks, and
decisions related to the offering according to the provisions of Clause 2,
Article 108 of the Enterprise Law;
f/ There are
decisions to initiate lawsuits against members of its Board of Directors,
director or general director, deputy director or deputy general director, or
chief accountant; there are court judgments or rulings concerning its
operation; there are conclusions of tax offices on its violations of the tax
law.
3. A public company
shall disclose extraordinary information within seventy two hours after the
occurrence of one of the following events:
a/ It decides to
borrow a loan or issue bonds valued at thirty percent or more of its actual
capital;
b/ Its Board of
Directors makes decisions on its development strategy, medium-term development
plans and annual business plans; or decisions on alteration of applied
accounting method;
c/ It is notified by
the court of the acceptance of its application for opening of business
bankruptcy procedures.
4. A public company
shall disclose information at the request of the State Securities Commission
when one of the following events occurs:
a/ There appears
information related to it, which severely affects the legitimate benefits of
investors;
b/ There appears
information related to it, which greatly impacts securities prices and needs to
be verified.
Article 102.- Disclosure of information of issuing
organizations which conduct public offering of bonds
1. Issuing
organizations that conduct public offering of bonds shall disclose periodical
information according to the provisions of Clause 1, Article 101 of this Law.
2. Issuing
organizations that conduct public offering of bonds shall disclose extraordinary
information within seventy two hours after the occurrence of any event
specified at Points a, b and c, Clause 2, and Clause 3 of Article 101 of this
Law.
1. Apart from the
obligation to disclose information specified in Article 101 of this Law, a
listing organization shall also:
a/ Disclose
information within twenty four hours after an asset loss valued at 10% of its
own capital or more;
b/ Disclose
information on a quarterly financial statement within five days after the
completion of that statement;
c/ Disclose
information according to regulations of the Stock Exchange or the Securities
Trading Center.
2. When disclosing
information, a listing organization shall concurrently report to the Stock
Exchange or the Securities Trading Center on the disclosed information
contents.
1. Within ten days
after having its annual financial statement audited, a securities company or a
fund management company shall disclose periodical information on that annual
financial statement.
2. Within twenty four
hours after the occurrence of any of the following events, a securities company
or a fund management company shall report it to the Stock Exchange or the
Securities Trading Center so that the latter can disclose information according
to the provisions of Clause 2, Article 107 of this Law:
a/ A decision on
prosecution against a member of the Board of Directors or the Members' Council,
the director or general director, a deputy director or deputy general director,
or the chief accountant;
b/ The shareholders'
general assembly or the Members' Council adopts a contract on merger with
another company;
c/ The company suffers
a loss equal to 10% of its asset value or more;
d/ The company
changes a member of the Board of Directors or the Members' Council, the
director or general director, a deputy director or deputy general director; the
company appoints or dismisses the executive officer of the securities
investment fund;
e/ The company
experiences important changes in its business operation.
3. A securities
company shall disclose at its head office, branches and order-receiving agents
information on changes related to the addresses of its head office, branches
and order-receiving agents; contents relevant to modes of trading, placing
orders and paying deposits for trading, time for payment, trading fee, services
provided and a list of securities practitioners of the company.
4. When requested by
the State Securities Commission, a securities company or a fund management
company shall disclose information related to it, which severely affects
legitimate benefits of investors.
1. A fund management
company shall disclose periodical information on a public fund's annual asset
report within ten days after that asset report is audited.
2. A fund management
company shall disclose the following periodical information on a public fund:
a/ Weekly, monthly,
quarterly and annual changes in net assets of the public fund;
b/ Assets of the
public fund in every month, quarter and year;
c/ Monthly, quarterly
and annual situation and results of investment activities of the public fund.
3. Within twenty four
hours after the occurrence of any of the following events in a public fund, the
fund management company shall report it to the Stock Exchange or the Securities
Trading Center so that the latter can disclose information according to the
provisions of Clause 2, Article 107 of this Law:
a/ Adoption of a
decision of the investors' congress;
b/ Issuance of a
decision on offering of the public fund's certificates;
c/ Issuance of a
decision on change of investment capital of the public fund;
d/ Withdrawal of the
certificate of public offering of the public fund's certificates;
e/ Termination or
cancellation of a public offering of the public fund's certificates.
4. When requested by
the State Securities Commission, a fund management company shall disclose
information on a public fund upon the occurrence of any of the following
events:
a/ A rumor that
affects the offering and price of the public fund's certificates;
b/ An abnormal
fluctuation of price and trading volume of the public fund's certificates.
1. Securities
investment companies that conduct public offering of stocks shall disclose
information according to the provisions of Article 101 and Clause 2, Article
105 of this Law.
2. Securities
investment companies whose stocks are listed at the Stock Exchange or the
Securities Trading Center shall disclose information according to the
provisions of Article 103 of this Law.
The Stock Exchange or
the Securities Trading Center shall disclose the following information:
1. Information on
securities trading at that Stock Exchange or Securities Trading Center;
2. Information on
organizations listed at that Stock Exchange or Securities Trading Center;
information on securities companies, fund management companies, securities
investment funds, securities investment companies;
3. Information on
supervision of activities of the securities market.
INSPECTION, AND HANDLING OF VIOLATIONS
Section 1. INSPECTION
Article 108.-
Securities inspectorate
1. The securities
inspectorate is a specialized inspectorate in the domain of securities and
securities market.
2. The securities
inspectorate is composed of the chief inspector, the deputy chief inspector and
inspectors.
3. The securities
inspectorate shall submit to the professional direction of the Finance
Ministry's inspectorate in accordance with the inspection law and this Law.
1. Subjects of
inspection include:
a/ Organizations
conducting public offering of securities;
b/ Public companies;
c/ Organizations
listing securities;
d/ Stock Exchanges
and Securities Trading Centers;
e/ Securities depository
centers, depository members;
f/ Securities
companies, fund management companies, securities investment companies,
supervisory banks; Vietnam-based branches and representative offices of foreign
securities companies or fund management companies;
g/ Securities
practitioners;
h/ Organizations and
individuals participating in investment and conducting activities on the
securities market;
i/ Other
organizations and individuals involved in securities activities and securities
market.
2. Scope of
inspection covers:
a/ Public offering of
securities;
b/ Securities
listing;
c/ Securities
trading;
d/ Securities
business and investment, provision of securities and securities market
services;
e/ Information
disclosure;
f/ Other activities
related to securities and securities market.
1. Inspections under
programs or plans approved by the Chairman of the State Securities Commission.
2. Extraordinary
inspections shall be conducted upon detection of signs of violation of the law
on securities and securities market by organizations or individuals
participating in investment and conducting activities on the securities market;
according to the requirements of the settlement of complaints and
denunciations, or under assignment by the Chairman of the State Securities
Commission.
1. A securities
inspection is conducted only under an inspection decision of a competent person
defined in Clause 2 of this Article.
2. The chief
securities inspector shall issue inspection decisions and set up inspection
teams. When necessary, the Chairman of the State Securities Commission shall
issue inspection decisions and set up inspection teams.
An inspection team is
composed of a head and members.
3. The issuance of an
inspection decision must be based on one of the following grounds:
a/ An inspection plan
or program approved by the Chairman of the State Securities Commission;
b/ Request of the
Chairman of the State Securities Commission;
c/ Detection of signs
of a violation of the law on securities and securities market.
1. An inspection
decision must contain the following details:
a/ Legal grounds for
inspection;
b/ Inspection
subject, content, scope and task;
c/ Inspection
duration;
d/ Head and members
of the inspection team.
2. Within three days
after an inspection decision is signed, it must be sent to the subject of
inspection, except for extraordinary inspection.
3. An inspection
decision must be notified within fifteen days after it is issued. The
notification of inspection decisions must be in writing.
1. An inspection
shall not exceed thirty days counting from the date of notification of the
inspection decision to the date of conclusion of the inspection at the
inspected place.
2. When necessary,
the inspection decision issuer may extend the inspection duration, for only
once. The extended duration shall not exceed the duration specified in Clause 1
of this Article.
1. Rights of
inspected subjects:
a/ To explain matters
relevant to the inspection contents;
b/ To reserve their
opinions in written records of inspection;
c/ To refuse to
supply information or documents classified as state secrets according to
provisions of law, and information or documents irrelevant to inspection
contents;
d/ To lodge
complaints with the inspection decision issuer about decisions and acts of the
head or members of the inspection team in the course of inspection when they
have grounds to deem those decisions or acts are illegal; to lodge complaints
with the Chairman of the State Securities Commission about inspection
conclusions or inspection handling decisions when they have grounds to believe
that those conclusions or decisions are illegal. Pending the settlement, the
complainants shall still abide by the inspection conclusions and handling
decisions;
e/ To claim damages
in accordance with law;
f/ Inspected subjects
being individuals are entitled to denounce violations committed by the chief
inspector, heads and members of inspection teams.
2. Obligations of
inspected subjects:
a/ To abide by
inspection decisions;
b/ To supply
promptly, adequately and accurately information, documents or electronic data
relevant to inspection contents at the request of inspectors and to take
responsibility for the adequacy, accuracy and truthfulness of supplied
information, documents or electronic data.
c/ To satisfy
requests, and abide by inspection conclusions and handling decisions of
inspectors and competent state agencies;
d/ To sign written
records of inspection.
1. An inspection
decision issuer has the following tasks and powers:
a/ To direct and
supervise the strict observance of inspection contents and duration stated in
the inspection decision by the inspection team;
b/ To request the
inspected subject to supply information, documents or electronic data, to
report in writing or to explain matters relevant to inspection contents; to
request organizations or individuals possessing information or documents
relevant to inspection contents to supply such information or documents;
c/ To solicit the
assessment of matters relevant to inspection contents;
d/ To request
competent persons to seal up or temporarily seize documents, vouchers,
securities and electronic data relevant to acts of violating the law on
securities and securities market when he/she finds it necessary to promptly
prevent those acts or to verify circumstances to serve as proofs supporting the
inspection decision;
e/ To request
competent persons to freeze monetary accounts, securities accounts as well as
mortgaged or pledged assets related to the violations of the law on securities
and securities market when he/she finds it necessary to verify circumstances to
serve as grounds for violation handling decisions or to promptly prevent acts
of dispersing money, securities or mortgaged or pledged assets related to the
violations of the law on securities and securities market.
f/ To suspend or
propose competent persons to suspend certain activities when he/she deems that
those activities cause serious damage to the State’s interests, legitimate
rights and interests of organizations or individuals participating in the
market;
g/ To issue a
handling decision according to his/her competence or propose a competent person
to handle the violation; to inspect and urge the execution of the
inspection-handling decision;
h/ To settle
complaints and denunciations related to responsibilities of the chief
inspector, the head and members of inspection team;
i/ To make a
conclusion on inspection contents;
j/ To transfer the
dossier of the law violation to an investigation agency within five days after
he/she detects signs of a crime.
2. While performing
the tasks or exercising the powers specified in Clause 1 of this Article, the
inspection decision issuer shall be held responsible before law for all his/her
decisions.
1. Tasks and powers
of an inspection team's head:
a/ To organize and
direct members of the inspection team to strictly comply with contents, subject
and duration stated in the inspection decision;
b/ To request the
inspected subject to supply information, documents or electronic data, to
report in writing or explain matters relevant to inspection contents;
c/ To issue a
decision on sealing or temporary seizure of documents, vouchers, securities or
electronic data relevant to violations of the law on securities and securities
market when he/she has grounds to believe that those documents, vouchers,
securities or electronic data may be dispersed, hidden or destroyed unless they
are promptly sealed up or temporarily seized. Within twenty four hours after
issuing a decision, the head of the inspection team shall report that decision
to and obtain a written approval from the securities chief inspector. If the
securities chief inspector disapproves the decision, the head of the inspection
team shall immediately cancel the decision on sealing or temporary seizure and
return sealed or temporarily seized documents, vouchers, securities or
electronic data;
d/ To report to the
inspection decision issuer on inspection results and take responsibility for
the accuracy, truthfulness and objectivity of his/her report;
e/ To make a written
record of inspection;
f/ While performing
the tasks or exercising the powers specified in Clause 1 of this Article, the
head of the inspection team shall be held responsible before law for all
his/her decisions.
2. Tasks and powers
of members of an inspection team:
a/ To perform tasks
assigned by the head of the inspection team;
b/ To request the
inspected subject to supply information, documents, to report in writing or
explain matters relevant to inspection contents; to request agencies,
organizations or individuals possessing information or documents relevant to
inspection contents to supply those information or documents;
c/ To propose the
handling of matters relevant to inspection contents;
d/ To report on
performance of their assigned tasks to the head of the inspection team, and
take responsibility before law and the head of the inspection team for the
accuracy, truthfulness and objectiveness of their reports.
1. Within fifteen
days after receiving a report on inspection results, an inspection decision
issuer shall make an inspection conclusion in writing. The inspection
conclusion must have the following contents:
a/ Assessment of the
observance of policies and law and the performance of tasks by the inspected
subject;
b/ Conclusions on
inspection contents;
c/ Clear
determination of the nature, severity and causes of violations (if any), as
well as responsibilities of agencies, organizations or individuals committing
the violations;
d/ Handling measures
already applied according to his/her competence; proposed handling measures.
2. In the course of
inspection, the inspection decision issuer may request the head and members of
the inspection team to report; or request the inspected subject to explain and
further clarify necessary matters in service of making of an inspection
conclusion.
3. Inspection
conclusions shall be sent to the Chairman of the State Securities Commission
and inspected subjects. Inspection conclusions made by the Chairman of the
State Securities Commission shall be sent to the Finance Minister.
4. Within fifteen
days after an inspection conclusion is made by the Securities Chief Inspector,
the Chairman of the State Securities Commission shall examine that inspection
conclusion; handle organization or individual committing the violation of the
law on securities and securities market; apply measures according to his/her
competence or propose the Finance Ministry to apply remedies or measures to
improve mechanisms, policies or law.
Article 118.-
Principles for handling of violations
1. Organizations and
individuals that commit acts of violating the provisions of this Law and other
laws concerning securities activities and securities market shall, depending on
the nature and severity of their violations, be disciplined, administratively
sanctioned or examined for penal liability. If causing damage, they shall pay
compensation therefor in accordance with law.
2. Persons who abuse
their positions or powers to impede securities activities or operation of
securities market; commit harassment for bribes or cause troubles to
organizations or individuals participating in the securities market; fail to
promptly respond to the request of organizations or individuals according to
regulations; or fail to perform other official duties prescribed by law shall,
depending on the nature and severity of their violations, be disciplined or
examined for penal liability.
3. The sanctioning of
administrative violations shall comply with this Law and the law on handling of
administrative violations.
1. Organizations and
individuals that commit violations of the provisions of this Law shall be
subject to one of the following principal sanctioning forms:
a/ Caution;
b/ Fine.
2. Depending on the
nature and severity of their violations, organizations and individuals may be
subject to one or several additional sanctioning forms, including suspension of
operation; revocation of licenses or certificates related to securities and
securities market or securities practice certificates; confiscation of all
amounts generated from the commission of violations and the volume of
securities used for commission of violations.
3. Apart from the
sanctioning forms specified in Clauses 1 and 2 of this Article, violating
organizations and individuals shall also be subject to different remedies,
including forcible compliance with law; forcible cancellation or correction of
misleading or untruthful information; forcible recovery of issued securities
and refund of deposits or securities purchase amounts to investors.
1. The Securities
Chief Inspector has the following rights:
a/ To serve cautions;
b/ To impose fines.
2. The Chairman of
the State Securities Commission has the following rights:
a/ To serve cautions;
b/ To impose fines;
c/ To apply the
additional sanctioning forms and remedies specified in Clauses 2 and 3, Article
119 of this Law.
3. The Government
shall specify the sanctioning competence and level for each act of violation in
securities and securities market activities specified in Articles 121 thru 130
of this Law.
1. Issuing
organizations, directors or general directors, chief accountants and other
affiliated persons of issuing organizations, issuance-underwriting
organizations, issuance consultancy organizations, accredited audit
organizations, persons signing audit reports, organizations and individuals
certifying dossiers of registration of public offering of securities, that
commit forgery in preparing dossiers of registration of public offering of
securities, shall be cautioned, fined or examined for penal liability according
to the provisions of law. An issuing organization committing such a violation
shall have its certificate of public offering of securities withdrawn, refund
the mobilized amount plus the demand deposit interest, and pay a fine equal to
between one and five percent of the total illegally mobilized amount.
2. Issuing
organizations, directors or general directors, chief accountants and other
affiliated persons of issuing organizations, issuance-underwriting
organizations, and issuance consultancy organizations, that intentionally
disclose misleading information or hide the truth, or use information outside
prospectuses to survey the market or distribute securities not in accordance
with contents of offering registrations regarding type of securities, issuance
duration and minimum volume as specified, or notify the securities issuance on
mass media not with specified contents and beyond the set time limit shall be
cautioned or fined, or have the public offering of securities suspended or
cancelled, or be examined for penal liability according to the provisions of
law. Issuance-underwriting organizations that underwrite securities of a total
value exceeding the level specified by law shall be cautioned, fined or
suspended from issuance underwriting operation.
3. An issuing
organization that conducts the public offering of securities without a
certificate of public offering of securities shall be suspended from public
offering of securities, have its illegal revenue confiscated and be imposed a
fine equal to between one and five times the illegal revenue.
1. Companies defined
at Point c, Clause 1, Article 25 of this Law that fail to submit dossiers of
public companies to the State Securities Commission within ninety days after
they become public companies shall be cautioned or fined and compelled to strictly
comply with the provisions of law on public companies.
2. Public companies
that fail to comply with the provisions on corporate governance shall be
cautioned and compelled to strictly comply with those provisions.
1. Listing
organizations, directors or general directors, deputy directors or deputy
general directors, chief accountants and other affiliated persons of listing
organizations, listing consultancy organizations, accredited audit
organizations, persons signing audit reports, organizations and individuals
certifying listing dossiers, that commit forgery in preparing listing dossiers,
thus causing serious misunderstanding, shall be cautioned, fined, delisted or
examined for penal liability in accordance with law.
2. Listing
organizations that fail to fully comply with the provisions on duration,
contents and means of disclosure of information on listing shall be cautioned,
fined and compelled to strictly comply with the provisions of law on listing.
1. Organizations and
individuals that organize securities trading markets in contravention of this
Law shall have their operation stopped, their illegal incomes confiscated and
be fined between one and five times their illegal incomes or be examined for
penal liability according to the provisions of law. If they have no illegal
incomes, they shall only be fined.
2. Stock Exchanges,
Securities Trading Centers, members of Boards of Directors or Control Boards,
directors, deputy directors and staff members of Stock Exchanges or Securities
Trading Centers, that violate provisions on listing, members, trading,
supervision and disclosure of information, shall be cautioned, fined or
examined for penal liability in accordance with law.
Article 125.- Handling of violations of provisions
on securities trading activities and securities practice certificates
1. Securities
companies, fund management companies, securities investment companies,
Vietnam-based branches of foreign securities companies or foreign fund
management companies, that conduct securities trading activities without
licenses or lend, lease or transfer their licenses, conduct trading activities
in domains not stated in their licenses or with invalid licenses, erase or
modify their licenses, or effect changes related to securities and securities
market without approval of the State Securities Commission, shall be cautioned
or fined, have their illegal incomes confiscated, their operation stopped, or
their establishment and operation licenses or certificates of operation
registration of representative offices withdrawn.
2. Securities
companies that fail to strictly comply with the provisions of this Law on
management of monetary assets and securities of customers; fail to maintain the
prescribed liquidity level; invest or contribute capital in excess of the
prescribed level; act against order of investors; or fail to keep confidential
information on customers shall be cautioned or fined, have their operation
stopped or their establishment and operation licenses withdrawn.
3. Securities
companies and their securities practitioners that abuse their positions, powers
or duties to lend money or securities on accounts of their customers; pledge or
use money or securities on accounts of their customers without the latter's
entrustment shall be cautioned or fined, have their illegal incomes
confiscated, or be examined for penal liability in accordance with law.
4. In the course of
fund management, if fund management companies and their securities
practitioners fail to separate the management of each fund or fail to comply
with the charters of the securities investment funds and to protect legitimate rights
and interests of investors, fail to perform the internal control according to
regulations, use capital and assets of the securities investment funds to
invest or purchase assets of other investment funds; violate provisions on
capital contribution, share holding, lending or borrowing applicable to fund
management companies and vice versa shall be cautioned, fined and compelled to
strictly comply with legal provisions on management of securities investment
funds.
5. Securities
practitioners who concurrently work for, and contribute capital to, two or more
securities companies; securities practitioners of fund management companies who
concurrently act as directors or general directors or shareholders owning more
than five percent of voting stocks of an organization publicly offering
securities; and securities dealers who lend or lease their securities practice
certificates, or erase or modify securities practice certificates shall be
fined and have their securities practice certificates withdrawn.
1. Persons who know
well inside information or possess inside information and purchase or sell
securities, disclose that information or propose others to purchase or sell
securities shall be fined, have illegal incomes confiscated, or be examined for
penal liability in accordance with law.
2. Organizations or
individuals that are banned by law from stock trading but rename themselves or
borrow others' names to directly or indirectly hold, purchase or sell stocks
shall have the volume of stocks used in violation and their illegal incomes
confiscated and be fined. Officials and civil servants who commit such a
violation shall be disciplined in accordance with law.
3. Organizations or
individuals that violate provisions on prohibited acts to manipulate securities
prices, make sham securities prices or conduct sham securities transactions
shall be fined, have their illegal incomes confiscated, or be examined for
penal liability in accordance with law.
4. Professional
staffs of Stock Exchanges, Securities Trading Centers and securities companies
who intentionally supply forged documents, forge, falsify or destroy
transaction documents to deceive or entice customers into selling or purchasing
securities shall be fined, have their securities practice certificates
withdrawn, or be examined for penal liability in accordance with law.
5. Organizations or
individuals that fabricate and spread untruthful information, thus seriously
affecting the securities market or manipulating the securities trading market,
shall be fined or examined for penal liability in accordance with law.
6. Organizations or
individuals that make public bids without sending bid registrations to the
State Securities Commission; fail to make public bids according to regulations
or make modifications or adjustments to bid registrations without reporting
thereon according to regulations; fail to apply conditions for public bids to
all shareholders of public companies; refuse to purchase stocks from any
shareholders under announced conditions; or fail to make public bids within the
set time limit shall be fined and compelled to strictly comply with the
provisions of law on public bids.
Article 127.- Handling of violations of provisions
on securities registration, depository, clearing and payment, and supervisory
banks
1. Organizations
conducting securities registration, depository, clearing and payment and their
staffs that violate provisions on time limit for certification of data or
securities transfer; modify or forge vouchers in payment; violate the regime of
securities preservation, regime of securities registration, depository,
clearing and payment or regime of keeping secret of depository accounts of
customers; or fail to supply promptly and sufficiently the list of securities
holders to issuing organizations shall be cautioned, fined or examined for
penal liability in accordance with law.
2. Supervisory banks
and their staffs that preserve assets of securities investment funds in contravention
of those funds' charters; fail to separate assets of securities investment
funds from other assets; or fail to separate assets of an investment fund from
those of another fund shall be fined, suspended from operation or have their
certificates of registration of securities depository activities withdrawn.
Issuing
organizations, public companies, listing organizations, securities companies,
fund management companies and securities investment companies that fail to
disclose information in a sufficient, prompt and timely manner and on proper
media as specified; disclose untruthful information or disclose secret data or
documents; or fail to disclose information according to the provisions of this
Law shall be cautioned, fined or compelled to strictly comply with the
provisions of law on information disclosure.
Stock Exchanges,
Securities Trading Centers, securities depository centers, public companies,
securities companies, fund management companies, securities investment
companies and supervisory banks that insufficiently report on specified
contents; fail to report within the specified time limit or with specified forms;
terminate their operation without reporting to the State Securities Commission
or obtain no approval of reported operation termination from the State
Securities Commission; or fail to report or fail to promptly report on
occurrence of unexpected events which might seriously affect their financial
capability and securities trading and service activities shall be cautioned or
fined and compelled to strictly comply with the provisions of law on reporting
regime.
Issuing
organizations, listing organizations, securities companies, fund management
companies, securities investment companies, supervisory banks, stock exchanges,
securities trading centers, securities depository centers, depository members
and other organizations and individuals involved in securities activities and
securities market, that commit acts of delaying, shirking or acting against
inspection; fail to sufficiently and promptly supply information, documents or
electronic data at the request of inspection teams and inspectors, thus
obstructing inspection activities; or use violence against or intimidate
members of inspection teams who are on inspection duty shall be cautioned,
fined or examined for penal liability in accordance with law.
SETTLEMENT OF DISPUTES, COMPLAINTS AND
DENUNCIATIONS AND PAYMENT OF DAMAGES
Article 131.-
Settlement of disputes
1. Disputes arising
in securities activities and securities market in Vietnam may be settled
through negotiation or conciliation, or resorted to arbitration or court for
settlement in accordance with law.
2. Competence and
procedures for settling disputes arising in securities activities and
securities market at arbitration or court shall comply with the provisions of
law.
1. Organizations or
individuals that suffer from damage or losses caused by acts of violating this
Law and other relevant laws are entitled to initiate independently or in
coordination with other damaged organizations or individuals lawsuits to claim
damages from damage-causing organizations or individuals.
2. The determination
of the damage or loss value and procedures for payment of damages shall comply
with the provisions of law.
1. Individuals are
entitled to lodge complaints or denunciations, or to initiate lawsuits;
organizations are entitled to lodge complaints or to initiate lawsuits
according to the provisions of law. The lodging of complaints and
denunciations, the initiation of lawsuits, the settlement of complaints and
denunciations and the handling of lawsuits in securities activities and
securities market shall comply with this Law and other relevant laws.
2. Within the time
limit for lodging complaints or denunciations or for initiating lawsuits,
concerned organizations or individuals shall still execute administrative
decisions of the State Securities Commission. As soon as decisions on
settlement of complaints or denunciations are issued by competent state agencies
in charge of securities and securities market or court rulings or judgments
take legal effect, they shall execute those decisions, rulings or judgments.
3. The State
Securities Commission shall accept written complaints and denunciations of
organizations and individuals, which fall under its settling competence. When
receiving complaints or denunciations falling beyond its settling competence,
it shall promptly forward them to competent agencies, organizations or
individuals for settlement and notify such in writing to complainants or
denouncers.
4. The time limit for
settlement of denunciations is sixty days after written denunciations are
accepted. For complicated cases, that time limit may be extended but must not
exceed ninety days after written denunciations are accepted.
5. The time limit for
settlement of first-time complaints is thirty days and that for settlement of
second-time complaints is forty five days after written complaints are
accepted. For complicated cases, those time limits may be extended but must not
exceed sixty days after written complaints are accepted.
6. Within thirty days
after the expiration of the time limit for settlement of a first-time complaint
specified in Clause 5 of this Article or after the receipt of the State
Securities Commission Chairman's decision on settlement of first-time
complaint, a complainant whose complaint is left unsettled or who disagrees
with that decision on settlement of first-time complaint is entitled to lodge
his/her complaint with the Finance Minister or initiate an administrative
lawsuit at a court in accordance with law.
7. Within thirty days
after the expiration of the time limit for settlement of a second-time
complaint specified in Clause 5 of this Article or after the receipt of the
Finance Minister's decision on complaint settlement, a complainant whose
complaint is left unsettled or who disagrees with that decision on complaint
settlement is entitled to initiate an administrative lawsuit at a court in
accordance with law.
IMPLEMENTATION PROVISIONS
Article 134.-
Application of the Securities Law to organizations engaged in securities
activities and securities market before the effective date of this Law
1. Organizations that
have registered for public issuance of securities, listed or registered for
trading; securities investment funds that have registered for setting up and
operation and satisfied the requirements specified by this Law are not required
to carry out procedures for re-registration.
2. Securities
companies and fund management companies that have been established and
operating under securities trading and service licenses and satisfied the
requirements specified by this Law are not required to carry out procedures to
apply for re-grant of establishment and operation licenses.
3. Representative
offices of foreign securities companies or fund management companies that have
commenced their operation under permits for setting up representative offices
not granted by the State Securities Commission before the effective date of this
Law shall carry out procedures for re-registration with the State Securities
Commission.
4. Securities
companies that are performing the professional operation of managing portfolios
shall carry out procedures for renewal of their establishment and operation
licenses within one year after the effective date of this Law.
5. Securities trading
centers that have been established under the Prime Minister's Decision No.
127/1998/QD-TTg of July 11, 1998, shall carry out procedures for conversion
into Stock Exchanges or Securities Trading Centers as defined in this Law
within eighteen months after the effective date of this Law.
6. Securities
depository centers that have been established under the Prime Minister's
Decision No. 189/2005/QD-TTg of July 20, 2005, shall carry out procedures for
conversion into securities depository centers as defined in this Law within
eighteen months after the effective date of this Law.
This Law takes effect
on January 1, 2007.
The Government shall
detail and guide the implementation of this Law.
This Law was passed on June 29, 2006, by the XIth National Assembly of
the Socialist Republic of Vietnam at its 9th session.
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