- 1Circular No. 57/2004/TT-BTC of June 17, 2004 guiding the disclosure of information on the securities market
- 2Circular No. 58/2004/TT-BTC of June 17, 2004 providing guidance on securities members and transactions
- 3Circular No.59/2004/TT-BTC of June 18, 2004 guiding the listing of stocks and bonds on the central securities market
- 4Circular No.60/2004/TT-BTC of June 18, 2004 guiding the issuance of stocks to the public
- 5Decision No. 60/2004/QD-BTC of July 15, 2004 promulgating the regulation on securities registration, custody, clearing and settlement
| THE GOVERNMENT | SOCIALIST REPUBLIC OF VIET NAM |
| No. 144/2003/ND-CP | Hanoi, November 28th, 2003 |
ON SECURITIES AND SECURITIES MARKETS
THE GOVERNMENT
Pursuant to the Law on the Organization of the Government dated 25 December 2001;
In order to create a favourable environment for the issue and trading of securities; to promote the mobilization of domestic and foreign long-term funds; to ensure the organized, safe, public, fair and efficient operation of securities markets; and to protect the legitimate rights and interests of investors;
On the proposal of the Chairman of the State Securities Commission;
DECREES:
This Decree provides for the public issue and listing of securities, for conducting securities business and for trading securities, and for operations and services relating to securities and securities markets in the territory of the Socialist Republic of Vietnam.
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in enterprises with foreign owned capital after conversion to operation in the form of shareholding companies.
Article 2. Operational principles of securities markets
Operations being the public issue, listing and trading of securities, conducting securities business, providing securities services and other relevant operations must ensure the principles of being public, fairness, transparency and protection
of the legitimate rights and interests of investors.
Article 3. Interpretation of terms
1. Securities means certificates or book entries certifying the lawful rights and interests of a securities owner with respect to assets or capital of an issuing organization. Securities comprise:
(a) Shares;
(b) Bonds;
(c) Investment fund certificates; and
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2. Securities right means a type of securities issued with bonds or preference shares which entitles the securities right holder to purchase a fixed volume of ordinary shares at a pre-determined price during a specified period.
3. Share purchase right means a type of securities recognizing the right given to existing shareholders of a shareholding company to purchase in advance a number of shares in a new issue of ordinary shares in proportion to their existing shareholding in the company.
4. Treasury share means a type of issued share which the issuing organization re-purchases on the securities market.
5. Bonus share means a type of share issued with retained profits or other legal sources of owners' capital in the shareholding company which is given free-of-charge to existing shareholders in proportion to their existing shareholding in the company.
6. Issuing organization means an organization registered to make a public issue of securities as stipulated in this Decree.
7. Public issue of securities1 means an offer for sale of a tranche of transferable securities via an intermediary organization to at least fifty (50) investors external to the issuing organization.
8. Prospectus means a written announcement of an issuing organization presenting the financial position, business activities, and plan for utilization of the proceeds earned from the issue aimed at providing information to the public to assess and make a decision on investing in the securities.
9. Securities listing means conducting registration of eligible securities and conducting trading of such securities in the centralized2 trading market.
10. Listing organization means an issuing organization which is permitted to list securities in the centralized trading market in accordance with the provisions in this Decree.
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12. Self-trading means the purchase and sale of securities by a securities company for itself.
13. Portfolio management means the management of capital of a client by purchasing, selling and holding securities of the client in the interests of such client.
14. Underwriting3 means an act whereby an underwriter assists an issuing organization by completing procedures prior to the offer for sale of securities, receiving some or all of the securities of the issuing organization for re-selling, or purchasing the amount of the remaining undistributed securities.
15. Securities investment and financial consultancy means services which a securities company or fund management company provides to clients in the sector of securities investments; financial restructuring; division, demerger, merger or consolidation of enterprises; and assistance to enterprises during issue and listing of securities.
16. Securities distribution means the sale of securities through agents or underwriters on a contractual basis.
17. Agent for a securities issue means securities companies, credit institutions and non-banking credit institutions which undertake the sale of securities for an issuing organization on the basis of an agreement or via the underwriting organization itself.
18. Liquid capital means capital in cash and valuable papers which can be converted into cash within a period of thirty (30) days in order to pay debts or to satisfy a risks reserve within that same period.
19. Securities investment fund means a fund formed from capital contributed by investors, which a fund management company is entrusted to manage and to invest at least sixty (60) per cent of the value of the assets of the fund in securities.
20. Fund operator means a person appointed by a fund management company to manage directly a securities investment fund.
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22. Bank appointed for payment means a commercial bank appointed by the State Securities Commission to open payment account(s) for Securities Trading Centres, Securities Depository Centres, the Stock Exchange and depository members in order to service payment of monies for securities transactions.
23. Jobber4 means a person appointed by a member of a Securities Trading Centre, and approved by the Securities Trading Centre, to act as agent in carrying out transactions at the Centre.
24. Representative of a bondholder means a legal entity authorized to hold bonds and which represents the interests of a bondholder.
25. Major shareholder means a person holding at least five per cent of the voting shares of an issuing organization.
26. Acquirer means an organization or individual with the intention to hold, either alone or with other related persons also having the intention to hold, at least twenty five (25) per cent of the share capital in a listing organization.
27. Foreign party means a foreign individual or an organization established under foreign law.
28. Share split or share consolidation means the split of one shareholding into a number of smaller shareholdings or the consolidation of a current number of shareholdings into one shareholding.
29. Approved auditing organization means an independent auditing organization approved by the State Securities Commission to audit issuing organizations, listing organizations and securities business organizations.
30. Valid file means a file containing all documents in accordance with this Decree and having contents which are correct and complete in accordance with law.
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32. Related persons comprise individuals or organizations having interactive relations in the following circumstances:
(a) A parent company and its subsidiaries (if any);
(b) A company and the person or group of persons with the ability to control the decision-making or operations of the company via the body managing the company;
(c) A company and its managers;
(d) A group of persons who agree to co-ordinate with one other to acquire the capital contribution, shareholding or benefits of the company or to control the decision-making of the company;
(dd) Parents, adopted parents, spouses, children, adopted children and siblings of company managers, company members or controlling shareholders.
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1. Securities issued to the public may be in the forms of either certificates or book entries.
2. Securities issued to the public must be denominated in Vietnamese dong.
3. Par value of shares and investment fund certificates in an initial issue to the public shall be ten thousand Vietnamese dong (VND10,000). The minimum par value of bonds shall be one hundred thousand Vietnamese dong (VND100,000) and multiples of one hundred thousand Vietnamese dong (VND100,000).
Article 6. Conditions for initial public issue of shares
1. The shareholding company must have a minimum amount of paid-up charter capital of five billion Vietnamese dong (VND5 billion) at the time of registration of the share issue.
2. Business operations in the year immediately preceding the year of registration of the issue must have been profitable.
3. There must be a feasible plan for utilization of the proceeds earned from the share issue.
4. It shall not be mandatory to comply with clauses 1 and 2 of this article in the case of a public issue of shares for the purpose of raising capital for the establishment of a new shareholding company operating in the sectors of infrastructure construction or high-tech.
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2. When an issuing organization which issues shares to the public wishes to issue additional shares to the public for the purpose of payment of dividends or bonus shares, it must conduct procedures for registration with the State Securities Commission.
Article 8. Conditions for public issues of bonds
1. The shareholding company, limited liability company or State owned enterprise must have a minimum amount of paid-up charter capital of ten billion Vietnamese dong (VND10 billion) at the time of registration of the issue.
2. Business operations in the year immediately preceding the year of registration of the issue must have been profitable.
3. There must be a feasible plan for utilization of the proceeds earned from the bonds issue.
4. There must be an underwriter.
5. The bond-issuing organization must determine the representative(s) of bondholder(s).
Article 9. Conditions for public issues of investment fund certificates
1. An initial public issue of investment fund certificates shall be implemented at the same time as the conduct of procedures for application for permission to establish the investment fund.
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Article 10. Application file for registration of issue
1. An application file for registration of an initial public issue of shares shall comprise:
(a) Application for registration of issue;
(b) Valid copy of business registration certificate of the company;
(c) Charter of the company;
(d) Decision of the general meeting of shareholders approving the public issue of shares;
(dd) Prospectus;
(e) List of and summarized CVs of members of the board of management, board of directors and board of controllers;
(g) Audited financial reports for the last two consecutive years preceding the year of registration of issue;
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2. An application file for registration of an additional issue of shares shall comprise:
(a) An application file for registration of an additional public issue of shares for the purpose of increasing capital, including the issue of share purchase rights or securities rights, shall contain the documents stipulated in sub-clauses (a), (d), (dd), (e), (g), and (h) of clause 1 of this article, and also the documents stipulated in sub- clauses (b) and (c) if there is any amendment of or addition to contents since submission of the file for the initial public issue;
(b) An application file for registration of a number of tranches for additional issue of the same shares shall contain, in addition to the documents stipulated in sub-clause (a) of clause 2 of this article, the schedule for each specific issue tranche within the plan for overall issue and shall specify the proposed volume of shares and the duration of each specific issue tranche.
3. An application file for registration of a public issue of bonds shall comprise:
(a) Documents stipulated in sub-clauses (a), (b), (c), (dd), (e), (g), and (h) of clause 1 of this article;
(b) Decision of the general meeting of shareholders approving the public issue of bonds;
(c) Undertaking by the issuing organization for performance of obligations to investors;
(d) Contract between the bond-issuing organization and representative(s) of bondholder(s);
(dd) Minutes certifying the value of security assets or certificate of written approval for the guarantee for payment of the underwriter in the case of an issue of secured bonds.
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5. Any organization advising on an issue, any underwriter, any independent auditing organization and any person signing the audit report certifying the financial reports of an issuing organization shall be jointly liable for the validity of a file.
Article 11. Conditions for underwriting public issues of securities
1. An underwriter of a public issue of securities must have a licence to conduct underwriting and must not be a related person to the issuing organization.
2. Each underwriter may only underwrite issues of securities the total value of which does not exceed thirty (30) per cent of the equity of such underwriter.
Article 12. Registration of issue
Within thirty (30) working days from the date of receipt of a complete and valid file from an applicant for registration of an issue, the State Securities Commission shall grant a certificate of registration of an issue of securities. If the issuing organization or the State Securities Commission discovers that the file contains errors, the issuing organization must amend or supplement the file in order that it is complete and correct in accordance with regulations and, in such case, the date of receipt of the file shall be the date on which the State Securities Commission receives the amended or supplemented file. If the State Securities Commission discovers that a file contains errors or inaccuracies, it shall have the right to refuse to grant a certificate of registration of an issue of securities.
Article 13. Information prior to issue
Pending consideration of an application file for registration of an issue by the State Securities Commission, organizations registering an issue, underwriters or other related entities may only use truthfully and accurately the information given in the prospectus which has been submitted to the State Securities Commission for the purpose of market research, and must specify that information about an issue date and about sale prices of securities is proposed information only. Market research shall not be conducted by way of the mass media.
Article 14. Announcement of issue
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Article 15. Securities distribution
1. Issuing organizations, agency organizations and underwriters shall not be permitted to distribute securities unless they have announced the issue and provided a prospectus.
2. Issuing organizations, agency organizations and underwriters must distribute securities in a fair manner and must ensure that the time-limit within which investors may register to purchase securities shall be a minimum of fifteen (15) working days.
In a case where the volume of securities registered for purchase exceeds the authorized volume for issue, the issuing organization or underwriter must sell all underwritten securities to investors corresponding to the percentage at which investors have registered to purchase.
Article 16. Time-limit for distribution
1. An issuing organization must complete distribution of a tranche of securities within a minimum of ninety (90) days.
2. In a case where a public distribution of securities is not able to be conducted within the time-limit stipulated in clause 1 of this article and the issuing organization makes a written request, the State Securities Commission shall consider such request and issue a decision on extension of the time-limit to enable distribution to continue. Upon expiry of any extended time-limit, any remaining unsold securities must not be issued to the public.
Article 17. Revocation of certificate of registration of issue of securities
1. A certificate of registration of an issue of securities shall be revoked in the following circumstances:
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(b) The results of the issue tranche do not result in a minimum of fifty (50) investors or the volume of securities actually issued does not account for eighty (80) per cent of the volume of securities authorized for issue.
2. After the State Securities Commission issues a decision to revoke a certificate of registration of an issue of securities, the issuing organization shall immediately inform investors and, if requested by investors, shall recall all distributed securities and refund investors within thirty (30) days from the date of revocation. Upon expiry of this time-limit, the issuing organization must compensate investors for their losses in accordance with the undertakings that the issuing organization provided to investors and in accordance with law.
1. Within ten (10) working days of the end of an issue tranche, an issuing organization shall report to the State Securities Commission on, and publicly announce the results of, such issue tranche.
2. Issuing organizations shall periodically report every six months and annually to the State Securities Commission on the financial position and business activities of the enterprise. Annual financial reports must be certified by an approved independent auditing organization.
Where an issuing organization holds fifty (50) per cent or more of the share capital or capital contribution in another organization, or if another issuing organization holds fifty (50) per cent or more of the share capital of the issuing organization, such issuing organization shall also enclose with its own financial reports the financial reports of such other organization or such issuing organization shall forward consolidated financial reports.
3. Where it is necessary to protect the interests of investors and the State Securities Commission so requests, issuing organizations must report on the status of their production and business activities.
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1. If an organization which has made a public issue of securities wishes to list those securities, it must be granted a licence by the State Securities Commission.
2. Each type of securities may only be listed at one Securities Trading Centre.
3. The State Securities Commission shall make proposals to the competent State body to make a decision on specific listings at Securities Trading Centres.
Article 20. Conditions for listing shares
1. The shareholding company must have a minimum amount of paid-up charter capital of five billion Vietnamese dong (VND5 billion) at the time of application for listing; it must have a healthy financial standing, and its business operations in the two consecutive years immediately preceding the year of application for listing must have been profitable.
2. With respect to a State owned enterprise which is listed on the securities market immediately after it has been equitized, its business operations in the year immediately preceding the year must have been profitable.
3. Shareholders being members of the board of management, board of directors or board of controllers of the company must undertake to hold at least fifty (50) per cent of the shares they own for a period of three years as from the date of listing.
4. At least twenty (20) per cent of the share capital of the company must be held by at least fifty (50) shareholders external to the issuing organization. With respect to companies with a share capital of ten billion Vietnamese dong (VND10 billion) or more, this minimum percentage shall be fifteen (15) per cent of the share capital.
Article 21. Conditions for listing bonds
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2. Business operations in the two consecutive years immediately preceding the year of application for listing must have been profitable, and the company must have a healthy financial standing.
3. There must be at least fifty (50) bondholders.
Article 22. Listing of Government bonds
Listing of Government bonds shall be conducted by Securities Trading Centres on the proposal of bond-issuing organizations.
Article 23. Conditions for listing investment fund certificates
Within a time-limit of thirty (30) days from the end of a public issue tranche of investment fund certificates, the securities investment fund shall conduct procedures for registration for listing with the State Securities Commission if it satisfies the following conditions:
1. The fund must have a minimum total value of issued investment fund certificates of five billion Vietnamese dong (VND5 billion) calculated at par value.
2. There must be at least fifty (50) certificate holders.
Article 24. File for grant of licence for listing shares, bonds or investment fund certificates
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(a) Application for grant of a licence for listing shares;
(b) Decision of the general meeting of shareholders, board of management on listing shares;
(c) Register of shareholders of the organization applying for listing;
(d) Valid copy of business registration certificate;
(dd) Charter of the company;
(e) Prospectus;
(g) List of and summarized CVs of members of the board of management, board of directors and board of controllers;
(h) Undertaking of members of the board of management, board of directors and board of controllers to hold at least fifty (50) per cent of the shares they own for the period stipulated in article 20 of this Decree as from the date of listing;
(i) Financial reports certified by an approved independent auditing organization.
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(a) Application for grant of a licence for listing bonds;
(b) Decision of the general meeting of shareholders, board of management on listing bonds;
(c) Register of bondholders of the organization applying for listing;
(d) Valid copy of business registration certificate;
(dd) Charter of the company;
(e) Prospectus;
(g) List of and summarized CVs of members of the board of management, board of directors and board of controllers;
(h) Financial reports certified by an approved independent auditing organization.
3. An application file for grant of a licence for listing investment fund certificates shall comprise:
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(b) Valid copy of business registration certificate of the fund management company;
(dd) Charter of the securities investment fund;
(d) Prospectus;
(dd) Results of issue of investment fund certificates;
(e) Undertaking of founding members of the fund not to assign the investment fund certificates they own for a period of two years as from the date of listing.
4. At least one securities company must participate as consultant in preparation of the application file for grant of a licence for listing shares or bonds, and the securities company shall be liable within the scope of such consultancy.
1. An organization applying for a licence for listing shall be liable for the validity of a file. If it is discovered that a file already submitted to the State Securities Commission is incomplete or contains inaccurate information or if new events arise which affect the contents of a file already submitted, the organization applying for a licence for listing must report to the State Securities Commission for prompt amendment of or addition to the application file for a licence for listing.
2. Any organization providing consultancy on listing, any independent auditing organization and any person signing the audit report certifying financial reports of the organization applying for a licence for listing shall be jointly liable for the validity of an application file for a licence for listing in accordance with law.
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1. In every case when a listing organization issues additional shares, it must conduct procedures for registration for listing additional shares in accordance with law.
2. If a listing organization wishes to conduct a share split or share consolidation, it must report the relevant details of the share split or share consolidation to the State Securities Commission and register for re- listing.
3. If a listing organization undergoes a demerger or merger without change of the listing legal entity, it must still register for re-listing with the State Securities Commission.
4. A change of listing location of securities which are currently listed at a Securities Trading Centre shall be implemented in accordance with law.
Article 27. Approval or refusal to grant licence for listing
Within forty five (45) days from the date of receipt of a complete and valid application file, the State Securities Commission shall grant, or refuse to grant, a licence for listing. Where the grant of a licence is refused, the State Securities Commission shall specify the reasons therefor in writing.
Article 28 Obligations of listing organizations
1. Listing organizations must conduct procedures for listing and for registration of listed securities in accordance with this Decree.
2. Within five working days prior to the date for trading securities, a listing organization shall announce the listing in three consecutive editions of a central newspaper or a newspaper in the locality where the head office of the listing organization is located or in the securities market newsletter. The announcement shall contain the following particulars:
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(b) Date on which securities are permitted to be traded;
(c) Location to obtain prospectus.
3. Listing organizations must implement the reporting regime stipulated in article 18 of this Decree and the regime for disclosure of information stipulated in Chapter VI of this Decree.
4. Listing organizations must pay fees for listing in accordance with law.
Article 29. Cancellation of listing
Listing of listed securities shall be cancelled upon occurrence of one of the following events:
1. The securities no longer satisfy the conditions for listing within the stipulated time-limit;
2. The existence of the listing organization terminates due to merger, consolidation, division, dissolution or bankruptcy;
3. The listing organization submits an application for cancellation of listing which is approved by the State Securities Commission;
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Securities the listing of which has been cancelled may be considered for re-listing when they satisfy the conditions stipulated in articles 20, 21 and 23 of this Decree.
1. Listed securities must be traded via the trading system at Securities Trading Centres and the Stock Exchange by the method of matching orders or the method of reaching agreement.
2. Trading of securities by the method of matching orders shall comply with the principles of priority in terms of price and priority in terms of time.
3. Trading of small lots of listed securities shall be conducted directly between investors and securities companies which are members of Securities Trading Centres and the Stock Exchange on the principle of reaching agreement on a price.
Article 32. Monitoring of securities and temporary suspension of trading
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(a) Applicable to listed shares and listed bonds:
- An approved independent auditing organization does not agree on or refuses to provide an opinion on the annual financial reports of the listing organization;
- The listing organization breaches the provisions on disclosure of information;
- The listing organization fails to submit on time annual financial reports in accordance with regulations;
- The net assets of the listing organization are negative;
- The requirements of articles 20 and 21 of this Decree are no longer satisfied;
- There is no trading of shares or bonds of an enterprise for ninety (90) days.
(b) Applicable to investment fund certificates:
- The fund management company breaches the provisions on disclosure of information;
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- The requirements of article 23 of this Decree are no longer satisfied;
- There is no trading of investment fund certificates for ninety (90) days.
Securities shall be taken off the list of securities to be monitored when events stipulated in sub-clauses (a) and (b) of clause 1 of this article are remedied.
2. Trading of securities shall be suspended temporarily upon occurrence of one of the following events:
(a) There are abnormal fluctuations in the price and volume of securities being traded;
(b) Share split or share consolidation;
(c) There is a serious breach of the provisions on disclosure of information in accordance with law;
(d) The listing organization suffers business losses in two consecutive years;
(e) Suspension is necessary in order to protect the interests of investors or to ensure stable market operations.
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The Chairman of the State Securities Commission shall make decisions on the price fluctuation range of securities which are being traded.
Any member of a board of management or board of director, the chief accountant or any controller of a listed company and any related person who intends to trade shares of that same listed company must notify the Securities Trading Centre and the Stock Exchange at least ten (10) working days prior to the trading taking place. If trading does then take place, notice must be given to the Securities Trading Centre and the Stock Exchange within three days of completion of the transaction and, at the same time, notice must be given to the listing organization for its information.
Article 35. Trading treasury shares
1. The State Securities Commission must provide prior approval for a listing organization to re-purchase its own treasury shares with legal capital sources or re-sell them.
2. A listing organization must complete the purchase of its own shares or the re-sale of treasury shares within ninety (90) days from the date on which approval is provided. Re-purchased shares may only be resold after they have been held for a minimum of six months.
Article 36. Transactions in order to acquire listing organization
1. When any organization or individual holding, either alone or with related persons, five per cent, ten (10) per cent, fifteen (15) per cent or twenty five (25) per cent of the share capital in a listing organization conducts a transaction which increases or reduces the above levels, such entity must report the transaction in writing to the State Securities Commission, the Securities Trading Centre, the Stock Exchange and the listing organization within three working days from the date of the transaction resulting in any of the above percentages of ownership5.
2. An acquirer must notify in writing its intention to acquire to the State Securities Commission. If, within ten (10) working days from the date of such notice, the State Securities Commission does not have a different opinion, the acquirer shall publicly announce its offer to purchase in three consecutive editions of a central newspaper or of a local newspaper or in the securities market newsletter in the locality where the head office of the listing organization sought to be acquired is located. After making the public announcement, an acquirer may not change its intention to acquire as announced.
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4. The duration of a public offer to purchase may not be less than thirty (30) days and not more than sixty (60) days. During the duration of a public offer to purchase, the acquirer must apply the conditions of the public offer to all shareholders in the listing organization sought to be acquired; the acquirer may not refuse to purchase shares from any one shareholder in the listing organization because the same announced conditions shall apply to all shareholders, and the acquirer may not purchase or sell shares in the listing organization by any other method than the announced method. The transaction of acquiring the listing organization must be completed within five working days of expiry of the duration of the public offer to purchase.
If an acquirer holds eighty (80) per cent of the share capital in a listing organization sought to be acquired, the listing of the listing organization shall be cancelled. If the remaining shareholders so request, the acquirer shall be obliged to purchase their shares within ten (10) days of the announcement of the results of the acquisition on the same announced conditions of the public offer to purchase.
5. The acquirer shall not be permitted to sell the shares it has purchased within six months from the date of completion of the acquisition.
Article 37. Responsibilities of investors
Investors shall be responsible to open a securities trading account and, when they place purchase orders or sale orders, they shall lodge a deposit being the amount payable for purchase orders or the volume of securities they order to sell in accordance with law. Investors shall bear self responsibility for their own investment decisions.
REGISTRATION, DEPOSITORY AND CLEARANCE
Article 38. Securities Depository Centres
1. The Prime Minister of the Government shall make decisions on the establishment of Securities Depository Centres which shall have the following basic functions and duties:
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(b) To supervise operations of depository members in registration, depository and clearance of transactions of listed securities;
(c) To register secured transactions in the case of contracts of pledge of securities which are centrally deposited at Securities Depository Centres;
(d) To provide a list of securities owners for issuing organizations which hold registered or deposited securities;
(dd) To provide depository members with information about securities depository accounts of depository members at Securities Depository Centres;
(e) To provide fully and promptly to banks appointed for payment all the necessary vouchers for payments relating to securities transactions;
(g) To notify promptly depository members of the results of clearance of securities transactions which concern such depository members;
(h) To manage and use the Settlement Assistance Fund to support promptly depository members which become insolvent.
2. Members of Securities Depository Centres may include Vietnamese commercial banks and foreign bank branches operating in Vietnam to which the State Securities Commission grants a depository licence, and securities companies which have a licence to engage in brokerage or self- trading activities and which have already conducted the procedures for registration as members at a Securities Depository Centre.
Article 39. Registration of listed securities
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1. Registration of information about the securities and the owner of the securities.
2. Registration of transfer of ownership of securities.
Article 40. Securities depository
1. Listed securities must be centrally deposited at Securities Trading Centres and Securities Depository Centres in the form of general depository.
2. Securities depository shall be implemented at two levels, namely the owner of securities must deposit them with a depository member, and then the depository member shall re-deposit the same securities at a Securities Trading Centre or Securities Depository Centre.
3. Only depository members may open a securities depository account at a Securities Trading Centre or Securities Depository Centre.
In special cases, the State Bank of Vietnam, credit institutions and other organizations permitted to participate in the auction of Government bonds or as issuing agents or underwriters for Government bonds may open a Government bonds depository account at a Securities Trading Centre or Securities Depository Centre.
4. Securities depository operations shall comprise the following activities:
(a) Opening securities depository accounts;
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(c) Undertaking the transfer on demand of securities between various accounts in the system of securities depository accounts;
(d) Exercising rights related to securities.
1. Settlement of securities transactions must be consistent with the volume of securities and the monetary sums stipulated in transaction vouchers.
2. Payment for securities transactions shall comply with the principle of simultaneous delivery of securities with payment therefor.
3. Payment must be made via the system of accounts of depository members and of the Securities Trading Centre and Securities Depository Centre opened at a bank appointed for payment.
4. Payment for securities must be made via the system of accounts of depository members opened at a Securities Trading Centre or Securities Depository Centre.
1. The bank must have a licence for establishment and operation in Vietnam.
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3. It must have adequate material and technical facilities for conducting operations of registration, depository and clearance of securities transactions.
4. It must have at least two professional staff members and one member of the board of controllers with expert qualifications in securities and securities business.
5. A foreign bank with a branch in Vietnam must be permitted by the law of its own country to conduct securities depository operations.
Article 43. Application file for grant of depository licence
1. An application file from a Vietnamese commercial bank for grant of a depository licence shall comprise:
(a) Application for grant of a depository licence;
(b) Valid copy of licence for establishment and operation;
(c) Explanatory statement of material and technical facilities servicing the operations of registration, depository and clearance of securities transactions;
(d) Audited financial reports for the last two consecutive years.
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(a) Documents stipulated in clause 1 of this article;
(b) Power of attorney from the foreign bank for the branch in Vietnam to conduct the operations of registration, depository and clearance of securities transactions;
(c) Valid copy of licence or other documents proving that the foreign bank which has a branch in Vietnam is permitted by the law of its own country to conduct the operations of registration, depository and clearance of securities transactions.
Article 44. Time-limit and fees for grant of depository licence
1. Within thirty (30) days from the date of receipt of a complete and valid application file, the State Securities Commission shall grant, or refuse to grant, a depository licence. Where the grant of a licence is refused, the State Securities Commission shall specify the reasons therefor in writing.
2. Vietnamese commercial banks and foreign bank branches operating in Vietnam must pay fees for the grant of a depository licence in accordance with law.
Article 45. Suspension of depository operations and revocation of depository licence
1. A depository member shall be suspended from conducting depository operations upon occurrence of one of the following events:
(a) The depository member no longer satisfies the conditions for grant of a depository licence;
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2. The depository licence of a depository member shall be revoked in the following circumstances:
(a) If, at the end of a period of suspension of operations, the depository member has still not remedied the breaches stipulated in clause 1 of this article;
(b) The depository member fails to commence operations within twelve (12) months from the date of grant of a depository licence;
(c) The depository member voluntarily requests termination of operations;
(d) Termination of operations due to dissolution, bankruptcy, merger, division, consolidation or conversion of enterprise.
3. The order and procedures for suspension of depository operations and for revocation of a depository licence shall be implemented in accordance with law.
Article 46. Rights and obligations of depository members
1. To provide services being registration and deposit of securities for clients on the basis of written contracts with clients; to inform clients promptly and fully of the results of clearance of securities transactions in which such clients are involved.
2. To conduct registration and deposit of securities for clients at Securities Trading Centres and Securities Depository Centres, and to provide essential information and data to Securities Trading Centres and Securities Depository Centres in order to carry out operations of registration, depository and clearance of securities transactions.
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4. To manage separately the securities which have been deposited by each client and to manage the securities which have been deposited by clients separately from the securities of the depository member.
5. To contribute to the Settlement Assistance Fund in accordance with law.
6. To provide securities support and to receive securities support from other depository members in accordance with law when temporary insolvency prevents payment or refund.
Article 47. Rights and obligations of banks appointed for payment
1. To make full payment on time for securities transactions conducted at
Securities Trading Centres.
2. To comply with the regimes on disclosure of information, reporting and confidentiality of information in accordance with law.
3. To have adequate material and technical facilities for conducting operations of making payment for securities transactions.
4. To request Securities Trading Centres and Securities Depository Centres to provide essential source documents in order to make payment for securities transactions.
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1. A Securities Trading Centre or Securities Depository Centre shall establish a Settlement Assistance Fund in order to make payment in lieu of a depository member which defaults in making payment for a securities transaction. The Settlement Assistance Fund shall be managed separately from the assets of the Securities Trading Centre or Securities Depository Centre.
2. The level of contributions to the Settlement Assistance Fund and the method of making supportive payments shall be implemented in accordance with law.
Securities Trading Centres, Securities Depository Centres, depository members and banks appointed for payment shall comply with the regime for periodical and extraordinary reporting on the operational status of registration, depository and clearance of securities transactions. Securities Trading Centres, Securities Depository Centres, depository members and banks appointed for payment must provide reports in necessary cases upon request from the State Securities Commission.
Article 50. Fees for provision of services
Securities Trading Centres, Securities Depository Centres, depository members and banks appointed for payment shall be permitted to collect fees for provision of services in accordance with law.
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2. Issuing organizations and listing organizations shall be responsible to disclose clearly information about voting rights, rights to register for purchase of securities, rights to transfer securities and other rights for the information of all shareholders; and to disclose the rules and implementation of such rules on public disclosure of share ownership by members of the board of management, the board of directors, major shareholders and related persons.
3. When Securities Trading Centres, the Stock Exchange and issuing organizations disclose information, they shall at the same time report it to the State Securities Commission. When listing organizations, securities companies and fund management companies disclose information, they shall at the same time report it to the State Securities Commission, Securities Trading Centres and the Stock Exchange.
4. Information shall be disclosed by way of the mass media and the securities market newsletter.
Article 52. Periodic disclosure of information by issuing organizations and listing organizations
1. Within ten (10) days from the date of completion of their annual financial reports, issuing organizations and listing organizations shall announce the audited results of their production and business activities of such financial year in three consecutive editions of one central newspaper or of one newspaper in the locality where the head office of the listing organization is located or in the securities market newsletter.
Issuing organizations and listing organizations shall bear the major responsibility for the accuracy of their disclosed financial reports in accordance with law; auditing organizations and auditors directly auditing financial reports shall be jointly liable for the items that they audit.
2. Within five days from the date of completion of their quarterly and six- monthly financial reports in accordance with law, issuing organizations and listing organizations shall announce the results of their production and business activities of such quarter and six month period in the securities market newsletter.
1. An issuing organization and a listing organization shall disclose information in accordance with law within twenty four (24) hours of the occurrence of one of the following events:
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(b) Ten (10) per cent or more of the value of the share capital of the company is lost;
(c) A legal body initiates an examination of the issuing organization, the listing organization, a member of the board of management, board of directors or board of controllers, or of the chief accountant; there is a court judgment relating to the operations of the company; or the tax office reaches a conclusion on breach of tax laws;
(d) There is a change of business methods and business scope of the company;
(dd) There is a decision to expand investment in production and business; a decision to invest in shares of another organization valued at ten (10) per cent or more of the total share capital of such other organization; or the company purchases or sells fixed assets valued at ten (10) per cent or more of its total share capital;
(e) It becomes insolvent, or it makes a decision on consolidation, merger, division, demerger, conversion or dissolution of enterprise;
(g) It signs a loan agreement or issues bonds valued at thirty (30) per cent or more of its total share capital;
(h) There is a change of chairman of the board of management, a change in more than one third (⅓) of the members of the board of management, or a change of director (general director);
(i) The general meeting of shareholders passes a decision;
(k) Other events occur which might have a major impact on securities or the interests of investors.
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(a) A decision to split or consolidate shares or to issue shares for the purpose of increasing charter capital; a decision to re-purchase or re-sell treasury shares; a decision on the date for exercising securities purchase rights for bonds which carry securities purchase rights; or a decision on the date for conversion of bonds to shares in the case of convertible bonds;
(b) The organization issues bonus shares or issues shares for the purpose of payment of dividends valued at ten (10) per cent or more of its total share capital;
(c) The organization submits an application for listing cancellation.
1. There is a rumour relating to the listing organization affecting the price of securities and such rumour requires confirmation.
2. The trading price and the volume traded of listed securities varies abnormally.
3. There is a rumour relating to the listing organization which seriously affects the interests of investors.
4. In other circumstances considered necessary by the State Securities Commission, Securities Trading Centres or Stock Exchange.
Article 55. Disclosure of information by Securities Trading Centres and Stock Exchange
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2. Information on issuing organizations, securities companies, fund management companies and securities investment funds.
3. Information on market management.
4. Other information on market status.
Article 56. Disclosure of information by securities companies
1. Securities companies shall be responsible to provide information to investors about listing organizations and securities investment funds.
2. Within ten (10) days from the date on which securities companies have their audit reports on the financial year, they shall announce their business results on information means of Securities Trading Centres and the Stock Exchange.
3. Securities companies shall be responsible to announce publicly information for investors on the forms of services provided by the securities companies; on their methods of placing, receiving and implementing orders; on the level of their trading fees; a list of members of the board of management and board of directors; address of head trading office; and any changes relating to the above items.
4. Securities companies shall report to the State Securities Commission and report to the Securities Trading Centres and the Stock Exchange within twenty four (24) hours of the occurrence of one of the following events, in order that the latter organizations may disclose information in accordance with regulations:
(a) A legal body initiates an examination of the company, of a member of the board of management (where a company has a board of management), of a member of the board of directors or of the chief accountant;
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(c) Ten (10) per cent or more of the value of the share capital of the company is lost;
(d) There is a change in the controlling shareholders (members) of the company;
(dd) The company appoints or dismisses the director (general director);
(e) There are important changes in the business operations of the company.
Article 57. Disclosure of information by fund management companies
1. Fund management companies shall report to the State Securities Commission and shall report to Securities Trading Centres and the Stock Exchange within twenty four (24) hours of the occurrence of one of the following events, in order that the latter organizations may disclose information in accordance with regulations:
(a) A legal body initiates an examination of the company, of a member of the board of management (where a company has a board of management), of a member of the board of directors or of the chief accountant;
(b) The company intends to merge with another company;
(c) The company sustains a major loss of assets;
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(dd) The company appoints or dismisses the director (general director);
(e) The company appoints or dismisses a fund operator;
(g) There are important changes in the business operations of the company which could affect fund management;
(h) The value of a fund decreases by ten (10) per cent compared with its value at the time of registration for official establishment;
(i) There are important changes in the status of investment in a fund.
2. In necessary circumstances, the State Securities Commission may request fund management companies to report and disclose information on the operation of funds or of the fund management company.
Article 58. Responsibilities during disclosure of information
1. The entities stipulated in article 51.1 of this Decree must comply with the following provisions during disclosure of information:
(a) Not disclose information not yet permitted to be disclosed, and not disclose information prior to discharging the obligations to report stipulated in article 51.3 of this Decree;
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(c) Not change the contents of information already disclosed without explanation and report in accordance with article 51.3 of this Decree;
(d) Not disclose information on the list of secrets stipulated by the Government.
Article 59. Stay of disclosure of information
(a) Information which the State Securities Commission permits to be reserved and not yet disclosed;
(b) For reasons of force majeure, disclosure of information is not able to be conducted within the stipulated time-limit.
Any stay of disclosure of information in the above circumstances shall be implemented in accordance with law.
Article 60. Organizational form of market
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2. The Prime Minister shall make decisions on the establishment of Securities Trading Centres and the Stock Exchange.
Article 61. Organization and operation of Securities Trading Centres
1. A Securities Trading Centre is a money-collecting administrative unit directly under the State Securities Commission, having legal person status and its own office, seal and accounts. Its operating expenses shall be funded by the State Budget.
2. A Securities Trading Centre shall assume the functions of control, management and supervision of securities trading activities at the Securities Trading Centre.
Article 62. Duties and powers of Securities Trading Centres
1. Organizing, managing and supervising the trading of listed securities.
2. Managing the securities trading system.
3. Fulfilling the duties and powers of Securities Depository Centres until such Centres are established.
4. Managing and supervising the listing of securities.
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6. Managing and supervising operations of members of Securities Trading Centres.
7. Organizing and managing the disclosure of market information.
8. Upon request, acting as intermediary in conciliation of disputes relating to operations of trading securities.
9. Collecting fees in accordance with law.
10 .Implementing the regimes for reporting, statistics, accounting and auditing provided for by law.
11. Fulfilling other duties delegated by the Chairman of the State Securities Commission.
Article 63. Members of Securities Trading Centres
Securities companies to which the State Securities Commission grants a licence to engage in brokerage or self-trading activities shall be permitted to register as members of Securities Trading Centres. Operations of members of Securities
Trading Centres shall be conducted in accordance with law.
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1. The Stock Exchange is a financially autonomous legal entity operating under the supervision and control of the State Securities Commission.
2. The Prime Minister of the Government shall make decisions on the organization, staffing structure and operation of the Stock Exchange.
1. The State Securities Commission may grant licences for securities business to shareholding companies or limited liability companies which are established to conduct securities business and provide securities services and which satisfy the conditions stipulated in article 66 of this Decree.
2. Types of securities business activities shall comprise:
(a) Brokerage;
(b) Self-trading;
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(d) Underwriting;
(dd) Securities investment and financial consultancy.
3. Securities companies may provide securities depository services and other financial services in accordance with law.
Article 66. Conditions for grant of securities business licence
1. Having a business plan consistent with the objectives of socio-economic development and development of the securities sector.
2. Having adequate material and technical facilities for securities business.
3. Having the minimum level of legal capital stipulated for each type of business as follows:
- Brokerage: three billion Vietnamese dong (VND3 billion);
- Self-trading: twelve billion Vietnamese dong (VND12 billion);
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- Underwriting: twenty two billion Vietnamese dong (VND22 billion);
- Securities investment and financial consultancy: three billion Vietnamese dong (VND3 billion).
Where a company applies for a licence for more than one type of business activity, its legal capital shall be the total legal capital of the types of business activities for which a licence is to be granted to such company.
4. Having a director and deputy director (general director and deputy general director) and business staff who satisfy the conditions in order to be granted securities business practising certificates by the State Securities Commission.
5. Underwriting licences shall only be granted to companies with self-trading licences.
Article 67. Procedures for grant of securities business licence
1. An application file for grant of a securities business licence shall comprise:
(a) Application for grant of a securities business licence;
(b) Proposed business plan for the first three years of operation; capital contribution plan; information about the founding organization;
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(d) Valid documents proving the company has satisfied the conditions stipulated in article 66 of this Decree.
2. Within sixty (60) days from the date of receipt of a complete and valid application file, the State Securities Commission shall grant, or refuse to grant, a securities business licence. Where the grant of a licence is refused, the State Securities Commission shall specify the reasons therefor in writing.
3. If a securities company to which a securities business licence has been granted wishes to undergo division, demerger, consolidation, merger or conversion, it must conduct procedures to re-apply for a securities business licence.
4. If a securities company to which a securities business licence has been granted wishes to amend or supplement the types of securities business it conducts, it must conduct procedures for amendment of or addition to its securities business licence.
Article 68. Announcement of securities business licence
1. Prior to commencement of any official activities, a securities company must make announcements in three consecutive editions of a central newspaper or of a newspaper in the locality where the main head office of the company is located; the announcement must contain the following main particulars:
(a) Name of company;
(b) Address of main head office;
(c) Number of business licence;
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(dd) Charter capital;
(e) Name of legal representative of company.
2. A securities company must post its securities business licence, the name of its legal representative, and a list of its branches, transaction bureaus and agencies for receipt of orders at the main head office and branches of the company.
3. Upon the occurrence of any of the changes stipulated in article 69 of this Decree, a securities company must post the decision of approval from the State Securities Commission at its main head office, branches, transaction bureaus and agencies for receipt of orders.
Article 69. Changes which must be approved
The State Securities Commission must provide written approval of the following changes by a securities company:
1. Change of location of main head office or branches.
2. Suspension of trading or services.
3. Establishment or closure of branches or transaction bureaus.
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Article 70. Rights and obligations of securities companies
1. To enter into written contracts with clients for securities transactions, registration and deposit of securities, portfolio management, underwriting, and provision of securities investment and financial consultancy.
2. To receive orders for transactions from clients only at the main head office, branches, transaction bureaus or agencies for receipt of orders.
3. To give priority to undertaking orders from clients over those from the company; to manage the assets, monies and securities of clients separately from those of the company, and to manage deposits from clients correctly in accordance with the contracts with clients; to manage the assets, monies and securities of each client separately.
4. To collect complete information on the financial position and investment objectives of clients; to provide complete, prompt and accurate market information to clients; to maintain confidentiality of information of clients, except where otherwise provided by law.
5. To conduct self-trading by the company separately from activities of brokerage, portfolio management and underwriting; to conduct business activities of the owner of the company separately from business activities of the securities company.
6. To maintain regularly7 the stipulated level of minimum liquid capital.
7. To invest in securities or make capital contribution only within the stipulated limits.
8. Not to provide securities credit services or to lend securities.
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10. To pay fees for the grant of its securities business licence and for securities business practising certificates in accordance with law.
11. To collect fees in accordance with law for provision of services to clients.
12. To comply with the accounting and financial regimes stipulated by law.
13. To comply with other relevant provisions of law.
Article 71. Suspension of operation and revocation of securities business licences
1. The securities business of a securities company may be suspended for a maximum duration of sixty (60) days in the following cases:
(a) Cessation of securities business activities without prior written approval of the State Securities Commission;
(b) Failure to satisfy the conditions required for granting of a licence for securities business activities as stipulated in clauses 2 and 3 of article 66 of this Decree and failure to remedy such situation within sixty (60) days from the date of receipt of written notice from the State Securities Commission;
(c) Breach of the provisions of articles 103 to 108 inclusive of this Decree.
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(a) Failure to rectify a breach upon expiry of the duration of suspension of securities business as stipulated in clause 1 of this article;
(b) Failure to commence operations within twelve (12) months from the date on which the licence is granted;
(c) Dissolution or bankruptcy;
(d) Revocation of business registration certificate.
3. A securities company the operation of which has been suspended or the securities business licence of which has been revoked shall complete all remaining transactions and contracts which were entered into prior to suspension or revocation. The State Securities Commission may appoint another securities company to complete all remaining transactions and contracts entered into by the company the operation of which has been suspended or the securities business licence of which has been revoked. In this case, an authorization relationship between the two companies shall be automatically established.
1. Securities companies shall comply with the regime for periodical and extraordinary reporting in accordance with law. Annual financial reports must be audited by an approved independent auditing organization. Securities companies must provide reports in necessary cases upon request from the State Securities Commission.
2. Securities companies shall report the following changes to the State
Securities Commission:
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(b) Change of name of company;
(c) Change of member of the board of management or board of directors;
(d) Amendment of or addition to the charter;
(dd) Establishment or closure of agencies for receipt of orders.
Article 73. Securities business practising certificates
1. The director and deputy director (general director and deputy general director) and business staff of a securities company must have a securities business practising certificate.
2. When an individual is proposed for a securities business practising certificate by the securities company where such individual works, the individual must satisfy the following conditions:
(a) Have full legal capacity and capacity for civil acts;
(b) Satisfy the standards in relation to professional expertise;
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(d) Not be currently subject to criminal prosecution, not be serving a prison sentence, or not have had his or her right to practise revoked by a court in accordance with law.
Article 74. Restrictions on individuals engaging in securities business
1. An individual engaging in securities business may only open a securities trading account for himself or herself at the securities company where such individual works.
2. An individual engaging in securities business must not:
(a) Work as the director of, or be a shareholder owning more than five per cent of the total voting shares of, a securities-issuing organization, except where he or she is a representative for a securities company at the issuing organization, in which the securities company participates in investment or capital contribution;
(b) Work concurrently for two or more securities companies.
Article 75. Extension and revocation of securities business practising certificates
1. A securities business practising certificate shall be valid for a duration of three years from the date on which it is granted, and may be extended when a holder satisfies the conditions on re-examination stipulated by the State Securities Commission.
2. The practising certificate of an individual engaging in securities business shall be revoked in the following cases:
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(b) The individual no longer works for the securities company;
(c) The individual breaches the provisions of articles 103 to 107 inclusive of this Decree.
SECURITIES INVESTMENT FUNDS AND FUND MANAGEMENT COMPANIES
Article 76. Participating parties
1. Fund management companies shall undertake management of securities investment funds.
2. Custodian banks shall preserve and accept into custody the assets of securities investment funds and shall supervise fund management companies for the benefit of investors.
3. Investors may contribute capital to securities investment funds and shall only be liable to the extent of their paid-up capital contribution.
Article 77. Establishment of securities investment funds
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2. Securities investment funds must have a minimum amount of charter capital of five billion Vietnamese dong (VND5 billion).
3. A securities investment fund must be granted a licence by the State Securities Commission prior to it making a public issue of investment fund certificates.
4. The establishment of a securities investment fund by capital contribution from members must be registered with the State Securities Commission.
1. The procedures for permission to establish a securities investment fund to make a public issue of investment fund certificates shall be conducted as stipulated in articles 9.1, 12, 13, 14, 15 and 16 of this Decree.
2. An application file for permission for establishment of a securities investment fund and to make a public issue of investment fund certificates shall comprise:
(a) Application for permission for establishment of a securities investment fund and to make a public issue of investment fund certificates;
(b) Charter of the securities investment fund;
(c) Prospectus;
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(dd) Contract for supervision of the securities investment fund between a fund management company and a custodian bank;
(e) Undertaking of founding members of the fund not to assign the investment fund certificates they own for a period of two years as from the date of issue.
3. The fund management company shall be liable for the validity of the file in accordance with article 10.4 of this Decree.
4. Within ten (10) working days of the end of a public issue tranche of investment fund certificates, the fund management company shall report to the State Securities Commission on the results of such issue tranche and shall apply for registration of establishment of the securities investment fund. Within fifteen (15) working days from the date of receipt of a complete and valid file, the State Securities Commission shall resolve registration of establishment of the securities investment fund.
Article 79. Suspension of issue of investment fund certificates
1. An issue of investment fund certificates shall be suspended if the State Securities Commission discovers errors in the prospectus which might cause loss to investors.
2. A fund management company shall notify investors immediately of suspension of an issue of investment fund certificates. During the period of suspension, an investor shall have the right to rescind its order to purchase investment fund certificates and require the fund management company to refund purchase monies within thirty (30) days from the date of the request of the investor.
3. If a fund management company continues with the public issue of investment fund certificates, such company shall make the amendments or additions required by the State Securities Commission and publicly announce such amendments or additions.
Article 80. Revocation of licence for issue of investment fund certificates
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(a) The errors stipulated in article 79.1 of this Decree are not amended or supplemented correctly in accordance with the procedures or within the stipulated time-limit;
(b) The results of the issue tranche do not result in a minimum of fifty (50) investors or the volume of investment fund certificates actually issued does not account for eighty (80) per cent of the volume of certificates authorized for issue.
2. Upon revocation of a licence for an issue, the fund management company shall immediately inform investors, recall all issued certificates and refund investors within thirty (30) days from the date of revocation of the licence. Upon expiry of this time-limit, the fund management company must compensate investors for their losses in accordance with the undertakings the fund management company provided to investors and in accordance with law.
1. An application file for registration of establishment of a securities investment fund shall comprise:
(a) Application for registration of establishment of a securities investment fund;
(b) Charter of the securities investment fund;
(d) Fund assets supervision contract;
(d) List of members making a capital contribution to the fund.
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3. An announcement shall be made after registration of establishment of a securities investment fund as stipulated in article 14 of this Decree.
Article 82. Committee of representatives of fund
1. A securities investment fund may have a committee of representatives of the fund, the members of which shall be appointed by the general meeting of investors.
2. The rights, obligations and operational principles of a committee of representatives of a fund shall be specified in the charter of the fund as passed by the general meeting of investors.
Article 83. Conditions for grant of licence for management of securities investment fund
The State Securities Commission shall grant a licence for management of a securities investment fund to organizations which satisfy the following conditions:
1. Being a shareholding company or limited liability company established in accordance with law and having a minimum legal capital of five billion Vietnamese dong (VND5 billion).
2. The company has a team of professional staff members with training in securities.
3. The company has adequate material and technical facilities for conducting operations of fund management.
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Article 84. Grant of licence for management of securities investment fund
1. An application file for grant of a licence for management of a securities investment fund shall comprise:
(a) Application for grant of a licence for management of a securities investment fund;
(b) Charter of the company;
(c) Proposed business plan for the first three years of operation; capital contribution plan; information about the founding organization;
(d) Valid documents proving the company has satisfied the conditions stipulated in article 83 of this Decree.
2. Within sixty (60) days from the date of receipt of a complete and valid application file, the State Securities Commission shall grant, or refuse to grant, a licence for management of a securities investment fund. Where the grant of a licence is refused, the State Securities Commission shall specify the reasons therefor in writing.
3. If a fund management company to which a licence for management of a securities investment fund has been granted wishes to undergo division, demerger, consolidation, merger or conversion, it must conduct procedures to re-apply for a fund management licence.
Article 85. Changes which must be approved
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1. Change of location of main head office or branches.
2. Suspension of trading or services.
3. Establishment or closure of branches or representative offices.
Article 86. Announcement of licence for management of securities investment fund
Within thirty (30) days from the date of grant of a licence for management of a securities investment fund, the fund management company must make announcements in three consecutive editions of a central newspaper or a newspaper in the locality where the main head office of the company is located, the announcement to contain the following particulars:
1. Name of company.
2. Address of main head office.
3. Number and date of grant of licence for fund management.
4. Type of business.
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6. Name of legal representative of company.
Article 87. Rights and obligations of fund management companies
1. To comply with the charter of the fund and to protect the rights and interests of investors.
2. To be fair and honest, and to act in the interests of the securities investment fund.
3. To separately manage each fund.
4. With respect to any transaction of a fund, where there is a conflict of interest, to ensure fairness and that no loss is caused to the interests of the fund, and to make a full disclosure to the committee of representatives of the fund of information relevant to such transaction.
5. All securities transactions of managers and staff of a fund management company must be reported and centrally managed at the company under the supervision of the internal control section.
6. To ensure liability for the trust relationship with third parties and to ensure that any changes in the organization and management of the fund management company do not adversely effect the interests and operation of the fund.
7. When the fund management company conducts transactions of the sale or purchase of assets for the fund, the members of the board of management, director and deputy director (general director and deputy general director) of the company and operators of the fund shall not be permitted to receive any benefit for the company, for themselves or for a third party apart from fees and bonuses as stipulated in the charter of the fund.
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9. To enjoy fees and bonuses as prescribed by the charter of the fund; not to have revenue or expenses which are contrary to the charter of the fund.
10. To provide securities investment and financial consultancy.
Article 88. Restrictions on activities of fund management companies
1. A fund management company may not use the capital and assets of securities investment funds to provide loans or guarantees for any loans; and may not borrow monies for financing activities of the fund, except for short-term loans for payment of necessary expenses.
2. The director and deputy director (general director and deputy general director), and members of the board of management of the fund management company, fund operators or related persons shall not be permitted to purchase assets for the fund for the company or for themselves, and shall not be permitted to sell their own assets to the fund.
3. A fund management company may not be a related person to the custodian bank which supervises fund assets.
4. A fund management company must comply with other provisions of the law on management of capital and assets of a fund.
1. The operation of a fund management company may be suspended for a maximum duration of sixty (60) days in the following circumstances:
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(b) No longer satisfying the requirements stipulated in article 83 of this Decree;
(c) Breach of the provisions of articles 103 to 108 inclusive of this Decree.
2. A licence for fund management of a fund management company shall be revoked in the following circumstances:
(a) Failure to rectify a breach upon expiry of the duration of suspension;
(b) Failure to commence operations after twelve (12) months from the date of grant of the licence;
(c) Dissolution or bankruptcy;
(d) Revocation of business registration certificate.
3. A fund management company the operation of which has been suspended or the licence for fund management of which has been revoked shall complete all remaining transactions and contracts which were entered into prior to suspension or revocation. The State Securities Commission may appoint another fund management company to complete all remaining transactions and contracts entered into by the company the operation of which has been suspended or the licence for fund management of which has been revoked.
Article 90. Rights and obligations of investors
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2. To pay in full for investment fund certificates which they purchase and to be liable for other debts and asset obligations of the fund to the extent of their paid-up capital contribution.
3. To enjoy benefits from investment activities of the fund.
4. To assign their capital contribution or investment certificates.
Article 91. General meeting of investors
1. The general meeting of investors shall be convened by the committee of representatives of the fund or by the fund management company (where the fund does not have a committee of representatives) and shall meet at least once annually.
2. An extraordinary general meeting of investors shall be convened in the following circumstances:
(a) When there are important changes in the environment of investment activities and investment status of the fund;
(b) If the fund management company is declared bankrupt or its operations are suspended;
(c) If the fund management company commits a serious breach of the provisions in the charter of the fund;
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Article 92. Dissolution of securities investment fund
1. A securities investment Fund shall be dissolved upon expiry of the operational term stipulated in the charter of the fund or upon a decision of the general meeting of investors.
2. Prior to conducting dissolution, the committee of representatives of the fund or the fund management company (where the fund does not have a committee of representatives) shall convene a general meeting of investors to make a decision.
1. A fund management company shall select a custodian bank which must be approved by the committee of representatives of the fund or by the general meeting of investors. The choice of or change of the custodian bank must be reported to the State Securities Commission.
2. A custodian bank must satisfy the following conditions:
(a) Have a licence to engage in securities depository activities granted by the State Securities Commission;
(b) Not own any assets of the securities investment fund;
(c) Not be a related person to the fund management company.
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1. To manage separately the assets of each fund from other assets.
2. To inspect and supervise fund management in order to ensure compliance with the law and the charter of the fund.
3. To ensure operations of revenue and expenses comply with the guidelines from the fund management company.
4. To certify reports prepared by the fund management company relevant to assets and activities of the fund.
5. To implement the regime for periodical and extraordinary reporting in accordance with law and to provide other reports upon request from the State Securities Commission.
6. To report to the State Securities Commission if it is discovers that the committee of representatives of the fund or the fund management company is operating in breach of law or in breach of the charter of the fund.
Article 95. Revenue from activities being supervision of fund assets
A custodian bank shall only be entitled to the benefits provided for in the charter of the fund and shall not receive any other benefits for itself or for a related person.
Article 96. Reporting regime applicable to fund management companies
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2. Fund management companies shall report the following events to the State Securities Commission:
(a) Increase or reduction in charter capital;
(b) Change of name of company;
(c) Change of member of the board of management or board of directors;
(d) Amendment of or addition to the charter of the company or to the charter of the fund managed by the company;
(dd) Other abnormal events which might have a major impact on the financial capacity and investment activities of the company or of the fund managed by the company.
3. Fund management companies must provide reports in necessary cases upon request from the State Securities Commission.
Article 97. Fund management practising certificates
The director and deputy director (general director and deputy general director) of a fund management company and operators of a fund must have a fund management practising certificate. The provisions in article 73 of this Decree shall apply to procedures for grant of fund management practising certificates.
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Article 98. Restrictions on individuals practising as fund managers
An individual practising as a fund manager may not:
1. Work as the director of, or be a shareholder owning more than five per cent of the total voting shares of, a securities-issuing organization.
2. Work concurrently for two or more fund management companies.
PARTICIPATION OF FOREIGN PARTIES
Article 99. General Principles
Any foreign individual or organization involved in investment in securities or securities business activities in Vietnam must comply with the provisions of this Decree and the laws of Vietnam.
Article 100 Investment in securities
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Article 101 Establishment of securities business organizations
1. Foreign securities business organizations may make capital contribution to, purchase shareholdings in, or contribute joint venture capital to establish securities companies or fund management companies with Vietnamese partners. The State Securities Commission must grant a licence for the establishment of a joint venture company. The Prime Minister of the Government shall make decisions on the percentage capital contribution of foreign securities business organizations to a joint venture.
2. Foreign fund management companies wishing to open an operational branch in Vietnam must be licensed by the State Securities Commission.
Article 102 Representative offices
The establishment of representative offices in Vietnam by foreign securities business organizations must be licensed by the State Securities Commission. The establishment and operation of representative offices of foreign securities business organizations shall be implemented in accordance with law.
1. Any entity which has internal information shall be prohibited from the following conduct:
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(b) Disclosing or providing internal information to a third party or advising a third party to purchase or sell securities on the basis of internal information.
2. The following organizations and individuals shall be deemed to be entities which have internal information:
(a) Members of the board of management, board of directors or board of controllers of an issuing organization or of a listing organization;
(b) Persons who have access to internal information because of their working position in an issuing organization or in a listing organization;
(c) Any major shareholder of an issuing organization or a listing organization;
(d) Individuals working at the State Securities Commission, Securities Trading Centres, Stock Exchange or other bodies having access to internal information;
(dd) Any auditor engaged in financial operations of an issuing organization or a listing organization;
(e) Individuals working at organizations which have a business co- operation relationship with an issuing organization or a listing organization;
(g) Individuals working at intermediary organizations in the securities market;
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3. Internal information means information which might have a major impact on the price of securities in the market and which has not been announced or which will not be announced to the public.
Article 104 Market manipulation
Organizations and individuals may not directly or indirectly engage in the following activities:
1. Trading securities without transferring the ownership rights with respect to such securities.
2. Conspiring with one another to purchase or sell securities in order to create false supply and demand of such securities;
3. Purchasing and selling securities continuously, or causing others to purchase and sell securities continuously, in order to control prices of securities.
Organizations and individuals may not contrive or disseminate any false information causing serious impact to securities trading activities.
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Article 107 Causing loss and damage to interests of investors
Securities companies and their staff may not engage in the following activities:
1. Contravening a purchase order or sale order of an investor.
2. Refusing to provide certification of transactions in accordance with the regulations.
3. Purchasing or selling for themselves securities in the account of a client or borrowing the name of a client in order to purchase or sell securities for themselves.
4. Other acts causing loss and damage to the interests of investors.
Article 108 Legal entities opening account in name of individual
A legal entity shall be prohibited from borrowing the name of an individual in order to open an account for the purchase and sale of securities.
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Article 109 State administration of securities and securities markets
1. The Government shall exercise uniform State administration of securities and securities markets.
2. Ministries, the State Securities Commission and people's committees of provinces and cities under central authority shall exercise State administration of securities and securities markets in accordance with regulations of the Government.
Article 110 Contents of State administration of securities and securities markets
1. Promulgating legal instruments relating to securities and securities markets; formulating strategies, policies and developmental plans for securities markets.
2. Granting, extending and revoking all types of licences relating to securities issues, listing, trading and services; collecting fees for the grant of licences in accordance with law.
3. Organizing and managing the trading market and other intermediary and auxiliary organizations which operate in securities markets.
4. Inspecting, supervising and dealing with breaches of the laws on securities and securities markets.
5. Providing professional training and disseminating knowledge of securities and securities markets.
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Article 111 Inspection, supervision and dealing with breaches
Issuing organizations, listing organizations, securities business organizations and individuals engaging in securities activities shall be subject to inspection and supervision by the State Securities Commission which shall also deal with any breaches by such organizations and individuals in accordance with law.
Article 112 Applicability and scope of inspection, supervision and dealing with breaches
1. The following entities shall be subject to inspection and supervision:
(a) Issuing organizations which make public issues of securities;
(b) Organizations which list securities;
(c) Securities Trading Centres and the Stock Exchange;
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(dd) Securities companies; investment fund management companies; securities investment funds; organizations engaged in securities registration, depository and clearing activities; custodian banks; and banks appointed for payment;
(e) Individuals practising securities business;
(g) Organizations and individuals involved in securities activities and securities markets.
2. Scope of inspection and supervision shall include:
(a) Securities-issuing activities;
(b) Securities-listing activities;
(c) Securities transactions;
(d) Securities business and the provision of securities services;
(dd) Information disclosure.
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1. Any dispute arising from securities-issuing and securities business activities must be first resolved through negotiation and conciliation. Securities Trading Centres, the Stock Exchange or the State Securities Commission may act as an intermediary to conciliate such disputes. Failing conciliation, the parties may refer such dispute to an arbitration body or a court for resolution in accordance with law.
2. In the case of any dispute involving a foreign party, if the parties fail to reach any agreement on conciliation, the dispute shall be resolved in accordance with the law of Vietnam; if there is an international treaty to which the Socialist Republic of Vietnam is a signatory or participant, the dispute shall be resolved in accordance with the provisions of such treaty.
Article 114 Resolution of complaints and denunciations
The State Securities Commission shall be responsible to resolve complaints and denunciations in the field of securities and securities markets in accordance with the laws on resolution of complaints and denunciations.
Article 115 Dealing with breaches
Any organization or individual intentionally or unintentionally breaching the provisions of this Decree and other legislation relating to securities and securities markets shall, depending on the nature and seriousness of the breach, be subject to disciplinary action, administrative penalties or prosecution for criminal liability in accordance with law; and such organization or individual shall pay compensation for any loss and damage caused in accordance with law.
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FOR THE GOVERNMENT
PRIME MINISTER
Phan Van Khai
- 1Decision No. 87/2007/QD-BTC of October 22, 2007, issuing regulations on registration, depository, clearing and settlement of securities.
- 2Announcement No. 20/TB-VPCP of January 29, 2007, on conclusions of The Prime Minister Nguyen Tan Dung on strengthening control and supervision of securities market activities.
- 3Circular No. 72/2006/TT-BTC
- 4Decision No. 163/2003/QD-TTg of August 05, 2003, approving the strategy on development of Vietnam''s securities market till 2010
- 5Decree of Government No. 22/2000/ND-CP, on sanctions against administrative violations in the field of securities and securities market
- 6Decision No. 31/1999/QD-UBCK6 of October 12, 1999, concerning the issuance of the regulation on the inspection and supervision of securities activities and the stock market
- 7Decision No. 04/1999/QD-UBCK1 of March 27, 1999, promulgating the regulation on membership, listing, information disclosure and securities trading
- 1Decision No. 87/2007/QD-BTC of October 22, 2007, issuing regulations on registration, depository, clearing and settlement of securities.
- 2Decision No. 60/2004/QD-BTC of July 15, 2004 promulgating the regulation on securities registration, custody, clearing and settlement
- 3Circular No. 57/2004/TT-BTC of June 17, 2004 guiding the disclosure of information on the securities market
- 4Circular No. 58/2004/TT-BTC of June 17, 2004 providing guidance on securities members and transactions
- 5Law No. 32/2001/QH10 of December 25, 2001 on organization of the Government
- 6Decree of Government No. 22/2000/ND-CP, on sanctions against administrative violations in the field of securities and securities market
- 7Decision No. 31/1999/QD-UBCK6 of October 12, 1999, concerning the issuance of the regulation on the inspection and supervision of securities activities and the stock market
- 8Decision No. 04/1999/QD-UBCK1 of March 27, 1999, promulgating the regulation on membership, listing, information disclosure and securities trading
Decree No. 144/2003/ND-CP of November 28th, 2003, on securities and securities markets.
- Số hiệu: 144/2003/ND-CP
- Loại văn bản: Nghị định
- Ngày ban hành: 28/11/2003
- Nơi ban hành: Chính phủ
- Người ký: Phan Văn Khải
- Ngày công báo: Đang cập nhật
- Số công báo: Đang cập nhật
- Ngày hiệu lực: 16/12/2003
- Ngày hết hiệu lực: 03/01/2020
- Tình trạng hiệu lực: Hết hiệu lực