The securities market play an important role in motivating the economic development. Let’s find out this issue with Lawyer X through the following situation: Dear Lawyer! I am a foreigner investor and want to buy stock, bonds in Vietnam. I want to comprehend more about legal regulations on the securities market in Vietnam. What are primary policies on development of the securities market in Vietnam? What are measures for assurance of security and safety of the securities market? How is the State management of securities and the securities authorities? Thank you!”
Legal grounds
2019 Vietnam Law on Securities
Policies on development of the securities market
– The State shall introduce policies facilitating Vietnamese and foreign organizations and individuals to invest and operate in the securities market in order to mobilize medium-term and long-term capital.
– The State shall introduce management and supervision policies to ensure the fairness, openness, transparency, safety and effectiveness of the securities market.
– The State shall introduce policies on investment in modernization of infrastructure and information technology serving the operation of the securities market, develop human resources for the securities industry, provide basic knowledge about securities and the securities market.
Measures for assurance of security and safety of the securities market
– Measures for assurance of security and safety of the securities market include:
+ Supervision of security and safety of the securities market;
+ Response to and recovery from events that adversely affect the safety, stability and integrity of the securities market;
+ Suspension of certain listed or registered securities from trading on the system;
+ Suspension of some or all transactions of VSE and its subsidiaries;
+ Partial or full suspension or restoration of securities registration, depositing, offsetting, payment functions of Vietnam Securities Depository and Clearing Corporation (VSDCC);
+ Temporarily or permanently prohibition from holding certain positions in securities companies, fund management companies, branches of foreign securities companies, investment companies; prohibition from securities activities due to commission of securities offences;
+ Freezing the securities account; requesting a competent person to freeze a deposit account involved in a securities fraud.
– The Government shall provide for implementation of securities market safety measures mentioned in Clause 1 of this Article.
State management of securities and the securities authorities
– The Government shall uniform state management of securities and the securities authorities.
– The Ministry of Finance shall be responsible to the Government for state management of securities and the securities market, and have the following duties and entitlements:
+ Propose strategies, plans, schemes and policies on development of the securities market to the Government and the Prime Minister for promulgation;
+ Promulgate or propose promulgation of legislative documents on securities and the securities market;
+ Direct SSC to implement the strategies, plans, schemes and policies on development of the securities market and legislative documents on securities and the securities market.
– Other ministries and ministerial agencies, within the scope of their duties and entitlements, shall cooperate with the Ministry of Finance in state management of securities and the securities market.
– The People’s Committees at all levels, within the scope of their duties and entitlements, are responsible for state management of securities and the securities market in their administrative divisions.
Regulations on State Securities Commission (SSC)
– SSC is affiliated to the Ministry of Finance and is responsible for advising and assisting the Minister of Finance in state management of securities and the securities market, organizing implementation of regulations of law on securities and the securities market as authorized by the Minister of Finance, and has the following duties and entitlements:
+ Propose legislative documents on securities and the securities market, strategies, plans, schemes and policies on development of the securities market to the Minister of Finance or a competent authority for promulgation;
+ Organize and develop the securities market; directly manage and supervise securities activities; manage services related to securities and the securities market in accordance with regulations of law;
+ Issue, reissue, renew, revise, revoke licenses, securities professional certifications, certificates related to securities activities; revise, suspend and revoke decisions relevant to securities activities;
+ Manage, inspect, supervise operations of VSE, its subsidiaries and VSDCC; consider approving regulations of VSE, its subsidiaries and VSDCC; request VSE, its subsidiaries and VSDCC to revise their regulations; revise, suspend and revoke decisions relevant to operations of VSE, its subsidiaries and VSDCC; direct VSE, its subsidiaries and VSDCC to fulfill duties to protect the lawful rights and interests of investors;
+ Consider approving new securities; change and apply new transaction methods;
+ Manage and supervise operations related to securities and the securities market of organizations and individuals;
+ Carry out inspections; settle complaints and denunciations; impose administrative penalties against securities-related offences;
+ Submit reports to the Ministry of Finance on the securities market developments. Submit a report to the Ministry of Finance, the Government and the Prime Minister on any adverse event that considerably affect the security and safety of the securities market in order to stabilize the market and maintain financial security and safety;
+ Implement or request a competent authority to implement measures for assurance of securities market safety and security;
+ Produce statistics and forecasting about securities activities and the securities market; modernize information technology serving securities activities and the securities market;
+Provide or cooperate with relevant organizations in providing training for securities officials and certified securities professionals; spread knowledge about securities and the securities market in the public.
+ Issue instructional documents and other documents under the management of SSC;
+ Supervise securities-related socio-professional organizations implementing their charters and guidelines;
+ Prepare and submit reports on securities trading and securities market as prescribed by law;
+ Promote international cooperation and coordinate implementation of securities-related international agreements to which Vietnam is a signatory;
+ Other duties and entitlements provided for in this Law and relevant laws.
– Functions, tasks, entitlements and organizational structure of SSC shall be specified by the Prime Minister.
– Officials and public employees of SSC, in performance of their duties, shall ensure truthfulness and confidentiality of information, compliance with regulations on securities and the securities market and relevant laws.
Regulations on Securities-related socio-professional organizations
– Securities-related socio-professional organizations shall be established and run in accordance with regulations of law on associations, comply with regulations of law on securities and the securities market, and be supervised by SSC.
– Each securities-related socio-professional organization shall issue its own code of professional ethics after it is approved by SSC; cooperate with securities authorities in disseminate knowledge about securities and the securities market among its members.
What are Professional investors?
– Professional investors are investors that have adequate financial capacity or securities qualifications, including:
+ Commercial banks, foreign branch banks (FB+, finance companies, insurers, securities companies, fund management companies, securities investment funds, international financial institutions, off-budget financial funds, state-owned financial institutions permitted to buy securities as prescribed by relevant laws;
+ Any company whose contributed charter capital exceeds 100 billion VND; every listed or registered organization;
+ Holders of securities professional certifications;
+ Any individual holding a quantity of listed or registered securities that is worth at least 02 billion VND as confirmed by the securities company;
+ Any individual whose taxable income in the latest year is at least 01 billion according to his/her submitted tax return or tax deduction documents of his/her income payer.
– The Government shall elaborate this Article.
Regulations on Securities-related offences?
– Direct or indirect commission of frauds, forgery of documents, provision or disclosure of false information to conceal true information or omit necessary information in a manner that causes misunderstanding, adversely affects the offering, listing, trading, investment of securities and provision of securities-related services.
– Use of internal information to buy or sell securities to oneself or another person; revelation or provision of internal information; advising another person to buy or sell securities based on internal information.
– Use of one or several accounts of oneself or another person, trading securities in a manner that creates artificial demand or supply; collaborating with another person in trading securities to manipulate securities prices; use of other methods, with or without false information, to manipulate securities prices.
– Engaging in securities trade or provision of securities-related services without a license, certification or approval from SSC.
– Use of a client’s account or asset without the client’s authorization or against the law; abuse of trust to appropriate a client’s assets.
– Allowing another person to borrow the account to trade securities, hold securities in the name of another person for the purpose of manipulating securities prices.
– Organizing the securities market against regulations of this Law.
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Frequently asked questions
Securities market refers to a location or method of information exchange for trading securities.
In case of transboundary violations relevant to Vietnam’s securities market, SSC shall cooperate with securities market authorities of the foreign country in investigation and information exchange.
Certified securities professionals shall attend training courses in securities and securities market, systems for trading of new securities organized by SSC, VSE and its subsidiaries, and VSDCC.
Conclusion: So the above is General regulations on the securities market in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
