Circular No. 13/2013/TT-BTC dated January 25, 2013 of the Ministry of Finance on securities trading surveillance on the securities market

THE MINISTRY OF FINANCE

Circular No. 13/2013/TT-BTC of January 25, 2013, on securities trading surveillance on the securities market

Pursuant to the June 29, 2006 Law on Securities;

Pursuant to the November 24, 2010 Law Amending and Supplementing a Number of Articles of the Law on Securities;

Pursuant to the Government’s Decree No. 58/2012/ND-CP of July 20, 2012, detailing and guiding a number of articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Chairman of the State Securities Commission;

The Minister of Finance promulgates the Circular on securities trading surveillance on the securities market.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the securities trading surveillance on the organized securities market.

Article 2. Subjects of application

This Circular applies to the following watchdogs and entities subject to surveillance:

1. Watchdogs:

a/ The State Securities Commission (SSC);

b/ The Stock Exchanges (SEs).

2. Subject to surveillance are institutions and individuals involved in securities trading and providing securities trading-related services, including:

a/ Listed institutions, institutions registered for trading;

b/ Securities companies, depository members of the Vietnam Securities Depository (VSD);

c/ Securities investment fund management companies, securities investment funds and securities investment companies;

d/ SEs and VSD, when providing securities trading-related services;

dd/ Affiliated entities (supervisory banks, commercial banks providing the service of opening securities investment deposit accounts, and investors).

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Listed institution or institution registered for trading means a public company that has its securities listed or registered for trading on an SE.

2. Securities trading means the purchase and sale of securities listed or registered for trading on the organized securities market.

3. Insider trading means securities trading with the use of insider information for purchase and sale of securities for oneself or for another person.

4. Manipulation trading means that one or more than one individual or institution that conducts or colludes with one another in conducting directly or indirectly the order placement, trading or information disclosure or spreading in order to create sham supply, demand, liquidity or price fluctuation of one or more than one type of securities.

5. Abnormal trading means trades subject to abnormality warning according to criteria set out by the SEs.

6. Abnormality warning criteria means a system of surveillance criteria for identification of abnormally traded securities elaborated and applied by the SEs to perform the trading surveillance after obtaining approval of the SSC.

7. Rumor means information spread by a group of individuals or an individual on a matter related to securities or securities trading on the securities market, which may be true or untrue but cannot be verified at the time of spreading.

Chapter II

ORGANIZATION OF SECURITIES TRADING SURVEILLANCE

Section 1

SECURITIES TRADING SURVEILLANCE BY THE STATE SECURITIES COMMISSION

Article 4. Responsibilities and powers of the SSC

1. Responsibilities

a/ To perform surveillance of securities trading and provision of securities trading-related services on the organized securities market by the entities specified in Clause 2, Article 2 of this Circular;

b/ To work out and implement annual plans on securities trading surveillance;

c/ To detect market manipulation, insider trading and trading-related violations of the law on securities and securities market;

d/ To supervise investors in their observance of regulations on securities trading and disclosure of securities trading-related information;

dd/ To promptly issue appropriate warnings about trades and acts showing signs of violation in order to prevent illegal acts of entities subject to surveillance in securities trading;

e/ To summarize reports on securities trading surveillance of the SEs and request the SEs to coordinate in promptly detecting, analyzing, assessing, inspecting and handling, when necessary, entities involved in abnormal securities trades in accordance with law;

g/ To announce on its website decisions on handling violations of institutions and individuals in securities trades;

h/ To report to the Ministry of Finance on results of securities trading surveillance on a biannual or annual basis or at the request of the Ministry of Finance.

2. Powers

a/ To assume the prime responsibility for, and coordinate with related agencies and units in, elaborating and submitting legal documents on securities trading surveillance to competent authorities for approval;

b/ To promulgate regulations on its securities trading surveillance contents, methods and process; to promulgate a regulation on coordination among the SSC, SEs and VSD in securities trading surveillance; to approve the system of trading surveillance criteria elaborated by the SEs;

c/ To request entities subject to surveillance to report, provide information and documents on securities trading in performing surveillance tasks;

d/ To assume the prime responsibility for, and coordinate with related units in, inspecting institutions and individuals in securities trading and provision of securities trading services.

Article 5. Contents of surveillance by the SSC

Contents of surveillance by the SSC include:

1. Making in-depth analyses based on trading surveillance reports of the SEs and other information sources in order to detect market manipulation trades and trades involving the use of insider information and securities trading-related violations of the law on securities and securities market in order to take measures to promptly prevent and handle them.

2. Performing surveillance of operations of the SEs in the surveillance of securities trades on the organized securities market under the management of the SEs as prescribed in Section 2 of this Circular.

3. Performing surveillance of operations of the VSD in the correction and cancellation of post-trading errors, transfer of ownership over securities listed or registered for trading not via the trading system of the SEs under Article 17 of this Circular.

4. Performing surveillance of operations of securities companies in securities trading and provision of securities trading-related services in accordance with law.

5. Performing surveillance of securities trades of institutional investors and foreign investors in order to promptly detect abnormal practices which may have psychological effects on small investors.

6. Performing surveillance of the provision of securities trading-related services by the entities specified in Clause 2 (Points b thru dd), Article 2 of this Circular.

Article 6. Methods of securities trading surveillance by the SSC

1. Based on trading data provided by the SEs, analyzing, assessing and handling under regulations securities trades showing abnormal signs.

2. Performing surveillance of securities trades based on information from the following sources:

a/ Securities trading surveillance reports of the SEs;

b/ Reports of public companies, securities companies and the VSD;

c/ Reports of listed institutions and institutions registered for trading;

d/ Reports of institutions and individuals involved in trading on the securities market;

dd/ Information reported in the mass media, rumors;

e/ Other sources of information.

3. Irregularly inspecting entities subject to surveillance upon detecting signs of abnormal trades or based on reports of the SEs and institutions and individuals involved in securities trading and provision of securities trading-related services on the securities market.

Section 2

SECURITIES TRADING SURVEILLANCE BY THE STOCK EXCHANGES

Article 7. Responsibilities and powers of the SEs

1. Responsibilities

a/ To perform surveillance of securities trading and provision of securities trading-related services within the securities trading markets they organize in accordance with law;

b/ To organize surveillance apparatuses capable of performing assigned functions and tasks; to issue surveillance regulations and processes to assure effective surveillance;

c/ To perform surveillance of trades during a day, many days or periodically; to make analyses and assessments and clearly identify signs of violation of abnormal trades in order to promptly detect trades showing signs of market manipulation or insider trades and acts violating regulations on securities trading as prescribed in Article 8 of this Circular; to handle violations according to their competence or report violations to the SSC for handling in accordance with law;

d/ To perform surveillance of information disclosure and reporting under current regulations regarding securities trading of securities companies, listed institutions, institutions registered for trading, securities investment fund management companies, public securities investment funds, securities investment companies and investors;

dd/ To review press information and rumors related to abnormal trades;

e/ To make and send to the SSC regular reports, irregular reports and reports upon request on the surveillance of securities trading of entities subject to surveillance;

g/ To build surveillance databases as prescribed in Article 11 of this Circular.

2. Powers

a/ To issue a system of criteria for surveillance of securities trading on the SEs as prescribed in Article 9 of this Circular after obtaining approval of the SSC;

b/ To inspect as authorized by the SSC and handle according to their competence trading members that violate securities trading regulations, and request the SSC to handle illegal securities trading activities;

c/ To request trading members and affiliated institutions and individuals to report and provide information and documents related to their securities trades for surveillance.

Article 8. Contents of securities trading surveillance by the SEs

1. Performing surveillance in order to prevent and detect trades and acts in violation of the law on securities trading, including:

a/ Using insider information for securities trading;

b/ Conducting market manipulation trading;

c/ Other acts in violation of securities trading regulations as specified in the law on handling of administrative violations in the field of securities and securities market and other relevant laws.

2. Performing surveillance of the trading and disclosure of information related to the trading of listed securities or securities registered for trading on the SEs of institutions listing securities or registered for securities trading, securities companies, securities investment fund management companies, public securities investment funds, securities investment companies, major shareholders and investors owning 5% or more of fund certificates of closed public funds, internal shareholders and internal investors of closed public funds and their affiliated persons, persons authorized to disclose information and individual investors under current regulations.

Article 9. Securities trading surveillance criteria

1. The SEs shall elaborate and issue a system of securities trading surveillance criteria to serve as a basis for performing surveillance of trades within a day or in many days after obtaining approval of the SSC.

2. Contents and specific parameters of the system of securities trading surveillance criteria must be developed and adjusted in each period to suit the trading reality of the securities market and assure effective securities trading surveillance.

Article 10. Methods of securities trading surveillance by the SEs

1. Performing online surveillance on their surveillance systems of trades within a day for listed securities or securities registered for trading, for detecting abnormal trades.

2. Performing surveillance of securities trades in many days based on one or more of the following sources:

a/ Their securities trading databases;

b/ Reports of securities companies, public companies, institutions and individuals participating in the securities market; information disclosed by investors in accordance with the law on securities and securities market;

c/ Information reported in the mass media;

d/ Other sources of information.

3. Requesting involved institutions and individuals to provide information and explanations to further clarify signs of abnormal trades.

4. Inspecting trading members under Article 12 of this Circular. Coordinating with the SSC in regularly or irregularly inspecting entities subject to surveillance under their management.

Article 11. Databases for securities trading surveillance

1. The SEs shall take the initiative in building databases to serve securities trading surveillance. A database must at least contain:

a/ Data on securities trading results;

b/ A list of and information on entities subject to surveillance under their management that violate the law on securities and securities market and their regulations;

c/ Reports and information on securities trading already disclosed through their media; reports and information already reported to the SSC;

d/ Data related to securities trading accounts of investors.

2. Databases for securities trading surveillance must be built in a scientific manner so that they can be effectively used for surveillance activities and stored in accordance with current regulations.

Article 12. Inspection of securities trading activities

1. Inspection contents

a/ Regular inspection:

- Inspecting observance of regulations and processes related to trading activities and member regulations issued by the SEs;

- Inspecting observance of regulations on listing and information disclosure by listed institutions and institutions registered for securities trading when conducting securities trading.

b/ Irregular inspection: Such inspection is conducted on the basis of signs of abnormal trading through the surveillance of trades within a day or in many days under the SSC’s authorization.

2. Upon detecting an abnormal trade, an SE shall conduct inspection under the SSC’s written authorization as follows:

a/ Requesting the trading member and involved parties to provide information on such trade;

b/ Conducting inspection at the offices of the trading member and institutions involved in the trade (when necessary);

c/ Notifying in writing to the inspected subject under authorization at least 3 days before conducting the inspection.

3. When conducting inspection at head offices, branches and places registered for securities trading of trading members in accordance with law, based on the SSC’s authorization, the SEs shall issue inspection decisions enclosed with inspection plans and send documents on inspection results to inspected subjects within 5 working days after completing the inspection.

4. Based on inspection results specified in Clauses 1, 2 and 3 of this Article, the SEs shall:

a/ Handle violations of securities trading regulations committed by trading members;

b/ Report to the SSC on inspection contents and conclusions and handling plans within 5 working days after making inspection conclusions and handling;

c/ Propose the SSC to handle violations of trading members in case such violations fall beyond their competence.

Article 13. Regular trading surveillance reports

1. The SEs shall send regular reports to the SSC, including:

a/ Weekly trading surveillance reports, including books of trading orders, results of trading order matching within a day; and regular information within a trading day as specified in Article 32.2 of the Ministry of Finance’s Circular No. 52/2012/TT-BTC of April 5, 2012, guiding the information disclosure on the securities market (below referred to as Circular No. 52/2012/TT-BTC), which must be made according to forms 01 and 02 provided in Appendix I to this Circular, and sent to the SSC within the first 2 working days of the subsequent week;

b/ Monthly trading surveillance reports, which must be made according to form 03 provided in Appendix I to this Circular and sent to the SSC within the first 10 working days of the subsequent month;

c/ Annual trading surveillance reports, which must be made according to form 04 provided in Appendix I to this Circular and sent to the SSC within the first 20 working days of the subsequent year.

2. Reports specified in Clause 1 of this Article must be made in writing and electronic files. Particularly, reports specified at Point a, Clause 1 of this Article may be sent only in electronic files. The above reports may be sent in electronic data files in case the SSC and SEs all apply the e-signature program. The SSC shall keep reported information in accordance with law.

Article 14. Irregular reports on trading surveillance

1. The SEs shall send to the SSC an irregular report when:

a/ Detecting an event specified in Clause 1, Article 8 of this Circular;

b/ Receiving a report requesting irregular disclosure of information relating to securities trading of a listed institution or an institution registered for trading, securities company, securities investment fund management company, public investment company or securities investment company as specified in Article 33 of Circular No. 52/2012/TT-BTC.

2. An irregular report on an event specified at Point b, Clause 1 of this Article may be sent to the SSC in writing and electronic file within twenty four (24) hours after the SE detects the event or receives a report requesting disclosure of information relating to securities trading.

3. In case of irregular reports specified at Point a, Clause 1 of this Article, the SEs shall make separate analysis reports on each specific case, stating assessment opinions and plans on handling according to their competence or proposing the handling for cases falling beyond their competence.

Article 15. Trading surveillance reports upon request

1. The SEs shall send reports upon written request of the SSC.

2. Reports to be sent to the SSC specified in Clause 1 of this Article must be in writing and electronic files, have contents and be sent within a time limit requested by the SSC.

Chapter III

OBLIGATIONS OF ENTITIES SUBJECT TO SURVEILLANCE

Article 16. Obligation to provide information and explanations at the request of institutions and individuals involved in securities trading or providing securities trading services

1. Institutions and individuals involved in securities trading or providing securities trading services are obliged to promptly, adequately and accurately provide information, documents and electronic data related to securities trading surveillance contents at the request of the SSC and SEs; make explanations at the request of the SSC and SEs about events related to securities trading in accordance with law and disclose information in accordance with the law on securities and securities market in the following cases:

a/ Securities trades of institutions or individuals that are their major shareholders specified in Article 29 of the Law on Securities and Circular No. 52/2012/TT-BTC;

b/ Securities trades of institutions or individuals or affiliated persons that intend to hold up to twenty-five percent (25%) of voting stocks or fund certificates of a public company or closed fund or are currently holding twenty-five percent (25%) or more of voting stocks or fund certificates of a public company or closed fund under Article 32 of the Law on Securities; Clause 11, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Securities and the Ministry of Finance’s Circular guiding the information disclosure on the securities market and public bidding of stocks of public companies and fund certificates of closed public securities investment funds;

c/ Securities trades of members of the Board of Directors, Control Board, General Director (Director), Deputy General Directors (Deputy Directors), Financial Director, Chief Accountant, Head of the Finance and Accounting Section of a public company, persons authorized to disclose information and affiliated persons defined in Circular No. 52/2012/TT-BTC;

d/ Commercial banks providing the service of opening securities investment accounts for investors shall provide information on the balance of these accounts at the request of the SSC and competent agencies in accordance with law;

dd/ Supervisory banks shall provide data on the securities investment and trading of investment funds which they supervise at the request of the SSC and competent agencies in accordance with law.

2. When conducting securities trades on the securities market, institutional and individual investors shall cooperate with the SSC, SEs and competent agencies at the latter’s request in accordance with law.

3. An institution or individual that conducts securities trades or provides securities trading services but fails to coordinate or cooperate with the agencies specified in Clause 2 of this Article shall be handled in accordance with law.

Article 17. Obligations of the Vietnam Securities Depository

1. To build a database under current regulations to serve the securities market surveillance.

2. To make and send to the SSC reports for securities trading surveillance within the ambit of its functions, including:

a/ Monthly reports: Within the first 10 working days of a month, it shall send to the SSC the following:

- Report on grant of securities codes;

- Report on correction/cancellation of trading payment errors;

- Statistics on securities trades with ownership transfer not via the trading system (donation, inheritance, etc.);

- Report on information and names of securities trading accounts of investors opened at securities companies;

- List of major shareholders of companies that have registered securities at the VSD.

Monthly reports with contents specified in the form provided in Appendix II to this Circular must be made in writing and electronic files and preserved in accordance with law.

b/ Reports upon request: It shall send reports when receiving written requests of the SSC and SEs to serve the surveillance. Reports upon request to be sent to the SSC and SEs must be made in writing and electronic files, have contents and be sent within a time limit requested by the SSC and SEs;

c/ Irregular reports: It shall send to the SSC irregular reports when detecting signs of violation of regulations on correction or cancellation of post-trading errors, ownership transfer or securities holding rate of investors, collaterals, change in securities ownership, exercise of rights; or violations of securities depository members and users of services provided by it in accordance with law.

3. It shall preserve reported information in accordance with law.

4. When necessary, it shall make regular or irregular reports at the request of the Ministry of Finance.

Article 18. Obligations of securities companies

1. Securities companies have the following obligations:

a/ To coordinate with the SSC and SEs in performing securities trading surveillance when so requested;

b/ To coordinate with the SSC in inviting investors to work with inspection teams of the SSC and SEs on trades showing abnormal signs;

c/ To send reports to the SSC upon detecting trades violating regulations on securities and securities market;

d/ To make and send to the SSC and SEs reports and documents upon receiving written requests of the SSC and SEs.

2. Reports and documents specified in Clause 1 of this Article must be made in writing and electronic files, have contents and be sent within a time limit requested by the SSC and SEs.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 19. Implementation provisions

1. This Circular takes effect on March 8, 2013, and replaces the Minister of Finance’s Decision No. 127/2008/QD-BTC of December 31, 2008, promulgating the Regulation on securities trading surveillance on the securities market.

2. The SSC and SEs shall organize securities trading surveillance apparatuses within the ambit of their powers and functions in accordance with law; promulgate regulations and processes for effective surveillance; and proactively coordinate with and avoid overlapping surveillance of entities subject to surveillance.

3. The SSC, SEs, VSD, securities companies, public companies, listed institutions, institutions registered for trading, securities investment fund management companies, securities investment companies and related institutions and individuals shall implement this Circular;

4. The Minister of Finance shall decide on the amendment, supplementation and replacement of this Circular.

For the Minister of Finance
Deputy Minister
TRAN XUAN HA

* All the forms mentioned in this Circular are not translated.-