Circular No. 145/2016/ND-CP dated November 01, 2016 of the Government on amending the Government’s Decree No. 108/2013/ND-CP dated September 23, 2013 on penalties for administrative violations against regulations on securities and securities market

THE GOVERNMENT

Circular No. 145/2016/ND-CP datedNovember 01, 2016 of the Government on amending theGovernment’s Decree no.108/2013/ND-CPdated September 23, 2013 on penalties for administrative violations against regulations on securities and securities market

Pursuant to the Law on the Organization of the Government dated June 19, 2015;

Pursuant to the Law on actions against administrative violations dated June 20, 2012;

Pursuant to theLaw on securities dated June 29, 2006 and the Law dated November 24, 2010 on amendments to a number of articles of the Law on securities;

Pursuant to the Law onprevention of money launderingdated June 18, 2012;

Pursuant to the Law onenterprisesdatedNovember 26, 2014;  

At the request of Minister of Finance;

The Government promulgates a Decreeonon amending thegovernment’s decree no.108/2013/ND-CPdated September 23, 2013 on penalties for administrative violations against regulations on securities and securities market

Article 1. To amend the Government’s Decree No. 108/2013/ND-CP dated September 23, 2013 on penalties for administrative violations against regulations on securities and securities market

1.To amend the Point b Clause 1 Article 3:

“b) Fine;

The maximum fine for a violation against regulations onsecurities and securities marketincurred by anorganizationis VND2,000,000,000; that incurred by anindividualis VND 1,000,000,000.

The maximum fine forany of the violations prescribedin Clause 3 Article 5 of this Decree shall be 5% of total amount mobilized illegallybut not exceeding VND 2,000,000,000 if that violation is committed by an organization or VND 1,000,000,000 if that violation is committed by an individual.  The maximum fineincurred by an organization thatcommits any of theviolations prescribedin Clause 5 Article 6 and Clause 2 Article 16 of this Decree shall be five times of the illegal revenuebut not exceeding VND 2,000,000,000.

The fines prescribedin Chapter II of this Decreeareapplied to organizations; the fine incurred by an individual shall be a half of that incurred by an organization for the same violation.

Fines prescribed in Clause 2 and Clause 3 Article 11, Clause 1a and Clause 3 Article 24, Clause 4 Article 26 of this Decree shall only apply to violations committed by individuals."

2.To amendPointa and Point k,Clause 3 Article 3:

“a)Enforcedrecall of securities already offered for saleorissued and refund of amounts used for securities purchaseor deposit (if any) and interests accrued thereofto investors; enforced recall of shares additionally issued;  

k)Enforced depositoryandseparate management of assets, capital,securitiesand trading positions;"

3.To amend theSection 1 Chapter II and name ofArticle 4:

“SECTION 1.VIOLATIONSAGAISNTREGULATIONSON NON-PUBLIC OFFERING OF STOCKS IN VIETNAM BY PUBLIC COMPANIES, SECURITIES COMPANIES OR FUND MANAGEMENT COMPANIES AND VIOLATIONS AGAISNT REGULATIONS ON NON-PUBLIC ISSUE OF BONDS IN VIETNAM

Article 4. Violations against regulations on non-public offering of stocks in Vietnam by public companies, securities companies or fund management companies and violations against regulations on non-public issue of bonds in Vietnam.”

4.To addPointc toClause 1 Article 4:

“c) Failing to reveal the report on asset use accredited by auditors in the General Meeting of Shareholders or failing to state detailed notes to use of assets earned from the non-public offering of stocks in the annual financial statements accredited by auditors, except for cases where stocks are offered for sale for the purpose of swapping them for debts or shares or contributed capital.”

5.To amendPoint band addition of Point dd toClause 2 Article 4:

“b) Conductingthe non-public offering of stocksinconsistently with the registered planor regulated period;conducting the private placement of bondsinconsistently with theapprovedplan; 

dd) Failing to open theescrow accountat a commercial bank; failing to transfer the proceeds from the offering to the openedescrow account; releasing or using the proceeds from the offering before obtaininga written certification of offering results fromthe State Securities Commission of Vietnam."  

6.To add Clause 3a toClause3Article 4:

“3a. A fine of from VND400,000,000to VND 700,000,000shall be imposed for forging documents of the non-public offering of stocks but is not liable to criminal prosecution.”

7.To addPointdto Clause 4 Article 4:

“d) An organization that commits the violation prescribed in Clause 3a of this Article is enforced to recallsecurities already offered for saleand refund securities buying amount or deposit (if any) andinterests accrued thereofaccording to the interest rate fordemand depositsannounced by the bank where the committing organization’s account is opened to receive securities buying amount or deposit at the time when the decision on enforcement of this measure comes into forceto investors. The time limit for enforced recall of securities and refund of money to investors shall be 60 days as of the date on which the decision on enforcement of this measure comes into force.”  

8.To amendClause 3 Article 5:

“3. A fine equal to between 1% and 5% of totalillegally-raisedamountof money shall be imposed for forging documents of the public offering of securities but is not liable to criminal prosecution.”  

9.To amendPoint b and addition of Pointcto Clause 1 Article 6:

“b) Failing to open the escrow account at a commercial bank; failing to transfer the proceeds from the offering to the opened escrow account; releasing or using the proceeds from the offering before obtaining a written certification of offering results from the State Securities Commission of Vietnam;

c) Failing to reveal the report on asset use accredited by auditors in the General Meeting of Shareholders or failing to state detailed notes to use of assets earned from the public offering ofsecuritiesin the annual financial statements accredited by auditors.”

10.To amendPointaClause 3 Article 9:

“a)Delaying the application for registration of public company 12 – 24 months from the deadline;”

11.To addClause 4andClause 5toArticle 9:

“4. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed for delaying the application for registration of public company 24 – 36 months from the deadline.  

5. A fine of from VND70,000,000 to VND100,000,000 shall be imposed forfailing to apply or delayingthe application for registration of public company 36 monthsor more from the deadline.” 

12.To amendClause 3 and Clause 4 Article 11:

“3. A fine offromVND 50,000,000to VND70,000,000 shall be imposed onChairperson ofBoard of Directors,member of Board of Directors, member of Control Board, Director or General Directororother manager ofapublic company who commits any of the following violations:

a) The Chairperson of Board of Directors concurrently holds the position of Director or General Director but this concurrent holding of positions is not yet given approval at the Annual General Meeting of Shareholders or is prohibited as regulated by laws;

b) Failing to fulfill all responsibilities and duties of company management; failing to reveal relevant interests or failing to inform the Board of Directors and the Control Board of transactions between the public company, its subsidiaries, or companies that are taken-over by the public company and any of the said persons or persons related to him/her as regulated by laws.    

4. A fine of from VND70,000,000 to VND100,000,000 shall be imposedfor any of the violations against regulations of the law on company management with respect to rights of shareholders, standing for election, nomination, voting and dismissal of members ofBoard of Directors,andmembersof Control Board,the composition of the Board of Directors,convening and holding meetings, and approval for decisions made at the General Meeting of Shareholders, decisions of the Board of Directors and those of the Control Board, transactions made with relevant persons or with shareholders, members ofBoard of Directors, membersof Control Board, Director or General Director, other managers and persons related to them.”    

13.To amendClause 1 Article 12:

“1. A fine of from VND 30,000,000 to VND 50,000,000 shall be imposedforany of the following violations:

a) Selling treasury stockspurchased in the latest offering within 06 months as of the end of the redemption, except for the cases where the treasury stocks are sold or used as bonus shares to reward to the company s employees or where stocks are redeemed without conditions for redemption; redeeming or selling treasury stocks within 07 days as of the disclosure of information concerning the redemption or sale of treasury stocks;   

b) Redeeming stocks but not via a designated securities company in case stocks of a public company have not been listed or registered for redemption transactions.”

14.To addPoints e, g and hto Clause 2 Article 12:

“e) Using treasury stocksas collateralorassets used for capital contribution or swaps;

g)Failing to place orders for redemption or sale of treasury stocks or placing orders for redemption or sale of treasury stocks with the pricesbeyond the price fluctuation limit within the registered period for trading in treasury stocks;

h) Disclose detailed information about estimated prices for trading in treasury stocks.” 

15.To amendto Section8Chapter II:

“SECTION 8.VIOLATIONSAGAISNTREGULATIONS ON SECURITIESLISTING AND TRADING REGISTRATION”

16.To addClause 2a Clause 2 Article 14:

“2a.The following fines shall be imposed for failing to apply for securities listing and trading or delaying the application for securities listing and trading:

a)A fine of from VND 10,000,000 to VND 30,000,000 shall be imposed fordelaying the application for securities listing and trading up to 01 month from the schedule;  

b) A fine of from VND30,000,000 to VND70,000,000 shall be imposed fordelaying the application for securities listing and trading01– 03months from the deadline;  

c) A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed fordelaying the application for securities listing and trading03 – 06 monthsfrom the deadline;

d) A fine of from VND 100,000,000 to VND 200,000,000 shall be imposed fordelaying the application for securities listing and trading06 – 09 monthsfrom the deadline;  

dd) A fine of from VND 200,000,000 to VND 300,000,000 shall be imposed fordelaying the application for securities listing and trading09 – 12 monthsfrom the deadline; 

e) A fine of from VND 300,000,000 to VND 400,000,000 shall be imposed forfailing to apply for securities listing and trading or delaying the application for securities listing and trading in excess of 12 months from the deadline.”

17.To amendClause 1 and Clause 2 Article 16:

“1. A fine of from VND 1,000,000,000toVND 1,200,000,000 shall be imposedon anorganization that organizesthe securities trading marketagainst regulations oflawprovided that there is no illegal revenue earned thereof.

2.A fine equal to 01-05 times the illegal revenue but not less than the maximum fine prescribed in Clause 1 of this Article and not exceeding VND 2,000,000,000 shall be imposed on an organization that organizes the securities trading market against regulations of law and earns illegal revenue.”

18.To amendClause 2 Article 18:

“2. A fine of from VND 300,000,000 to VND 400,000,000 shall be imposed on the Stock Exchange that gives approval for the registration of tradingmembership in case where all of regulated conditions are not satisfied; suspends or withholds the trading membership inconsistently with regulations."

19.To amendPoint b Clause 4 Article 20:

“b)Conducting the separation,merger,amalgamation, transformation or dissolution before schedule, or suspending or terminating its operations without obtaining approval fromthe State Securities Commission of Vietnam,unless otherwise provided for by law.”

20.To amendPointdand addition of Point dd to Clause 5 Article 20:

“d) Conducting securities trading activities, providing securities services or makingoutward investmentbut failing to meet regulated conditions;  

dd) Performing any of prohibited or restricted acts during the voluntary or compulsory suspension or termination of its operation.”  

21.To amendClause6, Clause 7and Clause8Article20:

“6. A fine of from VND 200,000,000 to VND 300,000,000 shall be imposed for any of the following violations:

a) Conducting securities trading or providing securities services without obtaining the license, certificate or approval fromthe State Securities Commission of Vietnam; providing securities services or financial services without obtaining a written approval fromthe State Securities Commission of Vietnamor written instructions from competent authorities;  

b) Performing activities other than those specified in the issued license, certificate or approval.

7. A fine of from VND200,000,000 to VND300,000,000 shall be imposed for any of the following violations:

a) Preparing or confirming the application for issuance or additions to the establishment and operation license with information deliberately made in contrary to the truth, hiding the truth or seriously falsified; 

b) Preparing or confirming the application for certificate of eligibility to trade derivatives with false information.

8.Additional penalties: Enforced suspension of business activities or provision of securities services within 01 - 03 months if any of the violations prescribed in Points b, c, d Clause 5, Clause 6; Point a Clause 7 of this Article is committed; enforced suspension of derivative trading within 06 – 09 months if the violation prescribed in Point b Clause 7 of this Article is committed.”   

22.To correctClause 21 andamendClause 1 Article 21:

“Article 21. Violations against regulations on operation of securities companies and branches of foreign securities companies in Vietnam

1. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed for any of the following violations:

a)Failing to formulate or comply withinternal processes, professional processes, internal control and riskmanagementprocesses,and code of professional ethics in conformity with business operations;

b) Failing to comply with regulations of the Law on securities, the Law on enterprises and other laws on management;

c)Preparing or confirming the application for provision of on-line securities services with incorrect information or failing to make modification or supplements to the application when detecting incorrect information or omitted important contents which must be included in the application;

d) Failing to collectandupdate sufficient informationabout thecustomers,except for the cases where acustomer failsto provide sufficient information; failing totimely providesufficient and truthful information to customers;

dd) Failing to separate working rooms,personnel, data systemandreportsamong professional divisions; failing to set upcustomer care division to contact and settle customers’ complaints;

e) Failing to post at the head office, branches and transaction offices information about methods of trading, placing orders, margin, time of payment, trading fees, provided services and conditions thereof, list of practitioners and other relevant information in accordance with prevailing laws;

g) Failing to notify or giving late notification of the discharge of deposited or mortgaged securities or securities trading results to customers as regulated by laws.”

23.To amend the heading of Clause 2 Article 21, amend thePoints and dd and addition of Pointgto Clause2Article 21:

“2. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed for any of the following violations:

“a)Failing to store sufficient documents, data and vouchers relating to operations of a securities company or a branch of foreign securities company in Vietnam; the stored documents, data and vouchers do not include detailed and accurate information about transactions of customers and of a securities company or a branch of foreign securities company in Vietnam; a branch of foreign securities company in Vietnam directly manages deposits for conducting securities trading and opens securities trading accounts for domestic investors;  

dd) Failing to set up or maintaininternal auditing, internal control and risk management systems;failing to supervise and prevent conflicts of interestsbetweencustomersor between a securities company or a branch of foreign securities company in Vietnam, securities practitioners and customers;

g)Failing to transferan investor smargin and open position toaderivative securities trading organization as a replacement as requested by that investor;failing to conduct transactions to liquidate or close a positionat the investor’s request; failing to liquidate or close a position on a proprietary trading or market-making account; failing toensure the priority in performing other investor’stransactions overhis/herown position-closing transactions.”

24.To correct theheading of Clause 3 Article 21 andadd thePointito Clause 3 Article 21:

“3. A fine of from VND 100,000,000 to VND 150,000,000 shall be imposed for any of the following violations:

i) Failing to adopt solutions for ensuring the security of systems and data of customers;”

25.To correct theheading of Clause4Article 21,amend thePointsaand d Clause4 and Clause 5Article 21:

“4. A fine of from VND 150,000,000 to VND 200,000,000 shall be imposed for any of the following violations:

a) Failing to set up a system for separately managing money of customers or failing to separately manage deposits for securities trading of each customer or failing to separately manage the money of customers from that of the securities company or branch of foreign securities company in Vietnam; making direct receipt and settlement of securities trading amounts from customers; accepting the customer’s authorization to conduct internal transfer among accounts of that customer;

d) Providing loans to customers, except for the cases where a loan is provided to purchase securities for conducting margin trading; providing loans under any form to major shareholders, members of the Control Board, the Executive Board, the Board of Members or the Board of Directors, chief accountant and other managers assigned by the Executive Board and persons concerning them.

5.Additional penalties:

Enforced suspensionof securities trading or provision of securities services of a securities company or a branch of foreign securities company in Vietnam for 01 - 03 monthsif any of the violations prescribed in Points c, dd, gClause3 and Clause 4of this Article is committed.”  

26.To amendPoints a and g,and addition of Points h, I, kto Clause 2 Article 22:

“a) Failing to set up the risk management system or failing to establish internal auditing or internal control division; failing to ensure qualified human resources for the internal auditing division or internal control division; failing to superviseand prevent conflicts of interestsbetweencustomersor between the fund management company, securities practitioners and customers;

g) Anticipating orgivingguarantee tocustomers of a ratio of earnings or profits to their investments orguaranteeing thatcustomersshall incur noloss; decidingto makeinvestment on behalfof a customer, except for cases where relevant laws govern;

h) Opening more than 01 securities trading account at a securities company to carry out its own securities trading activities; opening more than 02 securities trading accounts to manageinvestmentitems of entrusting customers and failing to separate the securities trading account for domestic entrusting customers from that for foreign entrusting customers; failing to open securities trading accounts for investment funds or securities investment companies under its management or opening more than 01 trading account for an investment fund or securities investment company under its management at a securities company;

i) Conducting asset transactions for an entrusting customer via a securities company with the trading amount or value during the year in excess of the limit on total trading amount or value within a year of that entrusting customer;   

k) Committing the violation prescribed in Point a Clause 2 Article 21 of this Decree.”

27.To amendPointcand addition of Point dd to Clause 3 Article 22:

“c)Committing violations against regulations on restrictions on operation of fund management companies, their related persons and staff; committing violations against regulations on restrictions on operation of securities investment companies; committing violations against regulations on real estate investment funds; committing violations against regulations restrictions on operation of real estate investment funds;

dd) Acting as the asset’s owner on behalf of an entrusting customer without written request made by that entrusting customer or conducting transactions for an entrusting customer before obtaining approval from that entrusting customer in case of acting as the asset’s owner for that entrusting customer.”

28.To addPoint1to Clause4Article22:

“1)Using entrusted funds orfundingof the investment fund or the securities investment companyto make investmentin derivativesbutthe investment portfolio management contract or the charter of the investment fund or thesecuritiesinvestment companydoes notcontain provisions to allow the use of the abovementionedfundingto invest in derivatives;usingitsown funding,loans and other legally-mobilizedfunds to make investmentin derivatives.”

29.To addClause 1a following Clause 1 Article 24:

“1a. A fine of from VND 30,000,000 to VND 50,000,000 shall be imposed on chief representative or employee of the representative office who concurrently holds another position in cases where the concurrent holding of positions is prohibited.”   

30.To amendPoint a Clause 2 Article 24:

“a)Running the representative office but failing to satisfy required conditions; failing to apply for registration of representative office or conducting operations of the representative office without obtaining the written approval or when it has not been issued certificate of registration of representative office by a competent authority;”

31.To correct the name ofArticle26:

“Article 26. Violations against regulations onpractice in securities and management of securities practitioners and staff”

32.To amendPoint b andaddPoint c to Clause 1 Article 26:

“b) Failing to employasufficientnumber ofsecurities practitioners; employingapersonwho possesssecurities practice certificate to perform operations incompatible withhis/her issued securities practice certificate;

c) Assigning a securities employee or practitioner to concurrently hold another position in cases where the concurrent holding of position is prohibited.” 

33.To amendPoint c andaddPoint d to Clause 5 Article 26:

“c) Buying or selling securities on a trading account of entrusting customer in excess of the entrusted scope,value of entrusted assets and investment objectivesof thatentrusting customer; making investments on behalf of  customers, except for cases where the management of securities trading account is entrusted by the individual investor;

d) Mediating inborrowing and lending of possessionsbetween customersor between a customerand a third party, except for lending of securities for correction of tradingerrors or forconducting swaps offund certificatesfor portfolio swaps.”

34.To amendPoint a Clause 6 Article 26:

"a)Misusing or appropriating securitiesormoney under the possession ofacustomer or temporarily keeping securitiesormoney under the possession ofacustomer in form of depository under name of securities company;”

35.To amendArticle27:

“Article 27. Violations against regulations on transactions of founding shareholders, major shareholders, investors holding 5% or above of fund certificates of a closed–end fund, members of a public company or a public fund and their related persons

1. A fine of from VND 10,000,000 to VND 30,000,000 shall be imposed forfailing to make reports on transactions with adequate and accurate information.

2. A fine of from VND 25,000,000 to VND 35,000,000 shall be imposed for failingto report within the required time limit to the public company, the fund management company, the State Securities Commission of Vietnam and/or the Stock Exchange of  changes of quantity of ownedshares/fund certificates in excess of 1% ofthe regulated amount ofshares/fund certificates.

3.A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed on any member of a public company/public fund or his/her related person for failing to buy and sell or sell and buy securities of a public company within the required time limit, or concurrently buying and selling securities of a public company or fund certificates/options to buy fund certificates of a public fund within the same registration time.  

4.The following fines shall be imposed for failing to report within the regulated time limit of planned transactions, transaction results, and reasons of failure to conduct a transaction or conduct all registered transactions; conducting a transaction before the Stock Exchange announces information thereof; failing to conduct transactions within regulated time limit or with registered volume:  

a) A warning shall be given for the violation which is committed for the first time and has mitigating factors or a fine of from VND 1,000,000 to VND 3,000,000 shall be imposed for trading less than 5,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

b)A fine of from VND 3,000,000 to VND 5,000,000 shall be imposed for trading 5,000 – 10,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

c) A fine of from VND 5,000,000 to VND 15,000,000 shall be imposed for trading 10,000 – 20,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

d) A fine of from VND 15,000,000 to VND 25,000,000 shall be imposed for trading 20,000 – 30,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

dd) A fine of from VND 25,000,000 to VND 35,000,000 shall be imposed for trading 30,000 – 50,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

e) A fine of from VND 35,000,000 to VND 45,000,000 shall be imposed for trading 50,000 – 100,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

g) A fine of from VND45,000,000 to VND65,000,000 shall be imposed for trading 100,000or moreshares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund.

5. A fine of from VND 50,000,000 to VND 75,000,000 shall be imposed for any of the following violations:

a) Failing to report within the regulated time limit when owning 5% or above of outstanding voting shares of a public company/public securities company or fund certificates of a closed-end fund or when withdrawing from the position of a major shareholder/investor holding 5% or more of fund certificates of a closed-end fund;   

b) Failing to report within the regulated time limit of any trading in restricted shares.

6.Fines as much as twice the fines regulated in Clause 2, Clause 4 and Clause 5 of this Article shall be imposed forfailing to reportonplanned transactions, transaction results, and reasons of failure to conduct a transaction orfailure toconduct all registered transactions;failing to report on changes of quantity of ownedshares/fund certificates in excess of 1% ofthe regulated amount ofshares/fund certificates; failing to report when owning 5% or above of outstanding voting shares of a public company/public securities company or fund certificates of a closed-end fund or when withdrawing from the position of a major shareholder/investor holding 5% or more of fund certificates of a closed-end fund; or failing to report before conducting trading of restricted shares.    

7.Remedial measures:

Enforce transfer of illegal benefits obtained fromthe violations mentionedin Clause3 of thisArticleto relevant public company.”

36.To amendClause 1, Clause 2 and Clause 3 Article 29:

“1. A fine of from VND 800,000,000 to VND 1,000,000,000 shall be imposed for conducting internal transactions but is not liable to criminal prosecution. 

2. A fine of from VND1,000,000,000 to VND 1,200,000,000 shall be imposed for conducting transactionsto corner the securities marketbut is not liable to criminal prosecution. 

3. A fine of from VND 1,200,000,000 to VND 1,400,000,000 shall be imposed forcommittingfraud or creatinganddisclosinguntrue information so as to enticeandinduce securities purchase and sale.”  

37.To amendPoint b Clause 5 Article 29:

“b) Enforced cancellation or correction of information if the violation mentioned in Clause 3 of this Article is committed.”

38.To amendArticle 31:

 “Article 31. Violations against regulations on securities registration, depository, clearing and settlement

1. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposedon securities depository, securitiesdepository member, clearing member or settlement bankforcommittingany of the following violations:

a)Conducting thesecurities registration, depository, clearingor settlement but failing to satisfy material and technical conditions to serve activities thereof as regulated by laws;

b) Failing toprovideadequate, timely and accurate lists of owners/shareholders and relevant documents upon valid request ofapublic companyin compliance with current regulations; failing to promptly and adequately notify benefits arising from deposited securities of customers.

2. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed on securities depository, securities depository memberorclearing memberfor committing violations against regulations on securities storage and depository or regulations on securities registration, depository, clearing and settlement.

3. A fine of from VND100,000,000 to VND150,000,000 shall be imposed on securities depository/securities depository member/clearing memberand a fine of fromVND50,000,000 to VND75,000,000 shall be imposed onstaff of a securitiesdepository member for committing any of the following violations:

a) Making incorrect accounting on securities depository account, position account or margin account; failing to make settlement on schedule or transferring the securities ownership not through a securities depository;

b) Conducting asecurities tradingwhich hasnot been accounted by thesecuritiesdepositary into a member s securities trading account,except for cases where relevant laws govern;

c)Failing to protect the database andretainoriginal documentsrelated tosecurities registration, depository, clearing and settlement;

d) Failing to protect secret of information relating to customers’ securities ownership;

dd)Failing to conduct depository and failing to manage securities deposited byacustomer at thesecuritiesdepositary/ securitiesdepository member separately fromthoseofthat securitiesdepositary/ securitiesdepository member; failing to open a detailed securities depository account for each customer andfailingtoseparatelymanage assets/positionsof each customeror failing to manageassets/positionsofacustomerseparately from those of a clearing member.

4. A fine of from VND 300,000,000 to VND 400,000,000 shall be imposedon a securities depositoryforcommittingany of the following violations:

a) Giving approval for depository membership but conditions for registration of depository operation have been not satisfied or cancelling a depository membership in contravention of current regulations;

b) Usingdepositedsecurities/assetsof customers in interest of otherentitiesor for its own benefits.

5. A fine of from VND 400,000,000 to VND 500,000,000 shall be imposed on securities depository/ securities depository member/ clearing member and a fine of from VND 200,000,000 to VND 250,000,000 shall be imposed on staff of a securities depository member/ clearing memberformodifying or causing loss of settlement vouchers or documents relating to the transfer of securities ownership.

6. Additional penalties:

a)Enforced suspension of securitiesdepository operations for01 - 03 months if any of the violations prescribed in Pointsa,b, c and dClause 3 of this Article is committedby a depository member;  

b) Enforced suspension of securitiestradingoperations/ provision of securities services for01 - 03 months if any of the violations prescribed in Pointdd Clause 3and Clause 5of this Article is committed by a depository member/ clearing member;  

c)Securities practice certificate shall be suspended for01 - 03 months if any of the violations prescribed in Clause 5 of this Article is committed by asecurities practitioner.

7. Remedial measures:

a) Enforce depository/management of securitiesdeposited by customersat the securities depositary/ securities depository member separately from those of that securities depositary/ securities depository member; enforce theopeningofdetailed securities depository account for each customer; enforceseparate managementofassets/positions of each customerandmanagementofassets/positions of a customer separately from those of a clearing memberif violations mentioned in Point dd Clause 3 of this Article are committed within 06 months as of the date on which decision on enforcement of relevant measure comes into force;

b)Enforce transfer of illegal benefits obtained from the violations mentioned in Clause 3, Clause 4 and Clause 5of this Article.”

39.To amendPoint a Clause 1 Article 33:

“a) Failing to register/ re-registerthe personin charge ofdisclosinginformationor the person authorized to disclose information, orfailing topromulgateregulationson information disclosure;”

40.To amendPointdClause 4 Article 33:

“d) Disclosing inaccurate information or concealing information about securities operations but not liable to criminal prosecution.”

41.To amendClause 6 Article 33:

“6.Remedial measures:

a) Enforce cancellation or correction of information ifany ofthe violationsmentioned inPoints c and dClause 4 of this Articleiscommitted;

b)Enforced transfer of illegal benefits obtained from the violations mentioned inPoint dClause 4 of this Article.”

42.To add Section 14a following Section 14 Chapter II and add Article 35a to Article 35:

“SECTION 14A. VIOLATIONS AGAISNT REGULATIONS ON PREVENTION OF MONEY LAUNDERING IN SECURITIES AND SECURITIES MARKET
Article 35a. Violations against regulations on prevention of money laundering in securities and securities market

1.The following fines shall be imposed on securities companies/fund management companies for committing violations against regulations on identification and updating of information about customers:

a) A fine of from VND 20,000,000 to VND 30,000,000 shall be imposed for failing to update customer identification information as regulated in Article 8 and Article 10 of the Law on prevention of money laundering;

b) A fine of from VND 30,000,000 to VND 50,000,000 shall be imposed for failing to adopt customer identification measures/ intensive evaluation measures as regulated in Clause 2, Clause 3 and Clause 4 Article 12 of the Law on prevention of money laundering, or failing to report on doubtful transactions in the field of securities as regulated in Clause 5 Article 22 of the Law on prevention of money laundering;  

c) A fine of from VND40,000,000 to VND80,000,000 shall be imposed for failing topromulgate or comply with internal regulations onprevention of money laundering, or failing to conduct an internal auditing ofprevention of money laundering;

d)A fine of from VND50,000,000 to VND100,000,000 shall be imposed forfailing to set up regulations on classification of customers or failing to classify customers according to thelevelsofmoney launderingrisksin compliance with prevailing laws, or failing to set up risk management process for advanced technologies-related transactions as regulated in Article 15 of the Law on prevention of money laundering;  

dd) A fine of from VND100,000,000 to VND150,000,000 shall be imposed for failing toset up the risk management system to identify foreign customers who may cause influence on political situation asregulated inClause 2 and Clause 3Article13of the Law on prevention of money laundering.

2. The following fines shall be imposed on securities companies/fund management companies for committing violations against regulations onprohibited acts related to the prevention of money laundering:

a) A fine of from VND30,000,000 to VND60,000,000 shall be imposed forobstructing the provision of information to serve theprevention of money laundering; a fineof from VND50,000,000 to VND100,000,000 shall be imposed forfailing to provide information to serve theprevention of money launderingat the requests of competent state agenciesas regulated inClause 4Article 18of the Law on prevention of money laundering;

b)A fine of from VND200,000,000 to VND250,000,000 shall be imposed fororganizing or facilitating money launderingbut is not liable to criminal prosecution. 

3.Afine of from VND70,000,000 to VND100,000,000 shall be imposedon a stock exchange for failing to retain or update basic information about organizational structure, founding members or owners who have benefits from listed enterprise as regulated in Clause 1Article 18of the Law on prevention of money laundering.”

43.To amendto PointcClause 2 Article 37:

“c) Amaximum fineof up to 5% of total illegally-raised amount shall be imposed for any of the violations mentioned in Clause 3 Article 5 and a maximum fine of up to 05 times the illegal revenue shall be imposed for any of the violations mentioned in Clause 5 Article 6 and Clause 2 Article 16 of this Decreebut not exceeding VND 2,000,000,000if that fine is imposed on an organization or VND 1,000,000,000if that fine is imposed on an individual;”

44.To addClause 3toArticle 37:

“3. Chairpersons of Provincial-level People’s Committees have the power to imposeadministrative penaltiesin conformity with regulations in Clause 3 Article 38 and Point c Clause 4 Article 52 of the Law on penalties for administrative violations for the violations prescribed in this Decree.”

45.To amendClause 2 and Clause 3 Article 39:

“2. In case only decision on fixed-term suspension of one or a number of trading operations/securities services is made, Chairman ofthe State Securities Commission of Vietnammust specify suspended trading operations/securities services, suspension period and effect in that decision.

3.In case of fixed-term suspension of trading operations/securities services, the committing organization must immediately suspend several or all of its trading operations/securities services/other activities which are recorded in the issued decision on penalty for administrative violation and comply with regulations on prohibited or restricted acts during suspension period."

46.To amendClause 3 Article 42:

“3. The period for enforcing remedial measures prescribed in Clause 3 Article 3 of this Decree is 30 days as of the date on which the decision on enforcement of remedial measures comes into force, except for the cases prescribed in Points a, b and d Clause 4 Article 4, Points a and b Clause 4 Article 5, Clause 7 Article 6, Point b Clause 3 Article 8, Point c Clause 6 Article 13, Point b Clause 7 Article 22, Clause 8 Article 26, Point b Clause 3 Article 28, Point a Clause 7 Article 31, Point a Clause 6 Article 32, Clause 4 Article 35, Clause 1 and Clause 2 Article 42 of this Decree.”

Article 2. Effect

This Decree takes effect on December 15, 2016. 

Article 3. Implementation organization

1.Minister of Finance shall have the responsibility to instruct and inspect the implementation of this Decree.

2.Ministers, heads of ministerial-level agencies, heads of the Government s affiliates and Chairpersons of People s Committees ofcentral-affiliated cities/provinces shall implement this Decree./.

For the Government

The Prime Minister

Nguyen Xuan Phuc