Circular No. 87/2013/TT-BTC of June 28, 2013, guiding e-transactions in the securities market

THE MINISTRY OF FINANCE

Circular No. 87/2013/TT-BTC of June 28, 2013, guiding e-transactions in the securities market

Pursuant to June 29, 2006 Law No. 70/2006/QH11 on Securities;

Pursuant to November 24, 2010 Law No. 62/2010/QH12 Amending and Supplementing a Number of Articles of the Law on Securities;

Pursuant to November 29, 2005 Law No. 51/2005/QH11 on E-Transactions;

Pursuant to June 29, 2006 Law No. 67/2006/QH11 on Information Technology;

Pursuant to the Government’s Decree No. 27/2007/ND-CP of February 23, 2007, on e-transactions in financial activities;

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 to guide e-transactions in the securities market as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes the principles and procedures for conducting e-transactions in online securities trading; exchange of e-information relating to public offering of securities, securities depository, listing, registration and trading; management of securities companies, fund management companies and securities investment companies; disclosure of information, and other activities relating to the securities market provided in June 29, 2006 Law No. 70/2006/QH11 on Securities and November 24, 2010 Law No. 62/2010/QH12 Amending and Supplementing a Number of Articles of the Law on Securities (below referred to as the Law on Securities).

Article 2. Subjects of regulation

Subjects of regulation include the State Securities Commission (SSC), the Stock Exchanges (SEs), Vietnam Securities Depository (VSD), issuing organizations, listing organizations, securities companies, fund management companies, securities investment companies, public companies, investors and other intermediary organizations that conduct securities trading and other activities in the securities market by electronic means.

Article 3. Interpretation of terms

1. E-transactions in the securities sector means transactions in service activities on securities and securities market which are conducted by electronic means. E-transactions in the securities sector include public offering of securities, securities depository, listing, registration and trading; management of securities companies, fund management companies and securities investment companies; disclosure of information, and other activities relating to the securities market provided in the Law on Securities.

2. E-document in the securities sector means a data message about securities operations which is created, sent, received and stored by electronic means in online securities trading; exchange of e-information relating to public offering of securities, securities depository, listing, registration and trading; management of securities companies, fund management companies and securities investment companies; disclosure of information, and other activities relating to the securities market provided in the Law on Securities.

3. E-order means a data message recording data included in an order placed at a certain time by a client via the online securities trading system (of the securities company at which the client opens his/her/its trading account) which is accessible only to the client through access and order-placing confirmation.

Article 4. Principles of conducting e-transactions in the securities sector

1. E-transactions in the securities sectors must adhere to the principle of clarity, equity, honesty, safety, effectiveness and compliance with Article 5 of Law No. 51/2005/QH11 on E-Transactions.

2. Providers of the service of e-transactions in the securities sector must satisfy the conditions prescribed in Section I.1, Part II of Circular No. 78/2008/TT-BTC, on e-transactions in financial activities.

3. Users of the service of e-transactions in the securities sector must satisfy the conditions prescribed in Section I.2, Part II of Circular No. 78/2008/TT-BTC, on e-transactions in financial activities.

Chapter II

ONLINE SECURITIES TRADING ACTIVITIES

Article 5. Requirements on services

1. Online securities trading services must be provided by securities companies to investors to open accounts, place orders, set out requirements on securities transactions or receive trading results via the Internet or by telephone.

2. Securities permitted for online trading are securities permitted for trading on SEs.

3. Securities companies that provide online securities trading services shall develop websites with identified Internet addresses which serve as gateways for online trading services.

4. Investors that open accounts on a securities company’s website in accordance with law may be provided with online trading services after making registration and completing necessary legal formalities.

When conducting online securities transactions, investors may use e-orders which must fully satisfy the criteria prescribed in Article 5 of Decree No. 27/2007/ND-CP, on e-transactions in financial activities.

5. Securities companies shall directly provide online securities trading services to investors and may neither authorize nor hire other unlicensed organizations to provide such services through paying service charges.

6. Securities companies shall issue processes for providing online trading services in accordance with the Law on E-Transactions and sign contracts with clients, clearly defining legal liabilities of both parties, including the liability to pay compensations in case of risk. Securities companies shall also point out relevant risks to investors in a “Risk statement” enclosed with contracts.

7. Securities companies that provide online securities trading services shall provide substitute or backup trading methods for clients that use these services.

8. Securities companies shall regularly provide documents on e-transactions for investors using online securities trading services for comparison.

9. Securities companies may not provide online securities trading services related to the transfer of financial resources, transfer or entrustment of securities trading.

10. Securities companies shall disclose relevant risks in the “Risk statement” on their official website and in clients’ applied software. The to-be-disclosed risks include:

a/ Suspension, cessation or delay of trading orders or data errors occurred during data transmission via the Internet;

b/ Inaccurate identification of organizations or investors, confidentiality errors;

c/ Errors or inaccuracies in market prices and other securities information;

d/ Other risks which securities management agencies and securities companies find necessary to be disclosed.

11. Securities companies that provide online securities trading services shall annotate the effective time or time delays of listed securities quotations sent to clients. If providing securities information to clients, securities companies shall disclose the sources of such information.

Article 6. Requirements on information confidentiality and data storage

1. Securities companies shall store, and ensure the integrity of, original e-documents, e-orders and e-data, and store records of clients’ order-placing calls for at least 10 years.

2. Securities companies shall keep confidential information of organizations and individuals conducting online trading in accordance with law. Securities companies may not disclose information relating to investors’ monetary accounts, securities, identification information and other data.

Article 7. Technical requirements

1. Securities companies shall apply technical solutions to ensure that the system of online securities trading services is technically separated from other trading systems; and apply confidentiality safety solutions to block illegal access to their internal business systems via online trading activities.

2.  Securities companies shall apply technical solutions to store data and information on investors that do not register online securities trading services separately from the system of online securities trading services.

3. The system of online securities trading services must have technical solutions for assuring the system safety, storing backup data and fixing faults in order to technically ensure the safety, integrity and accuracy of clients’ data.

 4. Securities companies shall assign professionally qualified staff to manage and supervise the operations of the system of online securities trading services. Securities companies must have staff members who satisfy professional requirements on information technology such as administration of the operating system, database administration, confidentiality techniques, and network administration.

5. The system of online trading services must have functions or tools for real-time management and blockage of illegal access. The system must rationally store daily information and check backups of its main software, such as the network operating system, database and applied software.

6. Information on users of online trading services, trading orders and other sensitive information must be encoded to ensure safety and confidentiality during data transmission via the Internet.

7. Securities companies shall apply reliable technical or managerial measures to accurately identify online investors, and block unauthorized access in online securities transactions.

8. Securities companies shall apply technical or managerial measures to set securities trading limits as prescribed by law for each investor that use online securities trading services.

9. The main technical equipment relating to safe data transmission and identification in the system of online securities trading services must be inspected and certified in terms of safety by the agencies in charge of information technology inspection as prescribed by law.

10. To ensure safety, confidentiality and security, securities companies’ use of digital signatures and certificates for applications used for online trading via the Internet is prescribed as follows:

a/ Websites and email systems of securities companies providing online securities trading services must be certified by digital certificates;

b/ Securities companies and investors may proactively select the type of digital signatures and certificates for use in online securities trading. Investors are recommended to use public digital certificates in online securities trading.

11. Securities companies shall request providers of applied software solutions for the online securities trading system to commit on the confidentiality of source codes of applied software.

Article 8. Conditions for provision of online securities trading services

1. To be licensed to provide online securities trading services to investors, a securities company must be a SE’s member and be connected with the SE’s trading system. After being connected with the SE’s trading system, the securities company shall register the provision of online securities trading services with the SSC.

2. A securities company may not provide online securities trading services in case it is suspended from operation, is forced to cease transactions to terminate its membership status at the SE or is placed under special control of the SSC.

Article 9. Dossier of registration for provision of online securities trading services

A dossier of registration for provision of online securities trading services comprises:

1. A written registration for provision of online securities trading services, made according to the form provided in Appendix 1 to this Circular.

2. The list of names and resumes of experts managing the company’s system of online securities trading services, made according to the forms provided in Appendices 2 and 3 to this Circular.

3. The model contract on online securities trading services signed with clients and the risk statement, made according to the forms provided in Appendices 4 and 5 to this Circular.

4. A report on design of the system of online securities trading services, made according to the form provided in Appendix 6 to this Circular.

5. A backup plan for breakdown of the system of online securities trading services,  made according to the form provided in Appendix 7 to this Circular.

6. Certified copies of certificates of inspection of the safety and quality of the online securities trading system, granted by agencies or organizations in charge of information and technology inspection as prescribed by law.

7. The company’s plan on control of risks in the provision of online trading services, made according to the form provided in Appendix 8 to this Circular.

8. Technical documents on network access devices, network connection devices, software, hardware, and other relevant devices, made according to the form provided in Appendix 9 to this Circular.

9. Certified copies of the SE’s approval document and record of examination of the online trading system.

Article 10. Procedures for approving the provision of online trading services

1. Within 5 (five) working days after receiving a dossier prescribed in Article 9 of this Circular, the SSC shall request in writing the securities company to supplement the dossier or give explanations, for an invalid dossier.

2. Within 10 (ten) working days after receiving the SSC’s request, the securities company shall give written explanations or supplement the dossier. Past the above time limit, if the securities company fails to supplement the dossier, the SSC may disapprove the provision of online trading services.

3. Within 35 (thirty-five) working days after receiving a complete and valid dossier, the SSC shall approve the provision of online securities trading services. In case of refusal, the SSC must give a reply clearly stating the reason.

Article 11. Reporting and information disclosure regimes

1. Securities companies licensed to provide online securities trading services shall send to the SSC and SEs documents and reports relating to the upgrading or change of the system, including extensive upgrading of the operating system of online securities trading services; overhaul of the business administration system; or operation of a technical system and application of online securities trading principles in a branch which has never provided online trading services. The time limit for report submission is 7 working days after the upgrading or change of the system.

2. Securities companies licensed to provide online securities trading services shall submit annual reports on online securities trading, made according to the form provided in Appendix 10 to this Circular, to the SSC before January 31 of the following year.

3. The SEs shall send reports on the provision of online securities trading services for securities companies and on the online trading system, made according to the form provided in Appendix 11 to this Circular, to the SSC before January 31 of the following year.

4. The SEs shall publish on their websites the list of securities companies eligible for and entitled to connect to their trading systems, and regulations on procedures for and dossiers of registration to be members of their online trading systems.

5. The SSC shall publish on its website the list of securities companies licensed to provide online securities trading services, and regulations on procedures for and dossiers of registration for the provision of online securities trading services to clients.

6. The SEs and securities companies shall send e-reports using digital signatures and certificates under the SSC’s guidance.

Article 12. Inspection and examination

The SSC shall conduct periodical or extraordinary inspection and examination of the SEs and securities companies in conducting online securities transactions according to regulations and upon occurrence of events which seriously affect investors’ interests and safety of the market.

Article 13. Revocation of decisions approving the provision of online securities trading services

1. A decision approving a securities company to provide online securities trading services will be revoked in the following cases:

a/ The company has registered for stoppage of securities brokerage operations and such stoppage has been approved by the SSC;

b/ The company is no longer licensed to conduct securities brokerage operations;

c/ The company is suspended from operation;

d/ The company has its establishment and operation license revoked.

2. A securities company which has the decision approving the provision of online securities trading services revoked under Clause 1 of this Article shall maintain and store data of the online securities trading system so as to perform its obligations as prescribed by law.

3. A securities company which has the decision approving the provision of online securities trading services revoked may re-register the provision of online securities trading services after having rectified the situations specified in Clause 1, Article 13 of this Circular.

Chapter III

E-INFORMATION EXCHANGE

Article 14. Provisions on e-information exchange

1. E-information exchange means the exchange of information via the Internet among market management organizations (including the SSC, the SEs and VSD), securities companies, fund management companies, securities investment companies and entities registering for use of e-information exchange services.

2. Entities that register for use of e-information exchange services may send their data on information disclosure and receive feedbacks from agencies in charge of securities market management via registered addresses.

3. Entities registering for use of e-information exchange services include:

a/ Public companies, and organizations registering public offering of securities;

b/ Organizations and individuals making securities registration or depository;

c/ Organizations applying for establishment of securities companies, fund management companies or securities investment companies;

d/ Other related organizations and individuals.

4.  Entities registering for use of e-information exchange services shall submit a written registration and complete other necessary formalities so as to use any e-information exchange services on websites of market management organizations.

5. Market management organizations shall issue processes on e-information exchange services and, when necessary, sign contracts with entities registering for the use the above services. Such a contract must clearly state the legal liabilities of both parties and risks likely to occur to service users when using services.

6. Management organizations shall develop websites on the Internet which serve as gateways for e-information exchange services.

7. Providers of e-information exchange services shall ensure information confidentiality for clients.

8. Information and data transmitted via e-information exchange systems must satisfy the conditions prescribed in Article 4 of Decree No. 27/2007/ND-CP, on e-transactions in financial activities.

9. Procedures for registration for provision of e-information exchange services in the securities sector must comply with Section V.A.2, Part II of Circular No. 78/2008/TT-BTC, on e-transactions in financial activities.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 15. Effect

This Circular takes effect on August 15, 2013, and replaces Circular No. 50/2009/TT-BTC of March 16, 2009, guiding e-transactions in the securities market.

Article 16. Organization of implementation

1. Securities companies which have been licensed to provide online securities trading services shall, within 6 months after the effective date of this Circular, fulfill the requirement on digital certificates for their websites and email systems as prescribed at Point a, Clause 10, Article 7 of this Circular.

2. The SSC shall guide in detail the use of digital signatures in the securities sector. The SEs and VSD shall issue guidelines on and professional processes of online trading activities and supervise the compliance of such guidelines and processes by members after such regulations and processes are approved by the SSC.

The SSC, the SEs, VSD, securities companies, fund management companies, securities investment companies, and other related organizations and individuals shall implement this Circular.

3. The Minister of Finance shall decide on the amendment or supplementation of this Circular.-

For the Minister of Finance
Deputy Minister
TRAN XUAN HA

* All appendices to this Circular are not translated.-