Decision 26/2022/QD-TTg establishment, organization and operation of the Vietnam Securities Depository and Clearing Corporation

DECISION

On the establishment, organization and operation of the Vietnam Securities Depository and Clearing Corporation

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Pursuant to the Law on Organization of the Government dated June 19, 2015; Law on Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Law on Management and Use of State Capital Invested in Production and Business at Enterprises dated November 26, 2014;

At the proposal of the Minister of Finance;

The Prime Minister promulgates the Decision on the establishment, organization and operation of the Vietnam Securities Depository and Clearing Corporation.

Article 1. Establishment of the Vietnam Securities Depository and Clearing Corporation by transformation from the Vietnam Securities Depository

1. The Vietnam Securities Depository and Clearing Corporation is a State-owned enterprise that is organized and managed in the form of single-member limited liability company in which the State holds 100% of charter capital; has the legal person status and its own seal; may open Vietnam-dong and foreign-currency accounts at the State Treasury office, domestic commercial banks, branches of foreign banks; conducts independent accounting, complies with financial, statistical reporting, accounting, audit and information disclosure regimes, and performs financial obligations in accordance with law.

a) International transaction name: Viet Nam Securities Depository and Clearing Corporation.

b) Abbreviated name: VSDC.

c) The Vietnam Securities Depository and Clearing Corporation’s headquarters are in Hanoi and Ho Chi Minh City.

2. The Vietnam Securities Depository and Clearing Corporation shall take over all interests and responsibilities of the Vietnam Securities Depository in accordance with the law; exercise rights and obligations in accordance with Law on Securities, Law on Enterprises, Law on Management and Use of State Capital Invested in Production and Business at Enterprises, and relevant laws; carry out enterprise registration under the Law on Enterprises.

Article 2. Functions and tasks

1. The Vietnam Securities Depository and Clearing Corporation has the function of organizing securities registration, depository, clearing and payment activities; supervising securities registration, depository, clearing and payment activities on the securities market in accordance with the law on securities; and other functions and tasks in accordance with law and its organization and operation charter.

2. The Vietnam Securities Depository and Clearing Corporation has the following main tasks:

a) To elaborate and organize the implementation of development investment strategies and plans, annual and 05-year production and business plans after obtaining the approval by competent authorities.

b) To promulgate regulations on securities registration, depository, clearing and payment, member regulations of the Vietnam Securities Depository and Clearing Corporation and other operations regulations after obtaining the approval by the State Securities Commission; to develop a process of operation and risk management for each operation.

c) To provide securities registration, depository, clearing and payment services; to register security interests for securities already registered at the Vietnam Securities Depository and Clearing Corporation at the request of customers; to provide other services as prescribed in its charter; to issue domestic securities numbers and international securities identification numbers for securities registered at the Corporation; to approve, change and cancel securities registration at the Corporation.

d) To provide information related to securities ownership by securities owners of public companies and issuing institutions at the request of such public companies and issuing institutions and competent agencies in accordance with law.

dd) To approve or cancel the status of its members; to suspend securities depository activities of depository members, to suspend securities clearing and payment activities of clearing members; to revoke depository member certificates and clearing member certificates.

e) To supervise securities registration, depository, clearing and payment activities; to control the holding rate of foreign investors in accordance with the law on securities and securities market; to supervise its members in fulfilling their obligations.

g) To ensure physical and technical foundations, and databases for securities registration, depository, clearing and payment activities. To take measures to protect databases and keep original documents on securities registration, depository, clearing and payment in accordance with the accounting and statistical laws.

h) To ensure confidentiality of information relating to customers’ ownership; to refuse the freezing, retention and transfer of assets of, and extraction and reproduction of information about securities ownership by, customers without their consent, unless it is so requested by a competent agency or the information provision is requested by auditors who audit financial statements of the Corporation or financial statements of its depository members in accordance with law.

i) To coordinate with others in providing investors with knowledge about securities and securities market.

k) To provide information to and coordinate with the Vietnam Stock Exchange and its subsidiary companies in performing securities operations and with competent agencies in conducting investigation and preventing and combating violations of the law on securities and securities market.

l) To separately manage assets of customers, manage assets of customers separately from its own assets; to separately manage assets of payment support funds, clearing funds and operations risk prevention funds in accordance with law; to use funding sources as support for payment in case its members temporarily lose their solvency as prescribed by law.

m) To operate for the sake of interests of securities depositors and securities owners; to pay compensations to customers in case its failure to perform obligations harms the lawful rights and interests of customers, except in force majeure events.

n) To receive, manage and effectively use, preserve and develop the State capital according to the financial mechanism applicable to the Vietnam Securities Depository and Clearing Corporation.

o) To report and propose to the State Securities Commission measures to respond to and remedy incidents, events and changes affecting its securities registration, depository, clearing and payment activities; and violations of its members.

p) Other tasks prescribed by law and its charter.

Article 3. Charter capital

1. The charter capital of the Vietnam Securities Depository and Clearing Corporation is VND 1 trillion, determined as equal to the equity of the Vietnam Securities Depository according to its audited financial statements at a time prior to the date on which the Vietnam Securities Depository and Clearing Corporation is granted the enterprise registration certificate.

2. The adjustment of the charter capital of the Vietnam Securities Depository and Clearing Corporation shall comply with the law on management and use of state capital invested in production and business at enterprises.

Article 4. Organizational and managerial structure

1. The organizational and managerial structure of the Vietnam Securities Depository and Clearing Corporation comprises: Members’ Council, General Director, Supervisory Board and professional divisions and departments.

2. The Chairperson of the Members’ Council and General Director of the Vietnam Securities Depository and Clearing Corporation shall be appointed and relieved from duty by the Minister of Finance at the request of the Members’ Council.

Article 5. Organization and operation charter

The Minister of Finance promulgates, amends and supplements the organization and operation charter of the Vietnam Securities Depository and Clearing Corporation at the proposal of the Members’ Council of the Corporation and based on opinions of the Chairperson of the State Securities Commission.

Article 6. Organization of implementation

1. The Ministry of Finance shall:

a) Exercise the owner-representing agency’s rights and obligations to the Vietnam Securities Depository and Clearing Corporation in accordance with Law on Management and Use of State Capital Invested in Production and Business at Enterprises, Law on Securities, Law on Enterprises, the Government’s Decree No. 59/2021/ND-CP dated June 18, 2021, providing a number of special contents in the mechanism for financial management and operational efficiency evaluation applicable to the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation, this Decision and guiding, amending, supplementing and replacing documents (if any).

b) Promulgate, amend and supplement the organization and operation charter of the Vietnam Securities Depository and Clearing Corporation at the proposal of the Members’ Council of the Corporation and based on opinions of the Chairperson of the State Securities Commission.

c) Submit to competent authorities for promulgation or amendment, supplementation or replacement of legal documents on the mechanism for financial management and operational efficiency evaluation applicable to the Vietnam Securities Depository and Clearing Corporation.

2. The State Securities Commission shall

a) Approve regulations on professional operations and member regulations submitted by the Vietnam Securities Depository and Clearing Corporation before they are issued by the Corporation under the law on securities.

b) Manage and supervise professional operations of the Vietnam Securities Depository and Clearing Corporation in accordance with the law on securities.

c) The Chairperson of the State Securities Commission shall give opinions about candidates for the positions of Chairperson of the Members’ Council and General Director of the Vietnam Securities Depository and Clearing Corporation before they are appointed and relieved from duty by the Minister of Finance in accordance with the Law on Securities.

d) The Chairperson of the State Securities Commission shall give opinions about the organization and operation charter of the Vietnam Securities Depository and Clearing Corporation before it is issued by the Minister of Finance in accordance with the Law on Securities.

3. Ministries, ministerial-level agencies, government-attached agencies and related agencies shall, within the ambit of their functions and tasks, organize the implementation of this Decision in accordance with law.

4. The Hanoi People’s Committee and the Ho Chi Minh City People’s Committee shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, performing the state management in their localities for the Vietnam Securities Depository and Clearing Corporation and its branches in accordance with law.

Article 7. Effect

1. This Decision takes effect on the signing date.

2. The Prime Minister’s Decision No. 171/2008/QD-TTg dated December 18, 2008, on the establishment of the Vietnam Securities Depository shall cease to be effective from the date on which the Vietnam Securities Depository and Clearing Corporation starts its operation under Clause 1 Article 8 of this Decision.

Article 8. Transitional provisions

1. The Vietnam Securities Depository and Clearing Corporation starts its operation after it is granted an enterprise registration certificate and must comply with Clause 6 Article 135 of Law No. 54/2019/QH14 on Securities.

2. The Vietnam Securities Depository shall continue its organization and operation in accordance with the Law No. 70/2006/QH11 on Securities, which was amended and supplemented under Law No. 62/2010/QH12 until the Vietnam Securities Depository and Clearing Corporation starts its operation under Clause 1 of this Article.

Article 9. Implementation responsibility

Minister of Finance, Ministers, Heads of ministerial-level agencies, Heads of government-attached agencies, Chairpersons of People’s Committees of provinces and centrally-run cities, related agencies shall take responsibility for the implementation of this Decision./.