VietnameseDecree No. 144/2003/ND-CP dated November 28, 2003 of the Government on securities and securities market
ATTRIBUTE
| Issuing body: | Government | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 144/2003/ND-CP | Signer: | Phan Van Khai |
| Type: | Decree | Expiry date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Issuing date: | 28/11/2003 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Securities |
THE GOVERNMENT | SOCIALISTREPUBLIC OF VIET NAM |
No.144/2003/ND-CP | Hanoi, November 28th,2003 |
DECREE
ON SECURITIES AND SECURITIES MARKETS
THE GOVERNMENT
PursuanttotheLawontheOrganizationoftheGovernmentdated25December2001;
Inordertocreateafavourableenvironmentfortheissueandtradingofsecurities; topromotethemobilizationofdomesticandforeignlong-termfunds;toensure theorganized,safe,public,fairandefficientoperationofsecuritiesmarkets;and toprotect thelegitimate rights andinterestsof investors;
On theproposalof theChairmanof theState Securities Commission;
DECREES:
Chapter I
GENERAL PROVISIONS
Article1.Governing scope
ThisDecreeprovidesforthepublicissueandlistingofsecurities,forconducting securities business and for trading securities, and for operations and services relatingto securities and securitiesmarkets in the territoryof the Socialist Republicof Vietnam.
ThisDecreedoesnotgoverntheissuanceofGovernmentbonds,localauthoritybonds,securitiesofcreditinstitutions,sharesinequitizedenterprisesandshares
inenterpriseswithforeignownedcapital after conversiontooperationinthe form of shareholdingcompanies.
Article2.Operationalprinciplesof securities markets
Operationsbeing thepublic issue, listingandtradingof securities, conducting securities business, providing securities services andother relevantoperationsmustensuretheprinciplesofbeingpublic,fairness,transparencyandprotection
of the legitimate rights and interestsofinvestors.
Article3.Interpretationof terms
1.Securitiesmeans certificates or bookentries certifyingthe lawful rights andinterestsofasecuritiesownerwithrespecttoassetsorcapitalofan issuingorganization. Securities comprise:
(a) Shares;
(b) Bonds;
(c) Investment fund certificates; and
(d) Other typesofsecuritiesin accordancewithlaw.
2.Securitiesrightmeansatypeofsecuritiesissuedwithbondsorpreference shareswhichentitlesthesecuritiesrightholdertopurchaseafixedvolume of ordinaryshares at apre-determined priceduring aspecified period.
3.Share purchase rightmeans a typeof securities recognizing the right giventoexistingshareholdersofashareholdingcompanytopurchasein advancea numberofshares inanewissueofordinarysharesinproportiontotheir existingshareholding inthe company.
4.Treasurysharemeans a type of issuedshare which the issuingorganization re-purchases onthe securities market.
5.Bonus sharemeans a typeof share issued with retainedprofitsorother legal sourcesof owners capital in theshareholding company which is givenfree-of-chargetoexistingshareholdersinproportiontotheirexisting shareholdinginthecompany.
6.Issuing organizationmeans an organization registered tomake a public issueof securities as stipulatedin thisDecree.
7.Public issueof securities1means an offer for sale of a trancheof transferablesecuritiesviaan intermediaryorganizationtoatleastfifty(50) investorsexternal totheissuingorganization.
8.Prospectusmeans a written announcementof an issuing organizationpresenting the financial position, business activities, andplan for utilization of the proceeds earned fromthe issue aimed at providing informationtothepublictoassessandmakeadecisiononinvestinginthe securities.
9.Securitieslistingmeansconducting registration ofeligiblesecuritiesand conducting tradingof such securities inthe centralized2tradingmarket.
10.Listingorganizationmeansanissuingorganizationwhichispermittedto list securities in the centralized tradingmarketin accordance with theprovisions in this Decree.
11.Securitiesbrokeragemeans an act wherebyan intermediaryor agentpurchasesor sells securitiesonbehalfofa client in return for commission.
12.Self-tradingmeans thepurchase and saleof securitiesby a securities company for itself.
13.Portfolio managementmeans themanagement of capital of a clientbypurchasing,sellingandholdingsecuritiesoftheclientintheinterestsof suchclient.
14.Underwriting3means an act whereby an underwriter assists an issuing organizationby completing proceduresprior to the offerfor saleof securities, receiving someor allof the securitiesof the issuing organizationfor re-selling, orpurchasing the amount ofthe remainingundistributed securities.
15.Securities investment and financial consultancymeans services which a securities companyor fund management companyprovides to clients in the sectorof securities investments; financial restructuring;division, demerger,merger orconsolidation ofenterprises;and assistance to enterprisesduringissue andlistingof securities.
16.Securitiesdistributionmeans the saleof securities through agentsor underwritersonacontractualbasis.
17.Agentforasecuritiesissuemeanssecuritiescompanies,creditinstitutions andnon-bankingcreditinstitutionswhichundertakethesaleofsecurities foranissuingorganizationonthe basis of an agreement or viathe underwritingorganization itself.
18.Liquidcapitalmeans capital in cash andvaluable papers which can be converted into cash within aperiod of thirty (30)days in ordertopaydebts or to satisfy arisksreserve withinthatsameperiod.
19.Securitiesinvestmentfundmeansafundformedfromcapitalcontributed byinvestors,whichafundmanagementcompanyisentrustedtomanage andtoinvestatleastsixty(60)percentofthevalueoftheassetsofthe fundin securities.
20.Fundoperatormeansapersonappointedbyafundmanagementcompany tomanagedirectly a securities investment fund.
21.Securitiesdepositoryaccountmeans an account used for accounting for thedeposit,withdrawalorassignmentofsecuritiesandforaccountingfor the deliveryandreceiptofsecurities.
22.BankappointedforpaymentmeansacommercialbankappointedbytheState Securities Commission to open payment account(s) for Securities Trading Centres,Securities DepositoryCentres,theStock Exchangeanddepositorymembersinordertoservicepaymentofmoniesforsecurities transactions.
23.Jobber4means aperson appointedby amemberof a Securities Trading Centre,andapprovedbytheSecuritiesTradingCentre,toactasagentincarryingouttransactions atthe Centre.
24.Representative of a bondholdermeans alegal entity authorized tohold bondsandwhichrepresents theinterestsofabondholder.
25.Major shareholdermeans a person holding at least five per cent ofthe voting sharesofanissuing organization.
26.Acquirermeansanorganizationorindividualwith theintentiontohold, eitheraloneorwithotherrelatedpersonsalsohavingtheintentiontohold, at least twenty five (25) per cent of the share capital in a listing organization.
27.Foreign partymeans aforeign individual oran organization established underforeignlaw.
28.Sharesplitorshareconsolidationmeansthesplitofoneshareholdinginto a number of smaller shareholdingsor the consolidation of a current number ofshareholdingsinto oneshareholding.
29.Approved auditing organizationmeans an independentauditingorganizationapprovedbytheStateSecuritiesCommissiontoauditissuingorganizations,listingorganizations andsecuritiesbusinessorganizations.
30.Valid filemeans a filecontaining all documents in accordance withthis Decreeandhavingcontentswhicharecorrectandcompleteinaccordance withlaw.
31.ValidcopymeansacopycertifiedbythenotarypublicofVietnamorby another competent bodyinaccordancewithlaw.
32.Relatedpersonscompriseindividualsororganizationshaving interactive relationsinthe following circumstances:
(a) Aparentcompany anditssubsidiaries(ifany);
(b) Acompanyandthepersonorgroupofpersonswiththeabilityto controlthedecision-makingoroperationsofthecompanyviathe bodymanagingthecompany;
(c) Acompany anditsmanagers;
(d) Agroup of persons who agree to co-ordinate with oneotherto acquire the capital contribution, shareholding or benefits of the companyortocontrolthe decision-makingofthecompany;
(dd) Parents, adopted parents,spouses,children,adoptedchildren and siblings of companymanagers, company members or controlling shareholders.
Chapter II
PUBLIC ISSUES OF SECURITIES
Article4.Registration ofpublic issuesof securitiesAnypublicissueofsecuritiesmustsatisfytheconditionsstipulatedinarticles6,7, 8 and 9of this Decree andmustbe registered with the State SecuritiesCommission.
Article5.Form andpar valueof securities
1. Securitiesissuedtothepublicmaybeintheformsofeithercertificatesorbookentries.
2. Securities issuedto thepublicmustbedenominatedin Vietnamesedong.
3. Parvalueofsharesandinvestmentfundcertificatesinaninitialissueto the public shallbe ten thousand Vietnamese dong (VND10,000). TheminimumparvalueofbondsshallbeonehundredthousandVietnamesedong(VND100,000)andmultiplesofonehundredthousandVietnamesedong (VND100,000).
Article6.Conditionsforinitialpublic issueof shares
1. The shareholding companymust have aminimum amountof paid-up chartercapitaloffivebillionVietnamesedong(VND5billion)atthetime of registrationof theshareissue.
2. Business operations inthe year immediately preceding the year of registrationof theissuemust havebeenprofitable.
3. Theremustbeafeasibleplanforutilizationoftheproceedsearnedfrom theshare issue.
4. Itshallnotbemandatorytocomplywithclauses1and2ofthisarticlein thecase ofa publicissue ofshares forthepurposeofraisingcapital forthe establishmentofanewshareholdingcompanyoperatinginthesectorsof infrastructureconstructionor high-tech.
Article7.Conditionsforadditional share issuesand for issuesof share purchaserights orsecurities rights
1. Anissuingorganizationwhichissuessharestothepublicmayonlyissue additionalsharestothepublicforthepurposeofincreasingcapital,ormay issuesharepurchaserightsorsecuritiesrights,whenitsatisfiesallofthe conditions in clauses 1, 2 and 3 of article 6 of this Decree. An issuing organizationmayregisteranumberofpublicissuetranchesofadditional shareswhenthereisaneedforanumberofissuetranchestoraisecapital forasingle project.
2. Whenanissuingorganizationwhichissuessharestothepublicwishesto issue additional shares tothepublic for thepurposeofpayment of dividendsorbonusshares,itmustconductproceduresforregistrationwith the State Securities Commission.
Article8.Conditionsforpublic issuesofbonds
1. Theshareholdingcompany, limited liability company or Stateowned enterprisemusthaveaminimumamountofpaid-upchartercapitaloftenbillionVietnamesedong(VND10billion)atthetimeofregistrationofthe issue.
2. Business operations inthe year immediately preceding the year of registrationof theissuemust havebeenprofitable.
3. Theremustbeafeasibleplanforutilizationoftheproceedsearnedfrom the bonds issue.
4. Theremust be an underwriter.
5. Thebond-issuingorganizationmust determine the representative(s)ofbondholder(s).
Article9.Conditionsforpublic issuesof investment fund certificates
1. Aninitial public issue ofinvestment fund certificates shall be implementedatthesametimeastheconductofproceduresforapplication for permission toestablish theinvestment fund.
2. Anissueofinvestmentfundcertificatesforthepurposeofincreasingthe capitalof afundmustbe approvedby the State Securities Commission.
Article10.Application file for registrationof issue
1. Anapplicationfileforregistrationofaninitialpublicissueofsharesshall comprise:
(a) Application for registration ofissue;
(b) Validcopyof business registration certificate ofthecompany;
(c)Charterofthecompany;
(d) Decisionof the generalmeetingofshareholdersapprovingthepublic issue ofshares;
(dd) Prospectus;
(e) List of and summarized CVs ofmembers of the board ofmanagement,boardof directorsandboardof controllers;
(g) Audited financial reports forthe last two consecutive years precedingtheyearof registrationof issue;
(h) Undertakingforunderwriting(ifany).
2. An application file for registrationofanadditionalissueofsharesshallcomprise:
(a) Anapplicationfileforregistrationofanadditionalpublicissueof sharesforthepurposeofincreasingcapital,includingtheissueof share purchase rightsor securities rights, shall containthedocumentsstipulatedinsub-clauses(a),(d),(dd),(e),(g),and(h) ofclause1ofthisarticle,andalsothedocumentsstipulatedinsub- clauses (b) and (c) if there isanyamendmentoforadditiontocontents sincesubmissionof thefile fortheinitialpublic issue;
(b) Anapplication file for registrationof a numberof tranches for additionalissueofthesamesharesshallcontain,inadditiontothedocuments stipulatedinsub-clause (a) of clause 2of this article, the scheduleforeachspecificissuetranchewithintheplanforoverallissue andshall specify the proposed volume of shares andthe durationof eachspecific issuetranche.
3. An application file for registrationof a public issue ofbonds shall comprise:
(a) Documentsstipulatedinsub-clauses(a),(b),(c),(dd),(e),(g),and (h)of clause1of this article;
(b) Decisionof the generalmeetingofshareholdersapprovingthepublic issue ofbonds;
(c) Undertaking by the issuing organization for performanceof obligationstoinvestors;
(d) Contract between the bond-issuing organization and representative(s)ofbondholder(s);
(dd)Minutes certifying the value of security assets or certificate of writtenapprovalfortheguaranteeforpaymentoftheunderwriter in the caseofanissueof secured bonds.
4. Theorganizationregisteringtheissueshallbeliableforthevalidityofthe file. If a file already submitted to the State Securities Commission contains errorsor if new events arise which affect the contents of a file alreadysubmitted,theorganizationregisteringtheissuemustreporttothe StateSecuritiesCommissionforpromptamendmentoforadditiontothe file.
5. Anyorganizationadvisingonanissue,anyunderwriter,anyindependentauditingorganizationandanypersonsigning theaudit report certifyingthe financialreportsofan issuing organizationshallbejointlyliableforthevalidityof afile.
Article11.Conditionsforunderwriting public issuesofsecurities
1. An underwriter of a public issueof securitiesmusthave a licence to conductunderwriting and mustnotbe a relatedperson to the issuing organization.
2. Eachunderwritermayonlyunderwriteissuesofsecuritiesthetotalvalueof which doesnot exceed thirty (30)per cent of the equityof such underwriter.
Article12.Registrationofissue
Withinthirty(30)workingdaysfromthedateofreceiptofacompleteandvalid file fromanapplicant forregistrationofanissue,the State Securities Commission shallgrant acertificateof registrationof an issue of securities. If the issuingorganizationortheStateSecuritiesCommissiondiscoversthatthefilecontains errors,theissuingorganizationmustamendorsupplementthefileinorderthatit iscompleteandcorrectinaccordancewithregulationsand,insuchcase,thedateofreceiptofthefileshallbethedateonwhichtheStateSecuritiesCommission receivestheamendedorsupplementedfile. IftheStateSecuritiesCommission discovers that a file contains errors or inaccuracies, it shall have the right to refusetogranta certificate ofregistration ofanissueof securities.
Article13.Informationprior to issue
Pending considerationof an application file for registrationofan issue by the StateSecuritiesCommission,organizationsregisteringanissue,underwritersorotherrelatedentitiesmayonlyusetruthfullyandaccuratelytheinformationgiven intheprospectuswhichhasbeensubmittedtotheStateSecuritiesCommission forthepurposeofmarketresearch,andmustspecifythatinformationaboutan issuedate and about saleprices of securities is proposedinformationonly. Marketresearchshall notbeconductedbyway of themass media.
Article14.Announcementofissue
Within five workingdays from thedateon which the StateSecurities Commissiongrantsacertificateofregistrationofanissueofsecurities,anissuingorganization shallbeobliged to announce the issuein one editionof a centralnewspaperorinoneeditionofanewspaperinthelocalitywheretheheadofficeof the issuing organization islocated.
Article15.Securitiesdistribution
1. Issuingorganizations,agencyorganizationsandunderwritersshallnotbepermittedtodistributesecuritiesunlesstheyhaveannouncedtheissueand providedaprospectus.
2. Issuingorganizations,agency organizations and underwritersmustdistribute securities in a fairmanner and must ensurethat the time-limit within which investorsmay register to purchase securities shallbe aminimumoffifteen (15) working days.
Inacasewherethevolumeofsecuritiesregisteredforpurchaseexceeds the authorizedvolume for issue, the issuing organizationor underwritermust sellallunderwritten securities to investors corresponding to the percentageatwhichinvestorshaveregisteredtopurchase.
Article16.Time-limit fordistribution
1. An issuing organizationmust completedistribution of a trancheof securitieswithinaminimumofninety (90)days.
2. In a case where a publicdistribution of securities isnot able to be conductedwithinthe time-limitstipulatedinclause 1of this article andthe issuingorganizationmakes a written request, the State Securities Commissionshallconsidersuchrequestandissueadecisiononextensionofthetime-limit to enabledistributiontocontinue. Upon expiryofany extendedtime-limit,anyremainingunsoldsecuritiesmustnotbeissuedto the public.
Article17.Revocationofcertificateof registrationofissueof securities
1. Acertificateofregistrationofanissueofsecuritiesshallberevokedinthe following circumstances:
(a) TheStateSecuritiesCommissiondiscoverserrorsintheprospectus whichmaycauselosstoinvestorsandtheissuingorganizationfails toamendorsupplementtheprospectusuponrequestfromtheState Securities Commission;
(b) Theresultsoftheissuetranchedonotresultinaminimumoffifty (50)investorsorthevolumeofsecuritiesactuallyissueddoesnot account foreighty (80) per cent of the volume of securities authorizedforissue.
2. After the State Securities Commission issues adecision to revoke a certificateofregistrationofanissueofsecurities,theissuingorganization shall immediately inform investorsand, if requested byinvestors,shall recallalldistributedsecuritiesandrefundinvestorswithinthirty(30)days fromthedateof revocation. Upon expiryof this time-limit, the issuing organizationmustcompensateinvestorsfortheirlossesin accordancewith theundertakingsthattheissuingorganizationprovidedtoinvestorsandin accordancewith law.
Article18.Reporting regime
1.Withinten (10)workingdaysofthe endofanissuetranche,anissuingorganization shall report to the State Securities Commission on, andpublicly announce the resultsof, such issue tranche.
2. Issuingorganizationsshall periodicallyreport everysixmonths andannuallytotheStateSecuritiesCommissiononthefinancialpositionandbusiness activities of the enterprise.Annual financial reportsmust be certifiedby an approvedindependent auditing organization.
Wherean issuing organizationholds fifty (50) per cent ormoreofthe sharecapitalorcapitalcontributioninanotherorganization,orifanother issuingorganizationholdsfifty(50)percentormoreofthesharecapital of the issuing organization,such issuingorganization shall also enclose with itsown financial reports the financial reportsof suchother organizationorsuch issuing organization shallforwardconsolidated financial reports.
3. Where it isnecessary to protect the interestsof investors andthe State Securities Commission so requests, issuing organizationsmust reporton the statusof their production and business activities.
Chapter III
SECURITIES LISTING
Article19.Principlesof listing
1. Ifanorganizationwhichhasmadeapublicissueofsecuritieswishesto list those securities, itmustbegranted alicencebythe State SecuritiesCommission.
2. Each typeof securitiesmayonlybe listed atone Securities Trading Centre.
3. The State Securities Commission shallmakeproposals to the competent Statebody to make adecision on specific listings at Securities Trading Centres.
Article20.Conditionsforlistingshares
1. The shareholding companymust have aminimum amountof paid-up chartercapitaloffivebillionVietnamesedong(VND5billion)atthetime ofapplicationforlisting;itmusthaveahealthyfinancialstanding,andits business operations in thetwoconsecutive years immediately preceding theyearof applicationfor listingmust havebeenprofitable.
2.WithrespecttoaStateownedenterprisewhichislistedonthesecurities marketimmediatelyafterithasbeenequitized,itsbusinessoperationsin the year immediately preceding theyearmust havebeenprofitable.
3. Shareholders beingmembers of the boardofmanagement, board ofdirectorsorboardofcontrollersofthecompanymustundertaketoholdat leastfifty(50)percentofthesharestheyownforaperiodofthreeyears as fromthedate of listing.
4. Atleasttwenty(20)percentofthesharecapitalofthecompanymustbe heldbyatleastfifty(50)shareholdersexternaltotheissuingorganization.WithrespecttocompanieswithasharecapitaloftenbillionVietnamesedong(VND10billion)ormore,thisminimumpercentageshallbefifteen (15) percentofthesharecapital.
Article21.Conditionsforlistingbonds
1. Theshareholdingcompany, limited liability company or Stateowned enterprisemusthaveaminimumamountofpaid-upchartercapitaloftenbillion Vietnamesedong (VND10billion) at the timeof application for listing.
2. Business operationsin thetwo consecutive years immediately preceding theyear ofapplication for listingmust have been profitable, and the companymust haveahealthyfinancial standing.
3. Theremust beat least fifty (50) bondholders.
Article22.Listing ofGovernmentbonds
Listing ofGovernmentbondsshallbeconductedbySecuritiesTradingCentreson theproposalof bond-issuing organizations.
Article23.Conditionsforlistinginvestment fund certificates
Withinatime-limitofthirty(30)daysfromtheendofapublicissuetrancheof investment fund certificates, the securities investment fund shall conductproceduresforregistrationforlistingwiththeStateSecuritiesCommissionifit satisfies thefollowingconditions:
1. The fundmust have aminimum total value of issuedinvestment fund certificatesoffivebillionVietnamesedong(VND5billion)calculatedat par value.
2. Theremust beat least fifty (50) certificate holders.
Article24.File forgrantof licence for listingshares, bonds or investment fund certificates
1. An application file for grantof a licencefor listingsharesshall comprise:
(a) Application for grantof a licencefor listingshares;
(b) Decisionof the generalmeeting ofshareholders, boardof management onlisting shares;
(c) Register of shareholders of theorganizationapplying forlisting;
(d) Validcopyofbusinessregistration certificate;
(dd) Charter of thecompany;
(e) Prospectus;
(g) List of and summarized CVs ofmembers of the board ofmanagement,boardof directorsandboardof controllers;
(h) Undertakingofmembersof theboard ofmanagement,boardof directorsandboardofcontrollerstoholdatleastfifty(50)percent ofthesharestheyownfortheperiodstipulatedinarticle20ofthis Decreeasfrom thedate of listing;
(i) Financial reports certified by an approved independent auditing organization.
2. An application file for grantof a licence for listingbonds shall comprise:
(a) Application for grantof a licencefor listingbonds;
(b) Decisionof the generalmeeting ofshareholders, boardofmanagementonlistingbonds;
(c) Register ofbondholders of theorganizationapplying forlisting;
(d) Validcopyofbusinessregistration certificate;
(dd) Charter of thecompany;
(e) Prospectus;
(g) List of and summarized CVs ofmembers of the board ofmanagement,boardof directorsandboardof controllers;
(h) Financial reports certified by an approved independent auditing organization.
3. Anapplication file for grant of a licence for listinginvestment fund certificates shall comprise:
(a) Application forgrant of a licence for listing investment fund certificates;
(b) Valid copy ofbusiness registrationcertificate of thefundmanagement company;
(dd) Charter of thesecurities investment fund;
(d) Prospectus;
(dd) Results of issue ofinvestment fundcertificates;
(e) Undertakingoffoundingmembers of the fundnot to assignthe investmentfundcertificatestheyownforaperiodoftwoyearsas fromthedateof listing.
4. At leastone securities companymustparticipate as consultant inpreparationof theapplicationfilefor grant ofalicence forlistingshares orbonds,andthesecuritiescompanyshallbeliablewithinthescopeofsuch consultancy.
Article25.Responsibilitiesoforganizations applying for licencefor listingandofotherorganizationsinvolved
1. An organization applyingfor a licence for listing shall be liable for thevalidityof a file. If it isdiscovered that a file already submitted to the State Securities Commission is incomplete or contains inaccurate information or if newevents arise which affectthecontents of a file alreadysubmitted,theorganizationapplyingforalicenceforlistingmust report to the State Securities Commission forprompt amendmentofor additionto theapplicationfile for a licencefor listing.
2. Any organization providing consultancy on listing,any independent auditingorganization and anyperson signingthe audit report certifying financialreportsoftheorganizationapplyingforalicenceforlistingshallbejointly liable for thevalidityof an application file for a licence for listinginaccordance with law.
Article26.Changeof listing
1. Ineverycasewhenalistingorganizationissuesadditionalshares,itmust conductprocedures for registration for listing additional shares in accordancewith law.
2. If a listingorganization wishes to conduct a share splitor share consolidation,itmustreporttherelevantdetailsofthesharesplitorshare consolidation to the State Securities Commission and register for re- listing.
3. Ifalistingorganizationundergoesademergerormergerwithoutchangeofthelistinglegalentity,itmuststillregisterforre-listingwiththeState Securities Commission.
4. A change of listinglocationof securities which are currently listed at a Securities Trading Centreshall beimplemented in accordance with law.
Article27.Approvalor refusaltograntlicence for listing
Within forty five (45) days from the date of receipt of a completeand valid applicationfile,theStateSecuritiesCommissionshallgrant,orrefusetogrant,a licenceforlisting. Wherethegrantofalicenceisrefused,theStateSecurities Commissionshall specifythe reasons therefor in writing.
Article28Obligationsoflistingorganizations
1. Listingorganizationsmust conduct procedures for listing andfor registration oflistedsecurities inaccordance withthisDecree.
2.Withinfiveworkingdayspriortothedatefortradingsecurities,alistingorganizationshallannouncethelistinginthreeconsecutiveeditionsofa centralnewspaperoranewspaperinthelocalitywheretheheadofficeof the listing organization is located or in the securities market newsletter. Theannouncement shall containthefollowing particulars:
(a) Licencefor listing grantedbythe State Securities Commission;
(b) Date on which securities arepermittedtobetraded;
(c) Locationto obtainprospectus.
3. Listingorganizationsmust implement the reporting regime stipulated in article18 ofthis Decree and the regime for disclosure of information stipulatedinChapterVIof this Decree.
4. Listingorganizationsmust pay feesfor listing in accordance with law.
Article29.Cancellation of listing
Listingof listed securities shallbe cancelled uponoccurrenceof one of the followingevents:
1. The securitiesno longer satisfy the conditions for listing within the stipulatedtime-limit;
2. The existenceof the listingorganization terminatesdue tomerger, consolidation,division, dissolutionor bankruptcy;
3. Thelistingorganizationsubmitsanapplicationforcancellationoflisting whichis approvedbythe State Securities Commission;
4. Othercircumstancesinaccordancewith law.
Article30.Re-listing
Securitiesthelistingofwhichhasbeencancelledmaybeconsideredforre-listing when they satisfy the conditions stipulated in articles20, 21 and 23 of this Decree.
Chapter IV
SECURITIES TRADING
Article31.Trading methods
1. Listed securitiesmustbe tradedvia the trading system at Securities Trading Centres andthe Stock Exchange by themethod ofmatching ordersorthemethod of reaching agreement.
2. Tradingofsecuritiesbythemethodofmatchingordersshallcomplywith the principlesof priority intermsofprice andpriority intermsoftime.
3. Tradingof small lotsof listed securities shallbe conducteddirectlybetween investors and securities companies which aremembersof Securities Trading Centres andthe Stock Exchange on theprincipleof reaching agreement on aprice.
Article32.Monitoringofsecurities andtemporary suspensionof trading
1. Securities shall be placed on the list of securities to bemonitored upon occurrenceofoneofthe followingevents:
(a) Applicabletolistedshares andlisted bonds:
- Anapproved independent auditing organizationdoes not agree on orrefuses toprovide anopinion onthe annual financial reportsofthelisting organization;
- Thelistingorganizationbreachestheprovisionsondisclosure of information;
- The listingorganization fails to submiton time annual financial reportsinaccordancewith regulations;
- Thenet assetsof thelistingorganizationarenegative;
- Therequirementsofarticles20and21ofthisDecreearenolonger satisfied;
- There is no trading ofshares orbonds of anenterprise for ninety(90) days.
(b) Applicabletoinvestment fund certificates:
- Thefundmanagement company breachestheprovisions on disclosureofinformation;
- The fundmanagement company fails tosubmit ontime annual financial reportsinaccordancewith regulations;
- The requirementsof article 23 of this Decree are no longer satisfied;
- Thereisnotradingofinvestmentfundcertificatesforninety (90) days.
Securities shallbe takenoff the listof securities tobemonitored when eventsstipulatedinsub-clauses(a)and(b)ofclause1ofthisarticleare remedied.
2. Trading of securities shallbesuspended temporarilyuponoccurrenceofoneofthe followingevents:
(a) Thereareabnormal fluctuations inthe priceandvolume of securitiesbeingtraded;
(b) Share splitor share consolidation;
(c) There is a serious breach ofthe provisionson disclosureof information inaccordancewith law;
(d) Thelistingorganizationsuffersbusinesslossesintwoconsecutive years;
(e) Suspensionisnecessaryinordertoprotecttheinterestsofinvestors or toensurestablemarketoperations.
Article33.Price fluctuation range
TheChairman of the State Securities Commission shallmakedecisions on thepricefluctuation rangeof securities whicharebeingtraded.
Article34.Internal trading
Anymemberofaboardofmanagementorboardofdirector,thechiefaccountant oranycontrollerofalistedcompanyandanyrelatedpersonwhointendstotrade sharesofthatsamelistedcompanymustnotifytheSecuritiesTradingCentreand the Stock Exchange at least ten (10) workingdays prior to the trading taking place. Iftrading doesthen take place, noticemust be given tothe Securities TradingCentreandtheStockExchangewithinthreedaysofcompletionofthe transactionand,atthesametime,noticemustbegiventothelistingorganization foritsinformation.
Article35.Tradingtreasury shares
1. TheStateSecuritiesCommissionmustprovidepriorapprovalforalisting organization to re-purchase its own treasury shareswith legal capital sourcesorre-sell them.
2. Alistingorganizationmustcompletethepurchaseofitsownsharesorthere-saleoftreasuryshareswithinninety(90)daysfromthedateonwhich approvalisprovided. Re-purchasedsharesmayonlyberesoldafterthey havebeen heldforaminimumofsixmonths.
Article36.Transactionsinorder toacquire listingorganization
1. Whenanyorganizationorindividualholding,eitheraloneorwithrelatedpersons, five percent,ten(10)percent,fifteen(15)percentortwentyfive (25) per cent ofthesharecapital in a listing organization conducts a transactionwhichincreasesorreducestheabovelevels,suchentitymust report the transaction in writing to the State Securities Commission, the SecuritiesTradingCentre,theStockExchangeandthelistingorganizationwithinthreeworkingdaysfromthedateofthetransactionresultinginany of theabovepercentages ofownership5.
2. An acquirermustnotify in writing its intention to acquire tothe State SecuritiesCommission. If,withinten(10)workingdaysfromthedateof suchnotice, the State Securities Commission does nothave adifferentopinion,theacquirershallpubliclyannounceitsoffertopurchaseinthree consecutiveeditionsofacentralnewspaperorofalocalnewspaperorin thesecuritiesmarketnewsletterinthelocalitywheretheheadofficeofthe listing organization sought to be acquired is located. Aftermaking thepublicannouncement,anacquirermaynotchangeitsintentiontoacquire as announced.
3.Thepriceofanoffertopurchasemaynotbelowerthanthepriceoflistedshares in the market which was current prior to thedateof theofferto purchase.
4. Thedurationofapublicoffertopurchasemaynotbelessthanthirty(30) daysandnotmorethansixty(60)days. Duringthedurationofapublicoffer to purchase, the acquirermust apply the conditionsof the public offertoallshareholdersinthelistingorganizationsoughttobeacquired; theacquirermay notrefuseto purchaseshares fromany oneshareholderin the listing organizationbecause the same announcedconditionsshall apply toallshareholders,andtheacquirermaynotpurchaseorsellsharesinthe listingorganizationbyanyothermethodthantheannouncedmethod.The transactionofacquiringthelistingorganizationmustbecompletedwithin fiveworkingdaysofexpiryofthedurationofthepublicoffertopurchase.
If an acquirer holds eighty(80) per cent of the share capital in a listingorganizationsoughttobeacquired,thelistingofthelistingorganization shallbecancelled. Iftheremainingshareholderssorequest,theacquirer shallbe obliged to purchase their shares within ten (10)daysoftheannouncement ofthe results ofthe acquisition on thesame announced conditionsofthepublic offertopurchase.
5. The acquirer shall notbepermitted to sell the shares ithas purchased within sixmonths fromthedateof completionof the acquisition.
Article37.Responsibilitiesofinvestors
Investorsshallberesponsibletoopenasecuritiestradingaccountand,whenthey placepurchaseordersorsaleorders,theyshalllodgeadepositbeingtheamountpayable for purchase ordersor the volumeof securities theyorder to sell in accordance with law. Investors shall bear self responsibility for their own investment decisions.
Chapter V
REGISTRATION, DEPOSITORY AND CLEARANCE
Article38.Securities Depository Centres
1. The Prime Minister of the Government shallmake decisionson the establishmentof Securities DepositoryCentres which shallhavethe followingbasic functions and duties:
(a) Toprovide servicesbeing registration anddepositof securitiesissuedtothepublicandservicesbeingclearanceoftransactionsof listedsecurities;
(b) Tosupervise operations of depositorymembers in registration,depository and clearance of transactionsof listedsecurities;
(c) Toregistersecuredtransactionsinthecaseofcontractsofpledgeof securities which are centrallydeposited at Securities Depository Centres;
(d) To provide a listof securitiesowners for issuingorganizations whichhold registeredordepositedsecurities;
(dd) To providedepositorymemberswith information aboutsecuritiesdepository accountsof depositorymembers at Securities Depository Centres;
(e) Toprovidefullyandpromptlytobanksappointedforpaymentall thenecessaryvouchers forpayments relating to securities transactions;
(g) Tonotifypromptlydepositorymembersoftheresultsofclearanceof securities transactionswhichconcernsuchdepository members;
(h) Tomanage anduse the Settlement Assistance Fund to supportpromptlydepositorymembers whichbecome insolvent.
2. Membersof Securities Depository Centresmay include Vietnamese commercial banks andforeign bank branchesoperating in Vietnam to which the State Securities Commissiongrants adepository licence, and securitiescompanieswhichhavealicencetoengageinbrokerageorself- trading activities and whichhave already conducted theprocedures for registrationasmembers at a Securities Depository Centre.
Article39.Registrationoflistedsecurities
ListedsecuritiesmustberegisteredatSecuritiesTradingCentresandSecurities Depository Centres, comprising:
1. Registration of information about the securities and theowner of the securities.
2. Registration of transferofownership of securities.
Article40.Securitiesdepository
1. ListedsecuritiesmustbecentrallydepositedatSecuritiesTradingCentres and SecuritiesDepository Centresinthe formofgeneraldepository.
2. Securitiesdepository shallbe implemented at two levels,namelytheownerofsecuritiesmustdepositthemwithadepositorymember,andthen thedepositorymembershallre-depositthesamesecuritiesataSecurities Trading Centre or SecuritiesDepository Centre.
3. Onlydepositorymembers mayopen a securitiesdepository account ata Securities TradingCentreor Securities Depository Centre.
Inspecialcases,theStateBankofVietnam,creditinstitutionsandotherorganizationspermittedtoparticipateintheauctionofGovernmentbonds or as issuing agents or underwritersforGovernment bondsmay open a Government bonds depository account at a Securities Trading Centre or Securities Depository Centre.
4. Securitiesdepository operations shall comprise thefollowingactivities:
(a) Openingsecurities depositoryaccounts;
(b) Managing andpreservingcentralizedsecurities;
(c) Undertakingthetransferondemandofsecuritiesbetweenvarious accountsinthesystemof securities depository accounts;
(d) Exercising rights relatedtosecurities.
Article41.Clearance
1. Settlementofsecuritiestransactionsmustbeconsistentwiththevolumeof securities and themonetary sums stipulatedintransaction vouchers.
2. Payment for securities transactions shall comply withthe principle of simultaneousdelivery of securities withpayment therefor.
3. Paymentmustbemadeviathesystemofaccountsofdepositorymembers andofthe Securities Trading Centre and Securities Depository Centre openedat a bank appointedfor payment.
4. Payment for securitiesmustbemadevia the systemof accounts ofdepositorymembersopened at a Securities Trading Centre or Securities Depository Centre.
Article42.Conditionsforgrantofdepository licence to Vietnamese commercial banksand foreignbankbranches
1. Thebankmusthavealicenceforestablishment andoperation in Vietnam.
2. Itmust haveahealthy financial standing.
3. Itmust have adequatematerial and technical facilities for conductingoperationsof registration,depository and clearanceof securities transactions.
4. Itmusthaveatleasttwoprofessionalstaffmembersandonememberof the boardof controllers with expert qualificationsin securities and securitiesbusiness.
5. AforeignbankwithabranchinVietnammustbepermittedbythelawof itsowncountry toconductsecuritiesdepositoryoperations.
Article43.Application file forgrantofdepository licence
1. An application file from a Vietnamese commercialbank for grant of adepository licence shall comprise:
(a) Application for grantof adepository licence;
(b) Validcopyoflicence for establishment andoperation;
(c) Explanatorystatementofmaterialandtechnicalfacilitiesservicing theoperationsofregistration,depositoryandclearanceofsecurities transactions;
(d) Audited financial reportsforthe last twoconsecutive years.
2. AnapplicationfilefromaforeignbankbranchinVietnamforgrantofadepository licence shall comprise:
(a) Documents stipulated in clause 1 of this article;
(b)PowerofattorneyfromtheforeignbankforthebranchinVietnam toconducttheoperationsofregistration,depositoryandclearanceof securities transactions;
(c) Validcopyoflicenceorotherdocumentsprovingthattheforeign bankwhichhasabranchinVietnamispermittedbythelawofits owncountry toconduct the operations of registration,depository and clearanceof securities transactions.
Article44.Time-limitand fees forgrantofdepository licence
1.Withinthirty(30)daysfromthedateofreceiptofacompleteandvalid applicationfile,theStateSecuritiesCommissionshallgrant,orrefuseto grant,adepositorylicence. Wherethegrantofalicenceisrefused,the State Securities Commission shall specifythe reasons therefor in writing.
2. Vietnamese commercial banksandforeign bankbranchesoperatingin Vietnammustpayfeesforthegrantofadepositorylicenceinaccordance withlaw.
Article45.Suspension ofdepositoryoperationsand revocationof depository licence
1. Adepositorymembershallbesuspendedfromconductingdepositoryoperations upon occurrenceof oneofthefollowingevents:
(a) Thedepositorymembernolongersatisfiestheconditionsforgrant of adepository licence;
(b) The depositorymember fails to discharge the obligations of adepositorymember stipulatedin article 46of thisDecree.
2. The depository licence of a depository membershall be revoked inthe following circumstances:
(a) If,attheendofaperiodofsuspensionofoperations,thedepository memberhasstillnotremediedthebreachesstipulatedinclause1of this article;
(b) Thedepositorymember fails to commenceoperations within twelve(12)monthsfromthedate ofgrantof adepository licence;
(c) Thedepositorymembervoluntarily requests termination of operations;
(d) Terminationofoperationsduetodissolution,bankruptcy,merger, division, consolidation or conversionofenterprise.
3. Theorderandproceduresforsuspensionofdepositoryoperationsandfor revocation of a depository licence shall be implemented in accordance withlaw.
Article46.Rightsandobligationsofdepository members
1. Toprovideservicesbeingregistrationanddepositofsecuritiesforclientson thebasisofwritten contractswith clients;to informclientspromptly and fullyofthe resultsof clearance of securities transactions in which suchclients are involved.
2. To conduct registration anddeposit of securities for clients at Securities Trading Centres and Securities Depository Centres, and toprovide essentialinformationanddatatoSecuritiesTradingCentresandSecurities Depository Centres inorder to carryout operations of registration,depository and clearance of securities transactions.
3. Toregistercontractsofpledgeofsecuritieswhicharecentrallydeposited at Securities TradingCentresandSecuritiesDepository Centres.
4. Tomanage separately the securities whichhavebeendepositedby each clientandtomanagethesecuritieswhichhavebeendepositedbyclientsseparately fromthe securities of thedepositorymember.
5. Tocontributetothe Settlement AssistanceFundinaccordancewithlaw.
6. Toprovidesecuritiessupportandtoreceivesecuritiessupportfromother depositorymembers in accordancewithlawwhentemporaryinsolvencyprevents paymentor refund.
Article47.Rightsandobligationsofbanksappointedforpayment
1. Tomake fullpaymenton time for securities transactions conducted at
Securities TradingCentres.
2. To complywith the regimes on disclosureof information, reporting and confidentialityof informationin accordancewith law.
3. Tohave adequatematerial and technical facilities for conductingoperationsofmakingpayment for securities transactions.
4. To requestSecuritiesTrading CentresandSecuritiesDepositoryCentres to provide essential sourcedocuments inorder tomakepayment for securities transactions.
Article48.Settlement Assistance Fund6
1. A Securities TradingCentreor Securities Depository Centre shall establish a Settlement Assistance Fund in ordertomakepayment in lieuof adepositorymember which defaults inmakingpaymentfor a securities transaction. TheSettlementAssistanceFundshallbemanagedseparately fromtheassetsoftheSecuritiesTradingCentreorSecuritiesDepository Centre.
2. The levelof contributionsto the Settlement Assistance Fund and themethodofmakingsupportivepaymentsshallbeimplemented inaccordancewith law.
Article49.Reporting regime
Securities Trading Centres, Securities Depository Centres,depository members andbanksappointedforpaymentshallcomplywiththeregimeforperiodicaland extraordinary reportingon the operationalstatus of registration, depository and clearance of securities transactions. Securities Trading Centres, Securities DepositoryCentres,depositorymembersandbanksappointedforpaymentmustprovide reports innecessary cases upon request from the State SecuritiesCommission.
Article50.Feesforprovisionof services
Securities Trading Centres, Securities Depository Centres,depository members andbanksappointedforpaymentshallbepermittedtocollectfeesforprovision of services inaccordancewith law.
Chapter VI
DISCLOSURE OF INFORMATION
Article51.Entities required todisclose information, contents and meansof disclosure ofinformation
1. Securities Trading Centres, the Stock Exchange, issuing organizations, listing organizations, securities companies and fundmanagement companies shallimplement the regimeondisclosureof information promptly, accurately and correctly in accordancewith law.
2. Issuingorganizationsand listing organizationsshall be responsibletodisclose clearly information aboutvoting rights, rights to register forpurchaseofsecurities,rightstotransfersecuritiesandotherrightsforthe information of all shareholders; and todisclosethe rules and implementationofsuchrulesonpublicdisclosureofshareownershipbymembersofthe boardofmanagement, theboardof directors,major shareholdersand related persons.
3. When Securities Trading Centres,the Stock Exchange and issuingorganizationsdiscloseinformation,theyshallatthesametimereportitto the State Securities Commission. When listing organizations, securities companies andfundmanagement companies disclose information,they shall at the same time report it tothe State Securities Commission, Securities TradingCentres andthe Stock Exchange.
4. Informationshallbedisclosedbywayofthemassmediaandthesecurities market newsletter.
Article52.Periodic disclosure of information byissuingorganizationsandlistingorganizations
1.Withinten(10)daysfromthedateofcompletionoftheirannualfinancial reports,issuingorganizationsandlistingorganizationsshallannouncethe auditedresultsoftheirproductionandbusinessactivitiesofsuchfinancial year in three consecutiveeditions ofone central newspaper or ofonenewspaperinthelocalitywheretheheadofficeofthelistingorganization is locatedor in the securitiesmarketnewsletter.
Issuingorganizationsand listingorganizationsshallbear themajor responsibility for the accuracy of their disclosed financial reports in accordancewithlaw;auditingorganizationsandauditorsdirectlyauditing financial reports shallbejointly liable fortheitems that they audit.
2.Within fivedaysfromthedateofcompletionoftheirquarterlyandsix-monthly financial reports in accordance with law, issuing organizations andlistingorganizationsshallannouncetheresultsoftheirproductionandbusinessactivitiesofsuchquarterandsixmonthperiodinthesecurities market newsletter.
Article53.Extraordinary disclosure of informationby issuingorganizationsandlistingorganizations
1. An issuing organization and a listing organization shall disclose informationinaccordancewithlawwithintwentyfour(24)hoursofthe occurrenceofoneofthe followingevents:
(a) There are large fluctuations in the conditions relevant to the productionandbusinessactivitiesofthecompany;
(b) Ten(10)percentormoreofthevalueofthesharecapitalofthe company is lost;
(c) Alegalbodyinitiatesan examination oftheissuing organization, the listingorganization, amemberof the boardofmanagement, boardof directors orboard ofcontrollers, orof the chief accountant;thereisacourtjudgmentrelatingtotheoperationsof the company; or the tax office reaches aconclusion onbreach of taxlaws;
(d) There is achangeofbusinessmethodsandbusiness scope of the company;
(dd) There is adecision to expand investment in productionand business; a decision to invest in sharesof anotherorganizationvaluedatten(10)percentormoreofthetotalsharecapitalofsuchotherorganization;orthecompanypurchasesorsellsfixedassetsvaluedat ten(10)per centormoreofitstotal share capital;
(e) It becomes insolvent,or itmakes a decisionon consolidation,merger,division, demerger,conversion or dissolutionofenterprise;
(g) Itsignsaloanagreementorissuesbondsvaluedatthirty(30)per cent ormoreof its total sharecapital;
(h) There is achange of chairman of theboardofmanagement, a changeinmorethanonethird(⅓)ofthemembersoftheboardofmanagement,orachangeofdirector(generaldirector);
(i) Thegeneralmeetingof shareholderspassesadecision;
(k) Othereventsoccurwhichmighthaveamajorimpactonsecurities or theinterestsof investors.
2. AnissuingorganizationandalistingorganizationshallreporttotheState Securities Commission and shalldisclose informationonmeans fordisclosure of information and inthe securitiesmarketnewsletter within twentyfour(24)hoursoftheboardofmanagementmakingadecisionon the following matters:
(a) Adecisiontosplitorconsolidatesharesortoissuesharesforthe purposeofincreasingchartercapital;adecisiontore-purchaseor re-sell treasury shares; a decisionon the date forexercising securitiespurchaserightsforbondswhichcarrysecuritiespurchase rights; oradecisiononthedate forconversion ofbondsto shares in the caseof convertiblebonds;
(b) The organization issues bonus shares or issues shares for the purpose of payment of dividends valued at ten (10) per cent ormoreofitstotal share capital;
(c) Theorganization submits anapplicationforlistingcancellation.
Article54.Disclosureof informationby issuingorganizationsand listing organizationsupon request fromStateSecurities Commission,Securities TradingCentresandStockExchange
1. Thereisarumourrelatingtothelistingorganizationaffectingthepriceof securities and such rumour requires confirmation.
2. Thetradingprice andthe volume tradedof listed securitiesvaries abnormally.
3. There is a rumour relating to the listingorganization which seriously affectsthe interestsofinvestors.
4. Inother circumstances considerednecessaryby the State Securities Commission,Securities Trading Centresor Stock Exchange.
Article55.DisclosureofinformationbySecuritiesTradingCentresandStock Exchange
1. Informationon trading inthemarket.
2. Informationon issuingorganizations, securities companies, fund management companies and securities investment funds.
3. Informationonmarketmanagement.
4. Otherinformationonmarketstatus.
Article56.Disclosure ofinformation bysecurities companies
1. Securities companies shallbe responsible toprovide informationto investors about listingorganizations andsecurities investment funds.
2.Within ten (10)days from thedate on which securities companieshave theirauditreportsonthefinancialyear,theyshallannouncetheirbusiness resultsoninformationmeansofSecuritiesTradingCentresandtheStock Exchange.
3. Securities companies shallbe responsible to announcepublicly informationforinvestors on theforms of services provided by the securities companies; on theirmethods of placing, receiving andimplementingorders;ontheleveloftheirtradingfees;alistofmembers oftheboard ofmanagement andboard of directors;addressof head tradingoffice;and any changes relating to the above items.
4. SecuritiescompaniesshallreporttotheStateSecuritiesCommissionand report tothe Securities Trading CentresandtheStockExchangewithintwentyfour(24)hoursoftheoccurrenceofoneofthefollowingevents,in orderthatthelatterorganizationsmaydiscloseinformationinaccordance with regulations:
(a) Alegalbodyinitiatesanexaminationofthecompany,ofamember of the board ofmanagement (where a company has a board ofmanagement),ofamemberoftheboardofdirectorsorofthechief accountant;
(b) Thecompany intendstomergewithanothercompany;
(c) Ten(10)percentormoreofthevalueofthesharecapitalofthe company is lost;
(d) Thereisachangeinthecontrollingshareholders(members)ofthe company;
(dd) Thecompanyappointsordismisses the director(general director);
(e) There are important changes in thebusiness operations of the company.
Article57.Disclosure ofinformation byfund managementcompanies
1. Fundmanagement companies shall report tothe State Securities CommissionandshallreporttoSecuritiesTradingCentresandtheStock Exchangewithin twentyfour(24)hoursoftheoccurrenceofoneofthe following events, in order that the latterorganizationsmaydisclose information inaccordancewithregulations:
(a) Alegalbodyinitiatesanexaminationofthecompany,ofamember of the board ofmanagement (where a company has a board ofmanagement),ofamemberoftheboardofdirectorsorofthechief accountant;
(b) Thecompany intendstomergewithanothercompany;
(c) Thecompanysustains amajor lossof assets;
(d) Thereisachangeinthecontrollingshareholders(members)ofthe company;
(dd) Thecompanyappointsordismisses the director(general director);
(e) The companyappoints ordismisses a fundoperator;
(g) There are important changes in thebusiness operations of the companywhichcouldaffectfundmanagement;
(h) Thevalueofafunddecreasesbyten(10)percentcomparedwith itsvalue atthetimeofregistration forofficial establishment;
(i) Thereareimportantchangesinthestatusofinvestment inafund.
2. Innecessarycircumstances,theStateSecuritiesCommissionmayrequest fundmanagement companies to report and discloseinformationonthe operation offundsor of thefundmanagement company.
Article58.Responsibilities duringdisclosureof information
1. Theentitiesstipulatedinarticle51.1ofthisDecreemustcomplywiththe following provisionsduringdisclosure ofinformation:
(a) Notdiscloseinformationnotyetpermittedtobedisclosed,andnotdisclose information priortodischarging theobligations to report stipulatedinarticle 51.3of this Decree;
(b) Notdisclose false information;
(c) Not change the contents ofinformation alreadydisclosed without explanation and report in accordance with article 51.3 of this Decree;
(d) Notdisclose information on the list of secrets stipulatedby theGovernment.
Article59.Stay ofdisclosure of information
(a) InformationwhichtheStateSecuritiesCommissionpermitstobereserved and not yetdisclosed;
(b) Forreasonsofforcemajeure,disclosureofinformationisnotabletobe conducted withinthestipulatedtime-limit.
Any stay of disclosure of information in the above circumstances shall be implementedinaccordance withlaw.
Chapter VII
CENTRALIZED TRADING MARKET
Article60.Organizational formofmarket
1. The centralized tradingmarket shall be organized in the form of a Securities TradingCentreor Stock Exchange.
2. The Prime Minister shallmake decisions on the establishment of Securities TradingCentres andthe Stock Exchange.
Article61.Organization and operation ofSecurities Trading Centres
1. A Securities Trading Centre is amoney-collecting administrative unitdirectlyundertheStateSecuritiesCommission,havinglegalpersonstatus and its own office, sealand accounts. Its operatingexpensesshall be funded bytheState Budget.
2. A Securities Trading Centre shall assume the functions of control, management and supervision of securities trading activities at the Securities TradingCentre.
Article62.Dutiesand powersofSecurities TradingCentres
1. Organizing, managing and supervisingthe tradingof listed securities.
2. Managing thesecurities trading system.
3. Fulfillingtheduties andpowersof Securities Depository Centres until suchCentres are established.
4. Managing and supervisingthe listingof securities.
5.Managingand supervising operationsof disclosure of informationby listingorganizationsand byfundmanagement companies.
6. Managing and supervising operations of members of Securities Trading Centres.
7. Organizing andmanagingthedisclosure ofmarket information.
8. Uponrequest,actingasintermediaryinconciliationofdisputesrelatingtooperationsof tradingsecurities.
9. Collectingfeesin accordancewith law.
10 .Implementingtheregimesforreporting,statistics,accountingandauditingprovidedforbylaw.
11. Fulfillingother dutiesdelegatedby the Chairmanof the State SecuritiesCommission.
Article63.MembersofSecurities TradingCentres
SecuritiescompaniestowhichtheStateSecuritiesCommissiongrantsalicence toengageinbrokerageorself-tradingactivitiesshallbepermittedtoregisteras members of Securities Trading Centres. Operationsof members of Securities
Trading Centres shallbe conductedinaccordancewith law.
Article64.StockExchange
1. The Stock Exchange is a financially autonomous legal entityoperatingunder the supervisionandcontrol of the State Securities Commission.
2. The Prime Minister of the Government shallmake decisionson the organization,staffingstructureand operation of the Stock Exchange.
Chapter VIII
SECURITIES COMPANIES
Article65.Entities to which licences maybegranted, typesof securities businessandservices whichmaybelicensed
1. The State Securities Commissionmay grant licences for securitiesbusinesstoshareholdingcompaniesorlimitedliabilitycompanieswhich are established to conduct securities business andprovide securities services and which satisfy the conditions stipulated in article66 ofthis Decree.
2. Typesof securitiesbusiness activities shall comprise:
(a) Brokerage;
(b) Self-trading;
(c) Portfoliomanagement;
(d) Underwriting;
(dd) Securities investment and financial consultancy.
3. Securitiescompaniesmayprovidesecuritiesdepositoryservicesandother financial services inaccordance withlaw.
Article66.Conditionsforgrantof securitiesbusiness licence
1. Havingabusinessplanconsistentwiththeobjectivesofsocio-economicdevelopment anddevelopmentof the securities sector.
2. Having adequatematerial and technicalfacilities for securities business.
3. Having the minimum level of legal capital stipulated for each type of businessasfollows:
- Brokerage: threebillion Vietnamesedong (VND3billion);
- Self-trading:twelvebillionVietnamesedong (VND12billion);
- Portfoliomanagement: threebillion Vietnamesedong (VND3billion);
- Underwriting: twenty twobillion Vietnamesedong (VND22billion);
- Securities investment and financial consultancy: threebillion Vietnamesedong (VND3billion).
Whereacompanyappliesforalicenceformorethanonetypeofbusiness activity,its legal capital shallbe the total legal capitalof the types ofbusinessactivities forwhicha licence is to be grantedto suchcompany.
4. Havingadirectoranddeputydirector(generaldirectoranddeputygeneral director) and business staffwho satisfy the conditions inordertobegranted securities business practising certificatesby the State SecuritiesCommission.
5. Underwritinglicencesshallonlybegrantedtocompanieswithself-trading licences.
Article67.Proceduresforgrantof securitiesbusinesslicence
1. An application file forgrantof a securities business licence shall comprise:
(a) Application for grantof a securitiesbusinesslicence;
(b) Proposedbusinessplanforthefirstthreeyearsofoperation;capital contribution plan; informationabout thefoundingorganization;
(c)Charterofthecompany;
(d) Validdocumentsprovingthecompanyhassatisfiedtheconditions stipulatedinarticle66of thisDecree.
2.Within sixty(60) daysfrom the dateof receipt of acomplete and valid applicationfile,theStateSecuritiesCommissionshallgrant,orrefusetogrant, a securitiesbusiness licence. Where thegrant of a licenceis refused,theStateSecuritiesCommissionshallspecifythereasonstherefor inwriting.
3. If a securities company to which a securitiesbusinesslicencehasbeen granted wishes to undergo division, demerger, consolidation,mergeror conversion, itmust conductprocedures to re-apply for a securitiesbusinesslicence.
4. If a securities company to which a securitiesbusinesslicencehasbeengrantedwishestoamendorsupplementthetypesofsecuritiesbusinessit conducts,itmustconductproceduresforamendmentoforadditiontoits securitiesbusiness licence.
Article68.Announcementof securities business licence
1. Prior to commencementof anyofficial activities, a securities companymustmake announcements inthree consecutive editionsof a centralnewspaperorofanewspaperinthelocalitywherethemainheadofficeof the company is located; the announcementmust contain the following mainparticulars:
(a) Nameofcompany;
(b) Address ofmainhead office;
(c) Numberof business licence;
(d) Typeofbusiness;
(dd) Charter capital;
(e) Nameoflegalrepresentativeof company.
2. Asecuritiescompanymustpostitssecuritiesbusinesslicence,thenameof itslegalrepresentative,andalistofitsbranches,transactionbureausandagenciesforreceiptofordersatthemainheadofficeandbranchesofthe company.
3. Upontheoccurrenceofanyofthechangesstipulatedinarticle69ofthis Decree,asecuritiescompanymustpostthedecisionofapprovalfromthe StateSecuritiesCommissionatitsmainheadoffice,branches,transaction bureausand agencies for receipt oforders.
Article69.Changeswhich must beapproved
TheStateSecuritiesCommissionmustprovidewrittenapprovalofthefollowing changesby a securities company:
1. Change of location ofmainhead officeor branches.
2. Suspension oftradingor services.
3. Establishment or closureof branchesortransaction bureaus.
4. Increaseor reduction of business products.
Article70.Rightsand obligationsof securities companies
1. To enter into written contracts with clients for securities transactions, registrationanddepositofsecurities,portfoliomanagement,underwriting, and provisionof securities investment and financial consultancy.
2. To receive orders for transactions from clients only at themain head office,branches, transactionbureausoragencies forreceiptoforders.
3. To give priority to undertaking ordersfrom clients over those from the company;tomanagetheassets,moniesandsecuritiesofclientsseparately fromthoseofthecompany,andtomanagedepositsfromclientscorrectly inaccordancewiththecontractswithclients;tomanagetheassets,monies and securitiesof each client separately.
4. Tocollectcompleteinformationonthefinancialpositionandinvestmentobjectives of clients; to provide complete, prompt and accuratemarket informationtoclients;tomaintainconfidentialityofinformationofclients, exceptwhereotherwise provided by law.
5. To conduct self-tradingby the company separately from activitiesofbrokerage, portfoliomanagement and underwriting; to conduct business activitiesoftheownerofthecompanyseparatelyfrombusinessactivitiesof the securities company.
6. Tomaintainregularly7the stipulatedlevel ofminimumliquidcapital.
7. To invest in securities or make capital contribution only within the stipulatedlimits.
8. Nottoprovidesecurities credit services or tolend securities.
9. A securities company, includingmembersoftheboardofmanagement, boardofdirectorsandboard ofcontrollersofthecompany, shallnot bepermittedtoinvest in anothersecurities company.
10. Topay fees for the grantofits securities business licence andfor securities businesspractising certificates inaccordance withlaw.
11. Tocollect feesin accordancewith law for provision of services to clients.
12. Tocomply withthe accountingand financialregimes stipulatedby law.
13. Tocomply withother relevantprovisionsof law.
Article71.Suspensionofoperationandrevocationofsecuritiesbusinesslicences
1. The securitiesbusinessof asecurities companymaybe suspended foramaximumduration of sixty(60) daysinthefollowing cases:
(a) Cessation of securities business activities withoutprior written approvalof the State Securities Commission;
(b) Failuretosatisfytheconditionsrequiredforgrantingofalicence forsecuritiesbusinessactivitiesasstipulatedinclauses2and3of article66ofthisDecreeandfailuretoremedysuchsituationwithin sixty(60)daysfromthedateofreceiptofwrittennoticefromthe State Securities Commission;
(c) Breach of the provisions of articles 103to 108 inclusive of this Decree.
2. Thesecuritiesbusinesslicenceofasecuritiescompanymayberevokedin the followingcircumstances:
(a) Failure to rectify a breach upon expiry of the duration of suspensionof securities business as stipulated in clause 1of this article;
(b) Failure to commence operations within twelve(12)monthsfrom thedateon whichthelicenceis granted;
(c) Dissolutionorbankruptcy;
(d) Revocationofbusinessregistration certificate.
3. A securities company the operationofwhichhasbeen suspended or the securities business licenceof whichhasbeen revoked shall complete all remaining transactions andcontracts which were entered intoprior to suspensionorrevocation.TheStateSecuritiesCommissionmayappoint another securities company to complete all remaining transactions and contracts entered into by the company the operationof which has been suspendedor the securities business licenceof whichhas beenrevoked. In this case, anauthorizationrelationshipbetweenthe twocompanies shallbe automaticallyestablished.
Article72.Reporting regime
1. Securities companies shall comply with the regimeforperiodical and extraordinaryreportinginaccordancewithlaw. Annualfinancialreportsmust be audited by anapprovedindependent auditing organization. Securitiescompaniesmustprovidereportsinnecessarycasesuponrequest fromthe State Securities Commission.
2. Securities companies shall report the following changesto the State
Securities Commission:
(a) Increaseor reduction incharter capital;
(b) Changeof nameofcompany;
(c) Changeofmemberof the board ofmanagement or boardof directors;
(d) Amendmentof or additiontothe charter;
(dd) Establishment or closureofagenciesfor receiptof orders.
Article73.Securitiesbusinesspractising certificates
1. The directorand deputy director(general directorand deputy generaldirector)andbusinessstaffofasecuritiescompanymusthaveasecurities businesspractising certificate.
2. When an individual is proposed for a securities businesspractising certificateby the securities company where suchindividual works, the individualmust satisfy thefollowingconditions:
(a) Havefull legalcapacity andcapacity for civil acts;
(b) Satisfy the standardsin relationto professional expertise;
(c) Havetherequisiteprofessionalsecuritiescertificatesgrantedbythe State Securities Commission;
(d) Notbecurrentlysubjecttocriminalprosecution,notbeservinga prisonsentence,ornothavehadhisorherrighttopractiserevokedby a court in accordancewith law.
Article74.Restrictionson individuals engaginginsecuritiesbusiness
1. Anindividualengaginginsecuritiesbusinessmayonlyopenasecurities trading account forhimselforherself at the securities company where suchindividualworks.
2. An individualengaginginsecurities businessmustnot:
(a) Workasthedirectorof,orbeashareholderowningmorethanfiveper cent of the total voting sharesof, a securities-issuing organization, except where heor she is a representative for a securities company at the issuingorganization, in which the securities companyparticipates in investmentor capital contribution;
(b) Workconcurrently for two ormore securities companies.
Article75.Extension and revocationof securities business practising certificates
1. Asecuritiesbusinesspractisingcertificateshallbevalidforadurationof three years from thedateon which it isgranted, and maybe extended whenaholdersatisfiestheconditionsonre-examinationstipulatedbythe State Securities Commission.
2. Thepractisingcertificateofanindividualengaginginsecuritiesbusinessshallberevokedin thefollowing cases:
(a) Theindividualnolongersatisfiestheconditionsrequiredforgrantofasecuritiesbusinesspractisingcertificateasstipulatedinarticle 73 ofthis Decree;
(b) Theindividualno longerworks forthe securities company;
(c) Theindividual breaches theprovisions of articles103 to 107 inclusive ofthis Decree.
Chapter IX
SECURITIES INVESTMENT FUNDS AND FUND MANAGEMENT COMPANIES
Article76.Participating parties
1. Fundmanagement companies shallundertakemanagement of securities investment funds.
2. Custodian banksshall preserveand accept into custody the assets of securities investment funds and shall supervise fundmanagement companiesforthebenefitofinvestors.
3. Investorsmay contribute capital to securities investment funds and shall onlybeliabletotheextentof their paid-upcapital contribution.
Article77.Establishmentof securities investmentfunds
1. Securities investment funds shallbe jointly establishedby fundmanagement companies with Vietnamese andforeign organizationsand individuals.
2. Securities investment fundsmust have aminimum amount of charter capitalof fivebillion Vietnamesedong(VND5billion).
3. A securities investment fundmustbegranted a licenceby the State Securities Commissionpriortoitmakingapublic issueof investment fund certificates.
4. Theestablishmentofasecuritiesinvestmentfundbycapitalcontribution frommembersmustbe registered with theState Securities Commission.
Article78.Proceduresandapplicationfileforpermissionforestablishmentof securitiesinvestmentfundtomakepublicissueofinvestmentfund certificates
1. Theproceduresforpermissiontoestablishasecuritiesinvestmentfundtomakeapublicissueofinvestmentfundcertificatesshallbeconductedas stipulatedinarticles9.1,12,13,14,15and 16of thisDecree.
2. An application file forpermission for establishmentof a securities investmentfundandtomakeapublicissueofinvestmentfundcertificates shall comprise:
(a) Application forpermission for establishmentof a securities investment fund andtomake a public issueof investment fund certificates;
(b) Charter of thesecurities investment fund;
(c) Prospectus;
(d) Planforpublicissueof investment fund certificates;
(dd) Contractforsupervisionofthesecuritiesinvestmentfundbetween afundmanagement company andacustodian bank;
(e) Undertakingoffoundingmembers of the fundnot to assignthe investmentfundcertificatestheyownforaperiodoftwoyearsas fromthedateof issue.
3. Thefundmanagementcompanyshallbeliableforthevalidityofthefile in accordancewitharticle 10.4of thisDecree.
4.Within ten(10) working days of theend of a public issue trancheof investmentfundcertificates,the fundmanagementcompanyshallreporttotheStateSecuritiesCommissionontheresultsofsuchissuetrancheandshall apply for registration of establishmentofthe securities investment fund.Within fifteen (15) working days from the date of receipt of a complete andvalid file, the State Securities Commission shall resolve registration ofestablishmentof the securities investment fund.
Article79.Suspensionofissueof investment fund certificates
1. An issue ofinvestment fund certificates shall be suspended if the State Securities Commissiondiscovers errors in theprospectus whichmight causelosstoinvestors.
2. Afundmanagement company shallnotify investorsimmediately of suspensionofanissueofinvestmentfundcertificates. Duringtheperiod of suspension, aninvestorshall havethe right to rescind its orderto purchase investment fund certificates andrequire thefundmanagement companytorefundpurchasemonieswithinthirty(30)daysfromthedate of therequestof theinvestor.
3. If afundmanagement company continues with thepublic issue of investmentfundcertificates,suchcompanyshallmaketheamendmentsor additions requiredby the State Securities Commission and publicly announce such amendments or additions.
Article80.Revocationoflicence for issueof investment fundcertificates
1. A licenceforanissueshall berevokedin the following circumstances:
(a) Theerrorsstipulatedinarticle79.1ofthisDecreearenotamendedor supplemented correctly in accordance with theproceduresor withinthe stipulatedtime-limit;
(b) Theresultsoftheissuetranchedonotresultinaminimumoffifty (50)investorsorthevolumeofinvestment fundcertificatesactually issueddoesnotaccountforeighty(80)percentofthevolumeof certificates authorized for issue.
2. Uponrevocationofalicenceforanissue,thefundmanagementcompany shallimmediatelyinforminvestors,recallallissuedcertificatesandrefund investorswithinthirty(30)daysfromthedateofrevocationofthelicence. Upon expiry ofthis time-limit, the fundmanagement companymust compensateinvestorsfortheirlossesinaccordancewiththeundertakings the fundmanagement company providedto investors and in accordance withlaw.
Article81.Proceduresfor registrationof establishmentof securities investment fundby capitalcontribution from members
1. An application file for registration of establishmentof a securities investment fundshall comprise:
(a) Application for registration of establishmentof a securities investment fund;
(b) Charter of thesecurities investment fund;
(d) Fund assetssupervisioncontract;
(d) Listofmembersmakinga capital contribution tothefund.
2Withinthirty(30)daysfromthedateofreceiptofacompleteandvalid applicationfile,theStateSecuritiesCommissionshallgrant,orrefusetogrant, a certificateof registrationof establishmentof a securities investment fund.Where the grant of acertificate is refused, the State Securities Commissionshall specify the reasonstherefor in writing.
3. An announcement shall bemade after registration of establishment of a securities investment fund as stipulatedinarticle14 ofthisDecree.
Article82.Committeeof representativesof fund
1. Asecuritiesinvestmentfundmayhaveacommitteeofrepresentativesof thefund,themembersofwhichshallbeappointedbythegeneralmeeting of investors.
2. The rights,obligations and operational principlesof a committee of representatives of a fundshall be specified in the charterof the fund as passedby thegeneralmeetingofinvestors.
Article83.Conditionsforgrantof licence for managementof securities investment fund
The State Securities Commission shallgrant a licence formanagementof a securities investment fund to organizations which satisfy the following conditions:
1. Beingashareholdingcompanyorlimitedliabilitycompanyestablishedin accordance with lawand having aminimum legal capital of five billion Vietnamesedong (VND5billion).
2. Thecompany has a team of professional staffmembers with trainingin securities.
3. Thecompanyhasadequatematerialandtechnicalfacilitiesforconducting operations offundmanagement.
4. There is a directorand deputy director (general director and deputy general director)of thefundmanagement company and fundoperators who satisfy the conditions in order to begrantedfundmanagement practising certificates by the State Securities Commission in accordance witharticle97of thisDecree.
Article84.Grantof licence formanagementofsecurities investment fund
1. Anapplicationfileforgrantofalicenceformanagementofasecurities investment fundshall comprise:
(a) Application for grant of a licence formanagementof a securities investment fund;
(b)Charterofthecompany;
(c) Proposedbusinessplanforthefirstthreeyearsofoperation;capital contribution plan; informationabout thefoundingorganization;
(d) Validdocumentsprovingthecompanyhassatisfiedtheconditions stipulatedinarticle83of thisDecree.
2.Within sixty(60) daysfrom the dateof receipt of acomplete and valid applicationfile,theStateSecuritiesCommissionshallgrant,orrefusetogrant,alicenceformanagementofasecuritiesinvestmentfund. Where thegrant of a licence is refused, the State SecuritiesCommission shall specify the reasons thereforin writing.
3. Ifafundmanagementcompanytowhichalicenceformanagementofa securities investment fund hasbeengranted wishes to undergodivision, demerger,consolidation,mergerorconversion,itmust conduct procedurestore-applyforafundmanagement licence.
Article85.Changeswhich must beapproved
TheStateSecuritiesCommissionmustprovidewrittenapprovaltothefollowing changesby afundmanagement company:
1. Change of location ofmainhead officeor branches.
2. Suspension oftradingor services.
3. Establishment or closureof branchesor representative offices.
Article86.Announcementoflicenceformanagementofsecuritiesinvestmentfund
Withinthirty(30)daysfromthedateofgrantofalicenceformanagementofa securities investment fund, the fund management companymustmake announcements in three consecutive editions of a central newspaper or anewspaperinthelocalitywherethemainheadofficeofthecompanyislocated, the announcement tocontainthefollowing particulars:
1. Name ofcompany.
2. Addressofmainheadoffice.
3. Numberanddate ofgrantof licenceforfundmanagement.
4. Typeofbusiness.
5. Charter capital.
6. Nameoflegalrepresentativeof company.
Article87.Rightsandobligationsoffundmanagementcompanies
1. To comply with the charterof the fund andto protect the rights and interestsofinvestors.
2. Tobe fair andhonest, and to act in the interests of the securities investment fund.
3. Toseparatelymanageeachfund.
4.With respect to any transaction of a fund, where there is a conflict of interest,toensurefairnessandthatnolossiscausedtotheinterestsofthe fund,andtomakeafulldisclosuretothecommitteeofrepresentativesof the fund of informationrelevant to suchtransaction.
5. All securities transactions ofmanagers and staffof a fundmanagement companymustbereportedandcentrallymanagedatthecompanyunder the supervision of the internalcontrol section.
6. Toensureliabilityforthetrustrelationshipwiththirdpartiesandtoensure that any changes in the organization andmanagementof the fundmanagementcompanydonotadverselyeffecttheinterestsandoperationof thefund.
7. Whenthefundmanagementcompanyconductstransactionsofthesaleor purchaseofassetsforthefund,themembersoftheboardofmanagement, directoranddeputydirector(generaldirectoranddeputygeneraldirector) ofthecompanyandoperatorsofthefundshallnotbepermittedtoreceive anybenefitforthecompany,forthemselvesorforathirdpartyapartfrom feesand bonuses as stipulatedinthe charterof thefund.
8. To representthefund by exercising rights and dischargingobligationsowedtoassetsininvestmentportfoliosof the fund.
9. Toenjoyfeesandbonusesasprescribedbythecharterofthefund;notto haverevenueorexpenseswhicharecontrarytothecharterof the fund.
10. Toprovidesecurities investment and financial consultancy.
Article88.Restrictionsonactivitiesof fund management companies
1. Afundmanagement companymay not use the capital and assets of securitiesinvestmentfundstoprovideloansorguaranteesforanyloans; andmaynotborrowmoniesforfinancingactivitiesofthefund,exceptfor short-termloans forpayment of necessaryexpenses.
2. The directorand deputy director(general directorand deputy generaldirector), andmembersof the board ofmanagementof the fundmanagement company,fund operators or related persons shallnot bepermitted topurchase assets for the fund for the companyor for themselves, andshall notbepermittedtosell theirown assets tothe fund.
3. Afundmanagementcompanymaynotbearelatedpersontothecustodianbankwhichsupervisesfundassets.
4. Afundmanagementcompanymustcomplywith otherprovisionsofthe lawonmanagement of capital andassetsofafund.
Article89.Suspensionofoperationandrevocationoflicenceformanagementof securities investmentfund
1. Theoperation of a fundmanagement companymay be suspended for amaximumduration of sixty(60) daysinthefollowing circumstances:
(a) Cessation of its activitieswithout written approval of the State Securities Commission;
(b) Nolongersatisfyingtherequirementsstipulatedinarticle83ofthis Decree;
(c) Breach of the provisions of articles 103to 108 inclusive of this Decree.
2. Alicenceforfundmanagementofafundmanagementcompanyshallbe revoked inthefollowing circumstances:
(a) Failure to rectify a breach upon expiry of the duration of suspension;
(b) Failuretocommenceoperationsaftertwelve(12)monthsfromthedate ofgrantof the licence;
(c) Dissolution orbankruptcy;
(d) Revocationofbusinessregistration certificate.
3. Afundmanagementcompanytheoperationofwhichhasbeensuspended orthelicence forfundmanagement of which has been revokedshall completeallremainingtransactionsandcontractswhichwereenteredintopriortosuspensionorrevocation. TheStateSecuritiesCommissionmay appoint another fundmanagement company to complete all remaining transactions and contracts entered intobythe company theoperation of whichhasbeensuspendedorthelicenceforfundmanagementofwhich hasbeenrevoked.
Article90.Rightsandobligationsofinvestors
1. Tocomplywiththecharterofthefund;tocomplywithdecisionsofthe generalmeetingof investors.
2. Topayinfullforinvestmentfundcertificateswhichtheypurchaseandto beliableforotherdebtsandassetobligationsofthefundtotheextentof theirpaid-upcapital contribution.
3. Toenjoybenefits frominvestment activitiesof thefund.
4. To assign their capital contribution orinvestment certificates.
Article91.Generalmeetingofinvestors
1. Thegeneralmeetingofinvestorsshallbeconvenedbythecommitteeof representativesofthefundorbythefundmanagementcompany(where thefunddoesnothaveacommitteeofrepresentatives)andshallmeetat leastonce annually.
2. Anextraordinary generalmeetingof investorsshall be convened inthe following circumstances:
(a) Whenthere are important changes in theenvironment of investment activities andinvestment status of the fund;
(b) Ifthe fundmanagement company is declared bankrupt or its operationsaresuspended;
(c) Ifthefundmanagementcompanycommitsaseriousbreachoftheprovisions in the charter ofthe fund;
(d) Uponrequestfromaninvestororgroupofinvestorsowningatleast ten(10)percentofthetotalnumberofinvestmentfundcertificates currently incirculation.
Article92.Dissolutionofsecurities investment fund
1. A securities investment Fundshall be dissolved upon expiry oftheoperationaltermstipulatedinthecharterofthefundoruponadecisionof thegeneralmeeting of investors.
2. Prior to conductingdissolution, the committeeof representativesof the fundorthefundmanagementcompany(wherethefunddoesnothavea committeeofrepresentatives)shallconveneageneralmeetingofinvestors tomake a decision.
Article93.Custodianbanks
1. Afundmanagementcompanyshallselectacustodianbankwhichmustbe approvedbythecommitteeofrepresentativesofthefundorbythegeneralmeetingofinvestors. Thechoiceoforchangeofthecustodianbankmustbereportedtothe State Securities Commission.
2. A custodianbankmust satisfy thefollowing conditions:
(a) Havealicencetoengageinsecuritiesdepositoryactivitiesgrantedby theState Securities Commission;
(b) Notown any assets of the securities investment fund;
(c) Notbearelated personto thefundmanagement company.
Article94.Responsibilitiesof custodianbanks
1. Tomanage separately the assetsof each fund fromother assets.
2. Toinspectandsupervisefundmanagementinordertoensurecompliance withthe lawandthe charter of thefund.
3. Toensureoperationsofrevenueandexpensescomplywiththeguidelines fromthefundmanagement company.
4. Tocertifyreportspreparedbythefundmanagementcompanyrelevantto assets andactivitiesof the fund.
5. To implement the regime for periodical andextraordinary reporting in accordance with law and toprovide otherreportsupon request fromthe State Securities Commission.
6. To report to the State Securities Commission if it isdiscovers that the committeeof representativesof the fundorthe fundmanagement companyisoperatinginbreachoflaworinbreachofthecharterofthe fund.
Article95.Revenue fromactivities being supervisionoffundassets
Acustodianbankshallonlybeentitledtothebenefitsprovidedforinthecharterof the fund and shall not receive anyotherbenefits for itselfor for a related person.
Article96.Reporting regimeapplicabletofund management companies
1. Fundmanagementcompaniesshallimplementthereportingregimeeverymonth,quarterandannuallyontheactivitiesofthecompanyandonthefund assets managed by the company in accordance with law. Annual financialreportsoffundmanagementcompaniesandannualreportsonthe fund assetsmanaged by the companymust be certified by an approved independentauditingorganization.
2. FundmanagementcompaniesshallreportthefollowingeventstotheState Securities Commission:
(a) Increaseor reduction incharter capital;
(b) Changeof nameofcompany;
(c) Changeofmemberof the board ofmanagement or boardof directors;
(d) Amendmentoforadditiontothecharterofthecompanyortothe charter ofthefundmanagedby thecompany;
(dd) Other abnormal eventswhichmight have amajor impact on the financial capacity and investment activitiesof the company orof thefundmanaged bythecompany.
3. Fundmanagement companiesmust provide reports in necessary casesupon requestfromthe State Securities Commission.
Article97.Fund managementpractisingcertificates
Thedirectoranddeputydirector(generaldirectoranddeputygeneraldirector)of a fundmanagement company and operatorsof a fundmust have a fundmanagement practising certificate. The provisions inarticle 73 of this Decree shall apply toproceduresforgrantoffundmanagementpractisingcertificates.
Theprovisions inarticle75ofthisDecreeshallapplytoextensionandrevocation offundmanagement practisingcertificates.
Article98.Restrictionson individualspractising asfund managers
An individualpractisingasafundmanagermay not:
1. Work as the directorof,or be a shareholder owningmore than fiveper cent ofthe totalvoting sharesof, a securities-issuingorganization.
2. Workconcurrently fortwoormorefundmanagement companies.
Chapter X
PARTICIPATION OF FOREIGN PARTIES
Article 99.General Principles
Any foreign individualor organizationinvolvedin investment in securitiesor securitiesbusinessactivitiesinVietnammustcomplywiththeprovisionsofthis Decreeandthelawsof Vietnam.
Article100Investmentinsecurities
Foreign individualsor organizationsmaypurchase and sell securities in the VietnamesesecuritiesmarketatthepercentagesdecidedbythePrimeMinisterof theGovernment.
Article101Establishmentof securities businessorganizations
1. Foreign securities businessorganizationsmaymake capital contribution to, purchase shareholdings in,or contribute jointventure capital to establish securities companiesor fund management companies with Vietnamese partners.The State Securities Commissionmust grant a licence for the establishment of a joint venturecompany. ThePrimeMinisteroftheGovernmentshallmakedecisionsonthepercentagecapital contribution of foreign securities business organizationsto a jointventure.
2. Foreign fundmanagement companies wishing toopen an operationalbranchin Vietnammustbe licensedby theState Securities Commission.
Article102Representativeoffices
The establishmentof representativeoffices in Vietnamby foreign securitiesbusinessorganizationsmustbelicensedbytheStateSecuritiesCommission. The establishment andoperationof representativeoffices of foreign securities businessorganizationsshallbe implementedinaccordance withlaw.
Chapter XI
PROHIBITED PRACTICES
Article103Insidertrading
1. Any entity whichhas internal information shallbe prohibited from the followingconduct:
(a) Purchasingorsellingsecuritiesforitselforforathirdpartyonthebasisof internal information;
(b) Disclosingorproviding internal informationto a thirdparty or advisingathirdpartytopurchaseorsellsecuritiesonthebasisof internalinformation.
2. Thefollowingorganizationsandindividualsshallbedeemedtobeentities which haveinternalinformation:
(a)Membersoftheboardofmanagement,boardofdirectorsorboard of controllersofanissuing organization orofalistingorganization;
(b) Persons who have access to internalinformation because of their working position in an issuing organization or in a listing organization;
(c) Anymajorshareholder of an issuingorganizationor a listing organization;
(d) IndividualsworkingattheStateSecuritiesCommission,Securities TradingCentres,StockExchangeorotherbodieshavingaccessto internalinformation;
(dd) Anyauditor engaged infinancial operations of an issuing organizationor alisting organization;
(e) Individualsworking at organizationswhich have a businessco- operation relationship with an issuing organizationor a listing organization;
(g) Individualsworking at intermediaryorganizationsinthe securities market;
(h) Otherrelevantorganizationsand individuals.
3.Internalinformationmeansinformationwhichmighthaveamajorimpactonthepriceofsecuritiesinthemarketandwhichhasnotbeenannouncedor which will notbeannouncedto thepublic.
Article104Marketmanipulation
Organizations and individualsmay not directly or indirectly engage in the followingactivities:
1. Tradingsecuritieswithouttransferringtheownershiprightswithrespectto suchsecurities.
2. Conspiring with one another to purchaseor sell securities inorderto create falsesupply anddemand of suchsecurities;
3. Purchasing and selling securities continuously, or causingothers topurchase and sell securities continuously, inorder to controlpricesof securities.
Article105False information
Organizations and individualsmay not contriveor disseminate any false informationcausingseriousimpact tosecurities tradingactivities.
Article106Short-selling
Organizationsandindividualsshallbeprohibitedfromselling securitiesiftheydo notownthemat the timeofthe transaction.
Article107Causing lossand damagetointerestsof investors
Securities companies andtheir staffmaynotengageinthe following activities:
1. Contraveningapurchaseorder orsaleorder of an investor.
2. Refusingtoprovide certificationof transactions in accordance with the regulations.
3. Purchasingorsellingforthemselvessecuritiesintheaccountofaclientorborrowingthenameofaclientinordertopurchaseorsellsecuritiesfor themselves.
4. Otheractscausinglossanddamagetotheinterestsofinvestors.
Article108Legal entitiesopeningaccount in nameofindividual
A legal entity shallbeprohibited fromborrowingthenameof anindividual in order toopenanaccountforthepurchaseandsaleof securities.
Chapter XII
STATE ADMINISTRATION OF SECURITIES AND SECURITIES MARKETS
Article109Stateadministrationofsecurities and securities markets
1. TheGovernmentshallexerciseuniformStateadministrationofsecurities and securitiesmarkets.
2. Ministries, the State Securities Commission andpeople s committeesofprovinces and citiesunder central authority shall exercise State administration of securities andsecuritiesmarkets in accordance with regulationsofthe Government.
Article110ContentsofState administrationof securitiesand securities markets
1. Promulgating legal instruments relating to securities and securitiesmarkets; formulating strategies, policies and developmental plansfor securitiesmarkets.
2. Granting,extendingandrevokingall typesoflicencesrelatingtosecurities issues,listing,tradingandservices;collectingfees forthegrant oflicences in accordancewith law.
3. Organizingandmanagingthetradingmarketandotherintermediaryand auxiliaryorganizationswhichoperate in securitiesmarkets.
4. Inspecting,supervisinganddealingwithbreachesofthelawsonsecurities and securitiesmarkets.
5. Providingprofessionaltraininganddisseminatingknowledgeofsecurities and securitiesmarkets.
6. Carryingout international co-operation in the fieldof securities and securitiesmarkets.
Chapter XIII
INSPECTION, SUPERVISION, DISPUTE RESOLUTION, DEALING WITH COMPLAINTS AND DENUNCIATIONS, AND DEALING WITH BREACHES
Article111Inspection, supervision and dealing withbreaches
Issuingorganizations,listingorganizations,securitiesbusinessorganizationsand individuals engaging in securities activities shallbe subjectto inspection and supervisionbythe State Securities Commission which shall alsodeal with any breachesbysuchorganizationsand individuals in accordancewith law.
Article112Applicabilityandscopeofinspection,supervisionanddealingwithbreaches
1. Thefollowing entities shall be subject toinspection and supervision:
(a) Issuing organizationswhichmakepublic issues of securities;
(b) Organizationswhichlist securities;
(c) Securities TradingCentres andthe Stock Exchange;
(d) Securities Depository Centres;
(dd) Securities companies; investment fund managementcompanies; securities investment funds;organizations engaged in securities registration, depository and clearing activities; custodianbanks;andbanksappointedforpayment;
(e) Individualspractisingsecurities business;
(g) Organizationsandindividualsinvolved insecuritiesactivitiesand securitiesmarkets.
2. Scope of inspectionandsupervisionshall include:
(a) Securities-issuing activities;
(b) Securities-listing activities;
(c) Securities transactions;
(d) Securitiesbusiness andthe provision of securities services;
(dd) Informationdisclosure.
Article113Disputeresolution
1. Anydispute arising from securities-issuing and securities business activitiesmustbe first resolved throughnegotiation and conciliation. Securities Trading Centres, the Stock Exchange or the State Securities Commission may act asan intermediary to conciliate suchdisputes. Failing conciliation,thepartiesmay refer suchdispute to an arbitration bodyor acourt forresolutionin accordancewith law.
2. Inthecaseofanydisputeinvolvingaforeignparty,ifthepartiesfailto reach any agreement onconciliation,the dispute shall be resolved in accordancewiththelawofVietnam;ifthereisaninternationaltreatyto whichtheSocialistRepublicofVietnamisasignatoryorparticipant,thedispute shall be resolvedin accordancewith theprovisionsof suchtreaty.
Article114Resolution ofcomplaintsand denunciations
TheStateSecuritiesCommissionshallberesponsibletoresolvecomplaintsand denunciationsinthefieldofsecuritiesandsecuritiesmarketsinaccordancewith the laws on resolutionof complaints anddenunciations.
Article115Dealingwith breaches
Any organization or individual intentionally or unintentionally breachingtheprovisionsofthisDecreeandotherlegislationrelatingtosecuritiesandsecuritiesmarketsshall,dependingonthenatureandseriousnessofthebreach,besubject todisciplinary action,administrativepenaltiesorprosecutionforcriminalliability in accordance with law; and such organization or individualshall pay compensation for anylossand damagecaused in accordance with law.
Chapter XIV
IMPLEMENTING PROVISIONS
Article116
ThisDecreeshallbeoffullforceandeffectafterfifteen(15)daysfromthedateofitspublicationintheOfficialGazetteandshallreplaceDecree48-1998-ND- CPoftheGovernmentdated11July1998. Anypreviousprovisionsinconsistent with thisDecree areherebyrepealed.
Article117
TheChairmanoftheStateSecuritiesCommissionshallberesponsibletomake submissionstothecompetentStatebodyonguidelinesforimplementationofthis Decree.
Article118
Ministers, headsofministerial equivalent bodies, heads of Government bodies, and chairmenofpeople s committeesofprovinces and citiesunder central authority shallberesponsiblefor implementationof thisDecree.
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