Decree No. 161/2004/ND-CP dated September 7, 2004 of the Government on sanctioning of administrative violations in the field of securities and securities market

DECREE

ON SANCTIONING OF ADMINISTRATIVE VIOLATIONS IN THE FIELD OF SECURITIES AND SECURITIES MARKET

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to July 2, 2002 Ordinance No. 44/2002/PL-UBTVQH10 on Handling of Administrative Violations;

At the proposal of the Finance Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope

1. This Decree prescribes the sanctioning of administrative violations in the field of securities and securities market, sanctioning forms, remedial measures, sanctioning levels, competence and procedures.

2. Administrative violations in the field of securities and securities market prescribed in this Decree include:

a/ Violation of regulations on issuance of securities to the public;

b/ Violation of regulations on listing of securities at the Securities Trading Center or the Stock Exchange;

c/ Violation of regulations on securities transactions;

d/ Violation of regulations on activities of securities trading, registration, custody, clearing and settlement of securities transactions;

e/ Violation of regulations on the reporting and information-disclosing regime;

f/ Violation of regulations thus obstructing inspection or examination, or failing to realize proposals of inspection and examination organizations.

Article 2.- Subjects of application

1. Vietnamese and foreign individuals, agencies and organizations (hereinafter referred collectively to as individuals and organizations) that commit administrative violations in the field of securities and securities market shall all be sanctioned for administrative violations according to the provisions of this Decree, except otherwise provided for by international agreements which Vietnam has signed or acceded to.

2. Organizations shall be sanctioned for all acts of administrative violation they commit. After executing the sanctioning decisions, sanctioned organizations shall identify individuals who are at fault in causing such administrative violations in order to determine their legal liability and financial obligation according to law provisions.

Article 3.- Principles for sanctioning of administrative violations

Principles for sanctioning of administrative violations in the field of securities and securities market shall comply with the provisions of Article 3 of the Ordinance on Handling of Administrative Violations.

Article 4.- Statute of limitations for sanctioning of administrative violations

1. The statute of limitations for sanctioning of an administrative violation in the field of securities and securities market shall be two years as from the date such administrative violation is committed. Past that time limit, no sanction shall be imposed but the remedial measures prescribed in Clause 3, Article 7 of this Decree may be applied.

2. An individual, who has committed an act of violating the legislation on securities and securities market and been subject to lawsuit, prosecution or a decision to bring his/her case to trial according to the criminal procedures, then a decision to suspend the investigation or the case, shall be administratively sanctioned according to the provisions of this Decree if he/she had committed an administrative violation act. Within three working days after decisions to suspend investigation or cases are issued, the suspension decision issuers shall have to send such decisions to the persons competent to sanction administrative violations. In this case, the statute of limitations for sanctioning of administrative violations shall be three months counting from the date the persons competent to sanction administrative violations receive the suspension decisions and violation case dossiers.

3. Within the time limits prescribed in Clauses 1 and 2 of this Article, if violating individuals and organizations commit new acts of violation in the field of securities and securities market or intentionally shirk or impede the sanctioning, the statute of limitations prescribed in Clauses 1 and 2 of this Article shall not apply. The statute of limitations for sanctioning of administrative violations shall be calculated as from the date of committing new acts of violation or date of stopping acts of shirking or obstructing the sanctioning.

Article 5.- Time limit for subjects to be considered having never been sanctioned for administrative violations

If one year after the sanctioning decisions are completely executed or cease to be effective for execution, the administratively sanctioned individuals and organizations do not relapse into violations, they shall be considered as having never been sanctioned for administrative violations.

Article 6.- Extenuating circumstances, aggravating circumstances

In the course of sanctioning administrative violations in the field of securities and securities market, only the following circumstances are considered extenuating circumstances or aggravating circumstances:

1. Extenuating circumstances:

a/ Administrative violators have prevented or mitigated damage caused by violation acts or voluntarily remedy consequences or compensate for damage;

b/ Administrative violators have voluntarily declared or sincerely admitted their faults;

c/ They commit violations under force or due to material or spiritual dependence;

d/ They commit violations due to ignorance;

e/ They commit violations due to violation acts of others.

2. Aggravating circumstances:

a/ They commit violations in an organized manner;

b/ They commit violations repeatedly or relapse into violations in the same domain of securities or securities market;

c/ They force persons who are materially or spiritually dependent on them to commit violations;

d/ They abuse their positions or powers to commit violations;

e/ They commit violations during the period of serving decisions on handling administrative violations;

f/ They continue performing acts of administrative violation though competent persons have requested them to stop such acts;

g/ After committing violations, they commit acts of shirking or concealing violation acts.

Article 7.- Forms of sanctioning administrative violations and measures to remedy consequences

1. For each act of administrative violation in the field of securities and securities market, violating individuals and organizations shall be subject to either of the following two principal sanctioning forms:

a/ Caution;

b/ Pecuniary fine.

2. Depending on the nature and seriousness of their violations, administratively violating individuals and organizations may also be subject to one or all of the following additional sanctioning forms:

a/ Confiscation of all amounts earned from the commission of violation acts as well as securities volumes used to commit administrative violations;

b/ Deprivation of the right to use certificates of registration for issuance of securities to the public; securities listing licenses, securities trading licenses; securities custody licenses, fund management licenses, securities trading practice certificates, fund management practice certificates for a definite or an indefinite time. During the period they are deprived of the right to use licenses and practice certificates, organizations and individuals must not conduct professional operations inscribed in their licenses or practice certificates.

3. Apart from the sanctioning forms prescribed in Clauses 1 and 2 of this Article, violating individuals and organizations may also be subject to the application of one of the following remedial measures:

a/ Compelled compliance with law provisions, for acts of administrative violation;

b/ Compelled cancellation or correction of erroneous or untrue information;

c/ Compelled withdrawal of already issued securities, refund of deposits or securities purchase payments by issuing organizations to investors within 30 days after they are deprived of the right to use issuance registration certificates.

The additional sanctioning forms and remedial measures prescribed in Clauses 2 and 3 of this Article shall only be applied in cases aiming to thoroughly handle violations, do away with causes of, and conditions for, further violations and overcome consequences caused by administrative violations in the field of securities and securities market.

Chapter II

ADMINISTRATIVE VIOLATIONS IN THE FIELD OF SECURITIES AND SECURITIES MARKET, SANCTIONING FORMS AND LEVELS

Section I. VIOLATION OF REGULATIONS ON THE ISSUANCE OF SECURITIES TO THE PUBLIC

Article 8.- Sanctions against acts of violating the regulations on the issuance of securities to the public

1. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on each issuing organization or issuance consultancy organization committing one of the following violation acts:

a/ Filing to the State Securities Commission dossiers of registration for issuance of securities to the public, which contain erroneous information or conceal the truth;

b/ Using information outside the prospectus to probe the market before being licensed to issue securities to the public;

c/ Distributing securities to the public before making the issuance announcement;

d/ Issuing securities to the public at variance with the contents inscribed in the issuance registrations regarding the securities types, issuance time limits and minimum volumes as prescribed;

e/ Announcing the securities issuance on the mass media at variance with the prescribed contents, time limits and time;

f/ Issuing bonds without any intermediary financial institutions taking part in issuance underwriting;

g/ Letting issuance-underwriting organizations underwrite securities volume with the total value exceeding the law-prescribed level.

2. A fine of between VND 20,000,000 and VND 50,000,000 shall be imposed on each issuing organization, issuance consultancy organization or auditing organization taking part in the compilation of dossiers for issuance of securities to the public for forgeries in the dossiers of issuance registration.

3. A fine of between VND 50,000,000 and VND 70,000,000 shall be imposed on each issuing organization or issuance-underwriting organization committing one of the following violation acts:

a/ Issuing securities to the public without getting certificates of registration for securities issuance;

b/ Underwriting the issuance of securities to the public without being licensed for the issuance underwriting business type.

4. Additional sanctioning forms:

a/ Deprivation of the right to use securities issuance registration certificates for 60 days for violations prescribed in Clause 1 of this Article;

b/ Deprivation of the right to use securities issuance registration certificates for an indefinite time for violations prescribed in Clause 2 of this Article;

c/ Confiscation of all service charges collected by organizations and/or individuals that commit violation acts prescribed in Clause 2 of this Article.

5. Application of remedial measures:

a/ Issuing organizations must withdraw already issued securities, refund deposits or payments for securities purchase to investors, if investors request the cancellation of their subscriptions within 60 days after such organizations are deprived of the right to use issuance registration certificates, in cases where issuing organizations are imposed with additional sanctions prescribed at Point a, Clause 4 of this Article;

b/ Issuing organizations must withdraw already issued securities, refund deposits or payments for securities purchase to investors within 30 days after they are deprived of the right to use issuance registration certificates, in cases where issuing organizations are imposed with additional sanctions prescribed at Point b, Clause 4 of this Article.

Section II. VIOLATION OF REGULATIONS ON SECURITIES LISTING AT THE SECURITIES TRADING CENTER OR THE STOCK EXCHANGE

Article 9.- Sanctions against acts of violating the regulations on securities listing at the Securities Trading Center (the Stock Exchange)

1. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on each listing organization or listing consultancy organization committing one of the following violation acts:

a/ Filing to the State Securities Commission dossiers of application for listing licenses, which contain erroneous information or conceal the truth;

b/ Additionally issuing stocks but failing to fill in the procedures for registering additional listing, for listing organizations;

c/ Conducting the stock split or reverse split without reporting thereon to the State Securities Commission or without having re-registered the listing, for listing organizations;

d/ Failing to fully comply with regulations on time, contents and means of disclosing information on granted listing licenses, for listing organizations.

2. A fine of between VND 20,000,000 and VND 70,000,000 shall be imposed on each listing organization, listing consultancy organization or auditing organization taking part in the compilation of listing dossiers for forgeries in dossiers of application for listing licenses.

3. Additional sanctioning forms:

a/ Deprivation of the right to use listing licenses for 60 days, for violation cases prescribed in Clause 1 of this Article;

b/ Deprivation of the right to use listing licenses for indefinite time, for violation cases prescribed in Clause 2 of this Article;

c/ Confiscation of all service charges collected by individuals and/or organizations that commit violation acts prescribed in Clause 2 of this Article.

Section III. VIOLATION OF REGULATIONS ON SECURITIES TRANSACTIONS

Article 10.- Sanctions against acts of violating the regulations on securities transaction activities

1. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on individuals or organizations committing one of the following violation acts:

a/ Legal persons open bank accounts in the names of individuals for securities purchase or sale, or violate law provisions on the opening of securities transaction accounts;

b/ Securities companies receive securities transaction orders from clients outside their head offices, branches, transaction offices or order-receiving agents;

c/ Investors being organizations or individuals make down payments for securities purchase not at the prescribed level or securities companies fail to closely supervise investors who make deficient down payments for securities purchase, thus causing delay or insolvency in the settlement of securities transactions;

d/ Members of managing boards, directorates, chief accountants or controllers of listing companies and involved persons perform acts of trading stocks of such listing companies without reporting such to the Securities Trading Center or the Stock Exchange 10 working days in advance.

2. A fine of between VND 20,000,000 and VND 50,000,000 shall be imposed on individuals or organizations committing one of the following violation acts:

a/ Purchasing or selling securities listed outside the Securities Trading Center (the Stock Exchange), except for odd-lot transactions conducted between securities companies and investors;

b/ Listing organizations repurchase or resell their own securities without permission of the State Securities Commission.

3. A fine of between VND 50,000,000 and VND 70,000,000 shall be imposed on individuals or organizations committing one of the following violation acts:

a/ Using or disclosing internal information to other persons, or advising other persons to purchase or sell securities for themselves or for the third party;

b/ Trading in securities without changing the ownership over securities;

c/ Conducting in collusion with other persons the securities purchase or sale in order to create sham supply-demand state;

d/ Joining or dragging other persons in continuously purchasing or selling securities in order to manipulate securities prices;

e/ Fabricating or spreading false information to mislead other persons about financial status or operation situation of issuing organizations and/or listing organizations, or make them misconceive securities prices;

f/ Fabricating or spreading untrue information in order to increase or reduce securities prices, checking prices at low levels or making prices abnormally fluctuate on the market;

g/ Selling securities in all forms while not owning such securities at the time of transaction.

4. Additional sanctioning forms:

a/ Deprivation of the right to use practice certificates for indefinite time, for cases where persons having securities trading practice certificates or persons having fund management practice certificates personally commit violation acts prescribed in Clause 3 of this Article;

b/ Deprivation of the right to use securities trading licenses for 45 days, for securities companies violating the provisions of Clause 3 of this Article;

c/ Confiscation of all service charges collected by individuals and/or organizations committing violation acts prescribed in Clause 3 of this Article.

5. Application of remedial measures:

Compelled strict compliance with law provisions, for violations prescribed at Point a, Clause 2 of this Article.

Article 11.- Sanctions against acts of violating the regulations on protection of shareholders or takeover of enterprises

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed on organizations or individuals committing one of the following violation acts:

a/ Organizations or individuals that hold or join involved persons in holding as much as 5%, 10%, 15% or 20% of share capital of a listing organization fail to report in writing on each change which increases or reduces the holding rate as compared with the above-said rates to the Securities Trading Center (the Stock Exchange), the State Securities Commission and listing organizations within three working days after they conduct the securities purchase or sale transactions to attain the said ownership rate;

b/ Members of managing boards, directorates, control boards breach commitments to hold at least 50% of stock quantity they own within the prescribed time limit.

2. A fine of between VND 20,000,000 and VND 70,000,000 shall be imposed on individuals or organizations committing one of the following violation acts:

a/ Investors being organizations or individuals commit acts of takeover without reporting such to the State Securities Commission and fail to announce their public bids according to regulations; or investors being organizations or individuals have effected the takeover already approved by the State Securities Commission and announced their public bids according to regulations, but later changed their already announced takeover intentions without reporting such change to the State Securities Commission;

b/ Organizations or individuals committing acts of takeover make bids at prices lower than the prices of stocks listed on the market before the date such bids are made;

c/ Within the time limit for public bids, taking-over organizations or individuals fail to apply conditions for public bids to all shareholders of listing organizations currently taken over;

d/ Taking-over organizations or individuals refuse to purchase stocks of listing organizations from any shareholders of such organizations under the already announced conditions, or taking-over organizations or individuals purchase or sell stocks of listing organizations in any form not under conditions of public bids;

e/ Taking-over organizations or individuals fail to strictly comply with the time limit for public bids (no less than 30 days and no more than 60 days) or taking-over organizations or individuals sell stocks of taken-over organizations 6 months before the end of takeover;

f/ Foreign organizations or individuals conduct securities transactions in order to hold securities of an issuing organization or listing organization in excess of the rate prescribed by law.

3. Application of remedial measures:

Compelled strict compliance with law provisions, for violations prescribed at Points a and b, Clauses 1 and 2 of this Article.

Section IV. VIOLATION OF REGULATIONS ON ACTIVITIES OF SECURITIES TRADING, REGISTRATION AND CUSTODY, CLEARING AND SETTLEMENT OF SECURITIES TRANSACTIONS

Article 12.- Sanctions against acts of violating the regulations on securities trading licenses and fund management licenses

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed on each securities trading or service organization, or each fund management company committing one of the following violation acts:

a/ Using names inconsistent with those stated in the granted securities trading licenses, fund management licenses or licenses to open branches;

b/ Organizing the commencement of operations while having not yet fully satisfied the conditions prescribed by law;

c/ Conducting activities in violation of charters of companies or funds or failing to report on amendments and/or supplements to charters.

2. A fine of between VND 20,000,000 and VND 50,000,000 shall be imposed on each securities trading or service organization, or each fund management company committing one of the following violation acts:

a/ Conducting securities trading or providing securities services while having not yet been granted licenses therefor;

b/ Lending, leasing or transferring licenses;

c/ Conducting securities trading or providing securities services in those fields not prescribed in the licenses or when the licenses have already expired;

d/ Erasing or modifying trading licenses, licenses to open branches or licenses to set up representative offices;

e/ Relocating or changing head offices, closing down or opening more branches or representative offices of securities trading organizations or fund management companies without the State Securities Commission's approvals;

f/ Separating from or merging into other securities trading organizations or fund management companies without the State Securities Commission's permits;

g/ Representative offices of foreign securities trading organizations are directly engaged in securities trading activities in contravention of law provisions.

3. Additional sanctioning forms:

a/ Confiscation of all amounts earned from violation acts prescribed at Points a, b, c and g, Clause 2 of this Article;

b/ Deprivation of the right to use securities trading licenses or fund management licenses for 30 days for violation cases prescribed at Point b, Clause 1; Points b, c, d and f, Clause 2 of this Article.

Article 13.- Sanctions against acts of violating the regulations on securities trading practice certificates and fund management practice certificates

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed on each securities trading or service organization, or each fund management company committing one of the following violation acts:

a/ Arranging persons without practice certificates to perform operations which require practice certificates as prescribed by the State Securities Commission;

b/ Failing to replace or transfer to other jobs persons who have had their practice certificates withdrawn under the State Securities Commission's decisions.

2. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on securities trading or fund management practitioners committing one of the following violation acts:

a/ Securities trading practitioners concurrently work for, or contribute capital to, two or more securities companies;

b/ Staff members of securities companies open securities transaction accounts at other securities companies;

c/ Members of managing boards, directorates or control boards of securities companies invest in other securities companies;

d/ Fund management practitioners concurrently act as directors or shareholders holding more than 5% of voting shares of a securities-issuing organization;

e/ Lending or leasing securities trading practice certificates;

f/ Erasing or modifying securities trading practice certificates or fund management practice certificates.

3. Additional sanctioning forms:

Deprivation of the right to use practice certificates for 45 days for violation cases prescribed in Clause 2 of this Article.

Article 14.- Sanctions against acts of violating the regulations on trading activities of securities companies

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed on securities companies committing one of the following violation acts:

a/ Failing to strictly comply with law provisions on management and use of assets, money and securities of clients; assets, money and securities of companies;

b/ Failing to maintain sufficient liquidity capital as prescribed by law;

c/ Investing in securities or contributing capital in excess of the limits prescribed by law;

d/ Securities companies invest in other securities companies.

2. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on securities companies committing one of the following violation acts:

a/ Failing to separate the dealing operation from brokerage, investment portfolio management or issuance underwriting operation; or failing to separate business activities of owners of companies from business activities of securities companies;

b/ Acting in contravention of securities purchase or sale orders of investors;

c/ Failing to supply or certify information on transactions according to law provisions; or failing to observe the regime of keeping confidential information for clients according to law provisions;

3. A fine of between VND 50,000,000 and VND 70,000,000 shall be imposed on securities companies committing one of the following violation acts:

a/ Purchasing or selling securities on clients' accounts without the latter's permission, or purchasing or selling securities in the name of clients;

b/ Taking part in securities credit and lending activities.

4. Additional sanctioning forms:

a/ Deprivation of the right to use securities trading licenses for 30 days for the violation cases prescribed in Clause 2 of this Article;

b/ Deprivation of the right to use securities trading licenses for 45 days for the violation cases prescribed in Clause 3 of this Article;

c/ Confiscation of amounts earned from violation acts prescribed in Clause 3 of this Article.

5. Application of remedial measures:

Compelled strict compliance with law provisions, for violation acts prescribed in Clause 1 of this Article.

Article 15.- Sanctions against acts of violating the regulations on trading activities of investment fund management companies

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed on fund management companies committing one of the following acts:

a/ Failing to separate the management of each fund from another;

b/ Failing to comply with fund charters and protect interests of investors;

c/ Failing to perform the internal control as provided for by law;

d/ Failing to perform other obligations of fund management companies as prescribed by law.

2. A fine of between VND 20,000,000 and VND 50,000,000 shall be imposed on fund management companies committing one of the following violation acts:

a/ Using capital or assets of securities investment funds to provide loans or underwrite issuance;

b/ Using capital and assets of an investment fund to invest in or purchase assets of another fund under their management.

3. Additional sanctioning forms:

a/ Deprivation of the right to use fund management licenses for 30 days, for violation cases prescribed at Points a and b, Clause 1 of this Article;

b/ Deprivation of the right to use fund management licenses for 45 days, for violation cases prescribed in Clause 2 of this Article;

c/ Confiscation of amounts earned from violation acts prescribed in Clause 2 of this Article.

Article 16.- Sanctions against acts of violating the regulations on responsibilities of supervisory banks

1. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on supervisory banks committing one of the following violation acts:

Supervisory banks preserve assets of investment funds in contravention of such funds' charters; or fail to separate assets of securities investment funds from other assets; or fail to separate assets of one investment fund from those of another fund.

2. Additional sanctioning forms:

Deprivation of the right to use securities custody licenses for 30 days, for violation cases prescribed in Clause 1 of this Article.

Article 17.- Sanctions against acts of violating the regulations on securities registration and custody, securities transaction clearing and settlement

1. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed on organizations engaged in securities registration or custody, securities transaction clearing and settlement for committing one of the following violation acts:

a/ Violating regulations on the time limit for certifying securities balance, transferring the securities ownership or modifying or forging vouchers in payment for securities transfers, thus causing losses to clients;

b/ Violating the regime of securities preservation; the regimes of securities registration or custody, securities transaction clearing and settlement;

c/ Failing to fully, accurately and promptly supply the list of securities holders and relevant documents to the issuing organizations.

2. A fine of between VND 20,000,000 and VND 50,000,000 shall be imposed on organizations engaged in securities registration or custody, securities transaction clearing and settlement which lend securities on their clients' accounts or pledge their clients' securities.

3. Additional sanctioning forms:

Confiscation of amounts earned from the performance of violation acts prescribed in Clause 2 of this Article.

Section V. VIOLATION OF THE REPORTING AND INFORMATION-DISCLOSING REGIME AND OBSTRUCTING INSPECTION AND EXAMINATION

Article 18.- Sanctions against acts of violating the regulations on reporting regime

1. A caution or a fine of between VND 200,000 and VND 1,000,000 shall be imposed on securities issuing organizations, listing organizations, securities companies, investment fund management companies, investment funds, custody organizations, or banks designated for settlement committing one of the following violation acts:

a/ Failing to fully report the contents prescribed by law;

b/ Failing to report within the time limit prescribed by law;

c/ Making reports not according to the form set by the State Securities Commission.

2. A fine of between VND 5,000,000 and VND 20,000,000 shall be imposed on each securities company, investment fund management company or securities custody organization committing one of the following violation acts:

a/ Ceasing its operation without reporting such to the State Securities Commission or without the State Securities Commission's approval though it has reported thereon;

b/ Failing to report or reporting not in time on the occurrence of unusual events that may severely affect its financial capability and securities trading or service activities.

3. Additional sanctioning forms:

Deprivation of the right to use securities trading licenses for securities companies, fund management licenses for fund management companies, custody licenses for securities custody organizations for 30 days, for cases of violation prescribed in Clause 2 of this Article.

Article 19.- Sanctions against acts of violating the regulations on information disclosure

1. A fine of between VND 20,000,000 and VND 50,000,000 shall be imposed on securities issuing organizations, listing organizations, securities companies or investment fund management companies committing one of the following violation acts:

a/ Failing to disclose information adequately, promptly and periodically according to law provisions;

b/ Disclosing untrue information and reports;

c/ Revealing confidential data and documents, but not seriously enough for penal liability examination;

d/ Announcing changes in the already disclosed information contents, thus adversely affect the securities market and investors, without giving the reasons for such changes and without reporting them to competent agencies according to regulations;

e/ Disclosing contradictory information or denying previously disclosed information;

f/ Failing to disclose information as prescribed by law.

2. Application of remedial measures:

Compelled cancellation or correction of erroneous or untrue information.

Article 20.- Sanctions against acts of obstructing the inspection or examination or failing to realize the inspectors' proposals

1. A caution shall be served to issuing organizations, listing organizations, securities companies, fund management companies, custody organizations, supervisory banks, organizations or individuals engaged in other securities activities, that commit acts of resisting or failing to fully and promptly supply documents, vouchers and/or data in order to delay or shirk requests of inspection organizations, inspection teams or inspectors while they are on duty;

2. A fine of between VND 2,000,000 and VND 5,000,000 shall be imposed on organizations and individuals committing one of the following violation acts:

a/ Failing to realize requests of the securities inspectorate and other competent agencies;

b/ Concealing or modifying vouchers, documents, books or alter material evidences while being under inspection;

c/ Removing, relocating or taking other acts to change the status quo of sealed money and securities, accounting books, files and vouchers or other sealed material evidences and means without permission.

Chapter III

COMPETENCE AND PROCEDURES FOR SANCTIONING ADMINISTRATIVE VIOLATIONS

Article 21.- Competence to sanction administrative violations

1. Specialized chief inspectors may:

a/ Serve cautions;

b/ Impose fines of up to VND 70,000,000;

c/ Apply additional sanctioning forms and remedial measures prescribed in Clauses 2 and 3, Article 7 of this Decree.

2. Specialized inspectors who are on duty may:

a/ Serve cautions;

b/ Impose fines of up to VND 200,000;

c/ Confiscate material evidences and means used for commission of administrative violations, valued at up to VND 2,000,000;

d/ Compel the strict compliance with law provisions on acts of administrative violation;

e/ Compel the cancellation or correction of erroneous or untrue information.

3. Presidents of People's Committees of all levels are competent to sanction administrative violations under the provisions of Article 42 of the Ordinance on Handling of Administrative Violations, for acts of administrative violation in the field of securities and securities market prescribed in this Decree, and at the same time notify the State Securities Commission thereof.

Article 22.- Authorized sanctioning of administrative violations

In cases where the persons competent to sanction administrative violations defined in Clauses 1 and 3, Article 21 of this Decree are absent and authorize in writing their deputies, the latter shall be competent to sanction administrative violations but must not further authorize other persons and must take responsibility for their decisions.

Article 23.- Stopping acts of administrative violation

Upon detecting acts of administrative violation, the persons competent to sanction administrative violations must order in writing the immediate stop of such acts of administrative violation.

Article 24.- Making of written records on administrative violations

1. After ordering the stopping of acts of administrative violation, the persons with sanctioning competence who are on duty must promptly make written records on administrative violations and report them to specialized chief inspectors according to the provisions of the Government's Decree No. 17/2000/ND-CP of May 26, 2000 on organization and operation of securities inspectorate.

2. The making of written records on administrative violations shall apply to all cases involving acts of violation in the field of securities and securities market, except for cases where cautions are served or where violations previously involved in criminal cases are re-determined to be subject to administrative handling.

3. A written record on sanctioning of administrative violation must be made in at least two copies according to a set form. Written records must be signed by record makers, violators or representatives of violating organizations. If there are witnesses, victims or representatives of victim organizations, they must jointly sign the written records. If a written record contains many pages, the persons mentioned in this Clause must jointly sign each page. In cases where violators, representatives of violating organizations, witnesses, victims or representatives of victim organizations refuse to give their signatures in written records, the record makers shall have to clearly state reasons for the refusal in the written records.

4. One copy of a completely made written record shall be handed to violating organization or individual. For violations falling beyond the record makers' competence to sanction administrative violations, they shall have to send written records on administrative violations (originals) and all documents and dossiers already detected to be related to violation acts to authorities with sanctioning competence within three working days after making such written records.

Article 25.- Sanctioning decisions

1. Each sanctioning decision must be made in at least 5 copies according to a set form (for sanctioning form being caution) and at least 6 copies according to a set form (for sanctioning form being fine).

2. The time limit for issuing decisions on sanctioning of administrative violations shall be 10 working days, after written records on the administrative violations are made; for cases involving complicated circumstances, the time limit for issuing sanctioning decisions is 30 days. In cases where more time is needed to verify or gather evidences, competent persons shall have to report such in writing to their immediate superiors for prolongation of the said time limits. The prolongation must be made in writing and must not exceed 30 days. Past that time limit, persons competent to sanction must not issue sanctioning decisions. In cases where no sanctioning decision is issued, the remedial measures prescribed in Clause 3, Article 7 of this Decree may still be applied.

3. When deciding on sanctioning of an organization or individual that commits many acts of administrative violation, the competent person shall issue only one sanctioning decision. For cases involving many individuals and organizations committing the same act of administrative violation, but there exists no relationship among them in the course of performance of violation act, each individual or organization shall be sanctioned by a separate sanctioning decision. Depending on the nature and seriousness of violations committed by each individual or organization, persons with sanctioning competence shall decide on appropriate specific sanctioning level.

If sanctioning forms and levels fall beyond the competence of sanctioning persons, such persons shall have to transfer violation cases to authorities with sanctioning competence.

4. In cases where an administrative violation falls under sanctioning competence of many persons, the sanctioning thereof shall be carried out by the person who accepts the violation case first.

5. A sanctioning decision shall take effect after its signing, except for cases where another effective date is prescribed therein.

6. The time limit for sending sanctioning decisions to sanctioned organizations and individuals and the fine-collecting agencies shall be three working days after such sanctioning decisions are issued.

Article 26.- Fining procedures

1. Cases subject to pecuniary fines shall comply with the procedures prescribed in Articles 24 and 25, Chapter III of this Decree. Within 10 working days after being handed the sanctioning decisions, the sanctioned organizations or individuals shall have to pay fine amounts stated in such sanctioning decisions into the State Treasury and shall receive fine payment receipts.

2. When fines are imposed, specific fine level applicable to one act of administrative violation shall be the average level of the fine bracket prescribed for such act. If such act involves extenuating circumstance(s), the fine level may be reduced but must not be lower than the minimum level of the fine bracket. If such act involves aggravating circumstance(s), the fine level may be raised but must not be higher than the maximum level of the fine bracket.

Article 27.- Procedures for depriving the right to use licenses, practice certificates

1. Specialized chief inspectors may issue decisions on deprivation of the right to use licenses or practice certificates according to the provisions of Point b, Clause 2, Article 7 of this Decree.

2. For cases subject to the deprivation of the right to use licenses or practice certificates, a sanctioning decision must clearly state: the name, type and serial number of license; serial number of certificate; duration of deprivation of the right to use license or practice certificate. In cases where only a decision on suspension of a specific professional operation is issued, persons with sanctioning competence must clearly state in such sanctioning decision the suspended professional operation and the duration of deprivation of the right to conduct such professional operation.

3. When detecting that licenses are granted ultra vires or contain illegal contents, persons with sanctioning competence shall have to immediately withdraw them and concurrently report such to the licensing State agencies.

Article 28.- Procedures for confiscating and handling material evidences and means used in administrative violations

1. When confiscating material evidences and means used in administrative violations stated in sanctioning decisions, persons with sanctioning competence must make written records on confiscation of material evidences and means used in administrative violations according to the set form. Written records must be signed by confiscators, sanctioned individuals, representatives of sanctioned organizations or witnesses.

2. In cases where it is necessary to seal up material evidences and means used in violations, such seal-up must be carried out in front of administratively sanctioned individuals or representatives of sanctioned organizations and witnesses; if sanctioned individuals or representatives of sanctioned organizations are absent, two witnesses are required.

3. Procedures for handling material evidences and means used in administrative violations shall comply with Article 61 of the Ordinance on Handling of Administrative Violations.

Article 29.- Transfer of dossiers of violations showing criminal signs for penal liability examination

Procedures for transferring dossiers of violation cases showing signs of crimes for penal liability examination shall comply with Article 62 of the Ordinance on Handling of Administrative Violations.

Article 30.- Transfer of violation dossiers for sanctioning of administrative violations and execution of decisions on sanctioning of administrative violations

Procedures for transferring dossiers of violation cases for sanctioning of administrative violations and executing decisions on sanctioning of administrative violations shall comply with Articles 63 and 64 of the Ordinance on Handling of Administrative Violations.

Article 31.- Coercive execution of decisions on sanctioning of administrative violations

1. Individuals and organizations sanctioned for administrative violations that fail to voluntarily execute sanctioning decisions shall be coerced to do so with the following measures:

a/ Partial deduction of wages or incomes or deduction from bank accounts;

b/ Distraint of assets with value equal to fine amounts for auction;

c/ Application of other coercive measures to confiscate material evidences or means used in administrative violations, forcible compliance with law provisions on acts of administrative violation.

2. Persons competent to sanction administrative violations defined in Clauses 1 and 3, Article 21 of this Decree may issue coercive decisions and shall be obliged to organize the coercion.

3. Individuals and organizations that have received coercive decisions must strictly abide by them.

4. State agencies, people's police force and People's Committees of all levels shall have to coordinate with one another in organizing the coercion at requests of persons competent to sanction administrative violations prescribed in Clause 2 of this Article.

5. Individuals and organizations subject to coercion must bear all expenses for application of coercive measures.

Article 32.- Delivery of administrative violation-sanctioning decisions for execution

The delivery of administrative violation-sanctioning decisions for execution shall comply with Article 68 of the Ordinance on Handling of Administrative Violations.

Article 33.- Statute of limitations for execution of administrative violation-sanctioning decisions

Statute of limitations for execution of administrative violation-sanctioning decisions shall comply with Article 69 of the Ordinance on Handling of Administrative Violations.

Chapter IV

SUPERVISION AND INSPECTION IN SANCTIONING OF ADMINISTRATIVE VIOLATIONS, SETTLEMENT OF COMPLAINTS AND DENUNCIATIONS AND HANDLING OF VIOLATIONS COMMITTED BY PERSONS COMPETENT TO SANCTION ADMINISTRATIVE VIOLATIONS IN THE FIELD OF SECURITIES AND SECURITIES MARKET

Article 34.- Supervision and inspection in sanctioning of administrative violations

The Finance Minister has the responsibility to regularly supervise and inspect the sanctioning of administrative violations in the field of securities and securities market; promptly settle complaints and denunciations related to persons with sanctioning competence defined in Article 21 of this Article in sanctioning of administrative violations; handle persons committing violations or making mistakes in sanctioning administrative violations under his/her management, and report on the situation of administrative violations under his/her charge at requests of competent agencies.

Article 35.- Settlement of complaints about, lawsuits against, administrative violation-sanctioning decisions and denunciations against illegal acts of persons competent to sanction administrative violations

1. Individuals and organizations sanctioned for administrative violations in the field of securities and securities market may lodge their complaints about persons issuing administrative violation-sanctioning decisions to competent State agencies. Competent State agencies shall have to settle such complaints according to law provisions on complaints and denunciations.

The initiation of lawsuits against administrative violation-sanctioning decisions at administrative courts under People's Courts of all levels shall comply with the provisions of the Law on Complaints and Denunciations and the Ordinance on Procedures for Handling Administrative Cases.

In the course of lodging complaints or initiating lawsuits, individuals and organizations sanctioned for administrative violations still have to execute sanctioning decisions. When decisions on complaint settlement are issued by competent State agencies or court judgments or decisions take legal effect, they shall abide by such decisions of competent State agencies or court judgments or decisions.

2. The denunciation and settlement of denunciations against illegal acts in sanctioning administrative violations in the field of securities and securities market shall comply with the provisions of the Law on Complaints and Denunciations and other relevant law provisions.

Article 36.- Handling of violations committed by persons competent to sanction administrative violations in the field of securities and securities market

Handling of violations committed by persons competent to sanction administrative violations in the field of securities and securities market shall comply with Article 121 of the Ordinance on Handling of Administrative Violations.

Chapter V

IMPLEMENTATION PROVISIONS

Article 37.- Effect of the Decree

This Decree takes effect 15 days after its publication in the Official Gazette and replaces the Government's Decree No. 22/2000/ND-CP of July 10, 2000 on sanctioning of administrative violations in the field of securities and securities market. The previous stipulations which are contrary to this Decree are hereby annulled.

Article 38.- Responsibilities to guide and implement the Decree

The Finance Minister shall have to guide in detail the implementation of this Decree.

The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the People's Committees of the provinces and centrally-run cities shall have to implement this Decree.