Decree No. 51/2018/ND-CP dated April 09, 2018 of the Government on amending and supplementing a number of articles of the Government’s Decree No. 158/2006/ND-CP of December 28, 2006, detailing implementation of the Commercial Law regarding goods purchase and sale through the Goods Exchange

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 158/2006/ND-CP of December 28, 2006, detailing the implementation of the Commercial Law regarding goods purchase and sale through goods exchanges^[1]

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

Pursuant to the June 14, 2005 Commercial Law;

Pursuant to the November 26, 2014 Law on Enterprises;

Pursuant to the November 26, 2014 Investment Law;

At the proposal of the Minister of Industry and Trade;

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 158/2006/ND-CP of December 28, 2006, detailing the implementation of the Commercial Law regarding goods purchase and sale through goods exchanges.

Article 1.To amend and supplement a number of articles of the Government’s Decree No. 158/2006/ND-CP of December 28, 2006, detailing the implementation of the Commercial Law regarding goods purchase and sale through goods exchanges (below referred to as Decree No. 158/2006/ND-CP)

1. To amend Clause 3, Article 3 as follows:

“Article 3. Interpretation of terms

3. Trading order means a written request or a request expressed in a form equivalent to written form of a customer for a goods purchase or sale transaction to be conducted through a goods exchange.”

2. To add the following Clauses 14 and 15 to Article 3:

“Article 3. Interpretation of terms

14. Connectivity means that goods exchanges have interconnection agreements whereby goods contracts of one goods exchange may be traded on another goods exchange and vice versa.

15. Brokerage for goods purchase and sale through a goods exchange means that members of the goods exchange act as intermediaries for trading goods contracts for their customers on the goods exchange.”

3. To amend Point b, Clause 2, Article 4 as follows:

“Article 4. State management

b/ Deciding on the establishment and operation of goods exchanges; approving the operation charters of goods exchanges and amendments thereto;”

4. To amend and supplement Article 5 as follows:

“Article 5. Vietnamese traders participating in goods purchase and sale transactions through overseas goods exchanges

1. Vietnamese traders may participate in goods purchase and sale through overseas goods exchanges via Vietnam-based goods exchanges connected with such overseas goods exchanges.

2. Goods exchanges shall issue and announce their regulations on goods trading through overseas goods exchanges.

3. Payments for goods purchase and sale transactions through overseas goods exchanges shall be made via credit institutions permitted for international payment in compliance with relevant regulations on foreign exchange management.

4. The import and export of goods for goods purchase and sale transactions through overseas goods exchanges shall be carried out in accordance with the regulations on international goods purchase and sale and goods purchase and sale agency, processing and transit activities with foreign countries and other relevant regulations.”

5. To add the following Article 5a below Article 5:

“Article 5a. Notices of connectivity of transactions through overseas goods exchanges

1. In case a Vietnam-based goods exchange is connected with an overseas one, it shall submit one dossier of notification directly or send it by post or online to the Ministry of Industry and Trade. Such a dossier must comprise:

a/ A written notice of connectivity with the overseas goods exchange;

b/ A written record of cooperation between the Vietnam-based goods exchange and the overseas goods exchange or its trading member, bearing certification by the overseas Vietnamese representative mission.

2. The Vietnam-based goods exchange shall send one dossier of notification to the Ministry of Industry and Trade within 30 days after signing the written record of cooperation with the overseas goods exchange. In case the dossier of notification is incomplete, within 30 days after receiving it, the Ministry of Industry and Trade shall issue a written reply to the Vietnam-based goods exchange. Past the above time limit, if receiving no reply from the Ministry of Industry and Trade, such dossier of notification is regarded to be complete and valid.”

6. To amend Article 6 as follows:

“Article 6. Legal position of goods exchanges

Goods exchanges are enterprises established and operating in accordance with the Law on Enterprises and this Decree.”

7. To amend and supplement Article 8 as follows:

“Article 8. Conditions for establishment of goods exchanges

A goods exchange may be established when the following conditions are fully satisfied:

1. Having a charter capital of at least one hundred and fifty (150) billion Vietnam dong;

2. Having an information technology system satisfying the requirements on technological and technical solutions in goods purchase and sale through the goods exchange, specifically:

- The server system stably works and has at least one server in the standby state to back up the system when an incident occurs;

- The server system can back up data of professional operation apps and transactions and restore data in case an incident occurs;

- App software satisfies the intellectual property requirements in accordance with law;

- The software system has an operation-recording function to keep traces of all goods payments, delivery and receipt transactions during the operation process for at least 5 years;

- The information technology system complies with the technical regulations on cyberinformation security, if any.

3. Its operation charter does not contravene this Decree.”

8. To amend and supplement Article 9 as follows:

“Article 9. Dossiers of request for establishment of goods exchanges

A dossier of request for establishment of a goods exchange must comprise:

1. A written request for establishment of the goods exchange, made according to Form No. 01 provided in Appendix I to this Decree;

2. A copy of the enterprise registration certificate;

3. An economic-technical explanation, stating the objectives, operation place, physical foundations and information technology system, enclosed with supporting documents;

4. A draft operation charter of the goods exchange signed by the representative at law of the goods exchange, with the contents specified in Article 14 of this Decree, enclosed with the minutes on the approval of the draft charter.”

9. To amend and supplement Article 10 as follows:

“Article 10. Appraisal and grant of establishment licenses for goods exchanges

1. The Ministry of Industry and Trade shall receive dossiers of request for establishment of goods exchanges and examine the conditions and dossiers as prescribed in this Decree.

2. Procedures for granting a license for establishment of a goods exchange

a/ A trader shall send one dossier directly, by post or online to the Ministry of Industry and Trade;

b/ In case such a dossier is invalid, within 7 working days after receiving it, the Ministry of Industry and Trade shall send a written request to the trader for modifying it;

c/ Within 45 days after receiving a valid dossier, the Ministry of Industry and Trade shall examine the conditions and grant a license for establishment of the goods exchange, made according to the form provided in Appendix III to this Decree, in case the trader fully satisfies the conditions prescribed in this Decree. In case of refusal to grant a license, it shall issue a written reply clearly stating the reason.”

10. To amend and supplement Article 11 as follows:

“Article 11. Contents of licenses for establishment of goods exchanges

A license for establishment of a goods exchange serves concurrently as its business eligibility certificate, and has the following details:

1. Name and address of the head office;

2. Full name, permanent residence address, nationality, serial number of identity card, passport or another personal identification paper of the representative at law of the goods exchange;

3. Business registration number of the enterprise establishing the goods exchange;

4. Charter capital of the goods exchange;

5. Goods to be exchanged.”

11. To amend and supplement Article 12 as follows:

“Article 12. Modification of establishment licenses of goods exchanges

1. If having a change in the content of its establishment license specified in Article 11 of this Decree, a goods exchange shall send a dossier of request for modification of the license directly, by post or online to the Ministry of Industry and Trade.

2. A dossier of request for modification of the establishment license of a goods exchange must comprise:

a/ A written request for modification of the establishment license of the goods exchange, made according to Form No. 02 provided in Appendix I to this Decree;

b/ A copy of the establishment license of the goods exchange;

c/ Documents supporting the request.

3. Within 10 days after receiving a valid dossier specified in Clause 2 of this Article, the Ministry of Industry and Trade shall decide on the modification of the establishment license of the goods exchange. In case of refusal to modify the license, the Ministry of Industry and Trade shall issue a written reply clearly stating the reason.”

12. To amend and supplement Clauses 1 and 2, Article 13 as follows:

“Article 13.Re-grant of establishment licenses of goods exchanges

1. If the establishment license of a goods exchange is lost, torn or burned or otherwise damaged, the goods exchange shall send a dossier of request for re-grant of its establishment license directly, by post or online to the Ministry of Industry and Trade.

2. A dossier of request for re-grant of the establishment license of a goods exchange is a written request for re-grant of the establishment license, made according to Form No. 03 provided in Appendix I to this Decree.”

13. To amend Point e, Clause 1, Article 14 as follows:

“Article 14. Operation charters of goods exchanges

e/ Trading collateral and charge;”

14. To add the following Article 14a below Article 14:

“Article 14a. Approval of modified operation charters of goods exchanges

1. If having a change in the content of its operation charter as specified in Article 14 of this Decree, a goods exchange shall send a dossier of request for approval of the modified charter directly, by post or online to the Ministry of Industry and Trade.

2. A dossier of request for approval of the modified operation charter of a goods exchange must comprise:

a/ A written request for approval of the modified operation charter;

b/ The modified operation charter;

c/ The minutes on the adoption of the modified operation charter.

3. Within 30 days after receiving a valid dossier of request specified in Clause 2 of this Article, the Ministry of Industry and Trade shall decide to approve the modified operation charter of the goods exchange. In case of disapproval of the modified operation charter, it shall issue a written reply clearly stating the reason.”

15. To add the following Clause 12 to Article 15:

“Article 15. Powers of a goods exchange

12. A Vietnam-based goods exchange may be connected with overseas goods exchanges in accordance with this Decree.”

16. To add the following Clauses 11 and 12 to Article 16:

“Article 16. Responsibilities of a goods exchange

11. To issue regulations on goods listing, information disclosure and trading through the goods exchange.

12. To issue and announce regulations on the operation and risk management of the Clearing Payment Center.”

17. To add the following Article 16a below Article 16:

“Article 16a. Foreign investors participating in goods purchase and sale through Vietnam-based goods exchanges

1. Foreign investors may participate in goods purchase and sale transactions through Vietnam-based goods exchanges.

2. Foreign investors may contribute capital to establish Vietnam-based goods exchanges; or purchase shares or capital contributions of Vietnam-based goods exchanges under the following provisions:

a/ A foreign investor may contribute capital to establish a Vietnam-based goods exchange; or purchase shares or capital contributions of a Vietnam-based goods exchange accounting for no more than 49% of its charter capital;

b/ A foreign investor may participate in goods purchase and sale through a goods exchange as a customer or act as a member of a goods exchange (brokerage or trading member) with an unlimited charter capital holding rate;

c/ Procedures for foreign investors to contribute capital or purchase shares or capital contributions must comply with the Enterprise Law, Investment Law and other relevant regulations.”

18. To add the following Article 16b below Article 16a:

“Article 16b. Reporting by goods exchanges

1. Periodical reports

a/ Periodical reports, made according to the forms provided in Appendix II to this Decree, include:

- Form No. 01: Operation report of the goods exchange;

- Form No. 02: Report on the list of members of the goods exchange.

b/ Deadlines for submission of reports to the Ministry of Industry and Trade:

- April 15, for first-quarter reports, and October 15, for third-quarter reports;

- July 20, for biannual reports;

- January 31, for annual reports of the previous year.

2. Unscheduled reports

a/ In case of detecting an abnormal practice in trading, a goods exchange shall send a report to the Ministry of Industry and Trade as soon as possible;

b/ Other unscheduled reports, made according to specific requirements of the Ministry of Industry and Trade or another competent agency.

3. Form of and address for sending reports (periodical and unscheduled reports)

a/ Goods exchanges shall send hardcopy and softcopy reports to the Ministry of Industry and Trade;

b/ Address for sending hardcopy reports: Ministry of Industry and Trade, 54 Hai Ba Trung street, Hoan Kiem district, Hanoi.

c/ Address for sending softcopy reports:[email protected]”.

19. To amend Article 17 as follows:

“Article 17. Members of goods exchanges

1. Members of a goods exchange include:

a/ Trading members;

b/ Brokerage members.

2. Trading members of a goods exchange may deal in and broker goods purchase and sale through the goods exchange.

3. Brokerage members may only act as goods brokers through the goods exchange.”

20. To amend Clause 2, Article 19 as follows:

“Article 19. Brokerage members

A brokerage member must fully satisfy the following conditions:

2. Having a charter capital of at least five billion Vietnam dong;”

21. To amend Clause 2, Article 21 as follows:

“Article 21. Trading members

A trading member must fully satisfy the following conditions:

2. Having a charter capital of at least seventy-five billion Vietnam dong;”

22. To change the title of Chapter IV as follows:

“Chapter IV

CLEARING PAYMENT CENTERS AND GOODS FORWARDING CENTERS”

23. To amend Article 26 as follows:

“Article 26. Clearing payment centers

1. A center for clearing payment for goods purchase and sale through a goods exchange (below referred to as a clearing payment center) means an organization attached to such exchange functioning to provide services of clearing transactions of goods purchase and sale through the goods exchange, specifically as follows:

a/ Granting identification numbers of goods trading accounts for members of the goods exchange; managing and using collateral amounts to guarantee the goods exchange membership;

b/ Calculating and updating in the trading system and announcing collateral amounts of members under the operation regulation of the goods exchange;

c/ Calculating and clearing positions of members after the end of trading sessions;

d/ Updating open position limits of members in the trading system based on their account balances;

dd/ Checking and settling requests for withdrawal of collaterals of trading members and brokerage members;

e/ Applying and collecting trading charges from members;

g/ Sending payment orders to the bank providing payment services as designated by the goods exchange for money transfer or accounting debit/credit entries for members of the goods exchange.

2. The clearing payment center shall operate independently from members of the goods exchange.”

24. To amend Clause 4, Article 27 as follows:

“Article 27. Rights of clearing payment centers

4. Other rights specified in the operation regulation of the goods exchange.”

25. To amend Clause 5, Article 28 as follows:

“Article 28. Obligations of clearing payment centers

5. Other obligations specified in the operation regulation of the goods exchange.”

26. To amend Article 32 as follows:

“Article 32. Goods to be purchased or sold through a goods exchange

1. For goods on the list of goods permitted for conditional trading or restricted from trading, a goods exchange shall register them with a competent agency for listing for trading on the goods exchange.

2. For goods not on the list of goods banned from trading, restricted from trading or permitted for conditional trading, a goods exchange shall send one dossier of notification to the Ministry of Trade and Industry at least 30 days before officially listing them for trading on the goods exchange. Such a dossier shall be sent directly, by post or online to the Ministry of Trade and Industry.

A dossier of notification must comprise:

a/ A written notice of the listing of new goods on the goods exchange;

b/ Documents describing contracts for each type of goods expected to be listed on the goods exchange.

Within 30 days after receiving a dossier of notification of the goods exchange for listing of goods to be traded on the goods exchange, the Ministry of Trade and Industry shall issue a written reply to the goods exchange in case such dossier is incomplete. Past this time limit, if the goods exchange receives no written reply from the Ministry of Trade and Industry, its dossier shall be regarded to be complete and valid.”

27. To amend Article 53 as follows:

“Article 53. Competence and procedures for handling administrative violations

The competence and procedures for handling administrative violations in goods purchase and sale through the goods exchange must comply with the law on handling of administrative violations.”

28. To add the following Article 53a below Article 53:

“Article 53a. Obligation of goods exchanges to disclose information

1. Within 30 days after being granted an establishment license, a goods exchange shall announce the content of the license on an online newspaper or a printed newspaper lawfully published in Vietnam for three consecutive issues.

2. After being granted an establishment license, a goods exchange shall announce its operation regulation, list of and information about its members; information about transactions and trading orders for goods purchase or sale through the goods exchange and other information under its operation regulation at its head office and representative offices and on its website.

3. If having a change in the content of its establishment license, a goods exchange shall announce such change within the time limit and by the method prescribed in Clause 1 of this Article.”

29. To add the following Article 53b below Article 53a:

“Article 53b. Revocation of licenses

1. The Minister of Trade and Industry may issue a decision to revoke an establishment license of a goods exchange in the following cases:

a/ The dossier of request for grant, modification or re-grant of the establishment license contains untrue information or forged documents;

b/ The goods exchange is established by persons who are prohibited from establishing enterprises under the law on enterprises;

c/ The goods exchange fails to disclose information under this Decree;

d/ The goods exchange fails to maintain the required conditions;

dd/ The goods exchange fails to register its tax identification number or has its tax identification number invalidated in accordance with law;

e/ The goods exchange fails to operate at its registered head office for 6 consecutive months from the date of grant of its establishment license or modified establishment license (in case of relocation of the head office);

g/ The goods exchange has ceased its operation for a whole year without notifying such to the Ministry of Trade and Industry;

h/ The goods exchange fails to report under this Decree and the law on enterprises for 12 consecutive months or within 3 months after receiving a written request for reporting.

2. Within 2 working days after a license revocation decision takes effect, the Ministry of Trade and Industry shall send it to the goods exchange that has its license revoked and related agencies and units; and announce the revocation on its website. The goods exchange shall return its original license to the Ministry of Trade and Industry within 5 working days after receiving the license revocation decision.”

Article 2.To annul the following provisions and change phrases

1. To annul Point dd, Clause 2, Article 4 of Decree No. 158/2006/ND-CP.

2. To annul Clause 3, Article 4 of Decree No. 158/2006/ND-CP.

3. To annul Clause 6, Article 15 of Decree No. 158/2006/ND-CP.

4. To annul Clause 3, Article 19 of Decree No. 158/2006/ND-CP.

5. To annul Clause 3, Article 21 of Decree No. 158/2006/ND-CP.

6. To annul Clauses 1, 2 and 3, Article 34 of Decree No. 158/2006/ND-CP.

7. To annul Article 46 of Decree No. 158/2006/ND-CP.

8. To annul Article 52 of Decree No. 158/2006/ND-CP.

9. To replace the phrase “Ministry of Trade” with the phrase “Ministry of Industry and Trade” in Articles 4, 7, 9, 10, 12, 13, 16, 18, 32, 34 and 55.

10. To replace the phrase “payment center” with the phrase “clearing payment center” in Articles 26, 27, 28, 39, 41 and 42.

Article 3.Effect

This Decree takes effect on June 1, 2018.

Article 4.Transitional provisions

1. Within 12 months from the effective date of this Decree, goods exchanges that are granted establishment licenses before the effective date of this Decree must satisfy the conditions prescribed in Clause 7, Article 1 of this Decree and are not required to carry out the procedures for grant of establishment licenses again.

2. Past the time limit prescribed in Clause 1 of this Article, any goods exchange that fails to satisfy the required conditions will have its establishment license revoked.

Article 5.Organization of implementation

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC

* The appendices to this Decree are not translated.