Decree No. 85/2010/ND-CP dated August 2, 2010 of the Government on sanctioning of administrative violations in the field of securities and securities market

THE GOVERNMENT

Decree No. 85/2010/ND-CP of August 2, 2010, 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 the June 29, 2006 Law on Securities;

Pursuant to July 2, 2002 Ordinance on Handling of Administrative Violations; the March 8, 2007 and April 2, 2008 Ordinances Amending and Supplementing a Number of Articles of the Ordinance on Handling of Administrative Violations;

At the proposal of the Finance Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Decree specifies administrative violations in the field of securities and securities market, sanctioning forms and levels, and competence and procedures for sanctioning these violations.

Article 2. Subjects of application

Domestic and foreign individuals and institutions (below collectively referred to as individuals and institutions) that intentionally or unintentionally commit violations of the law on securities and securities market which are not serious enough for penal liability examination shall be administratively sanctioned under this Decree, unless otherwise provided for by a treaty to which the Socialist Republic of Vietnam is a contracting party. In this case, the treaty will prevail.

Article 3. Principles for sanctioning administrative violations

1. All administrative violations in the field of securities and securities market must be promptly detected and stopped. The sanctioning of administrative violations in the field of securities and securities market shall be conducted in a swift, just and thorough manner. All consequences of these administrative violations must be remedied under law.

2. An administrative violation in the field of securities and securities market shall be sanctioned only once. Institutions and individuals that commit many administrative violations shall be sanctioned for each violation.

3. The sanctioning of administrative violations in the field of securities and securities market shall be based on the nature and severity of violations and extenuating as well as aggravating circumstances specified in Articles 8 and 9 of the Ordinance on Handling of Administrative Violations before appropriate handling forms and measures are decided.

4. After completely executing sanctioning decisions, sanctioned institutions shall identify individuals who are at fault in these administrative violations in order to determine their legal liabilities and financial obligations under law.

5. The sanctioning of administrative violations in the field of securities and securities market shall be conducted by competent persons under this Decree.

Article 4. Statute of limitations for sanctioning administrative violations

1. The statute of limitations for sanctioning an administrative violation in the field of securities and securities market is 2 years after the violation is committed. Past this time limit, the violation shall not be sanctioned but is still subject to consequence remedies specified this Decree.

2. For an individual who had committed an act of violation of the law on securities and securities market and against whom a legal action was instituted or who was prosecuted or against whom a decision to bring the case for trial according to criminal procedures was issued, but later a decision to terminate the investigation or the case is issued, if his/her act constitutes an administrative violation, he/she shall be administratively sanctioned under this Decree. In this case, the statute of limitations for sanctioning the administrative violation is 3 months after the person with sanctioning competence receives the termination decision and the violation case dossier.

3. Within the time limit specified in Clause 1 or 2 of this Article, if violators commit new acts of violation in the field of securities and securities market or intentionally shirk or obstruct the sanctioning, the statute of limitations specified in Clause 1 or 2 of this Article will not apply. The statute of limitations for sanctioning administrative violations shall be counted from the date the new act of violation is committed or the date the act of shirking or obstructing the sanctioning is terminated.

Article 5. Duration upon the expiration of which a person will be regarded as having never been sanctioned for administrative violation

After 1 year since an individual or institution sanctioned for an administrative violation completely executes the sanctioning decision or since the expiration of the statute of limitations for execution of a sanctioning decision, if that individual or institution does not relapse into violation, he/she/it will be regarded as having never been sanctioned for administrative violation.

Article 6. Sanctioning forms and consequence remedies

1. Principal sanctions:

For each administrative violation in the field of securities and securities market, violators are subject to either of the following principal sanctions:

a/ Caution

Caution shall be imposed for minor administrative violations or those committed for the first time or involving extenuating circumstances and for these administrative violations the sanction of caution is specified herein.

b/ Fine

A specific fine for an administrative violation in the field of securities and securities market is the average level of the fine bracket prescribed for such violation. For a violation involving an extenuating circumstance, the applicable fine level may be lower but must not be lower than the minimum level of the fine bracket. For a violation involving an aggravating circumstance, the applicable fine level may be higher but must not be higher than the maximum level of the fine bracket. For an administrative violation involving both extenuating and aggravating circumstances, depending on the nature and characteristics of these circumstances, competent persons shall decide to apply a fine level higher or lower than the average level or apply the average level of the fine bracket.

2. Additional sanctions:

Depending on the nature and severity of their violations, individuals or institutions that commit violations in the field of securities and securities market may be also subject to one or several of the following additional sanctions:

a/ Confiscation of all illicit amounts earned from the commission of an administrative violation;

b/ Suspension or cancellation of a public offering of securities;

c/ Suspension of operation; revocation of licenses and certificates in the field of securities and securities market, and securities practice certificates.

3. Consequence remedies:

In addition to the principal and additional sanctions specified in Clauses 1 and 2 of this Article, violators may, depending on the nature and severity of their violations, be subject to consequence remedies specified in articles of Chapter II of this Decree.

Chapter II

ADMINISTRATIVE VIOLATIONS, SANCTIONING FORMS AND LEVELS

Section 1. VIOLATIONS OF REGULATIONS ON PUBLIC OFFERING OF SECURITIES

Article 7. Violations of regulations on dossiers for registration of public offering of securities

1. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on issuing institutions, issuance underwriting institutions, issuance consultancy institutions; and institutions and individuals that certify dossiers for registration of public offering of securities containing misleading information or fail to modify their dossiers upon detecting inaccurate information or omit important contents required by regulations to be included in these dossiers.

2. A fine of between VND 150,000,000 and 200,000,000 shall be imposed on issuing institutions, issuance underwriting institutions, issuance consultancy institutions; and institutions and individuals that certify dossiers for registration of public offering of securities containing information which has been intentionally falsified or hides the truth.

3. A fine equal to between 1% and 5% of the total raised money amount shall be imposed on issuing organizations that make or certify dossiers for registration of public offering of securities containing forgeries under Clause 1, Article 121 of the Law on Securities.

4. Additional sanctions:

a/ Suspension of public offering of securities for up to 60 days for application of remedies, for violations specified in Clause 1 of this Article;

b/ Forced cancellation of the public offering, if upon the expiration of the suspension duration specified at Point a of this Clause the violation remains unremedied;

c/ Revocation of the certificate of public offering of securities, for violations specified in Clauses 2 and 3 of this Article;

d/ Confiscation of all amounts illegally earned by violators from their acts of violation specified in Clauses 2 and 3 of this Article.

5. Consequence remedies:

Institutions that conduct public offerings of securities shall withdraw securities they have offered and refund to investors, within 30 days after receiving requests of these investors, securities purchase payments or deposits (if any) plus interests calculated at demand deposit interest rates applied by banks at which these institutions open accounts for security purchase payments or deposits at the time they are sanctioned.

Article 8. Violations of regulations on performance of public offering of securities

1. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an issuing institution that commits either of the following violations:

a/ Failing to disclose an issuance announcement under regulations; or announcing the issuance in the mass media with contents other than required and after a prescribed time limit;

b/ Failing to strictly comply with regulations on use of a frozen account of money amount raised from the offering.

2. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on an issuing institution, issuance underwriting institution or issuance consultancy institution that commits either of the following violations:

a/ Using information outside prospectuses to conduct a market survey before being permitted to conduct a public offering of securities; conducting a market survey in the mass media;

b/ Distributing securities at variance with the offering registration in terms of securities type and volume, time limit for registration of securities purchase and time limit for distribution under regulations.

3. A fine of between VND 100,000,000 and 120,000,000 shall be imposed on an issuing institution that commits either of the following violations:

a/ Conducting an additional issuance of securities without reporting it to or without having obtained the State Securities Commission’s approval;

b/ Conducting an additional issuance of securities without satisfying the specified conditions.

4. A fine of between VND 200,000,000 and 300,000,000 shall be imposed on an issuing institution that commits any of the following violations:

a/ Conducting a public offering of securities without fully satisfying the specified conditions;

b/ Conducting a public offering of securities to found an enterprise, except cases permitted by law;

c/ Conducting a public offering of securities without having registered it with the State Securities Commission under regulations.

5. A fine equal to between one and five times the illegally earned amount shall be imposed on an individual or institution that conducts a public offering of securities without having a certificate of public offering of securities specified in Clause 3, Article 121 of the Law on Securities.

6. Additional sanctions:

a/ Suspension of the public offering of securities for up to 60 days for application of remedies, for violations specified at Point b, Clause 2 of this Article;

b/ Forced cancellation of the public offering or additional issuance, for violations specified in Clauses 3, 4 and 5 of this Article and cases of suspension specified at Point a of this Clause in which violations remain unremedied;

c/ Confiscation of all amounts illegally earned by violators from their acts of violation specified in Clauses 4 and 5 of this Article.

7. Consequence remedies:

Institutions that conduct public offerings of securities shall withdraw securities they have offered and refund to investors, within 30 days after receiving requests of these investors, securities purchase payments or deposits (if any) plus interests calculated at demand deposit interest rates applied by banks at which these institutions open accounts for security purchase payments or deposits at the time they are sanctioned.

Section 2. VIOLATIONS OF REGULATIONS ON PUBLIC COMPANIES

Article 9. Violations of regulations on dossiers for registration of public companies

1. A caution shall be imposed on a public company that submits a dossier for its registration one month behind the deadline prescribed for dossier submission.

2. A fine of between VND 5,000,000 and 10,000,000 shall be imposed on a public company that submits a dossier for its registration between over one month and 12 months behind the deadline prescribed for dossier submission.

3. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a public company that commits either of the following violations:

a/ Failing to submit a registration dossier or submitting a registration dossier over 12 months behind the deadline prescribed for dossier submission;

b/ Declaring untruthful information in its registration dossier.

4. Consequence remedies:

a/ Forced compliance with regulations on public company registration;

b/ Forced cancellation or correction of information, for violations specified at Point b, Clause 3 of this Article.

Article 10. Violations of regulations on obligations of public companies

1. A caution or a fine of between VND 5,000,000 and 10,000,000 shall be imposed on a public company that fails to comply with regulations on corporate governance.

2. A fine of VND 20,000,000 shall be imposed on a public company that commits any of the following violations:

a/ Failing to audit annual financial statements;

b/ Failing to register securities in a centralized depository at the Securities Depository Center;

c/ Conducting securities registration or depository at variance with regulations on securities registration and depository at the Securities Depository Center, thus triggering a complaint or lawsuit.

3. Consequence remedy:

Forced compliance with regulations on obligations of public companies.

Section 3. VIOLATIONS OF REGULATIONS ON SECURITIES LISTING

Article 11. Violations of regulations on securities listing at the Stock Exchanges

1. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a listing institution or listing consultancy institution; institution or individual that certifies listing registration dossiers that commits either of the following violations:

a/ Certifying listing registration dossiers containing untruthful information or failing to modify dossiers upon detecting inaccurate information or omitting important contents required to be included in dossiers;

b/ The listing institution changes the volume of stocks to be listed without carrying out procedures for changing the additional listing registration.

2. A fine of between VND 150,000,000 and 200,000,000 shall be imposed on a listing institution or listing consultancy institution; institution or individual that certifies listing dossiers containing misleading or truth-hiding information.

3. A fine of VND 500,000,000 shall be imposed on a listing institution or listing consultancy institution; institution or individual that makes or certifies forged dossiers for securities listing.

4. Additional sanction:

Forced delisting, for violations specified in Clauses 2 and 3 of this Article.

5. Consequence remedy:

Forced cancellation or correction of information.

Section 4. VIOLATIONS OF REGULATIONS ON ORGANIZATION OF THE SECURITIES TRADING MARKET

Article 12. Violations of regulations on organization of the securities trading market

1. A fine of VND 500,000,000 shall be imposed on an institution or individual that organizes a securities trading market in contravention of law but earns no illegal amount.

2. A fine equal to between one to five times the illegal earning amount as specified in Clause 1, Article 124 of the Securities Law which must not be lower than the fine specified in Clause 1 of this Article shall be imposed on an institution or individual that organizes a securities trading market in contravention of law and earns illegal amounts.

3. Additional sanctions:

a/ Forced cancellation of the illegal organization of a securities trading market;

b/ Confiscation of all illegal earning amounts earned from violations specified in Clause 2 of this Article;

c/ Suspension of operation; revocation of licenses, certificates or practice certificates in the field of securities and securities market, for institutions and individuals that commit acts specified in this Article.

Article 13. Violations of regulations on listing management by the Stock Exchange

1. A fine of between VND 70,000,000 and 90,000,000 shall be imposed on the Stock Exchange for failing to detect or promptly handle listing institutions which fail to maintain all specified listing conditions; failing to warn or disclose information as prescribed, thereby affecting market prices of securities.

2. A fine of VND 100,000,000 shall be imposed on a stock exchange for accepting a listing or delisting in contravention of regulations.

3. Consequence remedy:

Forced compliance with the law on listing management by the Stock Exchange.

Article 14. Violations of regulations on management of members of the Stock Exchange

1. A fine of between VND 70,000,000 and 90,000,000 shall be imposed on the Stock Exchange for failing to detect trading members which fail to maintain all the conditions on members or strictly comply with regulations on member obligations under Clauses 2 and 4, Article 39 of the Securities Law.

2. A fine of VND 100,000,000 shall be imposed on a stock exchange for recognizing or denying the membership of a securities company in contravention of regulations.

3. Consequence remedy:

Forced compliance with the law on management of members of the Stock Exchange.

Article 15. Violations of regulations on trading, supervision and disclosure of information by the Stock Exchange

1. A fine of between VND 100,000,000 and 120,000,000 shall be imposed on the Stock Exchange for committing any of the following violations:

a/ Organizing the trading of securities of a new type, changing or applying new trading methods, or commissioning a new trading system without approval of the State Securities Commission;

b/ Failing to detect or promptly handle violations of trading regulations or failing to comply with the prescribed process of supervising trading activities, thus letting violations occur and affecting the fairness, publicity and transparency of the market;

c/ Failing to suspend, stop or cancel securities transactions under trading regulations of stock exchanges in cases of necessity to protect investors; failing to promptly warn or disclose information on fluctuations which exert serious impacts on the securities market under regulations.

2. Consequence remedy:

Forced compliance with the law on trading, supervision and disclosure of information by the Stock Exchange.

Article 16. Violations of regulations on securities trading registration

1. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a securities company for committing any of the following violations:

a/ Failing to provide to customers adequate, timely and accurate information on securities registered for trading, institutions registered for trading and trading activities under regulations;

b/ Failing to regularly update information on traded securities, institutions registered for trading and information disclosed by management agencies and trading regulations of the Stock Exchange on the information disclosure media under regulations;

c/ Failing to fully fulfill the obligation to report and disclose information on transactions in securities registered at the Stock Exchange under regulations.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an institution registered for trading or securities company; an institution or individual involved in the compilation or certification of trading registration dossiers containing untruthful information.

3. A fine of between VND 150,000,000 and 200,000,000 shall be imposed on an institution registered for trading or a securities company; an institution or individual involved in the compilation or certification of trading registration dossiers containing misleading or truth-hiding information.

4. A fine of between VND 400,000,000 and 500,000,000 shall be imposed on an institution registered for trading or a securities company; an institution or individual involved in the compilation or certification of forged dossiers for securities trading registration.

5. Additional sanction:

Forced trading deregistration, for violations specified in Clauses 3 and 4 of this Article.

6. Consequence remedy:

Forced cancellation or correction of information.

Section 5. VIOLATIONS OF REGULATIONS ON SECURITIES BUSINESS ACTIVITIES AND SECURITIES PRACTICE CERTIFICATES

Article 17. Violations of regulations on establishment and operation certificates

1. A fine of between VND 5,000,000 and 10,000,000 shall be imposed on a securities company, fund management company or securities investment company; a Vietnam-based branch of a foreign securities company or fund management company which uses the name of the company, branch, representative office or transaction bureau in contravention of regulations; or renames or relocates the head office, branch, representative office or transaction bureau without approval; or fails to shut down order-taking agents under regulations.

2. A fine of VND 50,000,000 shall be imposed on a securities company, fund management company or securities investment company; a Vietnam-based branch of a foreign securities company or fund management company which commits either of the following violations:

a/ Commencing operation without having fully satisfied the conditions specified by law;

b/ Setting up or shutting down a branch, representative office or transaction bureau without approval.

3. A fine of VND 70,000,000 shall be imposed on a securities company or securities investment fund management company which conducts its separation, splitting up, merger, consolidation or transformation or dissolves itself before schedule or suspends its operation without approval, unless otherwise provided for by law.

4. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on a securities company, fund management company or securities investment company; a Vietnam-based branch of a foreign securities company or fund management company or an institution or individual that commits any of the following violations:

a/ Conducting securities business or providing securities services without license or approval;

b/ Lending, leasing or transferring its license;

c/ Operating not in compliance with its license;

d/ Erasing or modifying its license;

e/ Compiling or certifying a dossier of application for an establishment and operation license or its supplementation, which contains misleading information.

5. Additional sanctions:

a/ Confiscation of all illegal amounts earned from violations specified at Point a, Clause 2, and Clause 4 of this Article;

b/ Suspension of operation for up to 60 days, for violations specified at Points c and e, Clause 4 of this Article;

c/ Revocation of the establishment and operation license of the securities company, fund management company or securities investment company; a Vietnam-based branch of a foreign securities company or fund management company, for violations specified at Points b and d, Clause 4 of this Article and violations subject to operation suspension specified at Point b of this Clause which remain unremedied.

Article 18. Violations of regulations on operation of securities companies

1. A fine of between VND 10,000,000 and 30,000,000 shall be imposed on a securities company which commits any of the following violations:

a/ Taking orders of customers in contravention of regulations; failing to archive adequate evidence proving the placement of orders by customers;

b/ Failing to enter into written contracts with customers when providing services to them;

c/ Failing to promulgate sufficient professional processes; failing to comply with professional processes;

d/ Failing to comply with regulations on corporate governance.

2. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a securities company which commits any of the following violations:

a/ Failing to organize an inquiry into and collect sufficient information on the financial status, investment objectives, risk assumption capacity of customers; giving to its customers investment recommendations or advice incompatible with criteria for assessment and classification of customers based on their risk assumption capacity, unless these customers fail to provide sufficient information; failing to provide sufficient and truthful information to its customers;

b/ Anticipating or guaranteeing its customers of a ratio of earnings or profits to their investments or securing its customers of no loss incurred; deciding on investments on its customers’ behalf, unless it is so provided for by law;

c/ Failing to adequately archive trading documents; failing to record in detail and accurately its and its customers’ transactions under regulations.

3. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a securities company which commits any of the following violations:

a/ Failing to separately manage securities of each investor or money and securities of investors from its own money and securities under regulations; receiving securities transaction money directly from its customers;

b/ Executing orders of its customers when these customers do not possess sufficient money and securities as required by law, unless otherwise provided for by law;

c/ Failing to buy professional liability insurance for its securities business operation and set up an adequate investor protection fund to pay compensations for investors’ damage caused by technical problems and errors made by their staff;

d/ Violating regulations on conditions and limitations on securities issuance underwriting;

e/ Disclosing customer information, unless it is so provided for by law or requested by state management agencies;

f/ Misleading its customers and investors as to securities prices.

4. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on a securities company which commits any of the following violations:

a/ Failing to organize or set up a system of internal control and risk management; failing to supervise and prevent conflicts of interests within the company and in transactions with affiliated persons under law;

b/ Failing to adhere to the prescribed principle of prioritizing orders of its customers over its own orders; acting against orders of investors;

c/ Failing to comply with regulations on the lending limit of securities companies;

d/ Investing in or contributing capital to other companies in contravention of law;

e/ Increasing or reducing its charter capital in contravention of law;

f/ Conducting transactions resulting a change in its share or contributed capital ownership in contravention of law.

5. A fine of between VND 100,000,000 and 150,000,000 shall be imposed on a securities company which commits either of the following violations:

a/ Selling or letting its customers sell securities when possessing no securities or lending securities to its customers, unless otherwise provided for by law;

b/ Using its capital or assets to provide loans in contravention of law.

6. Additional sanctions:

a/ Suspension of operation for up to 60 days, for violations specified at Point a, Clause 3, Points b, d and e, Clause 4, and Clause 5 of this Article;

b/ Revocation of the establishment and operation license of the securities company in case the violation remains unremedied after the expiration of the operation suspension duration specified at Point a of this Clause;

c/ Confiscation of all illegal amounts earned from violations specified in Clauses 4 and 5 of this Article.

7. Consequence remedy:

Forced compliance with regulations on operation of securities companies.

Article 19. Violations of regulations on operation of fund management companies

1. A fine of between VND 5,000,000 and 10,000,000 shall be imposed on a fund management company which commits any of the following violations:

a/ Committing violations specified at Points b, c and d, Clause 1, Article 18 of this Decree;

b/ Failing to assure separation of its organization from its operation or to divide the authority between the information technology system and the reporting system for assuring separation of its asset management from its own business operations and business operations of other institutions being affiliated persons;

c/ Failing to provide timely, sufficient and truthful information to supervisory banks under regulations.

2. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a fund management company which commits any of the following violations:

a/ Committing violations specified in Clause 2, Article 18 of this Decree;

b/ Failing to comply with its charter or investment portfolio management contracts, thereby causing damage to investors;

c/ Failing to take remedies to adjust the liquid capital level under regulations.

3. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a fund management company which commits any of the following violations:

a/ Committing violations specified at Points e and f, Clause 3, Article 18 of this Decree;

b/ Failing to distributing transaction assets under regulations upon conducting transactions for funds, securities investment companies, trusting investors and itself;

c/ Requesting, demanding or receiving in the capacity as an individual or its own capacity any benefits for conducting transactions in assets of funds, securities investment companies or trusting investors other than prescribed charges and fees;

d/ Acting as a buying or selling partner in a transaction in assets for trusted investment in contravention of law;

e/ Failing to keep the prescribed investment ratio or failing to readjust the investment portfolio under law;

f/ Failing to put into the depository and separately manage assets and capital of each trusting investor, fund or securities investment company managed by it and its assets on accounts and independent sub-accounts.

4. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on a fund management company which commits any of the following violations:

a/ Failing to comply with the prescribed pricing process or wrongly pricing fund certificates, or wrongly valuating the net assets or investment portfolio of a fund, securities investment company or trusting investor in order to stabilize the fund certificate price or the value of the investment portfolio on the market;

b/ Conducting a transaction resulting a change in its share or contributed capital ownership, or increasing or reducing its charter capital in contravention of regulations;

c/ Failing to comply with regulations on limitations on operation of fund management companies, their affiliated persons and staff;

d/ Borrowing loans to finance operation of an investment fund in contravention of law.

5. A fine of between VND 100,000,000 and 150,000,000 shall be imposed on a fund management company which commits any of the following violations:

a/ Using assets of an investment fund or a securities investment company to invest in such investment fund or securities investment company or other investment funds or securities investment companies established and operating in Vietnam or to contribute capital to a joint venture or association or to make financial investments in itself and its affiliated persons;

b/ Using capital sources in contravention of law to make financial investments, purchase stocks and bonds, or make contributions to found or hold shares of enterprises; borrowing or providing loans in contravention of regulations;

c/ Using assets of a securities investment fund or company or trusted assets to pay debts, provide loans or guarantee any loan of the company, its affiliated persons or any partner;

d/ Providing loans or consigning its capital to institutions or individuals being its affiliated persons for management;

e/ Intentionally shirking its legal obligations, limiting the scope of its compensation and financial liability, transferring risks from it to investors or unfairly forcing investors to pay compensations.

6. Additional sanctions:

a/ Suspension of operation for up to 60 days, for violations specified in Clauses 4 and 5 of this Article;

b/ Revocation of the establishment and operation license of the fund management company in case its violation remains unremedied after the expiration of the operation suspension duration specified at Point a of this Clause;

c/ Confiscation of all illegal amounts earned from violations specified at Points c, d and e, Clause 3, and Clauses 4 and 5 of this Article.

7. Consequence remedy:

Forced compliance with regulations on operation of fund management companies.

Article 20. Violations of regulations on representative offices of securities business institutions

1. A fine of between VND 10,000,000 and 30,000,000 shall be imposed on an institution or individual for failing to carry out procedures for adjusting, modifying or re-granting an operation registration certificate or terminating operation of a representative office under regulations.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an institution or individual that commits any of the following violations:

a/ Making a dossier of application for a representative office operation registration certificate, which contains misleading information;

b/ Commencing the operation of a representative office without having fully satisfied prescribed conditions or made operation registration under regulations, or operating without obtaining a representative office operation registration certificate;

c/ Operating for improper purposes or at variance with the operation registration certificate;

d/ Erasing or modifying contents of the representative office operation registration certificate; acting as a representative for another institution; or transferring the representative office operation registration certificate to another institution or individual.

3. A fine of between VND 70,000,000 and 90,000,000 shall be imposed on a representative office of a securities business institution for conducting securities business activities, managing capital and assets for foreign investors or securities business institutions in contravention of law.

4. Additional sanctions:

a/ Suspension of operation of the representative office for up to 45 days, for violations specified in Clauses 2 and 3 of this Article;

b/ Revocation of the representative office operation registration certificate in case the violation remains unremedied after the expiration of the operation suspension duration specified at Point a of this Clause;

c/ Confiscation of all illegal amounts earned from violations specified in Clauses 2 and 3 of this Article.

Article 21. Violations of regulations on setting up of member funds

1. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a fund management company; an institution or individual that makes or certifies a dossier for setting up a member fund, which contains misleading information.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a fund management company; an institution or individual that commits any of the following violations:

a/ Failing to report on the setting up of a member fund under regulations or setting up a member fund without satisfying prescribed requirements;

b/ Using the mass media to advertise, call for capital contribution or probe the market  in the process of setting up a member fund;

c/ Increasing or reducing the charter capital in contravention of regulations;

d/ Failing to report or to promptly report on risks or fund asset losses.

3. Consequence remedy:

Forced cancellation or correction of information.

Article 22. Violations of regulations on securities practice

1. A fine of between VND 5,000,000 and 10,000,000 shall be imposed on a securities company, fund management company or securities investment company which commits either of the following violations:

a/ Failing to report or to promptly report on change of its practice staff;

b/ Failing to employ sufficient securities practitioners for each business operation under regulations; employing persons possessing securities practice certificates to perform operations incompatible with their practice certificates or to work in different professional positions at the same time.

2. A fine of between VND 10,000,000 and 30,000,000 shall be imposed on a securities company, fund management company or securities investment company which commits any of the following violations:

a/ Employing persons possessing no securities practice certificate to perform operations which require securities practice certificates under law;

b/ Failing to change or remove from professional positions persons possessing securities practice certificates who have their practice certificates revoked under decisions of competent agencies;

c/ Failing to report or to promptly report on practitioners detected to have committed violations specified in Clauses 3 and 4 of this Article.

3. A fine of VND 50,000,000 shall be imposed on a securities practitioner who commits any of the following violations:

a/ Concurrently working for another institution which has ownership relations with the securities company or fund management company at which he/she is working;

b/ Concurrently working for another securities company or fund management company;

c/ Concurrently acting as the director or director general of an institution making a public offering of securities or an issuing institution, unless this institution is a securities company;

d/ Opening a securities trading account at a securities company other than the securities company at which he/she is working;

e/ Performing securities practice without working for a securities company, fund management company or securities investment company, unless otherwise provided for by law.

4. A fine of VND 70,000,000 and 100,000,000 shall be imposed on a securities company, a staff member of a securities company or a securities practitioner that commits any of the following violations:

a/ Lending money or securities on a customer’s account or putting securities of a customer in a pledge or using a customer’s account or money or assets on such account without this customer’s written authorization;

b/ Lending or leasing a securities practice certificate;

c/ Erasing or modifying a securities practice certificate;

d/ Changing the priority order of time upon executing orders of customers and staff members of a securities company.

5. Additional sanctions:

a/ Revocation of the establishment and operation license of the securities company, for violations specified in Clause 4 of this Article;

b/ Revocation of the securities practice certificate, for violations specified in Clauses 3 and 4 of this Article;

c/ Confiscation of illegal amounts earned from violations specified in Clause 4 of this Article.

6. Consequence remedy:

Forced compliance with regulations on securities practice.

Section 6. VIOLATIONS OF REGULATIONS ON SECURITIES TRADING

Article 23. Violations on regulations on transactions of founding shareholders, internal shareholders, major shareholders, persons authorized to disclose information, and transactions in fund certificates of affiliated persons

1. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on an institution or individual or a group of affiliated persons that holds at least 5% of voting stocks of a public company and conducts a transaction, including donation, inheritance, transfer or receipt of transferred right to purchase additionally issued stocks and other cases of conducting transactions under law or conducting no transaction but in which there is a change in the volume of held stocks exceeding 1% of the volume of outstanding stocks of the same type, but fails to report or to report within the prescribed time limit on the transaction to the public company, the State Securities Commission and the Stock Exchange.

2. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a founding shareholder, a member of the Board of Directors or the Control Board, a director or director general, a deputy director or deputy director general, a chief accountant, a person authorized to disclose information of a listing institution or an institution registered for trading; a founder or member of the representative board of a securities investment fund, a member of the Board of Directors, the Control Board or the Directorate of a fund management company, an executive officer of a public investment fund, a person authorized to disclose information of a public investment fund, or an affiliated person of such person, an institution or individual that commits either of the following violations:

a/ Failing to report or to report adequately and accurately or to report within the prescribed time limit before conducting a transaction in stocks of a listing institution or an institution registered for trading, or a transaction in his/her/its own fund’s certificates, including the case of transfer not through the trading system of the stock exchange; failing to report or to report within the prescribed time limit on transaction results or on the failure to conduct a transaction;

b/ Transferring stocks in contravention of regulations.

3. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a member of the Board of Directors, a director or director general, a deputy director or deputy director general, a chief accountant, a person in charge of finance or accounting or another manager in the managerial apparatus of a public company who purchases and sells or sells and purchases securities of a public company not within the prescribed time limit.

4. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an institution or individual or a group of affiliated persons that becomes a major shareholder of a public company and commits any of the following violations:

a/ Becoming a major shareholder of the public company without reporting or failing to report within the prescribed time limit on the change to the public company, the State Securities Commission and the stock exchange at which stocks of this public company are listed;

b/ Failing to report adequately or accurately on major shareholder ownership under regulations;

c/ Failing to submit or to submit within the prescribed time limit a report on the first change in the volume of held stocks, making the reporting institution, individual or group of affiliated persons no longer a major shareholder of the public company, to the company, the State Securities Commission and the stock exchange.

5. Consequence remedy:

Institutions and individuals that violate Point b, Clause 2 and Clause 3 of this Article shall refund all profit amounts earned from their violations to public companies.

Article 24. Violations of regulations on stock trading and holding by investors

1. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an individual or institution that commits any of the following violations:

a/ Breaching the prescribed stockholding rate applicable to foreign investors; violating the regulation on operation of foreign investors on the Vietnamese securities market;

b/ Violating regulations on the rate of ownership of equity capital or contributed capital of securities companies and fund management companies;

c/ Impersonating other entities or renaming it/him/herself for conducting securities transactions.

2. Additional sanction:

Confiscation of all illegal amounts earned from violations specified in Clause 1 of this Article.

3. Consequence remedy:

Forced transfer of stocks to reduce the holding rate to the prescribed one.

Article 25. Securities trading frauds

1. A fine of VND 500,000,000 shall be imposed on an individual or institution that commits either of the following violations:

a/ Directly or indirectly participating in scams, fabricating untruthful information or omitting necessary information, thus causing a serious misunderstanding and affecting the securities issuance, listing, trading, business, investment and service provision;

b/ Directly or indirectly participating in the disclosure of misleading information for the purpose of instigating or provoking securities purchase or sale, or failing to promptly and adequately disclose information on occurrences which might affect market securities prices.

2. Additional sanctions:

a/ Confiscation of all illegal amounts earned from violations specified in Clause 1 of this Article;

b/ Revocation of licenses or certificates in the field of securities and securities market, securities practice certificates, for violations specified in Clause 1 of this Article.

3. Consequence remedy:

Forced cancellation and correction of information.

Article 26. Violations of regulations on insider transactions in securities trading

1. A fine of between VND 150,000,000 and 200,000,000 shall be imposed on an individual or institution that commits either of the following violations:

a/ Using insider information for buying or selling securities for him/her/itself or for a third party;

b/ Disclosing or providing insider information or providing consultancy to a third party to buy or sell securities on the basis of insider information.

2. Additional sanction:

Confiscation of all illegal amounts earned from violations specified in Clause 1 of this Article.

Article 27. Acts of manipulating securities prices

1. A fine of between VND 200,000,000 and 300,000,000 shall be imposed on an individual or institution that commits any of the following violations:

a/ Acting in collusion with others in securities trading in order to create sham supply and demand;

b/ Trading in securities through conniving with or enticing others into placing orders to purchase and sell securities back and forth, thereby seriously impacting the securities supply and demand and manipulate their prices;

c/ Combining or using other trading tricks to manipulate securities prices.

2. Additional sanction:

Confiscation of all illegal amounts earned from violations specified in Clause 1 of this Article.

Article 28. Violations of regulations on public bids

1. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an institution or individual that makes bids and commits any of the following violations:

a/ Directly or indirectly purchasing or pledging to purchase stocks currently bid for outside a bidding;

b/ Selling or pledging to sell stocks they are bidding for;

c/ Unfairly treating owners of the same type of stocks put up for bids;

d/ Providing information only to a certain number of shareholders or providing information to different shareholders at different extents and different points of time;

e/ Conducting a public bidding at a time in contravention of law;

f/ Selling a stock volume it/he/she has purchased within 6 months after the completion of a public bidding;

g/ Failing to apply public bid conditions to all shareholders of the public company;

h/ Refusing to purchase stocks from any shareholders under public bid conditions;

i/ Purchasing stocks under terms different from those stated in the public bid registration.

2. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on an institution or individual that commits any of the following violations:

a/ Failing to make public bids under regulations or making a public bid without obtaining written approval of the State Securities Commission;

b/ Failing to disclose information on public bids under regulations;

c/ Changing the announced intention to make public bids, unless otherwise provided for by law.

3. Additional sanctions:

a/ Suspension of a public bidding for up to 45 days, for violations specified in Clauses 1 and 2 of this Article;

b/ Cancellation of a public bidding in case of failure to remedy violations after the expiration of the suspension duration specified at Point a of this Clause.

4. Consequence remedy:

Forced compliance with regulations on public bids.

Article 29. Violations of regulations on redemption of stocks or sale of treasury stocks

1. A fine of between VND 10,000,000 and 30,000,000 shall be imposed on a public company, securities company or fund management company which commits either of the following violations:

a/ Failing to report accurately, adequately and promptly on redemption of stocks, sale of treasury stocks and transaction results under regulations;

b/ Disclosing inaccurate, inadequate and untimely information on redemption of stocks, sale of treasury stocks and transaction results under regulations.

2. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a public company, securities company or fund management company which commits any of the following violations:

a/ Redeeming stocks or selling treasury stocks without reporting or disclosing information thereon under regulations or without satisfying all the prescribed conditions;

b/ Failing to comply with regulations on redemption sources and interval between the latest purchase and the latest sale of treasury stocks;

c/ Redeeming stocks in cases in which redemption is banned by law;

d/ Changing the intention or plan on redemption of stocks or sale of treasury stocks as reported or disclosed to the public in contravention of law; redeeming or selling treasury stocks at variance with reported or disclosed information.

3. Additional sanction:

Confiscation of all illegal amounts earned from violations specified in Clause 2 of this Article.

4. Consequence remedy:

Forced cancellation and correction of information.

Section 7. VIOLATIONS OF REGULATIONS ON SECURITIES REGISTRATION, DEPOSITORY, CLEARING AND PAYMENT, ON SUPERVISORY BANKS AND DEPOSITORY BANKS

Article 30. Violations of regulations on registration of depository operation

1. A fine of VND 30,000,000 shall be imposed on a securities company or commercial bank which fails to carry out registration of a depository member or a depository member’s branch and securities depository operation within the prescribed time limit.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a securities company or commercial bank which commits either of the following violations:

a/ Compiling a dossier for registration of securities depository operation or a depository branch containing misleading information;

b/ Conducting securities depository operation without fully meeting the specified conditions or obtaining a securities depository operation registration certificate or an approval of the State Securities Commission.

3. Additional sanctions:

a/ Suspension of depository operation for up to 90 days, for violations specified in Clause 2 of this Article;

b/ Revocation of securities depository operation registration certificate in case violations remain unremedied after the expiration of the suspension duration specified at Point a of this Clause;

c/ Confiscation of all illegal amounts earned from violations specified at Point b, Clause 2 of this Article.

Article 31. Violations of regulations on securities registration, depository, clearing and payment

1. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on the Securities Depositary Center, a securities depository member or payment bank that commits any of the following violations:

a/ Organizing securities registration, depository, clearing and payment without satisfying specified conditions on physical and technical foundations for securities registration, depository, clearing and payment activities;

b/ Failing to completely develop operational and risk management processes for each professional operation under regulations;

c/ Failing to supply adequate, timely and accurate lists of owners and shareholders and relevant documents upon valid requests of public companies and in compliance with current regulations; failing to promptly and adequately notify benefits arising from deposited securities of customers.

2. A fine of between VND 70,000,000 and 90,000,000 shall be imposed on the Securities Depositary Center, a securities depository member or a staff member of these institutions that commits any of the following violations:

a/ Accepting or canceling a depository membership in contravention of regulations;

b/ Violating regulations on securities preservation and keeping or regulations on securities registration, depository, clearing and payment;

c/ Failing to manage securities deposited by customers at the Securities Depositary Center or a depository member separately from assets of the Center or depository member; failing to open a securities depository account for each customer and to manage separately assets of each customer.

3. A fine of between VND 100,000,000 and 120,000,000 shall be imposed on the Securities Depositary Center, a securities depository member and a staff member of these institutions that commits any of the following violations:

a/ Violating regulations on accounting on securities depository accounts, time limit for securities payment or ownership transfer; or modifying, losing or forging documents in securities payment or ownership transfer;

b/ Using securities of customers in interest of other institutions and individuals or for its own benefit;

c/ Conducting a transaction in securities which have not been accounted by the Securities Depositary Center into a member’s securities trading account, unless otherwise provided for by law;

d/ Failing to devise measures to protect the database and keep original documents on securities registration, depository, clearing and payment under regulations;

e/ Violating regulations on confidentiality of customers’ depository accounts.

4. Additional sanctions:

a/ Suspension of depository operation for up to 90 days, for depository members committing violations specified at Points a, b, d and e, Clause 3 of this Article;

b/ Revocation of securities depository operation registration certificates in case violations remain unremedied after the expiration of the suspension duration specified at Point a of this Clause;

c/ Confiscation of all illegal amounts earned from violations specified in Clause 3 of this Article.

5. Consequence remedy:

Forced compliance with regulations on securities registration, depository, clearing and payment.

Article 32. Violations on regulations on responsibilities of supervisory banks and depository banks

1. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a supervisory bank or depository bank which commits any of the following violations:

a/ Failing to conduct the depository of assets of each fund or trusting customer separately from its own assets under regulations;

b/ Failing to properly and fully perform its obligations as prescribed in the supervision or depository contract, the fund charter and by law;

c/ Failing to make and archive dossiers and documents under regulations; failing to record in an accurate and detailed manner transactions of a company, investment fund, trusting investor or securities investment company under regulations;

d/ Failing to observe regulations on reporting and information disclosure and to report promptly on abnormal matters arising in depository or supervisory operations; failing to provide timely, adequate and accurate information to the fund management company, audit firm or functional management agencies under regulations;

e/ Failing to report to the State Securities Commission on member(s) of the Directorate assigned to take charge of securities depository, registration and clearing payment and professional staff members; failing to assure that the section providing the service of determining net asset values is staffed with certified auditors or accountants under regulations.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a depository bank which commits any of the following violations:

a/ Conducting the depository operation without satisfying the condition of physical and technical foundations or developing operational and risk management processes to secure the fulfillment of its obligations under law;

b/ Failing to conduct timely and accurate collection, payment, settlement and transfer of money and securities under regulations;

c/ Using money and assets of a fund or trusting investor for improper purposes or in contravention of the fund charter, the depository contract and current regulations;

d/ Paying for transactions not in accordance with the fund charter, entrustment contract and depository contract;

e/ Failing to properly, adequately and promptly execute orders or other lawful instructions of the fund management company and supervisory bank and to exercise rights arising in exercising rights and performing obligations related to the ownership of assets of the fund or trusting investor;

f/ Failing to adequately, accurately and promptly implement regulations on asset liquidation and plans on handling of remaining assets; failing to report to the State Securities Commission on necessary information relating to fund dissolution;

g/ Violating regulations on obligations of depository members.

3. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a supervisory bank, a member of the Board of Directors, a director or deputy director, a director general or deputy director general, or a professional staff member who commits any of the following violations:

a/ Being an affiliated person or participating in the management and administration of a fund management company or having an ownership, capital contribution, share holding, borrowing or lending relation with a fund management company or securities investment company and vice versa;

b/ Being a partner in asset transactions of a fund or securities investment company;

c/ Failing to supervise operation or limit investment of a fund made by a fund management company under law;

d/ Failing to report or to promptly report to the State Securities Commission on an error or a violation of a fund management company upon detecting it;

e/ Failing to promptly notify a functional management agency of the fact that it/he/she is an affiliated person or has an ownership, capital contribution, share holding, borrowing or lending relation with a fund management company or securities investment company and vice versa;

f/ Failing to separate the section providing the service of determining net asset values  from the supervisory section and the section in charge of making, archiving and updating the investor register in terms of operation, information technology system and reporting system;

g/ Failing to fully discharge the responsibility of a supervisory bank in reports on assets and operation of a fund made by a fund management company; certifying an inaccurate or erroneous asset report of a public fund or securities investment company or a report on determination of net asset values made by a fund management company or securities investment company.

4. Additional sanctions:

a/ Suspension of securities depository operation for up to 30 days, for violations specified at Point c, Clause 2 of this Article;

b/ Revocation of the securities depository operation registration certificate in case violations remain unremedied after the expiration of the suspension duration specified at Point a of this Clause;

c/ Confiscation of all illegal amounts earned from violations specified at Point c, Clause 3, and Points a and b, Clause 3 of this Article.

Section 8. VIOLATIONS OF REGULATIONS ON INFORMATION DISCLOSURE AND REPORTING

Article 33. Violations of regulations on information disclosure

1. A caution or a fine of between VND 5,000,000 and 10,000,000 shall be imposed on an issuing institution, a public company, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company, a stock exchange or the Securities Trading Center, or an institution or individual that commits either of the following violations:

a/ Disclosing information not in a set form;

b/ Failing to register the person authorized to disclose information; failing to notify or to notify within the prescribed time limit the change of this person under regulations.

2. A fine of between VND 10,000,000 and 30,000,000 shall be imposed on an issuing institution, a public company, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company, a stock exchange or the Securities Trading Center, or an institution or individual that commits any of the following violations:

a/ Organizing information disclosure in information disclosure media other than those specified by law;

b/ Failing to duly authorize an information discloser under law;

c/ Failing to build a website and to update disclosed information on this website under law;

d/ Failing to preserve and archive disclosed information under law.

3. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an issuing institution, a public company, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company, a stock exchange or the Securities Trading Center, or an institution or individual that commits either of the following violations:

a/ Failing to disclose information under regulations or upon request; failing to disclose   timely and adequate information under regulations;

b/ Failing to certify or correct information or failing to do so within the prescribed time limit upon receiving information affecting securities prices or upon receiving a request of the State Securities Commission for information certification or correction.

4. A fine of between VND 70,000,000 and 90,000,000 shall be imposed on an issuing institution, a public company, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company, a stock exchange or the Securities Trading Center, or an institution or individual that commits any of the following violations:

a/ Failing to disclose information or to disclose timely and adequate information upon occurrence of an abnormal event subject to information disclosure under law;

b/ Disclosing misleading information;

c/ Revealing secret documents and data pertaining to information banned from disclosure or not yet disclosed.

5. Consequence remedy:

Forced cancellation or correction of information.

Article 34. Violation of reporting regulations

1. A caution or a fine of between VND 5,000,000 and 10,000,000 shall be imposed on the Stock Exchange, the Securities Depositary Center, a public company, an issuing institution, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company or a supervisory bank, or an institution or individual that commits either of the following violations:

a/ Failing to report to the State Securities Commission or the Stock Exchange on disclosed information under regulations;

b/ Making a report not in a set form.

2. A fine of between VND 10,000,000 and 30,000,000 shall be imposed on the Stock Exchange, the Securities Depositary Center, a public company, an issuing institution, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company or a supervisory bank, or an institution or individual that commits either of the following violations:

a/ Failing to report adequately or within a prescribed time limit;

b/ Failing to preserve or archive reported information under law.

3. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on the Stock Exchange, the Securities Depositary Center, a public company, an issuing institution, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company or supervisory bank, or an institution or individual that commits either of the following violations:

a/ Failing to report under regulations or upon requests;

b/ Making a report containing misleading information.

4. A fine of between VND 70,000,000 and 90,000,000 shall be imposed on the Stock Exchange, the Securities Depositary Center, a public company, an issuing institution, a listing institution, an institution registered for trading, a securities company, a fund management company, a securities investment company or a supervisory bank, or an institution or individual that commits either of the following violations:

a/ Failing to report or to promptly report upon occurrence of an abnormal event which might seriously affect its financial capability or securities trading, business or service activities;

b/ Ceasing its operation without reporting on it.

5. Consequence remedy:

Forced correction of misleading information.

Section 9. VIOLATIONS OF REGULATIONS ON AUDIT OF SECURITIES ISSUING, LISTING OR TRADING INSTITUTIONS

Article 35. Violations of regulations on audit of securities issuing, listing or trading institutions

1. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on an audit firm or auditor that commits either of the following violations:

a/ Failing to notify an institution issuing, a listing or trading in securities of the latter’s failure to comply with regulations concerning audited financial statements and to request this institution to take measures to prevent or remedy its violation in the auditing process;

b/ Failing to explain or provide information and data on auditing operations at the request of the State Securities Commission.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on an audit firm or auditor that commits either of the following violations:

a/ Failing to record in an audit report its/his/her opinions on errors or violations of the audited institution which are left unhandled as required by audit standards;

b/ Failing to notify or to promptly notify the audited unit and a third party of the audit as required by audit standards; or failing to report or to promptly report to the State Securities Commission upon suspicion or detection of a material error or violation caused by the audited institution’s failure to comply with regulations concerning audited financial statements after an audit report is issued.

3. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on an audit firm or auditor that fails to make a truthful, accurate and informatively sufficient audit report under regulations.

4. Additional sanction:

Suspension for a definite duration or cancellation of the status of audit firms and auditors accredited for audit, for violations specified in Clauses 1, 2 and 3 of this Article.

Section 10. VIOLATIONS OF REGULATIONS ON INSPECTION OR EXAMINATION BY COMPETENT STATE AGENCIES

Article 36. Acts of obstructing inspection or examination

1. A fine of between VND 30,000,000 and 50,000,000 shall be imposed on a public company, an issuing institution, a listing institution, a securities company, a fund management company, a securities investment company or a supervisory bank, the Stock Exchange, the Securities Depositary Center, or an institution or individual involved in securities and securities market activities that commits any of the following violations:

a/ Refusing to provide information and documents; supplying inadequate and untimely information, documents and e-data to an inspection or examination team or competent person;

b/ Obstructing, causing difficulties for or shirking inspection or examination by competent persons;

c/ Intentionally delaying or shirking the execution of or failing to execute administrative decisions of competent persons; failing to realize requests, abide by conclusions or execute decisions of an inspection or examination team.

2. A fine of between VND 50,000,000 and 70,000,000 shall be imposed on a public company, an issuing institution, a listing institution, a securities company, a fund management company, a securities investment company or a supervisory bank, the Stock Exchange, the Securities Depositary Center, or an institution or individual involved in securities and securities market activities that obstructs inspection activities, uses violence against or intimidates members of an inspection or examination team while they are on duty.

3. A fine of between VND 70,000,000 and 100,000,000 shall be imposed on a public company, an issuing institution, a listing institution, a securities company, a fund management company, a securities investment company or a supervisory bank, the Stock Exchange, the Securities Depositary Center, or an institution or individual involved in securities and securities market activities that commits either of the following violations:

a/ Hiding or modifying vouchers, documents, books and e-data or altering material evidence while under inspection or examination;

b/ Removing, dispersing or otherwise arbitrarily changing the sealing condition of money, securities, books, dossiers and accounting documents or other sealed material evidence and means.

4. Additional sanctions:

Suspension of operation; revocation of licenses, certificates, securities practice certificates in the field of securities and securities market, for institutions and individuals committing violations specified in Clause 3 of this Article.

Chapter III

COMPETENCE AND PROCEDURES FOR SANCTIONING ADMINISTRATIVE VIOLATIONS

Article 37. Competence to sanction administrative violations

1. The Chief Inspector of the State Securities Commission may:

a/ Impose cautions;

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

2. The Chairman of the State Securities Commission may:

a/ Impose cautions;

b/ Impose fines of up to VND 500,000,000;

c/ Sanction violations specified in Clause 3, Article 7; Clause 5, Article 8 and Clause 2, Article 12 of this Decree under current law;

d/ Apply additional sanctions and consequence remedies specified in this Decree.

Article 38. Authorized sanctioning of administrative violations

1. The persons competent to sanction administrative violations defined in Article 37 of this Decree may authorize their deputies to sanction administrative violations. The authorization shall be made in writing and clearly state the scope, contents and duration of authorization.

2. Deputies authorized to sanction administrative violations shall take responsibility for their sanctioning decisions before their superiors and law. Authorized persons may not further authorize any individuals else.

Article 39. Termination of acts of administrative violation

When detecting an act of administrative violation, a competent person on duty shall issue a decision to immediately terminate such act.

Article 40. Making of written records of administrative violations

1. Upon detecting an administrative violation in the field of securities and securities market, a competent person on duty shall promptly make a written record of such violation.

2. A written record must be made in at least 2 copies and bear all required signatures under Clause 3, Article 55 of the Ordinance on Handling of Administrative Violations.

3. After being made, a copy of a written record shall be handed over to the violator. If the violation case falls beyond the sanctioning competence of the record maker, he/she shall send within 3 working days the written record of the administrative violation (the original) and all documents and records related to the violation to a person with sanctioning competence for sanctioning.

Article 41. Sanctioning decisions

1. A sanctioning decision shall be made in at least 5 copies according to a set form (for the sanction of caution) and at least 6 copies according to a set form (for the sanction of fine).

2. The time limit for issuing a sanctioning decision is 10 working days after a written record of administrative violation is made. For cases involving many complicated circumstances, the time limit for issuing a sanctioning decision is 30 days after a written record is made.

3. When more time is need for verifying and collecting evidence, a competent person shall report in writing to his/her immediate superior for extension of the time limit specified in Clause 2 of this Article at least 10 days before the expiration of that time limit. The extension shall be decided in writing and must not exceed 30 days. Past that time limit, a person with sanctioning competence may not issue a sanctioning decision. When no sanctioning decision is issued, the consequence remedies specified in this Decree may still be applied.

4. Sanctioning decisions shall be sent to sanctioned violators and fine collectors within 3 days after they are issued.

Article 42. Procedures for imposing fines

1. Cases subject to fines must comply with the procedures specified in Articles 40 and 41 of this Decree. Within 10 working days after receiving a sanctioning decision, a sanctioned institution or individual shall remit the fine amount indicated in the sanctioning decision into the State Treasury and receive a fine receipt. Past that time limit, if the sanctioned institution or individual fails to willingly execute the sanctioning decision, it/he/she shall be forced to comply with it.

2. A fine may be paid in installments when the fined violator satisfies all the conditions and complete the procedures specified in Article 27 of the Government’s Decree No. 128/2008/ND-CP of December 16, 2008, detailing a number of articles of the 2002 Ordinance on Handling of Administrative Violations and the 2008 Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Handling of Administrative Violations.

Article 43. Procedures for suspension of operation or revocation of licenses, certificates and securities practice certificates

1. The Chairman of the State Securities Commission may issue decisions to suspend operation or revoke licenses, certificates and securities practice certificates.

2. When taking the measure of operation suspension, a person with sanctioning competence shall clearly indicate the measure in the sanctioning decision. If only a decision to suspend a specific professional operation is issued, a person with sanctioning competence shall clearly indicate in the sanctioning decision the professional operation to be suspended and the duration of suspension.

3. In case of revocation of a license, certificate or securities practice certificate, the name, type and serial number of the license or certificate must be clearly indicated in the sanctioning decision. If only a decision to revoke licenses or certificates for one or several specific professional operations, a person with sanctioning competence shall clearly indicate the revoked licenses or certificates in the sanctioning decision.

4. When detecting that a license is granted ultra vires or contains unlawful contents, a person with sanctioning competence shall immediately revoke that license and concurrently notify such to the state agency with licensing competence.

Article 44. Procedures for confiscation of illegal earning amounts

1. When confiscating illegal amounts earned from administrative violations, a person with sanctioning competence shall make a written record according to a set form.

2. Earned amounts of investors will not be confiscated but shall be forcibly refunded by violators to these investors. Procedures for confiscation and handling of illegal amounts earned from administrative violations comply with Articles 60 and 61 of the Ordinance on Handling of Administrative Violations.

Article 45. Procedures for forced delisting or cancellation of trading registrations

1. Forced delisting or cancellation of trading registrations is an additional sanction imposed by the Stock Exchange.

2. Procedures for delisting or cancellation of trading registrations comply with listing and trading regulations of the Stock Exchange.

Article 46. Procedures for suspension or cancellation of public offering of securities

1. When applying the additional sanction of suspension for a definite duration or cancellation of a public offering of securities, a person with sanctioning competence shall clearly indicate that sanction in the sanctioning decision.

2. Procedures for suspension or cancellation of public offering of securities comply with Articles 22 and 23 of the Securities Law.

Article 47. Decisions to force the remedying of consequences in case no administrative sanctioning decision is issued

1. In case the statute of limitations for sanctioning an administrative violation specified in Article 4 of this Decree or the time limit for issuing a sanctioning decision specified in Article 41 of this Decree expires, a competent person may not issue a sanctioning decision but may still decide to apply consequence remedies.

2. A decision to force the remedying of consequences must be issued in writing according to a set form. Such a decision must clearly indicate the date of issuance; the full name and position of the issuer; the full name, address and occupation of the individual violator or the name and address of the institutional violator; the administrative violation; circumstances involved in the handling of the violation; articles and clauses of applicable legal documents; reason(s) for non-application of sanctions; applied consequence remedies; duration for execution of the decision; and the issuer’s signature.

Article 48. Competence to issue enforcement decisions and enforcement of administrative sanctioning decisions

1. Past the time limit of 10 days after a violator receives an administrative sanctioning decision, if the violator fails to willingly execute the sanctioning decision, the Chairman of the State Securities Commission may issue a decision to enforce the sanctioning decision and organize the enforcement.

2. An institution or individual sanctioned for an administrative violation that fails to willingly execute the sanctioning decision shall be forced to do so with the following measures:

a/ Deduction of part of his/her salary or its/his/her income or deduction of a sum of money from its/his/her bank account;

b/ Distraint of assets of a value equal to the fine for auction;

c/ Application of other enforcing measures to confiscate material evidence and means used for committing the administrative violation or confiscate all illegal amounts earned from administrative violations.

3. Institutions and individuals subject to enforcement shall strictly abide by enforcement decisions and bear all expenses for organizing the implementation of enforcement decisions.

4. State agencies, people’s public security forces and People’s Committees at all levels shall coordinate with one another in organizing the implementation of enforcement decisions at the request of the person competent to issue decisions enforcing administrative sanctioning decisions defined in Clause 1 of this Article.

Article 49. Public notification of information on sanctioning

Decisions to sanction administrative violations in the field of securities and securities market shall be publicly notified on the website of the State Securities Commission.

Article 50. Promulgation of forms of written records and decisions for sanctioning administrative violations in the field of securities and securities market

1. Forms of written records and decisions for sanctioning administrative violations in the field of securities and securities market shall be promulgated under Articles 46, 47, 48, 49, 54, 55, 55a, 56, 61, 71, 78, 87 and 96 of the Ordinance on Handling of Administrative Violations.

2. The Finance Ministry shall specify forms of written records and decisions for sanctioning administrative violations in the field of securities and securities market.

Chapter IV

SUPERVISION AND INSPECTION OF THE HANDLING OF ADMINISTRATIVE VIOLATIONS, SETTLEMENT OF COMPLAINTS AND DENUNCIATIONS ABOUT THE SANCTIONING OF ADMINISTRATIVE VIOLATIONS IN THE FIELD OF SECURITIES AND SECURITIES MARKET

Article 51. Supervision and inspection of the sanctioning of administrative violations

The Finance Minister shall regularly supervise and inspect the sanctioning of administrative violations in the field of securities and securities market under his/her management; promptly settle complaints and denunciations related to the sanctioning of administrative violations about persons with sanctioning competence defined in Article 37 of this Decree; handle persons under his/her management who make mistakes or commit violations in sanctioning administrative violations, and report on the situation of administrative violations in the field under his/her charge at the request of competent agencies.

Article 52. Complaints and denunciations and settlement thereof

The lodging and settlement of complaints and denunciations about decisions to sanction administrative violations in the field of securities and securities market shall be conducted under the law on complaints and denunciations.

Chapter V

IMPLEMENTATION PROVISIONS

Article 53. Organization of implementation

1. The Finance Minister shall guide, inspect and supervise the implementation of this Decree.

2. In case a new administrative violation arises in the field of securities and securities market, the Finance Ministry shall decide on handling measures suitable to the practical situation and requirements of state management of securities.

Article 54. Implementation provisions

1. This Decree takes effect on September 20, 2010, and replaces the Government’s Decree No. 36/2007/ND-CP of March 8, 2007, on sanctioning of administrative violations in the field of securities and securities market. Administrative violations in the field of securities and securities market detected after this Decree takes effect shall be sanctioned under this Decree. All previous stipulations which are contrary to this Decree are annulled.

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

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG