Circular 73/2023/TT-BTC amend Circular 117/2020/TT-BTC calculating unlawful earnings from violations of law on securities

CIRCULAR

Amending and supplementing a number of articles of the Minister of Finance’s Circular No. 117/2020/TT-BTC dated December 31, 2020, providing the method of calculating unlawful earnings and unlawful profits from violations of the law on securities and securities market

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

Pursuant to the Law on Handling of Administrative Violations dated June 20, 2012; the Law Amending and Supplementing a Number of Articles of the Law on Handling of Administrative Violations dated November 13, 2020;

Pursuant to the Government's Decree No. 118/2021/ND-CP dated December 23, 2021, detailing a number of articles of, and measures to implement, the Law on Handling of Administrative Violations;

Pursuant to the Government’s Decree No. 156/2020/ND-CP dated December 31, 2020, providing for the sanctioning of administrative violations in the domains of securities and securities market; the Government’s Decree No. 128/2021/ND-CP dated December 30, 2021, amending and supplementing a number of articles of the Government’s Decree No. 156/2020/ND-CP dated December 31, 2020, providing for the sanctioning of administrative violations in the domains of securities and securities market;

Pursuant to the Government’s Decree No. 14/2023/ND-CP dated April 20, 2023, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Chairperson of the State Securities Commission;

The Minister of Finance promulgates the Circular amending and supplementing a number of articles of the Minister of Finance’s Circular No. 117/2020/TT-BTC dated December 31, 2020, providing the method of calculating unlawful earnings and unlawful profits from violations of the law on securities and securities market.

Article 1. Amending and supplementing a number of articles of the Minister of Finance’s Circular No. 117/2020/TT-BTC dated December 31, 2020, providing the method of calculating unlawful earnings and unlawful profits from violations of the law on securities and securities market

1. To amend and supplement Point d Clause 3 Article 3 as follows:

“d) Unlawful earnings earned in the cases of securities price adjustments that are made during the period of securities market manipulation shall be calculated as the total unlawful earnings in the periods before the price adjustment (ex-dividend date) and the unlawful earning in the period after the price adjustment.

Unlawful earnings in the period before the time of price adjustment and unlawful earnings in the period after price adjustment shall be calculated according to the formula specified in this Clause. In case the total volume of sold securities is greater than the total volume of purchased securities in the period after price adjustment, the price of spread securities volume specified at Point c of this Clause shall be the average buying price in the period before the ex-dividend date shall be adjusted according to the following formula:

P’=(P+P_a*a-C)/(1+a+b)

In which:

P’: Price of volume of spread securities as prescribed at Point c of this Clause.

P: Average buying price of stocks in the period before the ex-dividend date.

P_a: Price of stocks additionally issued for preferential purchase rights.

a: proportion of stocks additionally issued for preferential purchase rights.

b: stock split ratio to increase share capital from owner's capital.

C: cash dividends.”.

2. To amend and supplement Point h Clause 3 Article 4 as follows:

“h) Unlawful profits earned from performing transactions to hide information about the true ownership of a security or more for avoidance or assist others for avoidance of disclosing information or making public bid or regulations on the foreign ownership ratio on the Vietnamese securities market specified in Clause 4 Article 34 of Decree No. 156/2020/ND-CP, amended and supplemented under Clause 28 Article 1 of the Government's Decree No. 128/2021/ND-CP dated December 30, 2021, amending and supplementing a number of articles of Decree No. 156/2020/ND-CP, shall be calculated as follows:

- For organizations and individuals that hide information about the true ownership of one or several securities to avoid the obligation to disclose information according to regulations or the prescribed obligation when making public bid or regulations to be complied with regarding the foreign ownership ratio on the Vietnamese securities market, unlawful profits gained by violator from committing violations shall be the entire amount of money, securities and other benefits arising from securities that conceal the true ownership;

- For organizations and individuals that assist others in hiding information about the true ownership of one or several securities to avoid the obligation to disclose information or make public bid or regulations on foreign ownership ratio on the Vietnamese securities market, unlawful profits gained by the violator from committing violations shall be the entire amount of money, securities and benefits related to this amount of money, securities arising from violations which are determined based on the contract or agreement between the parties;”.

Article 2. Implementation provisions

1. This Circular takes effect from February 05, 2024.

2. For violations occurring before the effective date of this Circular that are discovered or are in the process of being considered for decisions on sanctioning of administrative violations or considered for decisions on applying corrective measures when this Circular takes effect, the provisions of this Circular shall apply if this Circular stipulates lighter legal liability.

3. Any problems arising in the course of implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and settlement./.