Chương IX Luật chứng khoán 2006: Thanh tra và xử lí vi phạm

Chapter IX

INSPECTION, AND HANDLING OF VIOLATIONS

Section 1. INSPECTION

Article 108.- Securities inspectorate

1. The securities inspectorate is a specialized inspectorate in the domain of securities and securities market.

2. The securities inspectorate is composed of the chief inspector, the deputy chief inspector and inspectors.

3. The securities inspectorate shall submit to the professional direction of the Finance Ministry's inspectorate in accordance with the inspection law and this Law.

Article 109.- Subjects and scope of inspection

1. Subjects of inspection include:

a/ Organizations conducting public offering of securities;

b/ Public companies;

c/ Organizations listing securities;

d/ Stock Exchanges and Securities Trading Centers;

e/ Securities depository centers, depository members;

f/ Securities companies, fund management companies, securities investment companies, supervisory banks; Vietnam-based branches and representative offices of foreign securities companies or fund management companies;

g/ Securities practitioners;

h/ Organizations and individuals participating in investment and conducting activities on the securities market;

i/ Other organizations and individuals involved in securities activities and securities market.

2. Scope of inspection covers:

a/ Public offering of securities;

b/ Securities listing;

c/ Securities trading;

d/ Securities business and investment, provision of securities and securities market services;

e/ Information disclosure;

f/ Other activities related to securities and securities market.

Article 110.- Forms of inspection

1. Inspections under programs or plans approved by the Chairman of the State Securities Commission.

2. Extraordinary inspections shall be conducted upon detection of signs of violation of the law on securities and securities market by organizations or individuals participating in investment and conducting activities on the securities market; according to the requirements of the settlement of complaints and denunciations, or under assignment by the Chairman of the State Securities Commission.

Article 111.- Competence and grounds for issuance of inspection decisions

1. A securities inspection is conducted only under an inspection decision of a competent person defined in Clause 2 of this Article.

2. The chief securities inspector shall issue inspection decisions and set up inspection teams. When necessary, the Chairman of the State Securities Commission shall issue inspection decisions and set up inspection teams.

An inspection team is composed of a head and members.

3. The issuance of an inspection decision must be based on one of the following grounds:

a/ An inspection plan or program approved by the Chairman of the State Securities Commission;

b/ Request of the Chairman of the State Securities Commission;

c/ Detection of signs of a violation of the law on securities and securities market.

Article 112.- Contents of inspection decisions

1. An inspection decision must contain the following details:

a/ Legal grounds for inspection;

b/ Inspection subject, content, scope and task;

c/ Inspection duration;

d/ Head and members of the inspection team.

2. Within three days after an inspection decision is signed, it must be sent to the subject of inspection, except for extraordinary inspection.

3. An inspection decision must be notified within fifteen days after it is issued. The notification of inspection decisions must be in writing.

Article 113.- Inspection duration

1. An inspection shall not exceed thirty days counting from the date of notification of the inspection decision to the date of conclusion of the inspection at the inspected place.

2. When necessary, the inspection decision issuer may extend the inspection duration, for only once. The extended duration shall not exceed the duration specified in Clause 1 of this Article.

Article 114.- Rights and obligations of inspected subjects

1. Rights of inspected subjects:

a/ To explain matters relevant to the inspection contents;

b/ To reserve their opinions in written records of inspection;

c/ To refuse to supply information or documents classified as state secrets according to provisions of law, and information or documents irrelevant to inspection contents;

d/ To lodge complaints with the inspection decision issuer about decisions and acts of the head or members of the inspection team in the course of inspection when they have grounds to deem those decisions or acts are illegal; to lodge complaints with the Chairman of the State Securities Commission about inspection conclusions or inspection handling decisions when they have grounds to believe that those conclusions or decisions are illegal. Pending the settlement, the complainants shall still abide by the inspection conclusions and handling decisions;

e/ To claim damages in accordance with law;

f/ Inspected subjects being individuals are entitled to denounce violations committed by the chief inspector, heads and members of inspection teams.

2. Obligations of inspected subjects:

a/ To abide by inspection decisions;

b/ To supply promptly, adequately and accurately information, documents or electronic data relevant to inspection contents at the request of inspectors and to take responsibility for the adequacy, accuracy and truthfulness of supplied information, documents or electronic data.

c/ To satisfy requests, and abide by inspection conclusions and handling decisions of inspectors and competent state agencies;

d/ To sign written records of inspection.

Article 115.- Tasks and powers of inspection decision issuers

1. An inspection decision issuer has the following tasks and powers:

a/ To direct and supervise the strict observance of inspection contents and duration stated in the inspection decision by the inspection team;

b/ To request the inspected subject to supply information, documents or electronic data, to report in writing or to explain matters relevant to inspection contents; to request organizations or individuals possessing information or documents relevant to inspection contents to supply such information or documents;

c/ To solicit the assessment of matters relevant to inspection contents;

d/ To request competent persons to seal up or temporarily seize documents, vouchers, securities and electronic data relevant to acts of violating the law on securities and securities market when he/she finds it necessary to promptly prevent those acts or to verify circumstances to serve as proofs supporting the inspection decision;

e/ To request competent persons to freeze monetary accounts, securities accounts as well as mortgaged or pledged assets related to the violations of the law on securities and securities market when he/she finds it necessary to verify circumstances to serve as grounds for violation handling decisions or to promptly prevent acts of dispersing money, securities or mortgaged or pledged assets related to the violations of the law on securities and securities market.

f/ To suspend or propose competent persons to suspend certain activities when he/she deems that those activities cause serious damage to the State’s interests, legitimate rights and interests of organizations or individuals participating in the market;

g/ To issue a handling decision according to his/her competence or propose a competent person to handle the violation; to inspect and urge the execution of the inspection-handling decision;

h/ To settle complaints and denunciations related to responsibilities of the chief inspector, the head and members of inspection team;

i/ To make a conclusion on inspection contents;

j/ To transfer the dossier of the law violation to an investigation agency within five days after he/she detects signs of a crime.

2. While performing the tasks or exercising the powers specified in Clause 1 of this Article, the inspection decision issuer shall be held responsible before law for all his/her decisions.

Article 116.- Tasks and powers of heads and members of inspection teams

1. Tasks and powers of an inspection team's head:

a/ To organize and direct members of the inspection team to strictly comply with contents, subject and duration stated in the inspection decision;

b/ To request the inspected subject to supply information, documents or electronic data, to report in writing or explain matters relevant to inspection contents;

c/ To issue a decision on sealing or temporary seizure of documents, vouchers, securities or electronic data relevant to violations of the law on securities and securities market when he/she has grounds to believe that those documents, vouchers, securities or electronic data may be dispersed, hidden or destroyed unless they are promptly sealed up or temporarily seized. Within twenty four hours after issuing a decision, the head of the inspection team shall report that decision to and obtain a written approval from the securities chief inspector. If the securities chief inspector disapproves the decision, the head of the inspection team shall immediately cancel the decision on sealing or temporary seizure and return sealed or temporarily seized documents, vouchers, securities or electronic data;

d/ To report to the inspection decision issuer on inspection results and take responsibility for the accuracy, truthfulness and objectivity of his/her report;

e/ To make a written record of inspection;

f/ While performing the tasks or exercising the powers specified in Clause 1 of this Article, the head of the inspection team shall be held responsible before law for all his/her decisions.

2. Tasks and powers of members of an inspection team:

a/ To perform tasks assigned by the head of the inspection team;

b/ To request the inspected subject to supply information, documents, to report in writing or explain matters relevant to inspection contents; to request agencies, organizations or individuals possessing information or documents relevant to inspection contents to supply those information or documents;

c/ To propose the handling of matters relevant to inspection contents;

d/ To report on performance of their assigned tasks to the head of the inspection team, and take responsibility before law and the head of the inspection team for the accuracy, truthfulness and objectiveness of their reports.

Article 117.- Inspection conclusions

1. Within fifteen days after receiving a report on inspection results, an inspection decision issuer shall make an inspection conclusion in writing. The inspection conclusion must have the following contents:

a/ Assessment of the observance of policies and law and the performance of tasks by the inspected subject;

b/ Conclusions on inspection contents;

c/ Clear determination of the nature, severity and causes of violations (if any), as well as responsibilities of agencies, organizations or individuals committing the violations;

d/ Handling measures already applied according to his/her competence; proposed handling measures.

2. In the course of inspection, the inspection decision issuer may request the head and members of the inspection team to report; or request the inspected subject to explain and further clarify necessary matters in service of making of an inspection conclusion.

3. Inspection conclusions shall be sent to the Chairman of the State Securities Commission and inspected subjects. Inspection conclusions made by the Chairman of the State Securities Commission shall be sent to the Finance Minister.

4. Within fifteen days after an inspection conclusion is made by the Securities Chief Inspector, the Chairman of the State Securities Commission shall examine that inspection conclusion; handle organization or individual committing the violation of the law on securities and securities market; apply measures according to his/her competence or propose the Finance Ministry to apply remedies or measures to improve mechanisms, policies or law.

Section 2. HANDLING OF VIOLATIONS

Article 118.- Principles for handling of violations

1. Organizations and individuals that commit acts of violating the provisions of this Law and other laws concerning securities activities and securities market shall, depending on the nature and severity of their violations, be disciplined, administratively sanctioned or examined for penal liability. If causing damage, they shall pay compensation therefor in accordance with law.

2. Persons who abuse their positions or powers to impede securities activities or operation of securities market; commit harassment for bribes or cause troubles to organizations or individuals participating in the securities market; fail to promptly respond to the request of organizations or individuals according to regulations; or fail to perform other official duties prescribed by law shall, depending on the nature and severity of their violations, be disciplined or examined for penal liability.

3. The sanctioning of administrative violations shall comply with this Law and the law on handling of administrative violations.

Article 119.- Forms of sanctioning of administrative violations

1. Organizations and individuals that commit violations of the provisions of this Law shall be subject to one of the following principal sanctioning forms:

a/ Caution;

b/ Fine.

2. Depending on the nature and severity of their violations, organizations and individuals may be subject to one or several additional sanctioning forms, including suspension of operation; revocation of licenses or certificates related to securities and securities market or securities practice certificates; confiscation of all amounts generated from the commission of violations and the volume of securities used for commission of violations.

3. Apart from the sanctioning forms specified in Clauses 1 and 2 of this Article, violating organizations and individuals shall also be subject to different remedies, including forcible compliance with law; forcible cancellation or correction of misleading or untruthful information; forcible recovery of issued securities and refund of deposits or securities purchase amounts to investors.

Article 120.- Competence to sanction administrative violations

1. The Securities Chief Inspector has the following rights:

a/ To serve cautions;

b/ To impose fines.

2. The Chairman of the State Securities Commission has the following rights:

a/ To serve cautions;

b/ To impose fines;

c/ To apply the additional sanctioning forms and remedies specified in Clauses 2 and 3, Article 119 of this Law.

3. The Government shall specify the sanctioning competence and level for each act of violation in securities and securities market activities specified in Articles 121 thru 130 of this Law.

Article 121.- Handling of violations of provisions on public offering of securities

1. Issuing organizations, directors or general directors, chief accountants and other affiliated persons of issuing organizations, issuance-underwriting organizations, issuance consultancy organizations, accredited audit organizations, persons signing audit reports, organizations and individuals certifying dossiers of registration of public offering of securities, that commit forgery in preparing dossiers of registration of public offering of securities, shall be cautioned, fined or examined for penal liability according to the provisions of law. An issuing organization committing such a violation shall have its certificate of public offering of securities withdrawn, refund the mobilized amount plus the demand deposit interest, and pay a fine equal to between one and five percent of the total illegally mobilized amount.

2. Issuing organizations, directors or general directors, chief accountants and other affiliated persons of issuing organizations, issuance-underwriting organizations, and issuance consultancy organizations, that intentionally disclose misleading information or hide the truth, or use information outside prospectuses to survey the market or distribute securities not in accordance with contents of offering registrations regarding type of securities, issuance duration and minimum volume as specified, or notify the securities issuance on mass media not with specified contents and beyond the set time limit shall be cautioned or fined, or have the public offering of securities suspended or cancelled, or be examined for penal liability according to the provisions of law. Issuance-underwriting organizations that underwrite securities of a total value exceeding the level specified by law shall be cautioned, fined or suspended from issuance underwriting operation.

3. An issuing organization that conducts the public offering of securities without a certificate of public offering of securities shall be suspended from public offering of securities, have its illegal revenue confiscated and be imposed a fine equal to between one and five times the illegal revenue.

Article 122.- Handling of violations of provisions on public companies

1. Companies defined at Point c, Clause 1, Article 25 of this Law that fail to submit dossiers of public companies to the State Securities Commission within ninety days after they become public companies shall be cautioned or fined and compelled to strictly comply with the provisions of law on public companies.

2. Public companies that fail to comply with the provisions on corporate governance shall be cautioned and compelled to strictly comply with those provisions.

Article 123.- Handling of violations of provisions on securities listing

1. Listing organizations, directors or general directors, deputy directors or deputy general directors, chief accountants and other affiliated persons of listing organizations, listing consultancy organizations, accredited audit organizations, persons signing audit reports, organizations and individuals certifying listing dossiers, that commit forgery in preparing listing dossiers, thus causing serious misunderstanding, shall be cautioned, fined, delisted or examined for penal liability in accordance with law.

2. Listing organizations that fail to fully comply with the provisions on duration, contents and means of disclosure of information on listing shall be cautioned, fined and compelled to strictly comply with the provisions of law on listing.

Article 124.- Handling of violations of provisions on organization of securities trading markets

1. Organizations and individuals that organize securities trading markets in contravention of this Law shall have their operation stopped, their illegal incomes confiscated and be fined between one and five times their illegal incomes or be examined for penal liability according to the provisions of law. If they have no illegal incomes, they shall only be fined.

2. Stock Exchanges, Securities Trading Centers, members of Boards of Directors or Control Boards, directors, deputy directors and staff members of Stock Exchanges or Securities Trading Centers, that violate provisions on listing, members, trading, supervision and disclosure of information, shall be cautioned, fined or examined for penal liability in accordance with law.

Article 125.- Handling of violations of provisions on securities trading activities and securities practice certificates

1. Securities companies, fund management companies, securities investment companies, Vietnam-based branches of foreign securities companies or foreign fund management companies, that conduct securities trading activities without licenses or lend, lease or transfer their licenses, conduct trading activities in domains not stated in their licenses or with invalid licenses, erase or modify their licenses, or effect changes related to securities and securities market without approval of the State Securities Commission, shall be cautioned or fined, have their illegal incomes confiscated, their operation stopped, or their establishment and operation licenses or certificates of operation registration of representative offices withdrawn.

2. Securities companies that fail to strictly comply with the provisions of this Law on management of monetary assets and securities of customers; fail to maintain the prescribed liquidity level; invest or contribute capital in excess of the prescribed level; act against order of investors; or fail to keep confidential information on customers shall be cautioned or fined, have their operation stopped or their establishment and operation licenses withdrawn.

3. Securities companies and their securities practitioners that abuse their positions, powers or duties to lend money or securities on accounts of their customers; pledge or use money or securities on accounts of their customers without the latter's entrustment shall be cautioned or fined, have their illegal incomes confiscated, or be examined for penal liability in accordance with law.

4. In the course of fund management, if fund management companies and their securities practitioners fail to separate the management of each fund or fail to comply with the charters of the securities investment funds and to protect legitimate rights and interests of investors, fail to perform the internal control according to regulations, use capital and assets of the securities investment funds to invest or purchase assets of other investment funds; violate provisions on capital contribution, share holding, lending or borrowing applicable to fund management companies and vice versa shall be cautioned, fined and compelled to strictly comply with legal provisions on management of securities investment funds.

5. Securities practitioners who concurrently work for, and contribute capital to, two or more securities companies; securities practitioners of fund management companies who concurrently act as directors or general directors or shareholders owning more than five percent of voting stocks of an organization publicly offering securities; and securities dealers who lend or lease their securities practice certificates, or erase or modify securities practice certificates shall be fined and have their securities practice certificates withdrawn.

Article 126.- Handling of violations of provisions on securities trading

1. Persons who know well inside information or possess inside information and purchase or sell securities, disclose that information or propose others to purchase or sell securities shall be fined, have illegal incomes confiscated, or be examined for penal liability in accordance with law.

2. Organizations or individuals that are banned by law from stock trading but rename themselves or borrow others' names to directly or indirectly hold, purchase or sell stocks shall have the volume of stocks used in violation and their illegal incomes confiscated and be fined. Officials and civil servants who commit such a violation shall be disciplined in accordance with law.

3. Organizations or individuals that violate provisions on prohibited acts to manipulate securities prices, make sham securities prices or conduct sham securities transactions shall be fined, have their illegal incomes confiscated, or be examined for penal liability in accordance with law.

4. Professional staffs of Stock Exchanges, Securities Trading Centers and securities companies who intentionally supply forged documents, forge, falsify or destroy transaction documents to deceive or entice customers into selling or purchasing securities shall be fined, have their securities practice certificates withdrawn, or be examined for penal liability in accordance with law.

5. Organizations or individuals that fabricate and spread untruthful information, thus seriously affecting the securities market or manipulating the securities trading market, shall be fined or examined for penal liability in accordance with law.

6. Organizations or individuals that make public bids without sending bid registrations to the State Securities Commission; fail to make public bids according to regulations or make modifications or adjustments to bid registrations without reporting thereon according to regulations; fail to apply conditions for public bids to all shareholders of public companies; refuse to purchase stocks from any shareholders under announced conditions; or fail to make public bids within the set time limit shall be fined and compelled to strictly comply with the provisions of law on public bids.

Article 127.- Handling of violations of provisions on securities registration, depository, clearing and payment, and supervisory banks

1. Organizations conducting securities registration, depository, clearing and payment and their staffs that violate provisions on time limit for certification of data or securities transfer; modify or forge vouchers in payment; violate the regime of securities preservation, regime of securities registration, depository, clearing and payment or regime of keeping secret of depository accounts of customers; or fail to supply promptly and sufficiently the list of securities holders to issuing organizations shall be cautioned, fined or examined for penal liability in accordance with law.

2. Supervisory banks and their staffs that preserve assets of securities investment funds in contravention of those funds' charters; fail to separate assets of securities investment funds from other assets; or fail to separate assets of an investment fund from those of another fund shall be fined, suspended from operation or have their certificates of registration of securities depository activities withdrawn.

Article 128.- Handling of violations of provisions on information disclosure

Issuing organizations, public companies, listing organizations, securities companies, fund management companies and securities investment companies that fail to disclose information in a sufficient, prompt and timely manner and on proper media as specified; disclose untruthful information or disclose secret data or documents; or fail to disclose information according to the provisions of this Law shall be cautioned, fined or compelled to strictly comply with the provisions of law on information disclosure.

Article 129.- Handling of violations of provisions on reporting

Stock Exchanges, Securities Trading Centers, securities depository centers, public companies, securities companies, fund management companies, securities investment companies and supervisory banks that insufficiently report on specified contents; fail to report within the specified time limit or with specified forms; terminate their operation without reporting to the State Securities Commission or obtain no approval of reported operation termination from the State Securities Commission; or fail to report or fail to promptly report on occurrence of unexpected events which might seriously affect their financial capability and securities trading and service activities shall be cautioned or fined and compelled to strictly comply with the provisions of law on reporting regime.

Article 130.- Handling of acts of obstructing inspection

Issuing organizations, listing organizations, securities companies, fund management companies, securities investment companies, supervisory banks, stock exchanges, securities trading centers, securities depository centers, depository members and other organizations and individuals involved in securities activities and securities market, that commit acts of delaying, shirking or acting against inspection; fail to sufficiently and promptly supply information, documents or electronic data at the request of inspection teams and inspectors, thus obstructing inspection activities; or use violence against or intimidate members of inspection teams who are on inspection duty shall be cautioned, fined or examined for penal liability in accordance with law.