Chương 4 Nghị định 48/1998/NĐ-CP: Công ty chứng khoán

Chapter IV

SECURITIES FIRMS

Article 29.- The objects and contents of operation license granting

1. A securities firm must be a joint stock company or a limited liability company which meets the conditions prescribed in Article 30 of this Decree; credit institutions, insurance companies or corporations wishing to engage in the securities business shall have to establish independent securities firms. The State Securities Commission shall grant operation licenses to securities firms.

2. A securities firm shall be allowed to conduct business in one or a number of the following business types:

a) Brokerage;

b) Dealing;

c) Portfolio management;

d) Issuance underwriting;

e) Securities investment consultancy.

Article 30.- The conditions for being granted operation license

A firm which is to be granted an operation license must meet the following conditions:

1. Having a business plan compatible to the socio-economic development objectives and securities industry development objectives;

2. Having sufficient material and technical facilities in service of securities business activities;

3. Having legal capital level as prescribed for each type of business as follows:

a) Brokerage VND 3 billion

b) Dealing VND 12 billion

c) Portfolio management VND 3 billion

d) Issuance underwriting VND 22 billion

e) Securities investment consultancy VND 3 billion

In cases where a securities firm applies for license for several types of business operation, its legal capital shall be the total amount of legal capital levels prescribed for all types of business operation for which the firm is to be granted license;

4. The director (general director), business staff (excluding accounting staff, administrative staff, cashier) of a securities firm must have securities business practice licenses granted by the State Securities Commission.

Article 31.- Dossiers of application for operation licenses

A dossier of application for an operation license shall comprise:

1. An application;

2. A permit for the establishment of the firm (if any);

3. The statute of the firm;

4. Valid documents proving that the firm has met the conditions prescribed in Article 30 of this Decree;

5. Projected capital sources for the first 12 months' business operation.

Article 32.- The operation license-granting procedures and fee

1. Dossiers of application for securities operation license shall be submitted to the State Securities Commission. Within 90 days from the date of receipt of complete dossiers of application for securities operation licenses, the State Securities Commission shall either grant or refuse to grant licenses. In cases of refusal to grant licenses, the State Securities Commission must clearly state the reasons therefor in writing.

2. A securities firm must pay an operation license-granting fee equal to 0.2% of its legal capital.

Article 33.- Amendments and supplements to the operation licenses

1. A securities firm which has been granted a securities operation license, and wishes to supplement or change its securities business operations, to undertake corporate merger or splitting, shall have to carry out the procedures to apply for re-granting of license or granting of an additional license.

2. Any changes to the registered office and/or name, opening or shut-down of branches, change of Director (General Director) or Deputy General Director of a securities firm and other changes must be reported to and approved by the State Securities Commission.

Article 34.- The announcement of operation licenses

Before commencing its operation, a securities firm shall have to publish such information on newspaper(s) as required by law and post up its operation license at all places where the firm conducts business.

Article 35.- Liquidity capital of a securities firm

A securities firm that conducts brokerage and dealing operation must sustain its minimum liquidity capital level equal to 8% of its debt capital. The State Securities Commission shall specify the method of determining the liquidity capital level.

Article 36.- Deduction for setting up the fund for statutory capital supplement

Every securities firm shall have to set aside a part of its annual net profit to supplement its statutory capital as prescribed by the law.

Article 37.- The reporting regime

1. Securities firms shall have to make periodical reports in accordance with provisions of law and guidance of the State Securities Commission. Their accounting balance sheets and annual business performance reports must be audited.

2. Upon the occurrence of any extraordinary event that may seriously affect its financial capability and business activities, a securities firm shall have to report it to the State Securities Commission.

3. Securities firms shall have to preserve and keep contracts and transaction documents for a period of time prescribed by law.

Article 38.- The rights and obligations of securities firms

A securities firm shall have the following rights and obligations:

1. To sign written contracts with clients on securities buying and selling, investment portfolio management, issuance underwriting or provision of securities custody services;

2. To gather all information on financial status and investment purposes of clients;

3. To manage securities assets of clients in separation from securities assets in the possession of the firm;

4. To receive transaction orders from clients only at its office;

5. To execute securities selling or buying orders of clients ahead of those of the firm;

6. To keep information confidentiality for clients;

7. To collect service charges. The charge levels shall be set by the State Securities Commission after consulting the Ministry of Finance;

8. To comply with the accounting and financial regime prescribed by law;

9. To abide by other regulations of the State Securities Commission on securities business.

Article 39.- The suspension of operation and withdrawal of licenses

1. A securities firm may be suspended from securities business activities for a maximum period of 60 days in the following cases:

a) It has ceased securities business activities without any prior written permission from the State Securities Commission;

b) It violates stipulations in Articles 35, 36, 37 and 38 of this Decree.

2. A securities firm shall have its operation license withdrawn in the following cases:

a) It fails to mend its violations within the securities business suspension time limit prescribed in Clause 1 of this Article;

b) It fails to commence its operation within 12 months from the date of being granted operation license;

c) It voluntarily applies for termination of securities business activities, dissolves or goes bankrupt;

d) It is no longer able to fully meet the conditions for being granted securities operation license prescribed in Article 30 of this Decree;

e) It violates stipulations in Articles 69, 70, 71, 72 and 73 of this Decree.

3. A securities firm that is suspended from operation or has its securities operation license withdrawn shall have to complete all transactions and contracts which it previously committed itself to. The State Securities Commission may designate another securities firm to complete transactions and/or contracts of the securities firm having its operation suspended or its license withdrawn; in this case, the authorization relationship between the two firms is automatically established.

Article 40.- The conditions for being granted practitioner licenses

An individual who applies for a securities business practising license must meet the following conditions:

1. Having full legal capacity and full capacity for civil acts;

2. Meeting ethical and professional criteria;

3. Possessing all necessary certificates of professional securities expertise granted by the State Securities Commission.

Article 41.- The practitioner license-granting procedures and fees

1. The form of dossiers of application for securities business practising licenses shall be prescribed by the State Securities Commission.

2. The time limit for issuing notices on granting or refusal to grant securities business practising licenses shall be 30 days from the date of receipt of complete valid dossiers of application.

3. The securities business practising license-granting fee shall be set by the State Securities Commission.

Article 42.- The restrictions on securities business practitioners

A securities business practitioner shall not be allowed to:

1. Concurrently work for or contribute capital to two or more securities firms;

2. Concurrently work as director or a member of the Managing Board or a shareholder possessing more than 5% of the voting shares of a securities issuing organization;

3. Lend his/her securities business practising license to another person.

Article 43.- Withdrawal of securities business practising licenses

A securities business practitioner shall have his/her securities business practising license withdrawn in the following cases:

1. He/she is no longer able to meet the conditions for being granted securities business practising license stipulated in Article 40 of this Decree;

2. He/she violates stipulations in Articles 42, 69, 70, 71, 72 and 73 of this Decree.