Chương 6 Nghị định 58/2012/NĐ-CP: Tổ chức kinh doanh chứng khoán

Chapter 6.

SECURITIES BUSINESS ORGANIZATION

Article 71. Regulation on capital and shareholder, capital contribution member at securities business organization

1. The legal capital for the business operations of securities company in Vietnam is:

a) Securities brokerage: VND 25 billion;

b) Securities dealing: VND 100 billion

c) Securities issue guarantee: VND 165 billion;

d) Securities Investment Advisory: VND 10 billion

2. Where organization requests the licensing for many business operations, the legal capital is the total legal capital corresponding to each operation proposed the licensing.

3. The legal capital of the Fund Management Company in Vietnam, branch of foreign Fund Management Company in Vietnam is VND 25 billion.

4. The capital contributed for the establishment of the securities business organization and branch of foreign Fund Management Company in Vietnam must be in Vietnam dong.

5. Regulation for individual contributing capital to establish the securities business organization:

a) Being individual in the cases entitled to establish and manage enterprise in Vietnam in accordance with the law on business and having financial capacity to contribute capital for the establishment of securities business organization;

b) Only using his own capital and demonstrating adequate financial capacity complying with the guidance of the Ministry of Finance.

6. Regulation for organization contributing capital to establish the securities business organization:

a) Having legal status and not in a state of consolidation, merger, division, separation, dissolution, bankruptcy and not in the cases of not having the right to establish and manage enterprise in accordance with the law on enterprise;

b) Profitable business operation in 02 preceding years and without accumulated loss. In addition:

In case of commercial bank, insurance company, securities business organization not in a state of operational control, special control or other warning status at the same time fulfilling the conditions to participate in contribution of capital and investment under the regulations of specialized law.

In case of being other economic organization:

- Having operation time for at least 05 consecutive years preceding the year to contribute capital for the establishment of securities business organization;

- After subtracting long-term assets, the remainder of the owner’s equity is at least equal to the estimated contribution capital;

- The working capital must be at least equal to the estimated contribution capital.

c) Only using owner’s equity and other lawful capital sources under the provisions of specialized law, the financial statement audited of the nearest year without exception.

7. The structure of shareholders and capital contribution member in securities companies:

a) There are at least two (02) founding shareholders, founding members as an organization that meets the provisions of Clause 6 of this Article. Where the securities company is structured in the form of limited liability company with one member, the owner must be an insurer or a commercial bank;

b) The percentage of share ownership or capital contribution of the founding shareholders, the founding member as an organization with at least 65% of the charter capital, in which the organizations as insurers and commercial banks that own 30% of charter capital minimally;

c) The shareholders and capital contribution members own 10% or more of the charter capital of a securities company and the persons concerned of the shareholders and capital contribution members (if any) are not permitted to own more than 5% of charter capital at another securities company;

d) The securities company operating in Vietnam is not permitted to contribute capital for establishment, purchase shares or contributed capital at another securities company in Vietnam, except the following cases:

- The operation of the consolidation, merger or

- Purchasing to own or together with the person concerned (if any) own less than 5% of the outstanding stocks of the securities company that has registered trading and listing on the Stock Exchange.

8. Structure of shareholders and capital contribution member at the fund management company:

a) There are at least two (02) founding shareholders and founding member as an organization that meets the provisions of Clause 6 of this Article. Where the Fund Management Company is organized in the form of limited liability company with one member, the owner must be an insurer or a commercial bank or securities company.

b) The percentage of share ownership or capital contribution of the founding shareholders, the founding member as an organization with at least 65% of the charter capital, in which the organizations as insurers and commercial banks and securities company that own 30% of charter capital minimally;

c) The shareholders and capital contribution members own 10% or more of the Fund Management Company and the persons concerned of the shareholders and capital contribution members (if any) are not permitted to own more than 5% of charter capital at another securities company;

d) The securities company operating in Vietnam is not permitted to contribute capital for establishment, purchase shares or contributed capital at fund management and securities company in Vietnam, except the following cases:

 -The operation of the consolidation, merger or

- Purchasing to own or together with the person concerned (if any) own less than 5% of the outstanding stocks of the fund management and securities company that have registered trading and listing on the Stock Exchange.

9. The foreign investor may purchase shares or contributed capital to own up to 49% of charter capital of the securities business organization that is operating. The foreign organization, upon meeting the conditions prescribed at Point a, b, d, Clause 10 of this Article, is permitted to purchase to own 100% of the charter capital of the securities business organization that is operating. The foreign organization that meets the conditions prescribed in Clause 10 of this Article is permitted to newly establish the securities business organization with 100% foreign capital operating in Vietnam.

The purchase of shares, contributed capital, participation in capital contribution to establish securities business organization of foreign investor shall comply with the guidance of the Ministry of Finance.

10. Conditions for foreign organization to contribute capital to establish and purchase to own 100% capital of the securities business organization:

a) Being organization operating in banking, securities, insurance area with a minimum of 02 years of operation preceding the year participating in capital contribution for establishment, share purchase and contributed capital;

b) Being subject to regular and continuous monitoring of specialized management and supervision agency in foreign country in the area of banking, securities, insurance and being approved by this agency of the capital contribution to establish the securities business organization in Vietnam;

c) The specialized management and supervision agency in foreign country in the area of banking, securities, insurance and the State Securities Commission have signed bilateral or multilateral cooperation agreement on information exchange, management cooperation, inspection and supervision of securities activities and securities market;

d) Meeting relevant provisions in Clause 6 of this Article.

Article 72. Order, procedure and dossier to request the issue of establishment license of establishment and operation for securities business organization

1. The dossier to request the issue of establishment license of establishment and operation for securities business organization includes

a) Documents as prescribed in Article 63 of Securities Law;

b) The meeting minutes together with resolution of the shareholders and member expected to contribute capital or the owner's decision on the establishment of the securities business organization;

c) The principle Contract of headquarters lease or decision of space and headquarters handover of the owner together with the document certifying the ownership and use rights of headquarters of the lessor or owner;

d) Documents proving financial capacity:

- For individuals: Certification of bank on the balance of Vietnam dong, freely convertible foreign currency, certification of the Depository Securities Center of the securities on the number of stock on the depository account;

- For organizations: The audited financial statement of the nearest year and the audited financial statements of the nearest quarter. For capital contributing organization as the parent company has to supplement the consolidated audited financial statement of the nearest year in accordance with regulation of the law on accounting and auditing. For organization operating in the financial, banking, insurance and securities sector must add monthly report on the financial safety norms, capital adequacy as prescribed by specialized law of the 02 nearest years.

dd) List of proposed members of the Board of Directors, Board of members, Supervisory Board (if any), the internal audit department, the Director (General Director), Deputy Director (Deputy General Director) and at least five (05) professional employees for the dossier of Fund Management Company establishment or three (03) professional employees for each business operation requesting the license for dossier of securities company establishment together with a copy of identity card or valid passport, criminal record, curriculum vitae and copy of relevant certificate of practice.

e) List of shareholders and capital contribution member attached to the following documents

- For individual: a copy of identity card or valid passport and curriculum vitae Where the individual is expected to own over 10% of charter capital, he has to supplement criminal record.

- For organization: A copy of the license of establishment and operation (if any), certificate of business registration or other equivalent document, company charter, meeting minutes and decision of the General Meeting of Shareholders, Board of Directors or Board of members or the meeting minutes and decision of the Chairman of the Board of Directors and the Board of members or the owner's decision on the capital contribution to establish securities business organization, a copy of identity card or valid passport and curriculum vitae of the authorized representative together with a written authorization. Where the organization is expected to own 10% of charter capital, it has to supplement the criminal record of the legal authorized representatives.

g) Written approval of the permitted capital contribution for the establishment of the competent state management agency: the State Bank for commercial bank and the Ministry of Finance for insurer;

h) The other relevant documents evidencing individual and organization have met the conditions specified in Article 71 of this Decree.

2. In case of shareholder or capital contribution member is a foreign organization, the documents issued by the foreign competent authority must be consularly legalized within 06 months before the date of dossier submission and must be translated into Vietnamese and certified by an organization with translation function legally operating in Vietnam.

3. Dossier specified in Clause 1, 2 of this Article shall be made in one (01) original set together with the electronic information file. The original set of dossier shall be sent directly at one-stop division of the State Securities Commission or by mail.

4. The amendment and supplementation shall be conducted when the shareholders and capital contribution member deem it necessary. The amendment and supplement must be signed by those who have signed the dossier sent to the State Securities Commission. Where it is necessary to clarify issues related to dossier, the State Securities Commission has the right to request the representative of the shareholder and founding member or person intended as the director (General Director) to explain directly or in writing.

5. Within 30 days after the State Securities Commission has a written request, the shareholder and founding member to establishing securities business organization shall complete the dossier to request the issue of the license of establishment and operation. After the above time limit, if the dossier is not supplemented and completed in full, the State Securities Commission has the right to refuse to issue the license of establishment and operation.

6. Within 20 days from the date of receiving complete and valid dossier as prescribed in Clause 1, 2, 3 and 5 of this Article, the State Securities Commission shall have the written request of the completion of the conditions of material facility and contributed capital escrow. The shareholder and capital contribution member may deduct the contributed capital to invest in material facilities. The remaining contributed capital must be blockaded on account of commercial bank designated by the State Securities Commission and shall be released and transferred to the account of the company immediately after it is issued the license of establishment and operation.

7. After a period of 03 months after receiving notice of the State Securities Commission as prescribed in Clause 6 of this Article, the shareholder and capital contribution member fail to improve material facilities and blockade sufficient charter and complement personnel in full, the State Securities Commission may refuse to issue the license.

8. Within 07 days after receiving the certificate of capital escrow and record of material facilities inspection and other valid documents, the State Securities Commission shall issue the license of establishment and operation. In case of refusal, the State Securities Commission shall reply in writing stating the reasons therefor.

Article 73. Investment operation overseas of Vietnamese securities business organization

1. The securities business organization upon setting up branch and representative office abroad and carrying out investment abroad must be approved by the State Securities Commission as prescribed by the Ministry of Finance.

2. After obtaining the written approval of the State Securities Commission, the securities business organization shall set up branche and representative office abroad and carry out investment abroad in accordance with the law on investment and foreign exchange management.

Article 74. Conditions for establishment of branch and representative office of the foreign securities business organization in Vietnam

1. The foreign securities business organization providing the fund management services is permitted to establish representative office of the Fund Management Company in Vietnam if meeting the following conditions:

a) Being operating legally and regularly supervised by the specialized management and supervision agency in the finance, banking and securities area in the country where such organizaiton is established and operating;

b) Being operating legally in the country where the specialized management and supervision agency of that country has signed bilateral or multilateral with the State Securities Commission on information exchange, management cooperation, inspection and supervision of securities activities and securities market or being managing the funds investing in Vietnam. The remaining duration of operation (if any) is at least 01 year.

2. The foreign securities business organization performing securities brokerage operations, underwriting of securities is permitted to establish representative office of securities company in Vietnam if meeting the conditions stipulated at Point a and b, Clause 1 of this Article.

3. The foreign securities business organization providing the fund management services is permitted to establish its branch in Vietnam if meeting the provisions in Article 77 of the Securities Law and the following conditions:

a) Being operating legally and having permission to operate the public fund management in accordance with regulations of the country of origin and approved by the specialized supervision management agency in the country of origin approval in writing to permit the establishment of a branch operation in Vietnam (if any as per the regulation of foreign law);

b) Not being the shareholders and capital contribution member owning more than 5% of charter capital of a Fund Management Company in Vietnam;

c) Branch of foreign Fund Management Company is only permitted to provide the asset management services mobilized abroad;

d) Meeting the provisions at Point b, Clause 10, Article 71 of this Decree or having had representative office in Vietnam and meeting the provisions at Point b, Clause 1 of this Article;

đ) The order, procedure and dossier for issue of license of establishment and operation of the branch of foreign Fund Management Company and the operation of the branch of foreign Fund Management Company in Vietnam shall comply with the provisions of the Ministry of Finance .

Article 75. Order, procedure and dossier of representative office registration of foreign securities business organization in Vietnam

1. The dossier of representative office registration of foreign securities business organization (hereafter referred to as parent company) in Vietnam includes:

a) The documents specified in clause 2, Article 78 of the Securities Law;

b) The documents certifying the parent company meets the conditions specified in Clause1 and 2, Article 74 of this Decree, the documents of the competent authority in foreign country permitting to open representative office operating in Vietnam ( if any as per the regulation of foreign law); the financial statement audited of the nearest fiscal year or the written certification of the implementation of tax or financial obligations in the nearest fiscal year issued by the competent authority where the parent company is established;

c) The meeting minutes and decision of the Board of Directors or Board of members, or of the director (General Director) on the establishment of representative office in Vietnam, the decision to appoint Chief Representative in Vietnam, a certified copy of valid passport or identity card, curriculum vitae of the Chief Representative and staff working at representative office in Vietnam;

d) The principle Contract of representative office lease together with the written confirmation of ownership or authority to lease of the headquarters lessor.

In case of establishment of the representative office of the fund management company, the following documents related to the fund being invested in Vietnam (if any) shall be supplemented:

- The certified and consularly legalized copy of certificate of fund establishment (if any) or the document certifying the fund has completed the establishment registration abroad, the fund's Prospectus or equivalent documents issued by the management agency(if any), the fund charter, trust agreement or memorandum of capital contribution or other equivalent documents;

- The document of the depository bank certifying the scale of fund capital in Vietnam;

- A certified copy of the certificate of account registration of indirect investment capital or of the certificate of registration of securities trading code of these funds.

2. Dossier as specified in Clause 1 of this Article shall be made into two (02) sets, one in Vietnamese language and one in language of country of origin together with electronic data file. The original set of dossier shall be sent directly at the one-stop division of the State Securities Commission or by mail. The documents issued by the competent State management agency must be consularly legalized within 06 months before the date of the dossier submission.

The amendment and supplementation of dossier shall be conducted when the foreign securities business organization deems it necessary or the State Securities Commission requests the amendment and supplementation. The amendment and supplement must be signed by those who have signed the dossier sent to the State Securities Commission or who have the same title with the persons above mentioned.

4. Within 07 days after receiving complete and valid dossier, the State Securities Commission shall issue the certificate of operation registration of representative office of the foreign securities business organization in Vietnam. In case of refusal, the State Securities Commission shall reply in writing stating the reasons therefor.

Article 76. Rights and obligations of representative office, the Chief representative and staff at the representative office of foreign securities business organization in Vietnam

1. Rights and obligations of representative office of foreign securities business organization:

a) Being entitled to open account for expenditure in foreign currencies or Vietnam dong with foreign currency origin at commercial bank permitted to operate the foreign exchange business in Vietnam and only use this account in the operation of representative office. The opening, use and closure of the representative office’s account shall comply with the provisions of relevant laws;

b) Being entitled to recruit foreign employee to work in representative office under the provisions of the law of Vietnam. Within 15 days after the recruitment of foreign employee working in representative office in Vietnam, the parent company must report to the State Securities Commission on the recruitment of foreign personnel together with documents certifying the approval of the competent State management agencies;

c) Having own seal in accordance with regulation of Vietnam’s law and only using this seal in the trading documents under the power and function of the representative office;

d) Only performing the activities by the content and within the time limit and activities specified in the certificate of operation registration of representative office; not being entitled to perform business activities in Vietnam, to perform the asset management and investment capital management for investors, including investment capital of parent company in Vietnam and other securities business activities in Vietnam;

dd) Other rights and obligations as prescribed by law.

2. The Chief representative and staff at representative office are not permitted to hold the positions simultaneously as follows:

a) The head of the parent company’s branch, Chief Representative and staff of representative office and branche of other foreign organization in Vietnam;

b) The legal representative, Director (General Director), Deputy Director (Deputy General Director) or employees working for enterprises established under the law of Vietnam;

c) The legal representative, member of the Board of Directors, Board of members, the Director (General Director), Deputy Director (Deputy General Director) of the parent company or other individual working for parent company have the right on behalf of the parent company to sign economic contracts, property transactions without the written authorization of the parent company.

3. The Chief Representative on represents the parent company to sign contracts related to business and investment activities of the parent company with other economic organizations in Vietnam in the event of a legal authorization in writing by the competent person of the parent company. The Power of attorney must be made separately for each signing (one-time authorization) and one valid copy of it must be sent to the State Securities Commission within 10 days from the effective date.