Nghị định 86/2016/NĐ-CP quy định điều kiện đầu tư, kinh doanh chứng khoán

DECREE

ON REQUIREMENTS FOR INVESTMENT AND TRADING IN SECURITIES

Pursuant to the Law on Government organization dated June 19, 2015;

Pursuant to the Securities Law dated June 29, 2006; Law amending and supplementing a number of articles of Securities Law dated November 24, 2010;

Pursuant to the Law on employment dated November 26, 2014;

Pursuant to the Law on enterprises dated November 26, 2014;

At the request of the Minister of Finance;

The Government promulgates a Decree on requirements for investment and trading in securities.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Decree deals with requirements for investment and trading in securities that organizations or individuals must satisfy when conducting investment and trading in Vietnamese securities market.

2. This Decree applies to securities companies, fund management companies, investment companies, branches of foreign securities traders in Vietnam, depository members, trading members, paying bank(s), supervisory banks, Stock Exchange (SE), the Vietnam Securities Depository (VSD) and relevant agencies, organizations, and individuals on the Vietnamese securities market.

Article 2. Interpretation of terms

For the purposes of this Decree, these terms below shall be construed as follows:

1. Security company means an enterprise that is established and operates under law on securities to do business with one, some or all kinds of the following services: Securities brokerage, proprietary trading, securities underwriting, securities investment consultancy and financial services in accordance with the law on securities.

2. Fund management company means an enterprise that is established and operates under law on securities to do business with the following services: Management of securities investment fund, management of securities investment portfolio and securities investment consultancy.

3. Foreign securities traders includes securities companies and fund management companies established in foreign countries.

4. Branch of foreign securities company or fund management company in Vietnam is an unit which is affiliated to the foreign securities company or fund management company, has no legal status and is permitted to provide securities services in Vietnam.

5. Margin trading means practice of buying securities with money borrowed from a securities company, in which the purchased securities and other marginable securities of the customer then serve as collateral for the loan.

6. Day trading means practice of buying and selling the same security with the same volume, on the same account and within the same trading day.

7. Paying bank means a bank that provides payment process services for securities exchange on SE.

Article 3. General regulations on securities investment and trading

1. Any organizations or individuals, upon the establishment or during the investment and trading on the Vietnamese securities market, must conform and maintain requirements prescribed in this Decree and other requirements for investment and trading in securities (if any) prescribed in the Law on Securities and Decrees of the Government.

2. During the operation, if there is any changes to business service(s), name(s), business location(s), charter capital, legal representative(s) or head(s) of a securities trader, a branch of a securities trader, a branch of a foreign securities trader in Vietnam or restructuring of a securities trader, regulations on law on enterprises must be complied and such change or restructuring must be adopted by the General Meeting of Shareholders, Board of Directors, Member assembly or owner(s) of such entity in accordance with law on the Law on Securities and be registered with State Securities Commission (hereinafter referred to as SSC).

3. Procedures for investment and trading in securities on Vietnamese securities market applicable to domestic and foreign organizations or individuals shall be in accordance with law on securities.

Article 4. Requirements applied to foreign organizations holding 51% or more charter capital of securities traders in Vietnam

A foreign organization is permitted to hold 51% or more charter capital of securities traders in Vietnam when the following requirements are satisfied:

1. Regulations in Clause 6, 10 Article 71 of the Government's Decree No. 58/2012/ND-CP dated July 20th 2010 on guidelines for the Law on Securities and the Law on amendments to the Law on Securities (hereinafter referred to as the Decree No. 58/2012/ND-CP) and Clause 21, 24 Article 1 the Government's Decree No. 60/2015/ND-CP dated June 26, 2015 amendments to the Decree No. 58/2012/ND-CP (hereinafter referred to as the 60/2015/ND-CP).

2. The purchase of shares or stakes to hold 51% or more of charter capital of a securities trader in Vietnam is adopted by the General Meeting of Shareholders, the Board of members or owner(s) of the foreign organization.

3. The purchase of shares or stakes to hold 51% or more of charter capital of a securities trader in Vietnam by a foreign organization is adopted by the General Meeting of Shareholders, the Board of members or owner(s) of the securities trader in Vietnam, unless the foreign organization makes a tender offer as prescribed in law on securities.

4. Only owner’s equity and other legal sources of funds are used to buy shares or stakes and the foreign organization is not in the case of ownership restriction as prescribed in Point c Clause 7 and Point c Clause 8 of Article 71 of 58/2012/ND-CP.

5. The annual financial statement up to the latest submission of foreign organization (or the latest consolidated financial statement in case where the foreign organization is the parent company) is prepared and audited as prescribed in foreign law in conformity with international accounting and auditing standards.

Chapter II

ON REQUIREMENTS FOR INVESTMENT AND TRADING IN SECURITIES COMPANIES

Article 5. Requirements for issuance of establishment and operation license of securities companies

1. Requirements pertaining to head offices, facilities and equipment:

a) Having head offices ensuring the trading in securities;

b) Having adequate facilities, office equipment, computer system, software in service of investment analysis, risk analysis and management, storing documents and equipment for safety and security of the head office in accordance with instructions of the Ministry of Finance. Securities underwriting service and securities investment consultancy services are not required to satisfy the requirements pertaining to equipment.

2. Requirements pertaining to capital:

The minimum capital contributed at the establishment time of the company must equal to legal capital as prescribed in Clause 1 and 2 Article 71 of Decree No. 58/2012/ND-CP.

3. Requirements pertaining to personnel:

Having a scheduled list of personnel, in which there are at least 3 securities practitioners in conformity with each business services respectively that are applied for license of establishment and operations. Having General Director (Director) of securities companies who satisfies the following requirements:

a) He/she has full legal capacity, is not facing a criminal prosecution or serving an imprisonment sentence or is prohibited from practicing a business job by a court as prescribed by law;

b) Having at least 3 years' experience in services departments in the field of finance, banking and/or securities or in finance, accounting and/or investment departments of other enterprises and having at least 3 years' experience in administration;

c) Obtaining a practice certificate of financial analysis or a practice certificate of fund management;

d) Facing penalty/penalties prescribed in law on securities and securities market in the latest 12 months from the submission date of application;

dd) Having no violation prescribed in Point b Clause 1 Article 80 of the Law on Securities.

4. Requirements pertaining to shareholders and capital contributors:

Proportion of shareholders and capital contributors shall be in accordance with regulations of Clauses 5, 6, 7 and 10 Article 71 of Decree No. 58/2012/ND-CP, regulations on foreign investors in Clause 21 and Clause 24 Article 1 of Decree No. 60/2015/ND-CP and the following requirements are satisfied:

a) At the time of establishment registration, capital contributors have no accumulated loss mentioned in the latest audited annual financial statement and the latest examined biannual financial statement (if any);

b) Where the securities company is structured in the form of single member limited liability company, the owner must be a commercial bank, an insurer, or a foreign organization satisfying requirements prescribed in Article 4 of this Decree.

Article 6. Requirements for addition of securities services to securities companies

A securities company is entitled to provide additional securities services upon an approval granted by SSC if the following requirements are satisfied:

1. Regulations in Clauses 1, 2 and 3 Article 5 of this Decree applicable to existing securities services and expected additional services.

2. The securities company is not the a state of operational control, special control or operation suspension within the latest 3 months from the date on which the application for registration is submitted.

Article 7. Requirements for restructuring of securities companies

A securities company is entitled to engage in consolidation, acquisition or conversion of business type if the following requirements are satisfied:

1. Post-restructuring company must comply with Clauses 1, 2 and 3 Article 5 of this Decree. In case where the post-restructuring company is a single-member limited liability company, its owner must comply with Point b Clause 4 Article 5 of this Decree.

2. In case where the company combine the restructuring and private offering, public offering or a transaction approved by SSC, it is required to satisfy requirements of relevant law provisions.

3. The post-restructuring company satisfy requirements prescribed in law on competition and other laws on enterprise restructuring.

Article 8. Requirements for registration of provision of margin trading service, day trading service, and trading, clearing and settlement of derivative trading service

1. A securities company is entitled to provide margin trading service upon an approval of SSC when the following requirements are satisfied:

a) It is licensed to provide securities brokerage service and is adopted by the Board of Directors, Member assembly or owner(s) of the securities company to provide margin trading service;

b) It is a member of SE and VSD and is not in the state of warning, operational control, special control, mandatory suspension, voluntary suspension, consolidation, acquisition, dissolution, or bankruptcy;

c) There is no accumulated loss of 50% or more of charter capital according to the latest audited annual financial statement or the latest examined biannual financial statement, provided that such statement is made within 6 months up to the time at which the margin trading service is registered. The auditor’s opinions in the latest audited annual financial statement or the latest examined financial statement must be unqualified opinions.

d) The ratio of liabilities to owner’s equity does not exceed 3, owner’s equity is not lower than legal capital, and reserve funds are created sufficiently;

dd) Liquidity ratio accounts for at least 180% in the latest 12 consecutive months from the time of registration of margin trading service;

e) There are a system for margin trading service, supervision of margin accounts; a system of management of separate investors’ deposits for securities transactions at the bank; and a process of service and risk management, and control of margin trading.

2. Application for registration of margin trading service includes:

a) An original of registration of margin trading service;

b) A copy of resolution on margin trading service issued by Board of Directors, Member assembly or owner of securities company;

c) An original of description of the system serving margin trading, supervising margin accounts, including information technology system and software system;

d) The process of margin trading service and the process of risk management and control of margin trading.

3. The application prescribed in Clause 2 of this Article shall be made in one dossier enclosed with electronic file sent to SSC, directly or by post. Within 15 working days from the date on which the satisfactory application is received, SSC shall grant an approval for margin trading to the securities company. If the application is rejected, SSC must provide explanation in writing.

4. The securities company is entitled to provide day trading service upon an approval of SSC when the following requirements are satisfied:

a) It is licensed to provide all securities trading services and is adopted by Board of Directors, Member assembly or owner(s) of the securities company to provide day trading service;

b) It complies with Point b, c and d Clause 1 of this Article;

c) There are a system serving day trading service, a system of management and supervision of day trading on customers‘ accounts; a process of service and risk management for day trading service; and a system of management of separate investors’ deposits for securities transactions at the bank;

d) Liquidity ratio accounts for at least 220% in the latest 12 consecutive months from the time of registration of day trading service.

5. A securities trader is entitled to provide derivative trading service when the following requirements are satisfied:

a) Regulations in Clause 1 Article 4 of Government’s Decree No. 42/2015/ND-CP dated May 5, 2015 on derivatives and derivatives market (hereinafter referred to as Decree No. 42/2015/ND-CP);

b) Reserve funds are created sufficiently as prescribed and there is no loss in the latest 2 years; liquidity ratio accounts for at least 220% in the latest 12 consecutive months before the month in which the application is submitted;

c) The opinions of permitted audit organization in the latest audited annual financial statement and the latest examined biannual financial statement (if any) must be unqualified opinions.

6. A securities company, a commercial bank, a branch of foreign bank is entitled to provide clearing and settlement of derivative trading if the following requirements are satisfied:

a) It complies with Clause 2 Article 4 of Decree No. 42/2015/ND-CP and Point c Clause 5 of this Article;

b) Regarding the securities company: Reserve funds are created sufficiently as prescribed and there is no loss in the latest 2 years; liquidity ratio accounts for at least 260% in the latest 12 consecutive months before the month in which the application is submitted;

c) Regarding the commercial bank or the branch of foreign bank: Requirements pertaining to capital adequacy within the latest 12 months before the month in which the application is submitted in accordance with law on banking are satisfied.

Article 9. Requirements for establishment of and addition of services to branches and transaction offices of securities companies

1. A securities company is entitled to establish a branch if the following requirements are satisfied:

a) The satisfaction of requirements for issuance of licenses to the existing headquarter, branches and transaction offices (if any) is maintained;

b) At the time of establishment of the branch, the securities company is not in the state of operational control, special control or mandatory suspension as prescribed by law;

c) The securities company does not incur any penalties for administrative violations against regulations on securities and securities market within 6 months up to date on which SSC receives the application for establishment of the branch submitted by the securities company;

d) There is a head office of the branch and equipment serving the securities trading services authorized to provide at the branch as prescribed in Point c Clause 1 Article 5 of this Decree;

dd) The Director of branch must satisfy the requirements prescribed in Points a and d Clause 3 Article 5 of this Decree, obtain a securities practice certificate in conformity with business services provided by the branch, have at least 2 years’ experience in the fields of finance, banking and securities and at least 1 year’ experience in administration; there are at least 2 securities practitioners in conformity with each business service provided at the branch.

2. A securities company is entitled to provide services in a branch if the following requirements are satisfied:

a) It complies with regulations in Points a, d and dd Clause 1 applicable to existing and expected additional trading services;

b) The securities company is not the a state of operational control, special control or mandatory suspension within the latest 3 months from the date on which the application for registration is submitted.

3. A securities company is entitled to establish a transaction office if the following requirements are satisfied:

a) At the time of establishment of the transaction office, requirements in Points a, b and c Clause 1 of this Article are satisfied;

b) There is premise and equipment serving the securities trading services;

c) There are at least 2 securities practitioners working in the scheduled transaction office;

d) The transaction office must be located within the administrative division of the province or central-affiliated city (hereinafter referred to as province) where the securities company has its head quarter or branch located.

4. SSC shall carry out inspection of facilities and premise of the branch of the securities company scheduled to provide securities brokerage, proprietary trading or of the transaction office before receiving the approval.

Article 10. Requirements, application and procedures for establishment and operation of branches of foreign securities company in Vietnam

1. A foreign securities company is entitled to establish a branch in Vietnam if the following requirements are satisfied:

a) It is operating legally, not in the state of consolidation, division and dissolution, or bankruptcy; is licensed to provide securities trading services that are expected to register for the branch in Vietnam; the securities authority of the home country has signed bilateral or multilateral arrangements with SSC of Vietnam to exchange, cooperate and inspect securities operations and securities market;

b) The branch is provided with a minimum sum of capital equivalent to legal capital as prescribed in Clauses 1 and 2 Article 71 of Decree No. 58/2012/ND-CP on securities trading services registered for branches in Vietnam;

c) The operating period of the foreign securities company specified in the license (if any) is at least 5 years;

d) It has a process of risk management and a process of performance of securities trading services in accordance with Vietnamese law;

dd) It is not a shareholder, a capital contributor or in conjunction with a relevant person, directly owns or through investment trust or authorization, owns more than 5% of charter capital of a securities company in Vietnam;

e) The foreign securities company has its competent body approved the establishment of the branch in Vietnam;

g) The branch expected to be established in Vietnam complies with Clauses 1 and 3 Article 5 of this Decree.

2. A branch of foreign securities company in Vietnam is entitled to provide securities trading services similarly to the securities company, except for direct management of deposits for securities trading of customers and opening of securities trading accounts for domestic investors.

3. An application for issuance of establishment and operation license for a branch of foreign securities company in Vietnam includes:

a) An original of application form for issuance of establishment and operation license for the branch of foreign securities company in Vietnam bearing the signature of the competent representative of the foreign securities company;

b) A copy of charter of the foreign securities company and a decision on capital provision for the branch in Vietnam made by the foreign securities company;

c) A copy of establishment and operation license of the foreign securities companies and equivalent documents issued by competent authorities of the home country;

d) A document certifying by a foreign competent authority of the country where the foreign securities company has its headquarter located that the foreign securities company is not in the state of operational control, special control, or another warning status, unless otherwise prescribed by foreign law;

dd) The latest annual financial statement of the foreign securities company (or the latest consolidated annual financial statement in case where the foreign organization is the parent company) is prepared and audited as prescribed in foreign law in conformity with international accounting and auditing standards;

e) Copies of meeting minutes (if any) and a decision on establishment of branch in Vietnam issued by the General Meeting of Shareholders, the Board of Directors, or owner(s) or competent representative(s) as specified in the charter of the foreign securities company;

g) An original of list of Directors appointed in branches and expected professional personnel bearing the signature of the competent body of the foreign securities company; curriculum vitae and juridical record issued within 6 months up to the submission date and other documents proving that the Director of branch or personnel member satisfy requirements pertaining to personnel upon the establishment of branch;

g) An original of description of facilities and equipment for the branch premise enclosed with a copy of lease of branch premise in accompany with documents certifying ownership rights, right to use or power to lease of the lessor;

i) It has a process of risk management and a process of performance of securities trading services.

4. The application prescribed in Clause 3 of this Article shall be made in one dossier in Vietnamese enclosed with an electronic file. Such application shall be sent to SSC premise, directly or by post. In case where documents in the application are made in foreign languages, they must be consularly legalized and translated into Vietnamese; each translation must be notarized and bear authenticated signature of the translator as prescribed by law.

Within 20 days, from the date on which the application is received as prescribed in Clause 3 of this Article, SSC shall request the foreign securities company in writing to make necessary amendments in case of insufficient or unsatisfactory application or notify the foreign securities company of complete satisfaction of requirements pertaining to facilities and personnel in case of satisfactory application, and block capital provided for the branch. The foreign securities company may use the capital provided for the branch to invest in facilities. The remaining contributed capital must be blocked on account of commercial bank designated by SSC and shall be released and transferred to the account of the branch upon the effective date of the license of establishment and operation issued to the branch.

Within 6 months, from the date on which SSC notifies the foreign securities company of amendments to the application for issuance of establishment and operation license of branch, such company must make necessary amendments as prescribed. After the aforesaid time limit, if the foreign securities company fails to make necessary amendments or provide explanation as required, SCC may reject issuance of establishment and operation license of branch.

5. SSC shall carry out inspection of facilities and premise of the branch of the securities company scheduled to provide securities brokerage, proprietary before granting the approval.

6. Within 7 days after receiving the certificate of capital blockade and record of material facilities inspection and other valid documents prescribed in Clause 3 of this Article, SSC shall issue the license of establishment and operation of branch in Vietnam to the foreign securities company. If the application is rejected, SSC must provide explanation in writing.

7. Within 30 days, from the effective date of the establishment and operation license, the foreign securities company must apply for issuance of stamp to a police authority, and also announce the establishment and operation license of branch in a written newspaper or online newspaper permitted to publish in Vietnam in 3 consecutive issues.

8. Within 15 days from the commencement date, the branch of foreign securities company in Vietnam must send a notification of the commencement date and documents certifying that the foreign securities company has completed procedures prescribed in Clause 7 of this Article.

9. A branch of foreign securities company in Vietnam is entitled to provide additional securities trading services if the following requirements are satisfied:

a) It complies with Points a, c and d Clause 1 of this Article;

b) The branch is not the a state of operational control, special control or mandatory suspension within the latest 3 months from the submission date of application;

c) It complies with regulations in Clauses 1, 2 and 3 Article 5 of this Decree applicable to existing securities services and expected additional services.

10. The branch of foreign securities company in Vietnam must request SSC to amend to the establishment and operation license of the branch in case where trading services of the branch are added or withdrawn; there is any changes to Director, name and location of branch, location of headquarter of the foreign securities company, location of business registration of foreign securities company, legal status or other changes to division, acquisition, consolidation of the foreign securities company.

11. From the date on which the establishment and operation license is issued, the branch of foreign securities company in Vietnam is obligated to send reports, disclose information and comply with regulations on organization, operation and financial security similarly to a securities company.

12. The branch of foreign securities company in Vietnam is dissolved upon an approval granted by SSC. Application and procedures for dissolution are similar to those applicable to securities company being single-member limited liability company.

Chapter III

REQUIREMENTS FOR INVESTMENT AND TRADING IN FUND MANAGEMENT COMPANIES, INVESTMENT COMPANIES

Article 11. Requirements for issuance of establishment and operation license of fund management companies

1. Requirements pertaining to head offices, facilities and equipment:

Meeting the requirements prescribed in Clause 1 Article 5 of this Decree.

2. Requirements pertaining to capital:

The minimum capital contributed at the establishment time of the company must equal to legal capital as prescribed in Clause 3 Article 71 of Decree No. 58/2012/ND-CP.

3. Requirements pertaining to personnel:

There is a scheduled list of personnel, in which there are at least 5 staff members obtaining practice certificates of fund management. There are General Director (Director), Deputy General Director (Deputy Director) in charge of specialized services (if any) who satisfy the following requirements:

a) Satisfying requirements prescribed in Points a, d, dd Clause 3, Article 5 of this Decree;

b) Having at least 5 years' experience in services departments in the field of finance, banking, and/or insurance or in finance, accounting and/or investment departments of other enterprises;

c) Obtaining practice certificates of fund management and any of the following international degrees or certificates:

- Practice certificates of fund management issued by any of the countries being members of Organization for Economic Cooperation and Development (OECD); or

- International certificates of Chartered Financial Analyst level II, or Certified International Investment Analyst - Final level);

d) Unless securities practitioners are assigned to administer the organization receiving investment capital from the fund or trustor, they may not work concurrently full-time jobs in other business entities.

4. Requirements pertaining to shareholders and capital contributors:

Proportion of shareholders and capital contributors shall be in accordance with regulations of Clauses 5, 6, 8 and 10 Article 71 of Decree No. 58/2012/ND-CP, regulations on foreign investors in Clause 21 and Clause 24 Article 1 of Decree No. 60/2015/ND-CP and Point a Clause 4 Article 5 of this Decree. Where the fund management company is structured in the form of single member limited liability company, the owner must be a commercial bank, an insurer, or a foreign organization satisfying requirements prescribed in Article 4 of this Decree.

Article 12. Requirements for amendments to establishment and operation licenses of fund management companies

1. A fund management company is entitled to provide additional securities investment consultancy if the following requirements are satisfied:

a) It is not the a state of operational control, special control or mandatory suspension within the latest 3 months from the submission date of application;

b) It complies with Clause 1 Article 3 of this Decree and its owner’s equity is not lower than legal capital;

c) There is at least 1 staff member in department of investment consultancy provided for customers. The staff member in department of investment consultancy must satisfy requirements in Points a and d Clause 3 Article 11 of this Decree, obtain a practice certificate of securities trading or satisfy requirements in Point c Clause 3 Article 11 of this Decree and must no work part-time job in departments of fund management, investment and other departments facilitating asset transactions for the fund and trustors.

2. A fund management company is entitled to have business type converted into another type if the following requirements are satisfied:

a) The post-restructuring company satisfies requirements prescribed in Clauses 1, 2 and 3 Article 11 and Clause 1 Article 7 of this Decree;

b) Where the post-restructuring company is structured in the form of single member limited liability company, the owner must be a commercial bank, an insurer, or a foreign organization satisfying requirements prescribed in Article 4 of this Decree.

3. A fund management company is entitled to engage in consolidation or acquisition together with another fund management company if the following requirements are satisfied:

a) The post-restructuring company satisfies requirements prescribed in Clauses 1, 2 and 3 Article 11 and Clause 1 Article 7 of this Decree;

b) The post-restructuring company satisfy requirements prescribed in law on competition and other laws on consolidation and acquisition.

Article 13. Requirements for establishment of branches of fund management companies

1. Apart from trust fund management, a branch of a fund management company is entitled to provide securities investment consultancy service and other services according to decentralization and authorization of the fund management company if the fund management company satisfies the following requirements:

a) There are premise and equipment satisfying requirements prescribed in Clause 1 Article 11 and Points b and c Clause 1 Article 9 of this Decree;

b) The Director of the branch must satisfy requirements prescribed in Clause 3 Article 11 of this Decree and at least 1 staff member must satisfy requirements prescribed in Points a, d Clause 3 Article 11 of this Decree, both entities must obtain practice certificates of securities trading or satisfy requirements prescribed in Point c Clause 3 Article 11 of this Decree;

c) It complies with Clause 1 Article 3 of this Decree and its owner’s equity is not lower than legal capital.

2. Requirements pertaining to foreign securities trader providing fund management service entitled to establish in Vietnam:

a) It is not in state of consolidation, division, dissolution, or bankruptcy.

c) It complies with Clause 2 Article 74 of Decree No. 58/2012/ND-CP;

c) The minimum capital provided for the branch is equivalent to the legal capital prescribed in Clause 3 Article 71 of Decree No. 58/2012/ND-CP;

d) It complies with Clauses 1 and 3 Article 11 of this Decree.

Article 14. Requirements for issuance of and amendments to establishment and operation license of investment companies

1. Requirements for issuance of establishment and operation license of a public investment company, an real estate investment company shall comply with Article 79 of Decree No. 58/2012/ND-CP. Requirements for issuance of establishment and operation license of a private investment company shall comply with Article 87 of Decree No. 58/2012/ND-CP.

2. The change to name, change of the fund management company, depository bank, supervisory bank of an investment company must be approved by the General Meeting of Shareholders before SSC grants the approval.

3. Requirements for consolidation or acquisition of investment companies:

a) Actual consolidation or acquisition, plan for consolidation or acquisition; and contract of consolidation or acquisition must be approved by the General Meeting of Shareholders of the related companies;

c) In case of the stock swap combined with the payment in cash, the shareholders of acquired companies shall receive an additional sum not exceeding 10% of net asset value calculated on one (01) stock at the date of consolidation or acquisition;

c) In case of consolidation or acquisition of private investment companies, the consolidated companies and acquiring companies must comply with Article 87 of Decree No. 58/2012/ND-CP.

4. Requirements for extension of operating period of an investment company:

a) The extension must be approved by the General Meeting of Shareholders of the concerned company;

b) The net asset value of the concerned company at the latest evaluation period before submission of the application for extension is not lower than VND 5 billion.

Chapter IV

REGISTRATION OF SECURITIES DEPOSITORY, PAYING BANKS, SUPERVISORY BANKS

Article 15. Requirements for registration of depository members of the Vietnam Securities Depository

1. A securities company or a commercial bank in Vietnam is entitled to register as a depository member of VSD if the following requirements are satisfied:

a) It obtains a document certifying the registration of securities depository issued by SSC;

b) There is at least 1 member of the Board of Directors who is in charge of the registration, depository and clearing service;

c) There are staff members working in the department of depository service who have finished the professional courses provided by VSD;

d) There is a process of registration, depository, clearing and settlement of securities in accordance with current law provisions and operation regulations of VSD;

dd) There is a system of information technology satisfactory with the requirements for registration, depository, clearing and settlement of securities in accordance with current law provisions and operation regulations of VSD.

2. A depository member is entitled to register the securities depository service for its branch(es) if the following requirements are satisfied:

a) It complies with Points b, c, d and dd Clause 1 of this Article;

b) It obtains an approval for securities depository service provided by the branch issued by SSC.

Article 16. Requirements for registration as paying banks

1. SSC shall select bank(s) which act(s) as paying banks for primary securities trading and bank(s) which act(s) paying banks for derivative securities trading on SE. The selection of paying banks shall be conducted by SSC every 5 years as prescribed by law.

2. A commercial bank is entitled to register as a paying bank if the following requirements are satisfied:

a) It has paid-in charter capital of more than VND 10,000 billion;

b) Its financial performance is profitable within the latest 2 years;

c) It conforms to minimum capital adequacy ratio as prescribed by law on banking;

d) It has a technical system which is connected to VSD to ensure the process payment of securities trading;

dd) It has committed to SSC to grant loans for processing payment of securities trading in case where the depository member is insolvent;

e) It has a technical system allowed to store payment figures within at least 5 years and promptly provide those figures to SSC or VSD within 48 hours upon a request.SSC or VSD within 48 hours upon a request.

Article 17. Requirements for registration as supervisory banks

A commercial bank is entitled to register as a supervisory bank if the following requirements are satisfied:

1. It is a commercial bank which obtains a document certifying registration of securities depository to provide depository service and supervision of public fund management and investment company management.

2. It has at least 2 professional staff members who obtain the following certificates:

a) A certificate of law on securities and securities market;

b) Certificate of basic securities and securities market or practice certificates of securities trading or international certificates of at least Chartered Financial Analyst level I, at least Certified International Investment Analyst level I or practice certificates of securities trading issued at members of Organization for Economic Cooperation and Development (OECD);

c) Certificates of accounting or auditing or certificates of chief accountant or international certificates in the field of accounting or auditing such as Association of Chartered Certified Accountants (ACCA), Certified Public Accountants (CPA), Chartered Accountants (CA), Associate Chartered Accountants (ACA).

3. The supervisory bank, members of the Board of Directors, members of Board of Management and staff members of the supervisory bank that be in charge of asset fund and supervision of fund management by the fund management company may not be related entities or entities which engage in administration of the fund management company or proprietorial relation, capital contribution, share holding, loans or borrowing with the fund management company for which the supervisory bank provides supervision service and vice versa.

4. The supervisory bank, members of the Board of Directors, members of Board of Management and professional staff members may not be partners in trading of fund asset, except for the foreign exchange in accordance with relevant law provisions or securities trading performed on the trading system of SE.

5. With regard to supervision of real estate investment companies, the supervisory bank must have at least 2 professional staff members who obtain any of the following certificates: Real estate evaluation certificates in accordance with law on real estate trading or price verifier cards.

Chapter V

ESTABLISHMENT OF OUTWARD-LOCATED OR OUTWARD-INVESTED BRANCHES, REPRESENTATIVE OFFICES

Article 18. Requirements for establishment of outward-located or outward-invested branches and representative offices of securities traders

A securities trader is entitled to establish an outward-located or outward-invested branch or representative office if the following requirements are satisfied:

1. It has a plan for establishment of an outward-located or outward-invested branch or representative office which is approved by the General Meeting of Shareholders, the Board of members or owner(s) in writing.

2. It complies with regulations on prudential ratio after deduction of capital provided for the outward-located or outward-invested branch or representative office.

3. The operation scope of the outward-located branch or representative office is within the business scope specified in the establishment and operation license of the securities trader in Vietnam.

4. It complies with Article 73 of Decree 58/2012/ND-CP.

Article 19. Requirements for outward portfolio investment of securities traders

1. A securities trader which performs outward investment in the form of purchase, sale of securities or valuable papers or securities investment fund, overseas intermediary financial institutions must comply with regulations of law on outward portfolio investment and relevant provisions.

2. When performing outward investment in a form other than those prescribed in Clause 1 of this Article, the securities trader must satisfy requirements prescribed in Article 18 of this Decree and relevant law provisions.

Chapter VI

SECURITIES PRACTICE CERTIFICATES

Article 20. Rules and types of securities practice certificates

1. Securities practice certificates include:

a) Practice certificates of securities brokerage enable holders to provide securities brokerage and securities investment consultancy services;

b) Practice certificates of financial analysis enable holders to provide securities brokerage, securities investment consultancy, proprietary trading, and securities underwriting services;

c) Practice certificates of fund management enable holders to provide securities brokerage, securities investment consultancy, proprietary trading, securities underwriting, securities portfolio management, and securities investment fund management services.

2. Rules of securities practice:

a) A securities practice certificate is only valid when the holder works for a securities company, a fund management company, or an investment company and such company has notified SSC. A securities practice certificate will remain valid indefinitely, unless it is revoked as prescribed in ả 80 of the Law on Securities;

b) A person who obtains any of the 3 types of securities practice certificates prescribed in Clause 1 of this Article and obtains a certificate of derivatives and derivatives market is entitled to provide services equivalent to his/her certificates in terms of derivatives at securities traders;

c) A holder of a securities practice certificate is only entitled to work in a securities trading service department at a time.

Article 21. Requirements for issuance of securities practice certificates

1. A practice certificate of securities brokerage is issued to an individual if the following requirements are satisfied:

a) He/she complies with Point a Clause 1, Article 79 of the Law on securities;

b) He/she obtains at least a bachelor's degree;

c) He/she obtains certificates of securities, including: Basic securities and securities market, law on securities and securities market, securities analysis and investment, securities brokerage and securities investment consultancy;

d) He/she passes an test of securities practice certificate in conformity with the type of securities practice certificate applied for issuance.

2. A practice certificate of financial analysis is issued to an individual if the following requirements are satisfied:

a) He/she complies with regulations in Clause 1 of this Article;

b) He/she obtains the following certificate Certificates of financial consultancy and securities underwriting, certificates of corporate financial statement analysis.

3. A practice certificate of fund management is issued to an individual if the following requirements are satisfied:

a) He/she complies with regulations in Clause 2 of this Article;

b) He/she obtain certificate of asset and fund management;

c) He/she has at least 3 years' experience in the field of finance, banking or obtains any of the following international certificates: CFA, CIIA, ACCA, and CPA.

4. The cases of exemption from securities certificates shall be prescribed in Clauses 1, 2 and 3 of this Article;

a) A person obtained at least a CIIA or CFA level II is exempt from obtaining a certificate of basic securities and securities market, certificate of securities analysis and investment, or certificate of corporate financial statement analysis;

b) A person obtained an ACCA, a CPA or an audit practitioner certificate, an accounting practice certificate issued by the Ministry of Finance or a CFA level I, CIIA level I is exempt from obtaining a certificate of basic securities and securities market, or certificate of corporate financial statement analysis;

c) A person obtained a securities practice certificate issued in a foreign country or a document certifying that he/she is permitted to practice securities legally in a foreign country is exempt from all certificates of securities.

Chapter VII

IMPLEMENTATION

Article 22. Effect and transitional regulations

1. This Decree comes into force from July 1, 2016.

2. Clause 18 Article 2 of Decree No. 58/2012/ND-CP shall be annulled.

3. Any branches of foreign banks in Vietnam obtained a certification of securities depository services, registered as depository members of VSD before effective date of the Law on Securities dated June 29, 2006 is entitled to be a securities depository member.

4. In case where a securities trader has its business type converted into a single-member limited liability company before the effective date of this Decree is exempt from regulations on proportion of shareholders, capital contributors prescribed in Clause 4 Article 5 and Clause 4 Article 11 of this Decree.

Article 23. Implementation

1. The Finance Ministry is responsible for guiding the implementation of this Decree.

2. The Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, Chairman of People’s Committee of central-run provinces and cities are liable to execute this Decree. /.

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