Chương III Thông tư 121/2020/TT-BTC: Hoạt động nghiệp vụ của công ty chứng khoán

Chapter III

SERVICES, BUSINESS LINES OR CORE BUSINESS FUNCTIONS

Article 13. Responsibilities of securities companies for rendering securities brokerage services

1. Securities companies must designate securities practitioners to hold the following positions:

a) Providing counsels and explanations about contracts, and helping customers in opening accounts used for trades in stocks;

b) Offering counsels on stock trades or transactions to customers;

c) Receiving orders from customers, controlling customers' orders;

d) Acting as heads of departments or divisions involved in securities brokerage services.

2. Securities companies must comply with regulations on anti-money laundering regulations under laws currently in effect.

3. Data on customers’ brokerage accounts at securities companies must be managed according to the centralization principles, and must be kept in reserve at other locations.

4. When rendering securities brokerage services, securities companies shall be prohibited from:

a) Advising on any increase or decrease in the stock prices without any ground to entice customers to participate in trades;

b) Agreeing on or proposing a specific interest rate or sharing of profits or losses with customers in order to entice customers to participate in stock trades;

c) Directly or indirectly setting up fixed locations outside those approved by the State Securities Commission to sign contracts to open accounts with customers, receive, execute orders from customers or pay for trades with customers, except for trading stocks online;

d) Receiving orders, making payment for stock trades with persons other than account holders without written authorization from account holders;

dd) Disclosing the contents of customers' orders or other confidential information obtained when performing trades or transactions on behalf of customers if such disclosure neither serves public announcement purposes nor meets inspection or examination demands as legally required;

e) Using customer’s names or accounts for registering or trading stocks;

g) Infringing upon other assets, rights and interests of customers.

Article 14. Responsibilities of securities companies to customers for rendering their securities brokerage services

1. When rendering securities brokerage services, securities companies must comply with regulations laid down in clause 1, 2 and 3 of Article 91 in the Law on Securities.

2. Securities companies are obligated to update customers on any change upon customer's request.

3. Securities company must sign contracts to open accounts with customers, directly performing stock trades or transactions on customers’ behalf, and being held legally liable for these activities.

4. Securities companies must fully keep track of money and stocks of each customer, providing information about balance, increased or decreased amount of money and securities to customers upon their request.

5. Securities companies must quote customers stock trading fees before performing transactions, securities and must published such fees on their websites.

6. Securities companies must set up specialized departments in charge of communicating with customers and dealing with customer's inquiries and complaints.

Article 15. Opening securities trading accounts

1. Before buying and selling stocks on customers’ behalf, securities companies must take steps in opening accounts for each customer on the basis of contracts to open stock trading accounts with customers. These contracts must meet current regulations and at least contain required information shown in the form given in the Appendix III hereto.

2. Securities companies must give explanations about contractual terms and conditions and relevant documents when rendering stock trades or transactions on customers’ behalf, learning about financial capacity, risk tolerance and expectations of profits earned by customers.

3. An account opening contract prescribed in clause 1 of this Article shall not include any of the following agreements:

a) Agreement for avoidance of legal obligations of a securities company without plausible reasons;

b) Agreement for limitation on the scope of compensation of the securities company without plausible reasons, or transfer of risk from the securities company to customers;

c) Agreement that binds customers to fulfill compensation obligations in an unfair manner;

d) Agreements made unfairly to the detriment of customers.

4. Investors opening accounts at securities companies must fill out all information required on account opening contracts.

Article 16. Receiving and executing orders

1. Securities companies can receive orders from customers according to the following approaches:

a) Receiving orders directly at counters;

b) Receiving orders via phone, fax, internet and other transmission modes.

2. Securities companies are only allowed to perform online stock transactions according to the provisions of Article 201 of the Decree, detailing the implementation of a number of articles of the Law on Securities.

3. In case of receiving orders online, via phone, fax and other transmission modes, securities companies must comply with the following rules:

a) Complying with the Law on Electronic Transactions and other instructional documents;  

b) Providing customer authentication and recording full information at the time of receiving orders, and retaining evidence of the customer’s placement of orders that are accessible when necessary;

c) Conforming to the rule under which confirmation is sent to customers before entering orders into the trading system;

d) Taking measures to ensure the safety and security of transmission modes and applying appropriate remedies when the customer's order cannot be entered into the trading system through the company's fault.

4. Securities companies shall only be allowed to execute customers' orders when these orders contain complete and accurate information about customers, trading dates, order receipt time, stock codes, methods, order types, quantity and trading prices. The time (day, hour, minute) of receipt of customers’ trading orders must be recorded by securities companies at the time of receipt of these orders.

5. Securities companies must execute customers' trading orders in a fast and accurate manner.

6. When making payment for purchase or sale of securities to their customers, securities companies must provide sufficient money and securities as prescribed and must take necessary measures to ensure customers are capable of making payments for the orders to be executed.

7. Securities companies must notify the results of the execution of orders to their customers right after these orders are matched according to the method agreed upon between the customers and securities companies under binding contracts.

8. In case clients open depository accounts at the depository members who are not trading members, trading members and depository members must enter into contracts under which trading members are bound to execute trading orders; depository members are bound to examine the percentage of customers’ margins and stock pledges, ensuring their customers are paid in accordance with laws.

Article 17. Custody of funds of customers

1. Securities companies must hold customers’ funds for purchase of stocks separately, and customers' funds separately from money of securities companies.

2. Securities companies are not allowed to directly receive and pay cash for customers' stock trades, but must do so through commercial banks.

3. Securities companies are not allowed to abuse customers' money in any form. Trades or transactions related to customers' money are only allowed if they meet regulations of laws.

4. Securities companies must set up systems to give customers custody of their funds separately according to the methods or approaches specified at Point a of this Clause. In addition, securities companies may build additional systems according to the methods or approaches specified at Point b of this Clause for customers’ choice as follows:

a) Clients of securities companies open accounts directly at commercial banks selected by these securities companies to hold their funds used for securities trades or transactions. On employing this method, customers, securities companies and commercial banks shall enter into contracts on methods of confirmation, freezing of balances and money transfer for payments for stock trades or transactions of customers. After a customer's securities purchase order is matched, a securities company shall have the right to request the bank where the investor opens account to transfer money corresponding to the value of the matched order to the checking account for securities trades or transactions opened in the name of the securities company at the commercial bank designated by the securities company. The securities company is obliged to act on its customer’s behalf to pay for securities trades or transactions to interested parties;

b) Customers of securities companies open special-purpose accounts at commercial banks to hold funds used for their securities trades or transactions. Special-purpose accounts must be opened separately and independently from other securities company’s accounts.

These special-purpose accounts are only intended for customer’s transactions, specifically including:

- Paying or transferring money into accounts;

- Withdrawing or transferring money from accounts;

- Paying for trading of stocks;

- Putting up margin payments for stock trades or paying money for purchase of stocks at auction;

- Paying for exercise of call options;

- Other payments made upon customer’s request and in compliance with laws.

Securities companies shall be responsible for establishing accounting systems to provide each investor with safe custody for funds. Securities companies shall be obligated to clearly determine each customer’s balance at all times and provide customers or competent state authorities, upon their request, with detailed statements of balance at any time.

A securities company shall be responsible for guaranteeing that any request of a customer for withdrawal or transfer of funds within their balance will be accommodated when that requesting customer no longer owe any payment obligation to the securities company.

Securities companies are not allowed to receive authorization from their customers for intracorporate money transfer between their accounts.

5. Securities companies must publish the list of commercial banks designated to perform two methods of custody of customers' funds for securities transactions on their websites and at their branches and transaction offices.

6. Within the maximum duration of 03 working days from the contract signing date as prescribed at Points a and b, Clause 4 of this Article, securities companies must submit reports, enclosing valid copies of contracts between securities companies and commercial banks, to the State Securities Commission.

7. In case of using weekly reports, before 16:00 every Monday or the first working day of the week, securities companies with special-purpose accounts must report to the State Securities Commission on the number of customers, the balance of customers’ funds existing at the securities companies’ special-purpose accounts opened at commercial banks by using the form specified in Appendix II to this Circular. These reports must use data available at the end of the working day immediately preceding the reporting date.

Article 18. Custody of securities of customers

1. Regulations on custody of securities registered for the centralized deposit:

a) Securities companies must hold customers’ stocks separately from securities companies’ stocks;

b) Securities companies must re-deposit customers’ securities into Vietnam Securities Depository and Clearing Corporation in accordance with laws on registration, depositing or clearing of stock trades;

c) Securities companies are responsible for promptly and fully notifying customers of rights associated with customers' securities;

d) Entrustment for depository, withdrawal and transfer through accounts of securities must be subject to orders from customers and regulations on registration, depositing and clearing of stocks.

2. As for securities not yet registered for centralized depository, securities companies are allowed to register and deposit customers' securities at securities company under their contracts with customers and in accordance with Article 21 of the Circular.

Article 19. Entrustment for custody of stock trading accounts of individual investors

1. General principles

a) Securities companies obtaining securities brokerage service licenses as prescribed in Clause 1, Article 86 of the Law on Securities may render the service of authorized custody of securities trading accounts of individual investors;

b) Services are provided to investors under contracts between securities companies and individual investors;

c) Securities companies are not entitled to take on fiduciary duties to decide all transactions on securities trading accounts on behalf of individual investors. Customers must clarify the scope of entrustment or authorization prescribed in Clause 2 of this Article:

d) Securities purchased and sold in trust are stocks and fund certificates listed on the Stock Exchange, excluding those registered on the stock trading system of unlisted public companies (UpCom);

dd) Securities company may appoint securities practitioners holding certificates of financial analysis or fund management practice to hold trust trading accounts. Such appointment must be specified in the contract between a securities company and an individual investor.

2. The scope of entrustment or authorization covers the followings:

a) Types of securities to be traded;

b) Maximum volume of securities of specific kinds that can be bought or sold;

c) Maximum value of each order;

d) Maximum total value per a transaction day;

dd) Trading approaches and types of orders.

3. Securities companies shall be responsible for keeping themselves updated with information about financial capacity, investment term, investment objectives, acceptable risk level, investment restrictions, investment portfolio (if any) and other requirements of customers before entering into contracts. In case where any customer does not provide sufficient information or provide inaccurate information, securities companies shall have the rights to refuse to sign contracts.

4. Trust agreements

a) A trust agreement has the maximum term of 1 year and commences on the signature date;  

b) Each trust agreement must include, but not limited to, the followings:

- Customer’s particulars;

- Information about the securities practitioner trusted to have custody of a customer’s account;

- Fiduciary activities;

- Rights and obligations of contracting parties;

- Retention fees and rewards;

- Methods of contractual payment and settlement;

- Dispute resolution methods.

5. In case where a securities company fails to comply with the contract with its customer, causing damage to the customer, the securities company shall compensate the trustor according to the written agreement between both parties; in case of earning any profit, this profit must belong to the trustor.

6. Rights and obligations of the securities company acting as the trustee

a) Act honestly and in the best interests of customers, and avoid racketeering on customer’s information and cause any loss or damage to customers;

b) Request customers to provide required information;

c) Sell or purchase securities intra vires or within its delegated authority;

d) Clearly explain and fully provide information to customers about all of the potential risks in the entrustment for custody of securities trading accounts;

dd) Provide customers with statements of monthly or irregular transactions at the trustor’s request;

e) Notify the customer in advance within 24 hours from the time when the assets in the trustor’s trading account fall below 25% of total value of the trust agreement;

g) Make a monthly report using the form provided in Appendix II to this Circular, or at the request of the State Securities Commission, on the account custodial activities;

h) Provide a list of qualified securities practitioners that customers designate to hold their trust accounts;

i) Set up an independent supervisory division to supervise the custody of securities and securities trades on accounts held in trust by securities practitioners to ensure that trades performed through these accounts conform to terms and conditions of trust agreements and investment goals of customers;

k) The time of execution of all trading orders under the trust agreement must be recorded exactly;

l) Securities companies must notify and seek written consent from customers in case of making investment in securities that they underwrite during the underwriting period.

Article 20. Online trading of securities

1. Obligations of securities companies to provision of online securities trading services

a) Ensuring continuous and smooth services;

b) Ensuring security, safety and confidentiality for data of the trading system;

c) Having a standby system or an alternative in case of failure or emergency;

d) Separating from their other electronic information systems;

dd) Issuing the procedures for operation, management and operation of the online securities trading system.

2. When providing online securities trading services to customers, securities companies must sign contracts or annexure to contracts to have customer’s accounts opened, including the following terms and conditions:

a) Disclosure of the risks that can occur when trading securities online;

b) Stipulations as to the responsibility of customers and securities companies for the confidentiality of information about customers' online transactions.

3. Securities companies must report to the State Securities Commission on online securities trading activities, the condition of the online securities trading system and disclose information in accordance with the laws on instructions about electronic trading activities.

Article 21. Registration, depository and clearing of securities

1. Scope of services

a) Providing securities registration and depository services to customers;

b) Paying for securities transactions on the Stock Exchanges on customers’ behalf;

c) Rendering the service of management of shareholder, transfer agent registries at the request of issuers other than public companies.

2. Rights and obligations of securities companies

a) Opening depository accounts for customers at securities companies, managing customers' securities depository accounts in accordance with the provisions of law. Customer's securities depository accounts must be separate from the company's securities depository accounts;

b) Recording accurate, complete and updated information about customers opening depository accounts and securities under customers’ ownership who are deposited at securities companies;

c) Preserving, storing, collecting and processing data on customers' securities registration, depository and clearing activities;

d) Designing procedures for registration, depository, clearing and management of registries of shareholders, transfer agents, and internal control procedures, in order to manage and protect the interests of customers or owners of securities;

 dd) Collecting fees for securities registration and depository services and other service fees in accordance with laws.

Article 22. Proprietary trading of securities

1. Securities companies must ensure that they have enough money and securities to pay for trading orders on their own accounts.

2. Proprietary trading functions of securities companies must be performed in their own name, not in the name of other person or performed by using the individual’s name or letting others use their proprietary trading accounts.

3. The following activities are not deemed as the proprietary trading of securities:

a) Buying or selling securities due to post-trading error correction.

b) Buying or selling stocks of one’s own.

4. Securities companies must prioritize the execution of customer’s orders before executing their own orders.

5. Securities companies must inform customers of the case in which they are partners to contractual transactions with customers.

6. In case where customer’s buy or sell orders can considerably affect the prices of securities, securities companies shall be prohibited from the pre-market trading of securities of the same kind with themselves, or the disclosure of information to any third party wishing to buy and sell these securities.  

7. When customers place limit orders, securities companies are not allowed to buy or sell the same security for or to themselves at a price equal to or better than the price applied before these customers' orders are executed.

Article 23. Securities underwriting services

1. If securities companies underwrite the public offering of securities by way of buying part or all of the securities of issuers, they shall only be allowed to underwrite that total issuance of securities is not greater than equity and is not over 15 times more than the difference between the value of short-term assets and short-term liabilities according to the latest quarterly financial statements.

2. A securities company is not allowed to underwrite the issue of its securities by entering into a firm commitment or becoming a principal underwriter in the following cases:

a) Securities company operating independently or joining with its subsidiaries or related persons owns at least 10% of the charter capital of an issuer, or has control over an issuer, or has the right to appoint the General Director (Director) of the issuer;

b) At least 30% of the charter capital of a securities company and at least 30% of the charter capital of the issuer are held by the same individual or entity;

c) Issuer that is independent or joins with its subsidiaries or related persons, owns at least 20% of the charter capital of a securities company, or has control over a securities company, or has the right to appoint the General Director (Director) of the securities company;

d) Any member of the Governing Board, General Director (Director) and related persons of a securities company is also a member of the Governing Board or the General Director (Director) of another issuer;

 dd) Any member of the Governing Board, General Director (Director) and related persons of an issuer is also a member of the Governing Board or the General Director (Director) of a securities company;

e) A securities company and an issuer have the same legal representative.

3. Any securities company underwriting securities must open standalone accounts at commercial banks to receive money to buy securities from investors.

Article 24. Securities investment counseling service

1. In order to provide securities investment counseling services to customers, securities companies must enter into contracts with customers, including but not limited to the followings:

a) Rights, obligations and responsibilities of contracting parties;

b) Scope of service;

c) Method of rendering the service;

d) Service charge.

2. Securities companies must collect and manage customer’s information, including:

a) Financial health;

b) Investment objectives;

c) Risk tolerance;

d) Investment experience and knowledge.

3. Securities investment counsels must be provided on a reasonable and appropriate basis by using reliable information and logical analysis. Investment recommendations must relate and correspond to analyses of securities and stock markets. Stock and market analysis reports and investment recommendations must clarify the sources of data to be cited and the names of the persons in charge of implications of reports and investment recommendations.

4. When providing investment counsels to customers, securities companies must ensure that customers make their investment decisions after being provided with information in full, including implications and risks of provided products or services.

5. Securities companies must ensure that information received from users of counseling services is kept confidential during the process of providing counseling services, unless otherwise agreed by customers or otherwise provided by law.

6. Securities companies must provide investment counsels relevant to investment objectives and financial health of customers and shall be responsible for analysis results and reliability of information to be provided to customers.

7. A securities company is not allowed to provide its securities investment counseling services for another company of which at least 10% of the charter capital is held by the former.

Article 25. Other financial services

1. When performing other financial services as prescribed in Clause 5, Article 86 of the Law on Securities, a securities company must ensure that these services relate to and support other licensed business functions; must ensure that the interests of its customers or its own and the stock market are not affected.

2. A securities company is not allowed to provide counseling services related to offering and listing of securities, equitization and valuation of another company of which at least 10% of the charter capital is held by the former.

3. Securities companies are only allowed to provide other financial services in accordance with laws after making written reports to the State Securities Commission. The State Securities Commission has the right to request temporary suspension or termination of the provision of other financial services by any securities company if the provision of such services is in breach of the provisions of law or poses risks to the stock market.

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