Chương II Thông tư 210/2012/TT-BTC: Giấy phép thành lập và hoạt động

Chapter II

LICENSE FOR ESTABLISHMENT AND OPERATION

Section 1. ISSUANCE OF LICENSE FOR ESTABLISHMENT AND OPERATION

Article 3. Conditions for issuance of License for establishment and operation

1. Secutiries company with its head office, material facilities serving the securities business under the guidance of the State Securities Commission after it is approved by Ministry of Finance.

2. Secutiries company must have chartered capital which is capital actually contributed, at least equal to the legal capital as prescribed by law.

3. Director (General Director) of securities company must meet the provisions of Clause 3, Article 34 of this Circular.

4. Having at least three (03) securities practitioners for each business operation requesting License of operation.

5. Structure of shareholders, members of equity contribution of securities company:

a). Securities company is established in the form of joint stock company or limited liability company with two or more members must have a minimum of two (02) founding shareholders, the founding member is the organization which meets the provisions of Clause 7 of this Article, in which there must be at least one (01) organization as commercial bank, insurance company or foreign organization in accordance with provisions in Clause 8 of this Article;

b). Securities company is established in the form of a one-member limited liability company, the Owners shall be a commercial bank, insurance company in accordance with Clause 7 of this Article or foreign organization under Clause 8 of this Article;

c). Ratio of share Ownership, contributed capital of founding shareholders, founding member as an organization is at least 65% of the chartered capital in which organizations as commercial banks and insurance enterpries or foreign organizations specified in Clause 8 of this Article owns at least 30% of the securities company’s chartered capital;

d). Shareholder or member owns 10% or more of the capital stock or contributed capital of a securities company and the person concerned of the shareholders, that capital contributor must not contribute more than 5% of the share or contributed capital of another securities company;

đ) Securities company established and operating in Vietnam must not be contributed capital to establish other securities companies in Vietnam.

6. Conditions for individuals contributing capital to establish securities company:

a) Being individual not subject to the absence of the right to establish and manage enterprises in Vietnam in accordance with regulations of the law and having the financial capacity to contribute capital to establish securities company;

b) Only using their own capital for contribution, not using borrowed capital, investment trusts capital of other organizations and individuals;

c) Individuals who contribute capital must demonstrate their capital contribution capacity in Vietnam dong or a freely convertible currency in the bank account. The minimum value of money must be equal to the amount of capital to be contributed to the securities company and the time of confirmation of the bank shall not exceed thirty (30) days to the date the dossier for securities company establishment is complete and valid.

7. Conditions for organizations contributing capital to establish securities companies:

a) Having legal entity; not in a state of consolidation, merger, division, separation, dissolution, bankruptcy and not subject to the absence of the right to establish and manage the business as prescribed by law;

b) Business operations must be profitable in two (02) years preceding the year of capital contribution to establish securities company without accumulated losses to the time of capital contribution for establishment of securities company;

c) In case of commercial bank, insurance company and securities company contributing capital:

- Not being in the state of operation control, special control or other warning states;

- Fully meeting all the conditions for participation of capital contribution and investment in accordance with specialized law

d) In case of other economic organizations contributing capital:

- Having operating time of at least five (05) consecutive years preceding the year of capital contribution for establishment of securities organization;

- Equity shall be at least equal to the expected capital contribution after subtracting long-term assets;

- Working capital must be at least equal to the expected capital contribution

e) Only using equity and other valid capital sources under the provisions of specialized laws, do not use trust funds of other organizations and individuals for capital contribution.

8. Foreign capital participating in capital contribution to establish must meet the following regulations:

a) Being organization operating in the banking, securities, insurance, and having the operation time at least two (02) years preceding the year of capital contribution for establishment.

b). Subject to regular and continuous monitoring of foreign specialized management and monitoring agencies in the field of securities and approved by these agencies in writing for the capital contribution to establish securities business organizations in Vietnam;

c). The foreign specialized management and monitoring agencies in the field of securities and the State Securities Commission has signed bilateral or multilateral agreements on exchange of information, cooperation for management, inspection, monitoring of securities activities and securities market;

d). Meeting relevant provisions in Clause 7 of this Article;

đ) The rate of capital contribution to establish securities company of foreign organizations shall comply with regulations of the law.

Article 4. Dossier to request issuance of Licence of establishment and operation

1. Dosier to request the issuance of Licence of establishment and operation of securities company includes:

a) Written request for issuance Licence of establishment and operation (under form prescribed in Annex 1 issued together withi this Cicular);

b) A written explanation about the material facilities to ensure the implementation of the securities business operations (under the form prescribed in Appendix II to this Circular) together with documents proving the right to use head office;

c) Minutes of the meeting and decision of the founding shareholders or founders on the establishment of securities companies. The decision must include the following basic contents:

- Company’s name, business operations;

- Chartered capital and Ownership structure;

- Adoption of company ordinance and business plan;

- Representative of founding shareholders, founders performing procedures for establishment of securities companies.

d) A tentative list of the Director (General Director) and the securities practitioner (under the form provided in Appendix III issued together with this Circular) together with copies of valid certificate of securities practice; Written personal information of the Director (General Director) (under the form prescribed in Appendix IV issued together with this Circular);

đ) List and the percentage of Ownership of the shareholders and capital contributors (under the form provided in Appendix V issued together with this Circular);

e) A tentative list of members of Board of Directors, Board of Members s, Supervisory Board (if any) together with a valid copy of identity card or passport, judicial record and written personal information (under the form prescribed in Appendix IV issued with this Circular);

g) Documents proving the capacity of capital contribution of the shareholders, capital contributors to establish securities companies:

- For individuals: A copy of valid identity card or passport, a written personal information (under the form prescribed in Appendix IV issued with this Circular) and documents proving financial capacity to meet the provisions of Clause 6, Article 3 of this Circular; Judicial record for shareholders and capital contributor from ten percent (10%) or more of the chartered capital of the securities company;

- For organization:

A valid copy of the License for establishment and operation or business registration certificate or other equivalent documents; Company Ordinance; meeting minutes and decisions of the Board of Directors, Board of Members s or Ownership of capital contribution and appointment of representative of the contributed capital attached to a valid copy of identity card or passport, judicial record, a written personal information of the representative of the contributed capital (under the form prescribed in Appendix IV issued with this Circular) and other documents proving the satisfaction of the provisions of clause 7, Article 3 of this Circular. In case the organization is expected to own more than ten percent (10%) of the chartered capital of the securities company, it should supplement the judicial record of the legal representative;

For organizational of capital contribution as the parent company, the financial statement is the integrated statement of the latest year whcih has been audited in accordance with the law on accounting and auditing;

For organizations contributing capital as commercial banks and insurance companies must submit additional copy of periodic reports on the norms of financial and capital safety in accordance with the specialized law in the last two (02) years;

h) Written approval for the permission of the capital contribution for establishment of the specialized management supervision agencies for commercial banks, insurance companies or other documents evidencing the permission for capital contribution to establish securities company.

i) The draft of company Ordinance has been adopted by the founding shareholders, and the founder of the securities company.;

j) The business plan of the first three (03) years is consistent with business operations requested for the issuance of License (under the form prescribed in Appendix VI issued together with this Circular) with the business processes, the internal control and risk management processes.

2. Where the shareholders and contribute capital contributors to establish securities company are foreign organization, the documents issued by the foreign competent authorities must be legalized by the agency where the organization has been registered within six (06) months before the date of submission of application. Documents written in a foreign language must be translated and certified into Vietnamese by an organization with translation function in accordance with Vietnamese law.

3. Dossier specified in clause 1 and 2 of this Article shall be made in one (01) original attached to a file of electronic information. The original dossier is submitted directly to the State Securities Commission or sent by post.

Article 5. Procedures for issuance of License for establishment and operation

1. After receiving the dossier specified in Article 4 of this Circular, within twenty (20) working days, the State Securities Commission shall have a written request for dossier supplementation in case of invalidity of dossier or require the completion of conditions for material facilities and blockade of contributed capital for the cases of complete and valid dossier. Where it is necessary to clarify issues related to dossier, the State Securities Commission may request the representative of shareholders, founders or the expected Directors (General Director) to give direct explanation or in writing.

2. Within thirty (30) days after the State Securities Commission has a written request, the shareholders and founders establishing securities trading organizations must complete the dossier to request the issuance of License for establishment and operation. After the above time limit, if the shareholders and founders do not supplement and complete the dossier, the State Securities Commission may refuse to issue a License for establishment and operation.

3. Within ninety (90) days from the date of receipt of written notice of the State Securities Commission to complete the infrastructure conditions and blockade of contributed capital, the founding shareholders and founders shall complete the material facilities and blockade contributed capital. The chartered capital of the company must be blockaded on account of a commercial bank designated by the State Securities Commission and is released and transferred to the company's account immediately after being issued License for establishment and operation. Exceeding the time limit, the State Securities Commission may refuse to issue License for establishment and operation.

4. The State Securities Commission shall inspect the material facilities at the head office of securities company prior to the issuance of License for establishment and operation.

5. Within seven (07) days from the date of receipt of confirmation of capital blockade in accordance with the provisions in Clause 3 of this Article and the result of infrastructure examination of the company’s head office and other legal documents, the State Securities Commission shall issue License for establishment and operation to the securities company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

6. The securities company shall conduct activities of securities trading in a period of twelve (12) months from the date of issuance of a License for establishment and operation.

Article 6. Name of securities company

1. Name of securities company includes the following components:

a) Type of enterprise;

b) Word “securities”;

c) Proper name.

2. Name of securities company must comply with the provisions of Enterprise Law.

Article 7. Announcement of the License for establishment and operation

Within seven (07) days from the date of issuance of License for establishment and operation, the securities company shall announce the License for establishment and operation under the provisions of Article 66 of the Securities Law.

Section 2. ADJUSTMENT OF LICENSE FOR ESTABLISHMENT AND OPERATION

Article 8. Adjustment of License for establishment and operation

1. Securities company upon supplementation, withdrawal of securities business operations, renaming, location of its head office, increase or decrease of chartered capital, change of the legal representative shall request State Securities Commission to issue the adjusted License for establishment and operation.

2. Dossier for adjusting the License for establishment and operation shall be made ​​in one (01) original submitted directly to the State Securities Commission or sent by post.

3. In case dossie to request adjustment of the License is incomplete and invalid, the securities company shall supplement and complete the dossier within thirty (30) days after the State Securities Commission has a written request. After this time limit, the dossier sent to the State Securities Commission before shall be implicitly invalid.

4. The securities company issued License for establishment and operation shall announce the License of adjustment under the time limit and method prescribed in Article 66 of Securities Law.

Article 9. Supplementation of securities business operations

1. Securities company supplementing the business operations must meet the following regulations:

a) Having material facilities to meet provisions prescribed in Clause 1, Article 3 of this Circular for cases to request supplementation of securities brokerage and securities dealing;

b) Having chartered capital and equity at least equal to the legal capital for business operations which have been licensed and business operations requested for supplementation;

c) Ensuring adequate securities practitioners for business operations which are performed and having a minimum of three (03) of securities practitioners to undertake business operations requested for supplementation;

d) Securities company is not put under control, special control, suspension from operation under current regulations within three (03) months prior to the submission of dossier for supplementation of business operations.

2. Dossier to request supplementation of securities business operations includes:

a) Written request for adjustment of the License for establishment and operation (under form prescribed in Annex VII issued together with this Circular).

b) A written explanation about the material facilities for business operations in case of supplementation securities brokerage and securities dealing (under the form prescribed in Appendix II issued together with this Circular);

c) Decision of the General Meeting of Shareholders, the Board of Members s or the Owners on the supplementation of securities business operation;

d) The yearly financial statement or the most recent financial statement (but not more than 06 months to the time of requesting supplementation of operations) independently audited and approved by the State Securities Commission and certified by the bank for additional capital deposited in the escrow account (if any);

e) Business operation plan in the first three (03) years for the business operations requested for the supplementation (in the form prescribed in Appendix VI issued together with this Circular) together with the operation, internal control, risk management process applied to the securities business operations requested for the supplementation

f) List of securities practitioners who are working in the business operation departments of the company (under the form prescribed in Appendix III issued with this Circular); List and valid copy of certificate of securities practice and the labor contract of the securities practitioner and labor contract of the securities practitioner expected to perform additional operations;

e) The Ordinance amended and supplemented which has been adopted by the General Meeting of Shareholders, the Board of Members s or the Owners of the securities company.

3. The State Securities Commission shall inspect the material facilities for the case of request for supplementation of the operations of securities brokerage, securities dealing.

4. Within twenty (20) days from the date of receipt of valid dossier as prescribed in Clause 2 of this Article and the inspection result of material facilities (if any), the State Securities Commission shall adjust the License for establishment and operation. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

Article 10. Withdrawal of securities business operations

1. Procedures for the withdrawal of securities business operation:

a) The company securities shall submit dossier for withdrawal of the operation of securities brokerage. The dossier includes the following documents:

- Written request for adjusting the License for establishment and operation of the securities company (under the form prescribed in Appendix VII issued with this Circular);

- Decision of the General Meeting of Shareholders, the Board of Members or Owners on the withdrawal of the securities business operations;

- Phương án xử lý tài khoản của khách hàng Plan for handling of customers’ accounts.

b) Công ty chứng khoán thực hiện phương án và quy trình theo hướng dẫn của Ủy ban Chứng khoán Nhà nước;

Securities company shall implement the plan and procedures under the guidance of the State Securities Commission

c) Trong thời hạn bảy (07) ngày làm việc kể từ ngày nhận báo cáo đã thực hiện phương án xử lý tài khoản của khách hàng, Ủy ban Chứng khoán Nhà nước điều chỉnh Giấy phép thành lập và hoạt động đồng thời ra Quyết định thu hồi Giấy chứng nhận đăng ký lưu ký chứng khoán trong trường hợp công ty chứng khoán không có nghiệp vụ tự doanh chứng khoán. Trường hợp từ chối, Ủy ban Chứng khoán Nhà nước phải trả lời bằng văn bản và nêu rõ lý do.

Within seven (07) working days from the date of receipt of the report on having implemented plans for handling customer accounts, the State Securities Commission shall adjust the License for establishment and operation at the same time make a Decision on revocation of the Certificate of securities depository registration in case the securities company have no operations of securities dealing. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

2. Procedures for withdrawal of operation of securities investment consultation, securities underwriting and dealing.

a) Dossier to request the withdrawal of securities investment consultation operations, securities underwriting and dealing.

- Written request for asjustment of License for establishment and operation of securities company (under the form prescribed in Appendix VII issued with this Circular);

- Decision of the General Meeting of Shareholders, the Board of Members or Owners to on the withdrawal of securities business operations;

- Report on the results of processing contracts signed with customers in case of withdrawal of underwriting and investment consultation operations; plan for finalization of dealing accounts for cases of withdrawal of securities dealing.

b) Within seven (07) working days from the date of receipt of complete and valid dossier as specified at Point, clause 2 of this Article, the State Securities Commission shall adjust the Lincense for establishment and operation for the securities company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

Article 11. Renaming of company and location of head office

1. Dossier for renaming of company:

a) Written request for adjustment of the License for establishment and operation of securities company (under form prescribed in Appendix VII issued together with this Circular);

b) Decision of the General Meeting of Shareholders, the Board of Members or the Owners of the company on the renaming of the company;

c) The Ordinance amended and supplemented which has been adopted by the General Meeting of Shareholders, the Board of Members s or the Owners of the securities company.

2. Dossier for change of location of head office includes:

a) Written request for adjusting the License for establishment and operation of the securities company (under the form prescribed in Appendix VII issued with this Circular);

b) A written explanation about the material facilities for business operations at the new location of the head office (under the form prescribed in Appendix II issued together with this Circular).

c) Decision of the General Meeting of Shareholders, the Board of Members or the Owners of the company on the change of location of the company’s head office.

3. The new location for the head office of the securities company to be moved to must satisfy conditions for the material facilities as specified in Clause 1, Article 3 of this Circular.

4. Before accepting the location for the head office, the State Securities Commission shall inspect the material facilities at the new location of the head office for securities company having operations of securities brokerage and dealing.

5. Within twenty (20) days from the date of receipt of complete and valid dossier and the result of material facilities (if any), the State Securities Commission shall adjust the License for establishment and operation. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

Article 12. Change of chartered capital

1. Dossier for change of chartered capital:

a) Written request for adjusting the License for establishment and operation of the securities company (under the form prescribed in Appendix VII issued with this Circular);

b) Certification of the capital increase of the bank where the blockade account is opened or the financial statement at the time the securities company has completed the increase of chartered capital audited by the auditing organization approved by the State Securities Commission; the financial statement audited at the time after the securities company has completed the acquisition and cancellation of stocks and shares to reduce its chartered capital.

c) Report on the change of the Ownership structure before and after the change of chartered capital of the shareholders and capital contributor from ten (10%) or more of the chartered capital specified at Point d, Clause 2, Article 30 of this Circular and the Decision of the Board of Directors, Board of Members or Owners in case the buyer is the organization;

d) Report on the result of share offering in accordance with the law in case of increase of the chartered capital of the joint-stock company. Report on the result of acquisition of stocks and contributed capital and cancellation to reduce the chartered capital for the case of reduction of chartered capital.

2. Within twenty (20) days from the date of receipt of valid dossier as prescribed in Clause 1 of this Article, the State Securities Commission shall adjust the License for establishment and operation. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

Article 13. Change of legal representative

1. Dossier to request the change of legal representative of the company includes:

a) Written request for adjustment of the License for establishment and operation of securities company (under the form prescribed in Appendix VII issued with this Circular).

b) The decision of the Board of Directors, Board of Members or the Owners on the appointment of the Chairman of the Board of Directors, Chairman of the Board of Members or the Director (General Director), enclosed with a written personal information (under the form prescribed in Appendix IV issued with this Circular), a valid copy ofidentity card and a valid copy of certificate of securities practice of the newly appointed person (if any);

c) The amended and supplemented Ordinance has been adopted by the General Meeting of Shareholders, the Board of Members or the Owners for the case of changing the title of the legal representative.

2. Within twenty (20) days from the date of receipt of valid dossier as prescribed in Clause 1 of this Article, the State Securities Commission shall adjust the License for establishment and operation. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

Section 3. SUSPENSION AND REVOCATION OF LICENSE OF ESTABLISHMENT AND OPERATION

Article 14. Suspending operation of securities company

1. Securities company shall be suspended from operation in the following cases:

a) Dossier for issuance and adjustment of the License of establishment and operation with deliberately false information.

b) After the expiration of the time limit of warning specified in Article 74 of the Securities Law, the securities company still has not fixed the warning state with gross losses reaching fifty percent (50%) of the chartered capital or no longer satisfied the conditions for the capital of securities business operation;

c) Operating with improper purposes or not in accordance with the provisions specified in the License for establishment and operation;

Failing to maintain the conditions for issuing License for the establishment and operation as prescribed in Clause 1, 2, 3 and 4, Article 3 of this Circular;

d) Cases suspended in accordance with the law on sanctioning of administrative violations in the area of securities and securities markets.

2. The State Securities Commission shall base on the form and extent of violation of the securities company specified in Clause 1 of this Article to make a decision on suspending one or a number of all of the securities brokerage activities, securities dealing, securities investment consultation, securities underwriting and securities depository and clearly stating the time limit and scope of suspension.

3. During the time of suspension, the securities company shall not be allowed to open new securities trading account; not entitled to newly sign and extend contracts related to the business operations suspended from operations; make finalization and transfer account at customer’s request (if any); have remedial plan and report on the implementation of the plan at the request of the State Securities Commission.

Article 15. Revocation of License of Investment and operation

1. Securities companies revoked a license for the establishment and operation in the following cases:

a) Cases specified at Points a, b and c, Clause 2, Article 70 of the Law on Securities; cases in accordance with regulations of the law on sanctioning of administrative violations in the area of securities and securities markets; cases of revocation under the provisions of Clause 1, Article 46 of this Circular;

b) Securities company upon expiration of duration of operation under the Ordinance or requesting dissolution ahead of time;

c) Securities company goes bankrupt.

2. Within thirty (30) days from the date of the compelled withdrawal of a License for establishment and operation as prescribed in Clause 1 of this Article, the State Securities Commission shall make a decision to terminate all business activities licensed of the securities company to implement procedures for revoking License for establishment and operation.

3. Within 24 hours, publishing information on its website and business places of securities company and publishing information to the Stock Exchanges, Vietnam Securities Depository Center on the termination of all business activities which have been licensed to perform procedures for revoking License for establishment and operation;

a) Completely terminating the implementation of the licensed business operations, stopping signing all new contracts related to business activities of securities company;

b) Within fifteen (15) days, securities company shall make a plan to handle customer’s securities trading account opened at a securities company (if any). The plan includes the following basic contents:

- Time and method of disclosure of information and notification to each customer of the withdrawal of securities brokerage operations;

- Expected time of finalization of the transaction account (account closure or transfer) at the request of the customer, the finalization time mathematics shall last at least 30 days;

- Time to stop opening new accounts;

- Expected time of suspension of trading on both exchanges

- Time of suspension of withdrawal/deposit transaction of customers;

- Expected time of closure the existing account balance of the customer of undue finalization;

- Plans to deal with existing accounts and in dispute account.

4. Within forty-five (45) days after the State Securities Commission has its opinion about the plan to deal with customer accounts as specified in Clause 3 of this Article, the securities company shall implement the plan in the following order:

a) Publishing information on the mass media and in the business places of the company as prescribed and notifying to each customer under the plan;

b) Finalizing account (closure or transfer of account) including cash and securities at the customer’s request;

c) Within five (05) working days from the date of expiration of the account finalization, the securities company shall make report to the State Securities Commission on the finalization state of all accounts and existing accounts;

d) Securities company can make agreement to perform the transfer of securities trading account of customers to other securities companies.

The State Securities Commission may appoint substitute securities companies to complete the transactions and contracts of securities company which has been revoked License for the establishment and operation. In this case, the authorization relations are established between the two companies implicitly.

5. Within five (05) working days from the date of completion of the account finalization and transfer of existing accounts, the securities company shall make report to the State Securities Commission on the result of the implementation of the account finalization and transfer of existing securities trading account of customers. This provision shall not apply to securities company which has completed procedures for account finalization (not having existing account) to the customers.

6. Within five (05) working days from the date of receipt of the report as specified in Clause 4 and 5 of this Article, the State Securities Commission shall send text to securities company to require the company and relevant parties to carry out procedures for dissolution and bankruptcy of the company under the provisions of the Enterprise Law and the law on bankruptcy. This text is also published by the State Securities Commission on its website.

7. Within seven (07) working days from the date of complete dissolution or bankruptcy of the securities company, the legal representative of the securities company must send the original License for establishment and operation of securities company and dossier related to the dissolution of the company to the State Securities Commission. Within seven (07) working days after receiving complete and valid dossiers, the State Securities Commission shall make a decision to revoke License for establishment and operation and implement publication of information as prescribed.