Chương V Thông tư 210/2012/TT-BTC: Quản lý an toàn tài chính

Chapter V

MANAGEMENT OF FINANCIAL SECURITY

Article 39. Increase and decrease of chartered capital

1. Increase in chartered capital

a) Securities company is not entitled to adjust the increase in chartered capital when it has not officially conducted operations of securities business;

b) Securities Company is a limited liability company which implements the increase in its charter capital in the forms prescribed by the Enterprise Law. Before making an increase in capital, the securities company must make a report to the State Securities Commission. The reporting dossier includes:

- Notification of increase in chartered capital;

- Decision of the Board of Members, the Owners on the increase in capital and plans to raise capital adopted by the Board of Members and Owners of the company;

- List of new capital contributors and members contributing from ten percent (10%) or more of the securities company ‘s chartered capital together with the documents specified at point Article, Clause 2, Article 30 of this Circular.

c) Securities Company is a joint stock company which is entitled to increase in chartered capital by the following forms:

Issuance of new stocks to increase chartered capital shall comply with the relevant provisions of law, including the mode of conversion of debt into contributed capital as agreed between the creditor and securities company;

Conversion of bonds issued to shares in accordance with the laws;

Transfer of capital surplus, retained earnings and other valid sources to supplement the increase in chartered capital. Securities company is entitled to use capital surplus due to the difference between the sale price and the cost of acquisition of treasury stocks to increase chartered capital after selling out treasury stocks. Securities company can use capital surplus due to the difference between the sale price and the par value of the stocks issued to increase chartered capital after one year from the end of the issue.

d) Before implementing capital increase in the form of bond conversion and form of transfer of valid resources specified at Point c, Clause 1 of this Article, the securities companies must be registered with the State Securities Commission. The registration documents include:

In case of conversion of bonds into shares: The decision of the General Meeting of Shareholders on approving the plan for issue together with the plan for conversion of bonds into shares which has been approved by the General Meeting of Shareholders;

In case of transfer of valid sources to increase the capital stock: The decision of the General Meeting of Shareholders approving the plan for issue; Financial statement report with the latest audit and other necessary documents proving the legal capital source used to increase the chartered capital.

2. Reduction of chartered capital

a) Securities company is a one-member limited liability company is not entitled to reduce chartered capital;

b) Securities company is a limited liability company with two or more members, or joint-stock company which is entitled to buy back shares and contributed capital of the shareholders and the members to reduce its chartered capital. The shares and contributed capital of the shareholders and the members after the acquisition to reduce its chartered capital must be destroyed immediately;

c) Conditions for securities company to buy back shares and contributed capital to reduce its chartered capital include:

- Thời gian hoạt động tối thiểu ba (03) năm kể từ ngày được cấp Giấy phép thành lập và hoạt động Operating time is at least three (03) years from the date of issuance of License for the establishment and operation;

- General Meeting of shareholders, Board of Members shall approve the reduction of chartered capital and plan for reduction of chartered capital;

- On the basis of the audited financial statement in the latest period to demonstrate sufficient capital to buy back stocks and contributed capital from the following sources: surplus of capital stock or development investment fund or after-tax profits not distributed or other equity sources used for acquisition in accordance with the law;

- There must be approval from the creditors for capital reduction if at the time of of capital reduction, the company has the obligation to pay debt;

- After the capital reduction, the securities company shall ensure payment of all debts and other asset obligations while ensuring sufficient legal capital for the securities business operations licensed under current regulations, the ratio of disposable funds after the acquisition of stocks and contributed capital reaching a minimum of 180% or more.

d) Before performing the reduction of capital, the stock company, the securities company must make report to the State Securities Commission. The reporting dossier include:

- Notification of reduction of chartered capital;

- Decision of the Board of members and the General Meeting of Shareholders on the capital reduction and capital reduction plans which have been approved by the Board of Members and the General Meeting of Shareholders of the securities company;

- Financial statement audited by audit organizations and approved by the State Securities Commission closest to the time of the decision on chartered capital reduction;

- Opinion of the creditors about capital reduction with certification of independent audit organization approved by the State Securities Commission;;

- Commitment of the Board of Directors, members of the Board of Members to ensure the payment of all debts and other asset obligations after the capital reduction.

3. Within fifteen (15) days from the date of receipt of a valid document on the increase or reduction of capital as prescribed in Clauses 1 and 2 of this Article, the State Securities Commission shall reply to the securities company in writing the increase or reduction of capital.

4. After completing the implementation of the capital increase, acquisition of stocks and contributed capital to reduce capital, the securities company shall perform procedures for adjustment of License for establishment and operation as specified in Article 12 of this Circular.

Article 40. Financial security norms

1. The securities company must ensure financial security norms as prescribed by the Ministry of Finance.

2. Making report on the ratio of disposable funds on June 30 annually to be reviewed and on December 31 annually to be audited by an independent auditing organization approved by the State Securities Commission.

3. The State Securities Commission shall publish the information on it website on securities companies controlled and specially controlled and other relevant information to protect investor for a period of twenty-four (24) hours after the decision on putting the securities company in the state of control and special control.

Article 41. Treasury stocks

1. Except for the case to buy individual stocks at the request of the customer or purchase for trading error correction in accordance with regulations of the Securities Depository, the securities company as a joint-stock company entitled to buy back no more than ten percent (10%) of the number of ordinary shares issued as treasury stocks.

2. The securities company only uses the retained earnings, capital surplus and other sources (excluding financial reserve fund) as prescribed by law to purchase treasury stocks. After the purchase of treasury stocks, the securities company must ensure that the minimum equity is equal to the legal capital in accordance with the provisions of the law.

The above provisions shall be calculated according to the financial statements or the consolidated financial statements (in case the securities company is the parent company) with the latest audit but not more than six months prior to the expected time to buy treasury stocks.

3. The purchase or sale of treasury stocks must be approved by the company’s Board of Directors.

4. Securities company only sell treasury stocks after six (06) months from the end date of the most recent purchase of treasury stocks, except for distribution to employees in the company or as bonus stocks. Where used as bonus stocks to employees must be approved by the General Meeting of Shareholders to ensure reciprocal funds from the equity.

5. Securities company carries out the purchase or sale of treasury stocks must have a plan to buy or sell treasury funds specifying execution time, the principles of price determination and make report to the State Securities Commission in writing and publish information within seven (07) days before the date of the purchase or sale of treasury stocks. Report and publication of information include the following main contents:

a) Purpose of purchase or sale of treasury stocks;

b) Maximum number of stocks expected to be bought or sold;

c) Capital source for purchase;

d) Principle for price determination;

e) Time for transaction performance;

f) Price expected for performance.

6. Within ten (10) days after the end of the transaction to purchase or sell treasury stocks, the securities company must make a report to the State Securities Commission and publish information, the reason if it is not donethe number of stocks to buy or sell fund shares.

7. Securities company is not allowed to buy treasury stocks in the following cases:

a) Company has overdue debts;

b) Company is in the process of offering stocks for addtional capital mobilization;

c) Company is implementing the splitting, consolidation of stocks;

d) Company is implementing the sale of stocks;

e) Stocks of the company are subject to the tender offer.

8. Securities company must terminate the purchase or sale of treasury stocks by time the time announced but not exceeding ninety (90) days from the start date of the transaction.

9. Securities company is not entitled to purchase stocks as treasury stocks

a) Stocks of the major shareholders, the company manager and persons concerned as specified of the Securities Law, except that stocks of securities company were listed on the Stock Exchange;

b) Shares are transfered with restrictions as prescribed by law and the company Ordinance.

10. Where securities company sells preferred treasury stocks to the subjects mentioned at Point a, Clause 9 of this Article, the sale must be approved by the General Meeting of Shareholders, the subjects concerned are not entitled to vote.

11. Securities company is not entitled to change but carry out plans for purchase and sale of treasury stocks reported and published. In case of failure of implementation, the securities company must have a good reason and a written explanation to the State Securities Commission and notify information as prescribed.

12. Where the sale of treasury shares in the form of public offering of securities, securities companies must comply with the provisions of the offering of securities to the public.

Article 42. Loan restriction

1. Ratio of total debt to equity of securities company shall not exceed three (03) times. Value of total debt shall not include the following amounts:

a) Customers’ deposit for securities transaction;

b) Bonus and welfare fund;

c) Provision for allowance for job loss;

d) Provision for compensation to investors.

2. The securities company's short-term debt is equal to current assets maximally.

Article 43. Lending restriction

1. Securities companies is not entitled to lend money and securities in any form, except the case where the securities company lends money to customers to purchase securities under the provisions of margin trading of securities of the Ministry of Finance.

2. Securities company is not entitled to make lending in any form to major shareholders, members of the Supervisory Board, the members of Board of Directors, members of the Board of Members, members of the Management Board, Chief Accountant and other managerial positions which are appointed by the Board of Directors and persons concerned of the above subjects.

Article 44. Investment restriction

Securities company is not entitled to purchase and contribute capital to buy real estate except for use as its head office, branches and transaction offices in direct service to the business operations of securities company.

1. Securities company shall buy, invest in real estate in accordance with provisions in Clause 1 of this Article and fixed assets on the principles of residual value of fixed assets and real estate shall not exceed fifty percent (50%) of the total asset value of the securities company.

2. Securities company is not entitled to use more than seventy percent (70%) of the equity to buy corporate bonds or contribute capital to own other organizations in which it is not entitled to use more than twenty percent (20%) equity to invest in unlisted companies.

3. Stock company may not directly or entrust the implementation to other organizations and individuals.

4. Investment in stocks or contributed capital of the company owning more than fifty percent (50%) of the company’s chartered capital, except for odd-lot stock at the customer’s request;

a) Together with persons concerned to invest from five percent (5%) or more of another securities company’s chartered capital;

b) Investing more than twenty percent (20%) of the total number of stocks and treasury certificates in circulation of a listed company;

c) Investing or contributing capital more than ten percent (10%) of the total contributed capital of a limited liability company or business project;

d) Investing more than fifteen (15%) of equity in an organization.

5. Securities company has been established and has acquired fund management company as subsidiary company. In this case, the securities company must not comply with the provisions of Point c, d and e, Clause 4 of this Article. The securities company expected to establish and buy back fund management company as subsidiary company must meet the following conditions:

a) The equity, after capital contribution for establishment and acquisition of fund management company, must be at least equal to the legal capital for the business operations the company are performing;

b) The ratio of disposable funds after capital contribution for the establishment or acquisition of fund management company must reach at least one hundred eighty percent (180%);

c) Securities company after capital contribution for the establishment or acquisition of fund management company must ensure compliance with loan restriction specified in Article 42 of this Circular and the investment restriction specified in Clause 3 of this Article and Point e, Clause 4 of this Article.

6. Where securities company makes investment exceeding the limit due to the underwriting in the form of firm commitment, due to consolidation, merger or asset volatility, the equity of the securities company or organization contributing capital, the securities company must adopt the necessary measures to comply with the investment limit specified in Clause 2, 3 and 4 of this Article within one (01) year.