CIRCULAR

PROVIDING GUIDELINES ON COMPLIANCE SUPERVISION BY STATE SECURITIES COMMISSION REGARDING OPERATIONS IN THE FIELD OF SECURITIES OF VIETNAM EXCHANGE AND ITS SUBSIDIARIES AND VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION

Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to the Government's Decree No. 155/2020/ND-CP dated December 31, 2020 on elaboration of some Articles of the Law on Securities;

Pursuant to the Government’s Decree No. 158/2020/ND-CP dated December 31, 2020 on derivatives and derivative market; 

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Chairman of the State Securities Commission of Vietnam;

The Minister of Finance promulgates a Circular providing guidelines on compliance supervision by State Securities Commission regarding operations in the field of securities of Vietnam Exchange and its subsidiaries and Vietnam Securities Depository and Clearing Corporation.

...

...

...

GENERAL PROVISIONS

Article 1. Scope and regulated entities

This Circular provides guidelines on the supervision by the State Securities Commission of Vietnam (SSC) of compliance with the law on securities and securities market by Vietnam Exchange (VNX) and its subsidiaries, including Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX), and Vietnam Securities Depository and Clearing Corporation (VSDC) during their organization and performance of securities operations.

Article 2. Rights and responsibilities of SSC

1. Formulate legislative documents on supervision of compliance with the law on securities and securities market by VNX and its subsidiaries and VSDC, and submit them to competent authorities for promulgation and promulgate documents providing specialized guidelines within its competence.

2. Consider giving permission to VNX and VSDC to promulgate regulations on specialized operations and other documents on performance of securities operations in accordance with law; request VNX and its subsidiaries and VSDC to revise their rules and regulations on specialized operations.

3. Supervise the compliance with the law on securities and securities market during performance of securities operations by VNX and its subsidiaries and VSDC (hereinafter referred to as “compliance supervision”).

4. Suspend or invalidate decisions on operations of VNX and its subsidiaries and VSDC; direct VNX and its subsidiaries and VSDC to perform tasks related to their operations, where necessary, so as to protect legitimate rights and interests of investors in accordance with regulations of law.

5. Develop annual plans for compliance supervision and inspection, and organize periodical inspections or ad hoc inspections, where necessary, of VNX and its subsidiaries and VSDC.

...

...

...

7. Submit reports to the Ministry of Finance on compliance supervision results at the request of the Ministry of Finance.

Article 3. SSC’s supervision methods

1. SSC shall perform compliance supervision on the basis of reports submitted by VNX and its subsidiaries and VSDC as prescribed in Clause 3 Article 5 and Chapter IV of this Circular; denunciations of organizations and individuals operating on securities market and information available on the mass media concerning the compliance with regulations of law in respect of organization and performance of securities operations by VNX and its subsidiaries and VSDC.

2. Based on annual plans for compliance supervision and inspection, SSC shall organize periodical inspections and ad hoc inspections, where necessary, of VNX and its subsidiaries and VSDC.

Article 4. Obligations of VNX

1. Bear SSC’s inspection and supervision of its securities operations in accordance with this Circular; provide explanations and rectification plans for conclusions and recommendations included in compliance supervision reports given by SSC; report and propose to SSC measures for responding to incidents or events that adversely affect the safety, stability and integrity of the securities market.

2. Request SSC to promulgate or amend regulations on securities and securities market.

3. Submit reports as prescribed in Chapter IV of this Circular and delegate HOSE and HNX to fulfill reporting obligations as prescribed.

4. Retain and protect confidentiality of documents, files and data on securities operations in accordance with regulations of law; provide adequate, accurate and timely information, documents and data at the request of SSC to serve its performance of compliance supervision tasks.

...

...

...

1. Bear SSC’s inspection and supervision of its securities operations in accordance with this Circular; provide VNX with explanations and rectification plans for conclusions and recommendations included in compliance supervision reports given by SSC so that VNX submit consolidated reports to SSC. 

2. Propose regulations and amendments to regulations on supervision of securities market to VNX that shall then submit consolidated reports thereon to SSC.

3. Submit ad hoc reports to SSC on request and also submit such reports to VNX.

4. Fulfill reporting obligations as delegated by VNX so that VNX can prepare and submit consolidated reports to SSC.

5. Retain and protect confidentiality of documents, files and data on securities operations in accordance with regulations of law; provide adequate, accurate and timely information, documents and data at the request of SSC to serve its performance of compliance supervision tasks.

Article 6. Obligations of VSDC

1. Bear SSC’s inspection and supervision of its operations in the fields of securities and securities market in accordance with this Circular; provide explanations and rectification plans for conclusions and recommendations included in compliance supervision reports given by SSC.

2. Request SSC to promulgate or amend regulations on securities and securities market.

3. Submit reports according to Chapter IV of this Circular.

...

...

...

Chapter II

COMPLIANCE SUPERVISION OF VIETNAM EXCHANGE AND ITS SUBSIDIARIES

Article 7. Supervision of promulgation and dissemination of documents

Contents of SSC's supervision include:

1. Supervise promulgation, amendments to and abrogation of regulations and other documents prescribing operations of VNX and its subsidiaries.

2. Supervise cooperation in disseminating knowledge about securities and the securities market to investors of VNX and its subsidiaries.

Article 8. Supervision of operations of VNX

SSC shall supervise the compliance with the law on securities and securities market by VNX regarding the following operations:

1. Formulation and promulgation regulations on listing and trading of securities, and information disclosure, regulations on its members and other regulations on organization and operation of the securities market; issuance of criteria for supervision of transactions; issuance of trading indicators applied to members of VNX in accordance with regulations of law on securities and securities market.

...

...

...

3. Grant and cancellation of membership of members of VNX; management, inspection and taking actions against violations committed by members of VNX in accordance with regulations of the law on securities and acting as a mediator to settle disputes concerning securities trading operations at the request of members of VNX.

4. VNX’s supervision of compliance by HOSE and HNX with operational regulations; general supervision of securities trading and information disclosure by listed organizations, registered organizations, and investors that have to disclose information as prescribed; supervision of listed organizations, registered organizations, and investors operating on securities markets in accordance with regulations of law.

5. Assurance of the continuity, openness, fairness, order, safety and efficiency of securities trading on the securities market; implementation of measures for responding to incidents and events that adversely affect the safety, stability and integrity of the securities market; reporting on violations committed by members of VNX; reporting on violations committed by investors, listed organization or registered organizations in accordance with regulations of law.

6. Organization and exercise of compliance control by VNX of securities operations.

7. Retention and protection of confidentiality of documents, files and original data related to securities operations.

8. Other operations of VNX and its subsidiaries involved in its operations.

Article 9. Supervision of operations of HOSE and HNX

SSC shall supervise the compliance with the law on securities and securities market by HOSE and HNX regarding the following operations:

1. Organization and operation of securities market in accordance with regulations of law and within the ambit of their assigned tasks.

...

...

...

3. Putting securities under alert, control and restriction in accordance with regulations of law and VNX’s regulations.

4. Approving, changing and cancelling listing or registration of securities, and supervision of maintenance of fulfillment of securities listing requirements by listed organizations.

5. Inspection and taking actions against violations committed by listed organizations or registered organizations in accordance with VNX’s regulations.

6. Provision of auction and bidding services; services involving market information and information about traded securities; technological infrastructure development services for the securities market, and other relevant services specified in their Charter.

7. Organization and exercise of compliance control of securities operations.

Chapter III

COMPLIANCE SUPERVISION OF VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION (VSDC)

Article 10. Supervision of promulgation and dissemination of documents

Contents of SSC's supervision include:

...

...

...

2. Supervise cooperation in disseminating knowledge about securities and the securities market to investors of VSDC.

Article 11. Supervision of operations

SSC shall supervise the compliance with the law on securities and securities market by VSDC regarding the following operations:

1. Formulation and issuance of regulations on securities registration, depositing, clearing and settlement, and other operational regulations in accordance with regulations of the law on securities and securities market.

2. Grant and revocation of certificates of depository member; grant and revocation of certificates of underlying securities clearing members; approval and cancellation of membership of derivative clearing members; supervision of maintenance of fulfillment of eligibility requirements by depository members; supervision of performance of corporate actions by VSDC for its members; VSDC’s supervision of compliance by its members with the law on securities and VSDC’s regulations; taking actions against violations committed by depository members and clearing members of VSDC in accordance with regulations of the law on securities and VSDC’s regulations.

3. Securities registration, changes to securities registration, and cancellation of securities registration; issuance and management of ticker symbols; performance of corporate actions by securities holders; transfer of securities ownership through the securities trading system.

4. Opening and management of securities depository accounts; depositing, withdrawal, transfer, blockade and release of securities.

5. Issuance and management of securities trading codes to foreign investors, issuers of overseas depositary receipts and foreign-invested business entities.

6. Fulfillment of reporting and information disclosure obligations by VSDC as prescribed by law; VSDC's supervision of fulfillment of reporting obligations by depository members and clearing members in accordance with VSDC’s operational regulations.

...

...

...

8. Establishment of a system for ensuring separate management of accounts and assets of clearing members and VSDC; separate management of accounts and assets of each clearing member; separate management of accounts and margins of a clearing member and its clients.

9. Management of securities borrowing and lending system, exchange trading system for ETFs.

10. Supervision of foreign holdings in public companies and public funds in accordance with regulations of law. To be specific:

a) Supervise public companies and public funds that have securities registered at VSDC and do not apply for or cancel securities trading codes in accordance with regulations of law;

b) Supervise public companies that have securities registered at VSDC and have foreign holdings exceeding the maximum rate of foreign holding as certified by SSC.

11. Assurance of continuous operation of the securities registration, depositing, clearing and settlement system; supervision of security and safety of the securities registration, depositing, clearing and settlement system in accordance with regulations of the law on securities and securities market; supervision of performance of these activities by members of VSDC.

12. Registration and management of collateral for securities registered at VSDC.

13. Retention and protection of confidentiality of documents, files and original data related to securities operations.

14. Internal control and risk management of each operation.

...

...

...

16. Other securities-related operations of VSDC.

Chapter IV

REPORTING

Article 12. Reporting by VNX and VSDC

1. Periodical reports

a) VNX shall submit monthly and annual reports which are made using the forms in Appendix I and Appendix IV enclosed herewith to SSC;

b) VSDC shall submit monthly and annual reports which are made using the forms in Appendix II and Appendix III enclosed herewith to SSC.

2. The periodical reports mentioned in Clause 1 of this Article shall be submitted within the following time limits:

a) A monthly report will be submitted within 15 working days from the end of the reporting month;

...

...

...

3. The data closing dates of the periodical reports mentioned in Clauses 1 of this Article are provided for as follows:

a) A monthly report shall include data from the first day to the final day of the reporting month;

b) An annual report shall include data from January 01 to December 31 of the reporting year.

4. Ad hoc reports

VNX and its subsidiaries and VSDC shall submit ad hoc reports on compliance supervision at the request of SSC.

5. VNX and its subsidiaries and VSDC shall submit such reports in electronic and paper forms to SSC.

Article 13. Reporting by SSC

SSC shall submit reports to the Ministry of Finance on compliance supervision results at the request of the Ministry of Finance.

Chapter V

...

...

...

Article 14. Effect

1. This Circular comes into force from March 24, 2022.

2. All of the following legislative documents will be abrogated:

a) The Circular No. 116/2017/TT-BTC dated October 25, 2017 of the Minister of Finance;

b) The Circular No. 35/2019/TT-BTC dated June 12, 2019 of the Minister of Finance. 

Article 15. Transition

Before VSDC starts to officially operate according to the Law on Securities dated November 26, 2019, SSC shall carry out the compliance supervision of Vietnam Securities Depository in accordance with regulations applied to VSDC laid down in this Circular.

Article 16. Implementation

1. SSC, VNX, HOSE and HNX and VSDC shall be responsible for implementation of this Circular.

...

...

...

PP. MINISTER
DEPUTY MINISTER




Nguyen Duc Chi