THE GOVERNMENT --------	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness ------------------
No.: 145/2016/ND-CP	Hanoi, November 01, 2016

 

DECREE

ON AMENDMENTS TO THE GOVERNMENT’S DECREE NO. 108/2013/ND-CP DATED SEPTEMBER 23, 2013 ON PENALTIES FOR ADMINISTRATIVE VIOLATIONS AGAINST REGULATIONS ON SECURITIES AND SECURITIES MARKET

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

Pursuant to the Law on actions against administrative violations dated June 20, 2012;

Pursuant to the Law on securities dated June 29, 2006 and the Law dated November 24, 2010 on amendments to a number of articles of the Law on securities;

Pursuant to the Law on prevention of money laundering dated June 18, 2012;

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

At the request of Minister of Finance;

The Government promulgates a Decree on amendments to the Government’s Decree No. 108/2013/ND-CP dated September 23, 2013 on penalties for administrative violations against regulations on securities and securities market.

Article 1. Amendments to the Government’s Decree No. 108/2013/ND-CP dated September 23, 2013 on penalties for administrative violations against regulations on securities and securities market

1. Amendments to Point b Clause 1 Article 3:

“b) Fine;

The maximum fine for a violation against regulations on securities and securities market incurred by an organization is VND 2,000,000,000; that incurred by an individual is VND 1,000,000,000.

The maximum fine for any of the violations prescribed in Clause 3 Article 5 of this Decree shall be 5% of total amount mobilized illegally but not exceeding VND 2,000,000,000 if that violation is committed by an organization or VND 1,000,000,000 if that violation is committed by an individual.  The maximum fine incurred by an organization that commits any of the violations prescribed in Clause 5 Article 6 and Clause 2 Article 16 of this Decree shall be five times of the illegal revenue but not exceeding VND 2,000,000,000.

The fines prescribed in Chapter II of this Decree are applied to organizations; the fine incurred by an individual shall be a half of that incurred by an organization for the same violation.

Fines prescribed in Clause 2 and Clause 3 Article 11, Clause 1a and Clause 3 Article 24, Clause 4 Article 26 of this Decree shall only apply to violations committed by individuals."

2. Amendments to Point a and Point k Clause 3 Article 3:

“a) Enforced recall of securities already offered for sale or issued and refund of amounts used for securities purchase or deposit (if any) and interests accrued thereof to investors; enforced recall of shares additionally issued;  

k) Enforced depository and separate management of assets, capital, securities and trading positions;"

3. Amendments to Section 1 Chapter II and name of Article 4:

“SECTION 1. VIOLATIONS AGAISNT REGULATIONS ON NON-PUBLIC OFFERING OF STOCKS IN VIETNAM BY PUBLIC COMPANIES, SECURITIES COMPANIES OR FUND MANAGEMENT COMPANIES AND VIOLATIONS AGAISNT REGULATIONS ON NON-PUBLIC ISSUE OF BONDS IN VIETNAM

Article 4. Violations against regulations on non-public offering of stocks in Vietnam by public companies, securities companies or fund management companies and violations against regulations on non-public issue of bonds in Vietnam.”

4. Addition of Point c to Clause 1 Article 4:

“c) Failing to reveal the report on asset use accredited by auditors in the General Meeting of Shareholders or failing to state detailed notes to use of assets earned from the non-public offering of stocks in the annual financial statements accredited by auditors, except for cases where stocks are offered for sale for the purpose of swapping them for debts or shares or contributed capital.”

5. Amendments to Point b and addition of Point dd to Clause 2 Article 4:

“b) Conducting the non-public offering of stocks inconsistently with the registered plan or regulated period; conducting the private placement of bonds inconsistently with the approved plan; 

dd) Failing to open the escrow account at a commercial bank; failing to transfer the proceeds from the offering to the opened escrow account; releasing or using the proceeds from the offering before obtaining a written certification of offering results from the State Securities Commission of Vietnam."  

6. Clause 3a is added following Clause 3 Article 4:

“3a. A fine of from VND 400,000,000 to VND 700,000,000 shall be imposed for forging documents of the non-public offering of stocks but is not liable to criminal prosecution.”

7. Addition of Point d to Clause 4 Article 4:

“d) An organization that commits the violation prescribed in Clause 3a of this Article is enforced to recall securities already offered for sale and refund securities buying amount or deposit (if any) and interests accrued thereof according to the interest rate for demand deposits announced by the bank where the committing organization’s account is opened to receive securities buying amount or deposit at the time when the decision on enforcement of this measure comes into force to investors. The time limit for enforced recall of securities and refund of money to investors shall be 60 days as of the date on which the decision on enforcement of this measure comes into force.”  

8. Amendments to Clause 3 Article 5:

“3. A fine equal to between 1% and 5% of total illegally-raised amount of money shall be imposed for forging documents of the public offering of securities but is not liable to criminal prosecution.”  

9. Amendments to Point b and addition of Point c to Clause 1 Article 6:

“b) Failing to open the escrow account at a commercial bank; failing to transfer the proceeds from the offering to the opened escrow account; releasing or using the proceeds from the offering before obtaining a written certification of offering results from the State Securities Commission of Vietnam;

c) Failing to reveal the report on asset use accredited by auditors in the General Meeting of Shareholders or failing to state detailed notes to use of assets earned from the public offering of securities in the annual financial statements accredited by auditors.”

10. Amendments to Point a Clause 3 Article 9:

“a) Delaying the application for registration of public company 12 – 24 months from the deadline;”

11. Addition of Clause 4 and Clause 5 to Article 9:

“4. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed for delaying the application for registration of public company 24 – 36 months from the deadline.  

5. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed for failing to apply or delaying the application for registration of public company 36 months or more from the deadline.” 

12. Amendments to Clause 3 and Clause 4 Article 11:

“3. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed on Chairperson of Board of Directors, member of Board of Directors, member of Control Board, Director or General Director or other manager of a public company who commits any of the following violations:

a) The Chairperson of Board of Directors concurrently holds the position of Director or General Director but this concurrent holding of positions is not yet given approval at the Annual General Meeting of Shareholders or is prohibited as regulated by laws;

b) Failing to fulfill all responsibilities and duties of company management; failing to reveal relevant interests or failing to inform the Board of Directors and the Control Board of transactions between the public company, its subsidiaries, or companies that are taken-over by the public company and any of the said persons or persons related to him/her as regulated by laws.    

4. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed for any of the violations against regulations of the law on company management with respect to rights of shareholders, standing for election, nomination, voting and dismissal of members of Board of Directors, and members of Control Board, the composition of the Board of Directors, convening and holding meetings, and approval for decisions made at the General Meeting of Shareholders, decisions of the Board of Directors and those of the Control Board, transactions made with relevant persons or with shareholders, members of Board of Directors, members of Control Board, Director or General Director, other managers and persons related to them.”    

13. Amendments to Clause 1 Article 12:

“1. A fine of from VND 30,000,000 to VND 50,000,000 shall be imposed for any of the following violations:

a) Selling treasury stocks purchased in the latest offering within 06 months as of the end of the redemption, except for the cases where the treasury stocks are sold or used as bonus shares to reward to the company's employees or where stocks are redeemed without conditions for redemption; redeeming or selling treasury stocks within 07 days as of the disclosure of information concerning the redemption or sale of treasury stocks;   

b) Redeeming stocks but not via a designated securities company in case stocks of a public company have not been listed or registered for redemption transactions.”

14. Addition of Points e, g and h to Clause 2 Article 12:

“e) Using treasury stocks as collateral or assets used for capital contribution or swaps;

g) Failing to place orders for redemption or sale of treasury stocks or placing orders for redemption or sale of treasury stocks with the prices beyond the price fluctuation limit within the registered period for trading in treasury stocks;

h) Disclose detailed information about estimated prices for trading in treasury stocks.” 

15. Amendments to Section 8 Chapter II:

“SECTION 8. VIOLATIONS AGAISNT REGULATIONS ON SECURITIES LISTING AND TRADING REGISTRATION”

16. Clause 2a is added following Clause 2 Article 14:

“2a. The following fines shall be imposed for failing to apply for securities listing and trading or delaying the application for securities listing and trading:

a) A fine of from VND 10,000,000 to VND 30,000,000 shall be imposed for delaying the application for securities listing and trading up to 01 month from the schedule;  

b) A fine of from VND 30,000,000 to VND 70,000,000 shall be imposed for delaying the application for securities listing and trading 01 – 03 months from the deadline;   

c) A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed for delaying the application for securities listing and trading 03 – 06 months from the deadline;

d) A fine of from VND 100,000,000 to VND 200,000,000 shall be imposed for delaying the application for securities listing and trading 06 – 09 months from the deadline;   

dd) A fine of from VND 200,000,000 to VND 300,000,000 shall be imposed for delaying the application for securities listing and trading 09 – 12 months from the deadline; 

e) A fine of from VND 300,000,000 to VND 400,000,000 shall be imposed for failing to apply for securities listing and trading or delaying the application for securities listing and trading in excess of 12 months from the deadline.”

17. Amendments to Clause 1 and Clause 2 Article 16:

“1. A fine of from VND 1,000,000,000 to VND 1,200,000,000 shall be imposed on an organization that organizes the securities trading market against regulations of law provided that there is no illegal revenue earned thereof.

2. A fine equal to 01-05 times the illegal revenue but not less than the maximum fine prescribed in Clause 1 of this Article and not exceeding VND 2,000,000,000 shall be imposed on an organization that organizes the securities trading market against regulations of law and earns illegal revenue.”

18. Amendments to Clause 2 Article 18:

“2. A fine of from VND 300,000,000 to VND 400,000,000 shall be imposed on the Stock Exchange that gives approval for the registration of trading membership in case where all of regulated conditions are not satisfied; suspends or withholds the trading membership inconsistently with regulations."

19. Amendments to Point b Clause 4 Article 20:

“b) Conducting the separation, merger, amalgamation, transformation or dissolution before schedule, or suspending or terminating its operations without obtaining approval from the State Securities Commission of Vietnam, unless otherwise provided for by law.”

20. Amendments to Point d and addition of Point dd to Clause 5 Article 20:

“d) Conducting securities trading activities, providing securities services or making outward investment but failing to meet regulated conditions;  

dd) Performing any of prohibited or restricted acts during the voluntary or compulsory suspension or termination of its operation.”  

21. Amendments to Clause 6, Clause 7 and Clause 8 Article 20:

“6. A fine of from VND 200,000,000 to VND 300,000,000 shall be imposed for any of the following violations:

a) Conducting securities trading or providing securities services without obtaining the license, certificate or approval from the State Securities Commission of Vietnam; providing securities services or financial services without obtaining a written approval from the State Securities Commission of Vietnam or written instructions from competent authorities;  

b) Performing activities other than those specified in the issued license, certificate or approval.

7. A fine of from VND 200,000,000 to VND 300,000,000 shall be imposed for any of the following violations:

a) Preparing or confirming the application for issuance or additions to the establishment and operation license with information deliberately made in contrary to the truth, hiding the truth or seriously falsified; 

b) Preparing or confirming the application for certificate of eligibility to trade derivatives with false information.

8. Additional penalties: Enforced suspension of business activities or provision of securities services within 01 - 03 months if any of the violations prescribed in Points b, c, d Clause 5, Clause 6; Point a Clause 7 of this Article is committed; enforced suspension of derivative trading within 06 – 09 months if the violation prescribed in Point b Clause 7 of this Article is committed.”   

22. Correction of name of Clause 21 and amendments to Clause 1 Article 21:

“Article 21. Violations against regulations on operation of securities companies and branches of foreign securities companies in Vietnam

1. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed for any of the following violations:

a) Failing to formulate or comply with internal processes, professional processes, internal control and risk management processes, and code of professional ethics in conformity with business operations;

b) Failing to comply with regulations of the Law on securities, the Law on enterprises and other laws on management;

c) Preparing or confirming the application for provision of on-line securities services with incorrect information or failing to make modification or supplements to the application when detecting incorrect information or omitted important contents which must be included in the application;

d) Failing to collect and update sufficient information about the customers, except for the cases where a customer fails to provide sufficient information; failing to timely provide sufficient and truthful information to customers;

dd) Failing to separate working rooms, personnel, data system and reports among professional divisions; failing to set up customer care division to contact and settle customers’ complaints;

e) Failing to post at the head office, branches and transaction offices information about methods of trading, placing orders, margin, time of payment, trading fees, provided services and conditions thereof, list of practitioners and other relevant information in accordance with prevailing laws;

g) Failing to notify or giving late notification of the discharge of deposited or mortgaged securities or securities trading results to customers as regulated by laws.”

23. Correction of heading of Clause 2 Article 21, amendments to Points and dd and addition of Point g to Clause 2 Article 21:

“2. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed for any of the following violations:

“a) Failing to store sufficient documents, data and vouchers relating to operations of a securities company or a branch of foreign securities company in Vietnam; the stored documents, data and vouchers do not include detailed and accurate information about transactions of customers and of a securities company or a branch of foreign securities company in Vietnam; a branch of foreign securities company in Vietnam directly manages deposits for conducting securities trading and opens securities trading accounts for domestic investors;  

dd) Failing to set up or maintain internal auditing, internal control and risk management systems; failing to supervise and prevent conflicts of interests between customers or between a securities company or a branch of foreign securities company in Vietnam, securities practitioners and customers;

g) Failing to transfer an investor's margin and open position to a derivative securities trading organization as a replacement as requested by that investor; failing to conduct transactions to liquidate or close a position at the investor’s request; failing to liquidate or close a position on a proprietary trading or market-making account; failing to ensure the priority in performing other investor’s transactions over his/her own position-closing transactions.”

24. Correction of heading of Clause 3 Article 21 and addition of Point i to Clause 3 Article 21:

“3. A fine of from VND 100,000,000 to VND 150,000,000 shall be imposed for any of the following violations:

i) Failing to adopt solutions for ensuring the security of systems and data of customers;”

25. Correction of heading of Clause 4 Article 21, amendments to Points a and d Clause 4 and Clause 5 Article 21:

“4. A fine of from VND 150,000,000 to VND 200,000,000 shall be imposed for any of the following violations:

a) Failing to set up a system for separately managing money of customers or failing to separately manage deposits for securities trading of each customer or failing to separately manage the money of customers from that of the securities company or branch of foreign securities company in Vietnam; making direct receipt and settlement of securities trading amounts from customers; accepting the customer’s authorization to conduct internal transfer among accounts of that customer;

d) Providing loans to customers, except for the cases where a loan is provided to purchase securities for conducting margin trading; providing loans under any form to major shareholders, members of the Control Board, the Executive Board, the Board of Members or the Board of Directors, chief accountant and other managers assigned by the Executive Board and persons concerning them.

5. Additional penalties:

Enforced suspension of securities trading or provision of securities services of a securities company or a branch of foreign securities company in Vietnam for 01 - 03 months if any of the violations prescribed in Points c, dd, g Clause 3 and Clause 4 of this Article is committed.”  

26. Amendments to Points a and g, and addition of Points h, I, k to Clause 2 Article 22:

“a) Failing to set up the risk management system or failing to establish internal auditing or internal control division; failing to ensure qualified human resources for the internal auditing division or internal control division; failing to supervise and prevent conflicts of interests between customers or between the fund management company, securities practitioners and customers;

g) Anticipating or giving guarantee to customers of a ratio of earnings or profits to their investments or guaranteeing that customers shall incur no loss; deciding to make investment on behalf of a customer, except for cases where relevant laws govern;

h) Opening more than 01 securities trading account at a securities company to carry out its own securities trading activities; opening more than 02 securities trading accounts to manage investment items of entrusting customers and failing to separate the securities trading account for domestic entrusting customers from that for foreign entrusting customers; failing to open securities trading accounts for investment funds or securities investment companies under its management or opening more than 01 trading account for an investment fund or securities investment company under its management at a securities company;

i) Conducting asset transactions for an entrusting customer via a securities company with the trading amount or value during the year in excess of the limit on total trading amount or value within a year of that entrusting customer;   

k) Committing the violation prescribed in Point a Clause 2 Article 21 of this Decree.”

27. Amendments to Point c and addition of Point dd to Clause 3 Article 22:

“c) Committing violations against regulations on restrictions on operation of fund management companies, their related persons and staff; committing violations against regulations on restrictions on operation of securities investment companies; committing violations against regulations on real estate investment funds; committing violations against regulations restrictions on operation of real estate investment funds;

dd) Acting as the asset’s owner on behalf of an entrusting customer without written request made by that entrusting customer or conducting transactions for an entrusting customer before obtaining approval from that entrusting customer in case of acting as the asset’s owner for that entrusting customer.”

28. Addition of Point 1 to Clause 4 Article 22:

“1) Using entrusted funds or funding of the investment fund or the securities investment company to make investment in derivatives but the investment portfolio management contract or the charter of the investment fund or the securities investment company does not contain provisions to allow the use of the abovementioned funding to invest in derivatives; using its own funding, loans and other legally-mobilized funds to make investment in derivatives.”

29. Clause 1a is added following Clause 1 Article 24:

“1a. A fine of from VND 30,000,000 to VND 50,000,000 shall be imposed on chief representative or employee of the representative office who concurrently holds another position in cases where the concurrent holding of positions is prohibited.”   

30. Amendments to Point a Clause 2 Article 24:

“a) Running the representative office but failing to satisfy required conditions; failing to apply for registration of representative office or conducting operations of the representative office without obtaining the written approval or when it has not been issued certificate of registration of representative office by a competent authority;”

31. Correction of name of Article 26:

“Article 26. Violations against regulations on practice in securities and management of securities practitioners and staff”

32. Amendments to Point b and addition of Point c to Clause 1 Article 26:

“b) Failing to employ a sufficient number of securities practitioners; employing a person who possess securities practice certificate to perform operations incompatible with his/her issued securities practice certificate;

c) Assigning a securities employee or practitioner to concurrently hold another position in cases where the concurrent holding of position is prohibited.” 

33. Amendments to Point c and addition of Point d to Clause 5 Article 26:

“c) Buying or selling securities on a trading account of entrusting customer in excess of the entrusted scope, value of entrusted assets and investment objectives of that entrusting customer; making investments on behalf of  customers, except for cases where the management of securities trading account is entrusted by the individual investor;

d) Mediating in borrowing and lending of possessions between customers or between a customer and a third party, except for lending of securities for correction of trading errors or for conducting swaps of fund certificates for portfolio swaps.”

34. Amendments to Point a Clause 6 Article 26:

"a) Misusing or appropriating securities or money under the possession of a customer or temporarily keeping securities or money under the possession of a customer in form of depository under name of securities company;”

35. Amendments to Article 27:

“Article 27. Violations against regulations on transactions of founding shareholders, major shareholders, investors holding 5% or above of fund certificates of a closed–end fund, members of a public company or a public fund and their related persons

1. A fine of from VND 10,000,000 to VND 30,000,000 shall be imposed for failing to make reports on transactions with adequate and accurate information.

2. A fine of from VND 25,000,000 to VND 35,000,000 shall be imposed for failing to report within the required time limit to the public company, the fund management company, the State Securities Commission of Vietnam and/or the Stock Exchange of  changes of quantity of owned shares/fund certificates in excess of 1% of the regulated amount of shares/fund certificates.

3. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed on any member of a public company/public fund or his/her related person for failing to buy and sell or sell and buy securities of a public company within the required time limit, or concurrently buying and selling securities of a public company or fund certificates/options to buy fund certificates of a public fund within the same registration time.  

4. The following fines shall be imposed for failing to report within the regulated time limit of planned transactions, transaction results, and reasons of failure to conduct a transaction or conduct all registered transactions; conducting a transaction before the Stock Exchange announces information thereof; failing to conduct transactions within regulated time limit or with registered volume:  

a) A warning shall be given for the violation which is committed for the first time and has mitigating factors or a fine of from VND 1,000,000 to VND 3,000,000 shall be imposed for trading less than 5,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

b) A fine of from VND 3,000,000 to VND 5,000,000 shall be imposed for trading 5,000 – 10,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

c) A fine of from VND 5,000,000 to VND 15,000,000 shall be imposed for trading 10,000 – 20,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

d) A fine of from VND 15,000,000 to VND 25,000,000 shall be imposed for trading 20,000 – 30,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

dd) A fine of from VND 25,000,000 to VND 35,000,000 shall be imposed for trading 30,000 – 50,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

e) A fine of from VND 35,000,000 to VND 45,000,000 shall be imposed for trading 50,000 – 100,000 shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund;

g) A fine of from VND 45,000,000 to VND 65,000,000 shall be imposed for trading 100,000 or more shares, share options, convertible bonds, convertible bond options, fund certificates or options to buy fund certificates of a closed-end fund.

5. A fine of from VND 50,000,000 to VND 75,000,000 shall be imposed for any of the following violations:

a) Failing to report within the regulated time limit when owning 5% or above of outstanding voting shares of a public company/public securities company or fund certificates of a closed-end fund or when withdrawing from the position of a major shareholder/investor holding 5% or more of fund certificates of a closed-end fund;   

b) Failing to report within the regulated time limit of any trading in restricted shares.

6. Fines as much as twice the fines regulated in Clause 2, Clause 4 and Clause 5 of this Article shall be imposed for failing to report on planned transactions, transaction results, and reasons of failure to conduct a transaction or failure to conduct all registered transactions; failing to report on changes of quantity of owned shares/fund certificates in excess of 1% of the regulated amount of shares/fund certificates; failing to report when owning 5% or above of outstanding voting shares of a public company/public securities company or fund certificates of a closed-end fund or when withdrawing from the position of a major shareholder/investor holding 5% or more of fund certificates of a closed-end fund; or failing to report before conducting trading of restricted shares.    

7. Remedial measures:

Enforce transfer of illegal benefits obtained from the violations mentioned in Clause 3 of this Article to relevant public company.”

36. Amendments to Clause 1, Clause 2 and Clause 3 Article 29:

“1. A fine of from VND 800,000,000 to VND 1,000,000,000 shall be imposed for conducting internal transactions but is not liable to criminal prosecution. 

2. A fine of from VND 1,000,000,000 to VND 1,200,000,000 shall be imposed for conducting transactions to corner the securities market but is not liable to criminal prosecution. 

3. A fine of from VND 1,200,000,000 to VND 1,400,000,000 shall be imposed for committing fraud or creating and disclosing untrue information so as to entice and induce securities purchase and sale.”  

37. Amendments to Point b Clause 5 Article 29:

“b) Enforced cancellation or correction of information if the violation mentioned in Clause 3 of this Article is committed.”

38. Amendments to Article 31:

 “Article 31. Violations against regulations on securities registration, depository, clearing and settlement

1. A fine of from VND 50,000,000 to VND 70,000,000 shall be imposed on securities depository, securities depository member, clearing member or settlement bank for committing any of the following violations:

a) Conducting the securities registration, depository, clearing or settlement but failing to satisfy material and technical conditions to serve activities thereof as regulated by laws;

b) Failing to provide adequate, timely and accurate lists of owners/shareholders and relevant documents upon valid request of a public company in compliance with current regulations; failing to promptly and adequately notify benefits arising from deposited securities of customers.

2. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed on securities depository, securities depository member or clearing member for committing violations against regulations on securities storage and depository or regulations on securities registration, depository, clearing and settlement.

3. A fine of from VND 100,000,000 to VND 150,000,000 shall be imposed on securities depository/ securities depository member/ clearing member and a fine of from VND 50,000,000 to VND 75,000,000 shall be imposed on staff of a securities depository member for committing any of the following violations:

a) Making incorrect accounting on securities depository account, position account or margin account; failing to make settlement on schedule or transferring the securities ownership not through a securities depository;

b) Conducting a securities trading which has not been accounted by the securities depositary into a member's securities trading account, except for cases where relevant laws govern;

c) Failing to protect the database and retain original documents related to securities registration, depository, clearing and settlement;

d) Failing to protect secret of information relating to customers’ securities ownership;

dd) Failing to conduct depository and failing to manage securities deposited by a customer at the securities depositary/ securities depository member separately from those of that securities depositary/ securities depository member; failing to open a detailed securities depository account for each customer and failing to separately manage assets/positions of each customer or failing to manage assets/positions of a customer separately from those of a clearing member.

4. A fine of from VND 300,000,000 to VND 400,000,000 shall be imposed on a securities depository for committing any of the following violations:

a) Giving approval for depository membership but conditions for registration of depository operation have been not satisfied or cancelling a depository membership in contravention of current regulations;

b) Using deposited securities/assets of customers in interest of other entities or for its own benefits.

5. A fine of from VND 400,000,000 to VND 500,000,000 shall be imposed on securities depository/ securities depository member/ clearing member and a fine of from VND 200,000,000 to VND 250,000,000 shall be imposed on staff of a securities depository member/ clearing member for modifying or causing loss of settlement vouchers or documents relating to the transfer of securities ownership.

6. Additional penalties:

a) Enforced suspension of securities depository operations for 01 - 03 months if any of the violations prescribed in Points a, b, c and d Clause 3 of this Article is committed by a depository member;  

b) Enforced suspension of securities trading operations/ provision of securities services for 01 - 03 months if any of the violations prescribed in Point dd Clause 3 and Clause 5 of this Article is committed by a depository member/ clearing member;  

c) Securities practice certificate shall be suspended for 01 - 03 months if any of the violations prescribed in Clause 5 of this Article is committed by a securities practitioner.

7. Remedial measures:

a) Enforce depository/management of securities deposited by customers at the securities depositary/ securities depository member separately from those of that securities depositary/ securities depository member; enforce the opening of detailed securities depository account for each customer; enforce separate management of assets/positions of each customer and management of assets/positions of a customer separately from those of a clearing member if violations mentioned in Point dd Clause 3 of this Article are committed within 06 months as of the date on which decision on enforcement of relevant measure comes into force;

b) Enforce transfer of illegal benefits obtained from the violations mentioned in Clause 3, Clause 4 and Clause 5 of this Article.”

39. Amendments to Point a Clause 1 Article 33:

“a) Failing to register/ re-register the person in charge of disclosing information or the person authorized to disclose information, or failing to promulgate regulations on information disclosure;”

40. Amendments to Point d Clause 4 Article 33:

“d) Disclosing inaccurate information or concealing information about securities operations but not liable to criminal prosecution.”

41. Amendments to Clause 6 Article 33:

“6. Remedial measures:

a) Enforce cancellation or correction of information if any of the violations mentioned in Points c and d Clause 4 of this Article is committed;

b) Enforced transfer of illegal benefits obtained from the violations mentioned in Point d Clause 4 of this Article.”

42. Section 14a is added following Section 14 Chapter II and Article 35a is added following Article 35:

“SECTION 14A. VIOLATIONS AGAISNT REGULATIONS ON PREVENTION OF MONEY LAUNDERING IN SECURITIES AND SECURITIES MARKET
Article 35a. Violations against regulations on prevention of money laundering in securities and securities market

1. The following fines shall be imposed on securities companies/fund management companies for committing violations against regulations on identification and updating of information about customers:

a) A fine of from VND 20,000,000 to VND 30,000,000 shall be imposed for failing to update customer identification information as regulated in Article 8 and Article 10 of the Law on prevention of money laundering;

b) A fine of from VND 30,000,000 to VND 50,000,000 shall be imposed for failing to adopt customer identification measures/ intensive evaluation measures as regulated in Clause 2, Clause 3 and Clause 4 Article 12 of the Law on prevention of money laundering, or failing to report on doubtful transactions in the field of securities as regulated in Clause 5 Article 22 of the Law on prevention of money laundering;  

c) A fine of from VND 40,000,000 to VND 80,000,000 shall be imposed for failing to promulgate or comply with internal regulations on prevention of money laundering, or failing to conduct an internal auditing of prevention of money laundering;

d) A fine of from VND 50,000,000 to VND 100,000,000 shall be imposed for failing to set up regulations on classification of customers or failing to classify customers according to the levels of money laundering risks in compliance with prevailing laws, or failing to set up risk management process for advanced technologies-related transactions as regulated in Article 15 of the Law on prevention of money laundering;  

dd) A fine of from VND 100,000,000 to VND 150,000,000 shall be imposed for failing to set up the risk management system to identify foreign customers who may cause influence on political situation as regulated in Clause 2 and Clause 3 Article 13 of the Law on prevention of money laundering.

2. The following fines shall be imposed on securities companies/fund management companies for committing violations against regulations on prohibited acts related to the prevention of money laundering:

a) A fine of from VND 30,000,000 to VND 60,000,000 shall be imposed for obstructing the provision of information to serve the prevention of money laundering; a fine of from VND 50,000,000 to VND 100,000,000 shall be imposed for failing to provide information to serve the prevention of money laundering at the requests of competent state agencies as regulated in Clause 4 Article 18 of the Law on prevention of money laundering;

b) A fine of from VND 200,000,000 to VND 250,000,000 shall be imposed for organizing or facilitating money laundering but is not liable to criminal prosecution. 

3. A fine of from VND 70,000,000 to VND 100,000,000 shall be imposed on a stock exchange for failing to retain or update basic information about organizational structure, founding members or owners who have benefits from listed enterprise as regulated in Clause 1 Article 18 of the Law on prevention of money laundering.”

43. Amendments to Point c Clause 2 Article 37:

“c) A maximum fine of up to 5% of total illegally-raised amount shall be imposed for any of the violations mentioned in Clause 3 Article 5 and a maximum fine of up to 05 times the illegal revenue shall be imposed for any of the violations mentioned in Clause 5 Article 6 and Clause 2 Article 16 of this Decree but not exceeding VND 2,000,000,000 if that fine is imposed on an organization or VND 1,000,000,000 if that fine is imposed on an individual;”

44. Addition of Clause 3 to Article 37:

“3. Chairpersons of Provincial-level People’s Committees have the power to impose administrative penalties in conformity with regulations in Clause 3 Article 38 and Point c Clause 4 Article 52 of the Law on penalties for administrative violations for the violations prescribed in this Decree.”

45. Amendments to Clause 2 and Clause 3 Article 39:

“2. In case only decision on fixed-term suspension of one or a number of trading operations/securities services is made, Chairman of the State Securities Commission of Vietnam must specify suspended trading operations/securities services, suspension period and effect in that decision.

3. In case of fixed-term suspension of trading operations/securities services, the committing organization must immediately suspend several or all of its trading operations/securities services/other activities which are recorded in the issued decision on penalty for administrative violation and comply with regulations on prohibited or restricted acts during suspension period."

46. Amendments to Clause 3 Article 42:

“3. The period for enforcing remedial measures prescribed in Clause 3 Article 3 of this Decree is 30 days as of the date on which the decision on enforcement of remedial measures comes into force, except for the cases prescribed in Points a, b and d Clause 4 Article 4, Points a and b Clause 4 Article 5, Clause 7 Article 6, Point b Clause 3 Article 8, Point c Clause 6 Article 13, Point b Clause 7 Article 22, Clause 8 Article 26, Point b Clause 3 Article 28, Point a Clause 7 Article 31, Point a Clause 6 Article 32, Clause 4 Article 35, Clause 1 and Clause 2 Article 42 of this Decree.”

Article 2. Effect

This Decree comes into force as of December 15, 2016. 

Article 3. Implementation

1. Minister of Finance shall have the responsibility to instruct and inspect the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of the Government's affiliates and Chairpersons of People's Committees of central-affiliated cities/provinces shall be responsible for implementing this Decree./.

 

ON BEHALF OF THE GOVERNMENT PRIME MINISTER Nguyen Xuan Phuc