Circular No. 116/2017/TT-BTC guides the State Securities Commission's compliance supervision work regarding securities activities of the Stock Exchange and the Vietnam Securities Depository Center.

CIRCULAR

Guidelines for the State Securities Commission's compliance supervision work regarding securities activities of the Stock Exchange and the Vietnam Securities Depository Center

Pursuant to the Securities Law dated June 29, 2006 and the Law Amending and Supplementing Certain Provisions of the Securities Law dated November 24, 2010;

Pursuant to Decree No. 58/2012/ND-CP dated July 20, 2012 of the Government detailing and guiding the implementation of certain provisions of the Securities Law and the Law Amending and Supplementing Certain Provisions of the Securities Law;

Pursuant to Decree No. 60/2015/NĐ-CP dated June 26, 2015 of the Government amending and supplementing certain provisions of Decree No. 58/2012/NĐ-CP dated July 20, 2012 of the Government detailing and guiding the implementation of certain provisions of the Securities Law and the Law Amending and Supplementing Certain Provisions of the Securities Law;

Pursuant to Decree No. 42/2015/NĐ-CP dated May 5, 2015 of the Government providing for derivative securities and the derivative securities market;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

In accordance with the proposal of the Chairman of the State Securities Commission, the Minister of Finance promulgates this Circular guiding the State Securities Commission's compliance supervision work regarding securities activities of the Stock Exchange and the Vietnam Securities Depository Center.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

This Circular guides the implementation of the State Securities Commission’s (hereinafter referred to as the SSC) supervision work on compliance with laws and regulations by the Stock Exchange (hereinafter referred to as the SSE) and the Vietnam Securities Depository Center (hereinafter referred to as the VSDC) in organizing and implementing securities business and the securities market.

Article 2. Powers and responsibilities of the SSC

1. Drafting legal normative documents on supervising compliance with securities and securities market laws for the SSE and the VSDC, submitting them to competent authorities for issuance, and issuing guidance documents within its authority.

2. Conducting supervision over the SSE and the VSDC in accordance with the law to ensure their operations comply with securities and securities market laws (hereinafter referred to as compliance supervision).

3. Approving the SSE and the VSDC to issue operational rules and other documents concerning the implementation of securities business and securities market activities in accordance with the law.

4. Developing and implementing annual compliance supervision inspection plans, organizing regular inspections according to the plan or conducting spot checks when necessary for the SSE and the VSDC.

5. Temporarily suspending securities trading activities of the SSE, securities deposit activities, and securities settlement activities of the VSDC in cases where there are signs affecting investors' legitimate rights and interests.

6. Handling violations of securities and securities market laws by the SSE and the VSDC within its authority or reporting to competent authorities for handling.

7. Reporting to the Ministry of Finance the results of compliance supervision work as stipulated in Chapter IV of this Circular.

Article 3. Methods of Supervision by the SSC

1. The SSC conducts compliance supervision based on reports from the SSE and the VSDC as stipulated in Chapter IV of this Circular; reflections from organizations and individuals operating in the securities market and information sources from mass media related to the organization and implementation of securities business and securities market activities by the SSE and the VSDC; and through collaborative business activities between the SSC and the SSE and the VSDC.

2. Based on the annual compliance supervision plan, the SSC conducts regular inspections of the SSE and the VSDC and organizes spot checks when necessary.

Article 4. Obligations of the SSE and the VSDC

1. Issuing operational rules, procedures, and business documents in accordance with securities and securities market laws.

2. Implementing reporting systems as stipulated in Chapter IV of this Circular.

3. Implementing storage and confidentiality requirements for business-related files, documents, vouchers, and data in accordance with the law.

4. Providing complete, accurate, and timely information, documents, and data at the request of the SSC to support compliance supervision work.

5. The SSE monitors compliance with securities and securities market laws and SSE rules by trading members, special trading members, listed and traded organizations, and individuals participating in securities market transactions. The VSDC monitors compliance with securities and securities market laws and VSDC rules by deposit members and clearing members. Upon discovering violations, the SSE and the VSDC have the responsibility to handle rule violations according to regulations. If beyond their authority, the SSE and the VSDC must report to the SSC for handling in accordance with the law.

6. Accepting inspections and supervision by the SSC in accordance with securities and securities market laws stipulated in this Circular; providing explanations and remediation plans for conclusions and recommendations made by the SSC regarding compliance supervision results.

7. Proposing the SSC to issue, amend, or supplement legal provisions and business documents of the SSE and the VSDC to be appropriate.

Chapter II

CONTENTS OF COMPLIANCE SUPERVISION

FOR THE STOCK EXCHANGE

Article 5. Supervision of the issuance of documents and dissemination, promotion

The contents of the SSC's supervision of these activities include:

1. Supervising the issuance, supplementation, amendment, and cancellation of the content of rules and other documents regulating the SSE's business activities.

2. Supervising the dissemination and promotion of legal normative documents and SSE business rules.

Article 6. Supervision of business activities

The SSC conducts compliance supervision of the SSE on the following business activities:

1. Organizing securities trading markets:

a) Organizing the organizational structure, operating the system of securities trading markets; providing transaction information and data; building and managing market indices and other related activities;

b) Organizing securities trading activities at securities trading markets; implementing measures to temporarily suspend, terminate, or cancel securities transactions.

2. Securities trading supervision organization: supervising the trading activities of trading members, special trading members, derivative securities trading members, and organizations and individuals participating in the securities market.

3. Auction and tendering of securities.

4. Management of listing and registration for trading of securities: approving, revoking listings and registrations for trading of securities; monitoring compliance with listing and registration conditions; monitoring controlled, warned, and suspended securities; handling violations of listed and registered organizations according to laws and stock exchange regulations.

5. Management of trading members and special trading members: approving, revoking trading member status; issuing and recalling trading representative cards; monitoring compliance with trading member status; supervising trading members' and special trading members' adherence to securities laws and stock exchange regulations; handling violations according to laws and stock exchange regulations.

6. Reporting, disclosing information, and supervising information disclosure activities: implementing reporting and disclosure obligations on the securities market as prescribed; providing market information and information related to listed and registered securities; supervising organizations with listed and registered securities, trading members, special trading members, rights issue organizations, and market participants in fulfilling their reporting and disclosure obligations.

7. Stock Exchange's mediation activities in disputes related to securities trading.

8. Internal control activities of the Stock Exchange regarding securities business and the securities market.

9. Implementing and evaluating the execution of regulatory documents, rules, procedures, and regulations governing securities business activities issued by the Stock Exchange.

10. Archiving and securing original records, documents, and data related to business operations.

11. Other activities of the Stock Exchange related to securities and the securities market.

Chapter III

CONTENTS OF COMPLIANCE SUPERVISION

FOR THE VIETNAM SECURITIES DEPOSITORY CENTER

Article 7. Supervision of the issuance and dissemination of documents

The contents of the SSC's supervision of these activities include:

1. Supervising the issuance, supplementation, amendment, and revocation of contents of rules, procedures, and other documents regulating the business activities of the Vietnam Securities Depository Center as prescribed by law.

2. Supervising the dissemination and promotion of legal regulatory documents and business rules of the Vietnam Securities Depository Center.

Article 8. Supervision of business activities

The State Securities Commission supervises the compliance of the Vietnam Securities Depository Center with securities and securities market laws in the following business activities:

1. Approving, revoking membership certificates for depositary members and settlement members; monitoring compliance with registration conditions for depositary members and settlement members; supervising the exercise of rights by the Vietnam Securities Depository Center towards depositary members and settlement members; supervising depositary members and settlement members' compliance with securities laws and Vietnam Securities Depository Center regulations; handling violations of depositary members and settlement members according to securities laws and Vietnam Securities Depository Center regulations.

2. Registering, deregistering securities; issuing and managing security codes; exercising rights of security holders; transferring ownership of securities outside the trading system.

3. Opening and managing securities deposit accounts; depositing, withdrawing, pledging, and releasing securities.

4. Issuing and managing foreign investor trading codes.

5. Fulfilling reporting and disclosure obligations according to laws; supervising depositary members and settlement members in fulfilling reporting obligations.

6. Organizing settlement and payment activities; correcting errors, handling errors, postponing payment deadlines, removing payments; establishing, managing, and using the Payment Support Fund; establishing, managing, and using the Settlement Fund.

7. Establishing a system to ensure separate management of settlement members' accounts and assets from those of the Vietnam Securities Depository Center; separating each settlement member's account and assets; separating margin accounts of settlement members and their clients.

8. Managing securities lending and borrowing systems (SLB), managing exchange-traded fund (ETF) certificate swap trading systems, managing guaranteed warrant settlement systems.

9. Securing and archiving original records, documents, and data related to business operations.

10. Internal control and risk management activities for each business activity.

11. Activities compensating customers for losses arising from services related to business activities.

12. Implementing and evaluating the execution of regulatory documents, rules, procedures, and regulations governing business activities issued by the Vietnam Securities Depository Center.

13. Other activities of the Vietnam Securities Depository Center related to securities and the securities market.

Chapter IV

REPORTING SYSTEM

Article 9. Reports of the Stock Exchange and the Vietnam Securities Depository Center

1. Periodic reports

a) The Stock Exchange and the Vietnam Securities Depository Center are responsible for reporting to the State Securities Commission the results of compliance supervision work monthly within the first ten working days of the following month according to the contents stipulated in Appendix I and Appendix II attached to this Circular.

b) The Stock Exchange (SGDCK) and the Central Depository Corporation (TTLKCK) shall be responsible for reporting to the Securities Commission (UBCKNN) the results of their annual compliance supervision work as prescribed in Appendices III and IV issued together with this Circular, including an assessment of the compliance with laws and related regulations in the implementation of business activities as stipulated in Chapters II and III of this Circular, and any recommendations or proposals (if any) within twenty working days at the beginning of the following year.

2. Unusual Reports

The Stock Exchange (SGDCK) and the Central Depository Corporation (TTLKCK) shall be responsible for reporting to the Securities Commission (UBCKNN) when the following events occur:

a) Warning, control, and suspension of trading of listed and registered securities on the Stock Exchange;

b) Temporary suspension of depositary, settlement, and payment activities for securities transactions; revocation of membership certificates for depositary members and clearing members of the Central Depository Corporation;

c) Violations by organizations with listed or registered securities, trading members, special trading members of the Stock Exchange, depositary members, and clearing members of the Central Depository Corporation within the jurisdiction of the Securities Commission;

d) Litigation involving depositary members and clearing members of the Central Depository Corporation, trading members, and special trading members of the Stock Exchange, and business operations of the Stock Exchange and the Central Depository Corporation within the jurisdiction of the Securities Commission.

The Stock Exchange and the Central Depository Corporation shall report to the Securities Commission within twenty-four hours from the occurrence of the events specified in point a and b of Clause 2 of this Article; for the contents specified in points c and d of Clause 2 of this Article, the Stock Exchange and the Central Depository Corporation shall report to the Securities Commission within seventy-two hours from the occurrence of the events.

For unusual monitoring reports sent to the Securities Commission as prescribed in Clause 2 of this Article, the Stock Exchange and the Central Depository Corporation shall clearly state their evaluation opinions and proposed handling solutions for each case, accompanied by all relevant documentation.

3. Reports upon Request

The Stock Exchange and the Central Depository Corporation shall submit reports in accordance with the content and deadlines specified in written requests from the Securities Commission regarding compliance monitoring work.

4. Regular, unusual, and requested reports as prescribed in Clauses 1, 2, and 3 of this Article shall be presented in both written form and electronic data files. The Stock Exchange and the Central Depository Corporation shall retain information reported to the Securities Commission in accordance with the provisions of the law.

Article 10. Reports of the Securities Commission

Within twenty working days from receiving complete reports on the results of annual compliance supervision work of the Stock Exchange and the Central Depository Corporation as prescribed in point b of Clause 1 of Article 9 of this Circular, the Securities Commission shall report to the Ministry of Finance on the implementation of compliance supervision work according to the contents stipulated in Chapters II and III of this Circular.

Chapter V

IMPLEMENTING PROVISIONS

Article 11. Implementation Provisions

1. This Circular takes effect from December 8, 2017, and replaces Circular No. 193/2013/TT-BTC dated December 16, 2013, issued by the Minister of Finance guiding the Securities Commission's compliance supervision work concerning activities in the securities sector of the Stock Exchange and the Central Depository Corporation of Vietnam.

2. The Chairman of the Securities Commission shall be responsible for organizing and directing the implementation of compliance supervision over activities in the securities sector of the Stock Exchange and the Central Depository Corporation in accordance with the provisions of the law and this Circular.

3. During the implementation process, if there are difficulties or obstacles, they should be promptly reflected to the Ministry of Finance for consideration and resolution./.