Decree No. 16/2019/ND-CP Amending and supplementing certain articles of decrees on business conditions within the scope of management of the State Bank of Vietnam.

DECREE

Amending and supplementing certain articles of Decrees
stipulating business conditions within the scope of state management
of the State Bank of Vietnam

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

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

At the proposal of the Governor of the State Bank of Vietnam;

The Government issues this Decree to amend and supplement certain articles of Decrees stipulating business conditions within the scope of state management by the State Bank of Vietnam.

Article 1. Amending, supplementing, and abolishing certain articles of Decree No. 135/2015/NĐ-CP dated December 31, 2015 of the Government on indirect foreign investment

1. Point a Clause 2 Article 14 shall be amended and supplemented as follows:

"a) Having profit for three consecutive years immediately preceding the year of submitting the application for issuance of the certificate of registration for indirect foreign investment, as shown in the audited financial statements and without any significant disclaimer according to the regulations of the Ministry of Finance. The financial statements must be audited by independent auditing organizations approved and announced by the Ministry of Finance in accordance with the regulations on independent auditing for public interest entities;"

2. Point b Clause 3 Article 14 shall be amended and supplemented as follows:

"b) A fund management company managing a securities investment fund or a securities investment company engaging in indirect foreign investment must have internal procedures, control mechanisms, internal audit, risk identification and management related to indirect foreign investment activities; meet financial safety indicators as prescribed by the Ministry of Finance.

In case a securities investment company manages its own capital for indirect foreign investment, it must comply with the provisions set out in point c Clause 2 of this Article;"

3. Point b Clause 4 Article 14 shall be amended and supplemented as follows:

"b) Having profit for three consecutive years immediately preceding the year of submitting the application for issuance of the certificate of registration for indirect foreign investment, as shown in the audited financial statements and without any significant disclaimer according to the regulations of the Ministry of Finance. The financial statements must be audited by independent auditing organizations not included in the list of auditing organizations not allowed to audit credit institutions and foreign bank branches published by the State Bank of Vietnam;"

4. Clause 1 Article 20 shall be amended and supplemented as follows:

"1. Having profit for three consecutive years immediately preceding the year of implementing entrusted indirect foreign investment, as shown in the audited financial statements independently audited by independent auditing organizations and without any significant disclaimer according to the regulations of the Ministry of Finance (this does not apply to securities investment funds and securities investment companies)."

5. Points a and b Clause 2 Article 23 shall be amended and supplemented as follows:

"a) Having profit for three consecutive years immediately preceding the year of submitting the application for issuance of the certificate of registration for entrusted indirect foreign investment activities, as shown in the audited financial statements and without any significant disclaimer according to the regulations of the Ministry of Finance. The financial statements must be audited by independent auditing organizations approved and announced by the Ministry of Finance in accordance with the regulations on independent auditing for public interest entities (applicable to fund management companies acting as entrusted organizations);

b) Having profit for three consecutive years immediately preceding the year of submitting the application for issuance of the certificate of registration for entrusted indirect foreign investment activities, as shown in the audited financial statements and without any significant disclaimer according to the regulations of the Ministry of Finance. The financial statements must be audited by an independent auditing organization not included in the list of auditing organizations not allowed to audit credit institutions and foreign bank branches published by the State Bank of Vietnam (applicable to commercial banks acting as entrusted organizations);"

6. Abolishing points d and e Clause 2, points d and g Clause 4 Article 14; point d Clause 2 Article 23.

Article 2. Amend, supplement, and abolish certain articles of Decree No. 39/2014/NĐ-CP dated May 7, 2014 of the Government on the activities of finance companies and financial leasing companies.

1. Point a Clause 1 Article 13 shall be amended and supplemented as follows:

"a) The conditions prescribed in Article 5 of this Decree;"

2. Abolish Clause 1, Clause 3 Article 5; Clause 2, Clause 3 Article 6; Clause 2 Article 7; Clause 2, Clause 3 Article 8; Clause 2 Article 10; Point b Clause 1, Point b Clause 2 Article 11; Point c Clause 2 Article 12; Point b Clause 1, Point b Clause 2 Article 13.

1. Point b Clause 2 Article 15 (amended and supplemented by Clause 8 Article 1 of Decree No. 80/2016/NĐ-CP dated July 1, 2016 of the Government amending and supplementing certain articles of Decree No. 101/2012/NĐ-CP dated November 22, 2012 of the Government on non-cash payment transactions) shall be amended and supplemented as follows:

"b) Having a proposal for providing intermediary payment services approved by the competent authority according to the provisions of the charter of the organization, which must include at least the following contents:

(i) Technical business procedures of the proposed service, including: Name, scope of supply, customer target, usage conditions, diagram and explanation of each step of the procedure, cash flow process from transaction initiation to final settlement between related parties;

(ii) Mechanism to ensure payment capability, including: Mechanism for opening and maintaining the guarantee account balance, purpose of using the guarantee account;

(iii) Internal inspection and control procedures; risk management, security and confidentiality assurance; general principles and internal regulations on anti-money laundering; procedures and formalities for handling requests for verification, complaints, and disputes;"

2. Point d Clause 2 Article 15 shall be amended and supplemented as follows:

"d) Personnel conditions: The legal representative, General Director (Director) of the organization requesting permission must have a bachelor's degree or more, or have at least three years of direct work experience in one of the fields of business management, economics, finance, banking, or law;

Deputy General Director (Deputy Director) and key staff implementing the proposal for providing intermediary payment services (including Head of Department (Division) or equivalent and technical staff) must have an associate degree or higher in one of the fields of economics, finance, banking, information technology, or the specialized field they are responsible for;"

3. Abolish Point h Clause 2 Article 15 (amended and supplemented by Clause 8 Article 1 of Decree No. 80/2016/NĐ-CP dated July 1, 2016 of the Government amending and supplementing certain articles of Decree No. 101/2012/NĐ-CP dated November 22, 2012 of the Government on non-cash payment transactions).

Clause 5 Article 7 (amended and supplemented by Article 1 of Decree No. 57/2016/NĐ-CP dated July 1, 2016 of the Government amending and supplementing Article 7 of Decree No. 10/2010/NĐ-CP dated February 12, 2010 of the Government on credit information activities) shall be amended and supplemented as follows:

"There must be a minimum of 15 credit institutions, foreign bank branches (excluding policy banks, cooperative banks, people's credit funds, and microfinance organizations) committed to providing credit information, and these credit institutions and foreign bank branches do not have similar commitments with other credit information companies."

Article 5. Amending, supplementing, and abolishing certain provisions of Decree No. 89/2016/NĐ-CP dated July 1, 2016 of the Government on conditions for foreign exchange trading agency activities and services of receiving and paying foreign currency by economic organizations.

1. Clause 5 of Article 4 shall be amended and supplemented as follows:

"5. To have business procedures for foreign exchange trading, to have measures to ensure security during the foreign exchange trading process; at the transaction location, there must be a publicly displayed exchange rate notice board and a sign indicating the name of the authorized credit institution and the name of the foreign exchange trading agency."

2. Clause 7 of Article 4 shall be amended and supplemented as follows:

"7. An economic organization may only act as a foreign exchange trading agency for one permitted credit institution."

3. Abolish Clause 1, Clause 3, and Clause 4 of Article 4; Points a and b of Clause 1 of Article 5; Points a and b of Clause 1 of Article 6.

Article 6. Implementation Provisions

This Decree takes effect from March 20, 2019.

Article 7. Responsibilities for Organizing Implementation

The Minister, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under central cities are responsible for implementing this Decree./.