Decision No. 26/2022/QD-TTg Establishing, Organizing, and Operating the Vietnam Securities Depository and Settlement Corporation

Pursuant to …;

ESTABLISHMENT, ORGANIZATION AND OPERATIONS OF THE VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

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

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Law on Management and Use of State Capital for Investment in Business Operations dated November 26, 2014;

At the proposal of the Minister of Finance;

The Prime Minister issues this Decision on the establishment, organization and operations of the Vietnam Securities Depository and Clearing Corporation.

Article 1. Establishment of the Vietnam Securities Depository and Clearing Corporation based on the transformation of the Vietnam Securities Depository Center.

1. The Vietnam Securities Depository and Clearing Corporation is a state-owned enterprise organized under the form of a limited liability company with one member, wholly owned by the State, having legal personality, its own seal; it may open accounts in Vietnamese dong and foreign currencies at the State Treasury and domestic commercial banks, branches of foreign banks; it operates independently, implements financial regulations, statistical reporting systems, accounting, auditing, information disclosure, and financial obligations as prescribed by law.

a) International trading name: Viet Nam Securities Depository and Clearing Corporation.

b) Abbreviation: VSDC.

c) The headquarters of the Vietnam Securities Depository and Clearing Corporation is located in Hanoi and has a branch in Ho Chi Minh City.

2. The Vietnam Securities Depository and Clearing Corporation inherits all rights and responsibilities of the Vietnam Securities Depository Center as prescribed by law; it performs rights and obligations as stipulated in the Securities Law, the Enterprise Law, the Law on Management and Use of State Capital for Production and Business Investment, and other relevant laws; it registers the business according to the provisions of the Enterprise Law.

Article 2. Functions and tasks

1. The Vietnam Securities Depository and Clearing Corporation has the function of organizing and implementing registration, custody, clearing, and settlement of securities; supervising the activities of registration, custody, clearing, and settlement of securities transactions on the securities market as prescribed by securities law; other functions and tasks as prescribed by law and the Charter of the Vietnam Securities Depository and Clearing Corporation.

2. The main tasks of the Vietnam Securities Depository and Clearing Corporation are as follows:

a) Developing and implementing investment development strategies, five-year production and business plans, and annual production and business plans after approval by competent authorities as prescribed.

b) Issuing regulations on registration, custody, clearing, and settlement of securities, membership regulations of the Vietnam Securities Depository and Clearing Corporation, and other operational regulations after approval by the State Securities Commission; developing operational procedures and risk management processes for each business activity.

c) Providing services for registration, custody, clearing, and settlement of securities; registering security pledges for securities centrally registered at the Vietnam Securities Depository and Clearing Corporation upon customer requests; providing other services as stipulated in the Charter of the Vietnam Securities Depository and Clearing Corporation; implementing the issuance of domestic security codes and international security identification numbers for centrally registered securities; approving, changing, or canceling security registrations at the Vietnam Securities Depository and Clearing Corporation.

d) Providing information related to the ownership of securities of shareholders in public companies and issuers upon request of such public companies, issuers, and authorized agencies as prescribed by law.

đ) Approving or revoking the membership status of the Vietnam Securities Depository and Clearing Corporation; suspending the securities custody activities of custodian members, suspending the clearing and settlement activities of transaction members; recovering the Membership Certificate of custodian members and the Membership Certificate of clearing members.

e) Supervising the activities of registration, custody, clearing, and settlement of securities transactions; monitoring the foreign investor ownership ratio as prescribed by securities and securities market laws; supervising the compliance with obligations by members of the Vietnam Securities Depository and Clearing Corporation.

g) Ensuring physical infrastructure, technical facilities, and databases serving registration, custody, clearing, and settlement of securities activities. Implement measures to protect databases and retain original documents regarding registration, custody, clearing, and settlement of securities as prescribed by accounting and statistical laws.

h) Securing information related to customer ownership; refusing to freeze, hold, transfer assets, extract records, or copy customer ownership information without customer consent, except when required by authorized agencies or when requested to provide information by auditors conducting financial statement audits of the Vietnam Securities Depository and Clearing Corporation and financial statements of custodian members as prescribed by law.

i) Cooperating to promote and disseminate knowledge about securities and the securities market to investors.

k) Providing information and cooperating with the Vietnam Stock Exchange and its subsidiaries in securities business activities and with authorized agencies in investigations and prevention of violations of securities and securities market laws.

l) Managing separately the assets of customers from the assets of the Vietnam Securities Depository and Clearing Corporation; managing separately the assets of payment support funds, clearing funds, and business risk prevention funds as prescribed by law; using payment support sources when members of the Vietnam Securities Depository and Clearing Corporation temporarily lose their ability to pay as prescribed by law.

m) Operating in the interest of depositors and security holders; compensating customers for losses resulting from non-performance that causes damage to the legitimate rights and interests of customers, except in cases of force majeure.

n) Receive, manage, and use effectively, preserve and develop the state capital for the Vietnam Securities Depository and Central Counterparty Corporation in accordance with the financial mechanism.

o) Report and make recommendations to the State Securities Commission on measures to respond to, mitigate incidents, events, fluctuations affecting the registration, custody, clearing, and settlement activities of securities of the Vietnam Securities Depository and Central Counterparty Corporation; violations by members of the Vietnam Securities Depository and Central Counterparty Corporation.

p) Other tasks as prescribed by law and the Charter of the Vietnam Securities Depository and Central Counterparty Corporation.

Article 3. Registered Capital

1. The registered capital of the Vietnam Securities Depository and Central Counterparty Corporation is 1,000 billion VND, determined by the net assets of the Vietnam Securities Depository Center as reported in the audited financial statements at the time prior to the issuance of the Enterprise Registration Certificate to the Vietnam Securities Depository and Central Counterparty Corporation.

2. Adjustments to the registered capital of the Vietnam Securities Depository and Central Counterparty Corporation shall be carried out in accordance with the laws governing the management and use of state capital invested in production and business operations of enterprises.

Article 4. Management Structure

1. The management structure of the Vietnam Securities Depository and Central Counterparty Corporation includes: Board of Members, General Director, Supervisory Board, and specialized departments.

2. The Chairman of the Board of Members and the General Director of the Vietnam Securities Depository and Central Counterparty Corporation shall be appointed and relieved of duty by the Minister of Finance upon the proposal of the Board of Members.

Article 5. Charter of Organization and Operation

The Minister of Finance shall promulgate, amend, and supplement the Charter of Organization and Operation of the Vietnam Securities Depository and Central Counterparty Corporation based on the proposal of the Board of Members of the Vietnam Securities Depository and Central Counterparty Corporation and the opinion of the Chairman of the State Securities Commission.

Article 6. Implementation Organization

1. Ministry of Finance:

a) Implement the rights and obligations of the agency representing the owner towards the Vietnam Securities Depository and Central Counterparty Corporation as stipulated in the Law on Management and Use of State Capital Invested in Production and Business Operations of Enterprises, the Securities Law, the Enterprise Law, Decree No. 59/2021/NĐ-CP dated June 18, 2021 of the Government on certain special provisions regarding the financial management mechanism and assessment of operational effectiveness for the Vietnam Stock Exchange and the Vietnam Securities Depository and Central Counterparty Corporation, this Decision, and guiding documents that amend, supplement, or replace them (if any).

b) Issue, amend, and supplement the Charter of Organization and Operation of the Vietnam Securities Depository and Central Counterparty Corporation based on the proposal of the Board of Members of the Vietnam Securities Depository and Central Counterparty Corporation and the opinion of the Chairman of the State Securities Commission.

c) Submit to the competent authority for promulgation or amendment, supplementation, or replacement of legal documents regulating the financial management mechanism and assessment of operational effectiveness of the Vietnam Securities Depository and Central Counterparty Corporation.

2. The State Securities Commission

a) Approve operational regulations and member regulations for the Vietnam Securities Depository and Central Counterparty Corporation to issue in accordance with the Securities Law.

b) Manage and supervise the operational activities of the Vietnam Securities Depository and Central Counterparty Corporation in accordance with the Securities Law.

c) The Chairman of the State Securities Commission shall provide opinions on personnel serving as the Chairman of the Board of Members and General Director of the Vietnam Securities Depository and Central Counterparty Corporation before the Minister of Finance appoints or relieves them of duty in accordance with the Securities Law.

d) The Chairman of the State Securities Commission shall provide opinions on the Charter of Organization and Operation of the Vietnam Securities Depository and Central Counterparty Corporation before the Minister of Finance promulgates it in accordance with the Securities Law.

3. Ministries, agencies at the ministerial level, agencies under the Government, and related agencies shall implement this Decision in accordance with their functions and tasks as prescribed by law.

4. The People's Committee of Hanoi City and the People's Committee of Ho Chi Minh City shall take the lead and coordinate with the Ministry of Finance to manage the state on their respective territories over the Vietnam Securities Depository and Central Counterparty Corporation and its branches in accordance with the law.

Article 7. Effective Date

1. This Decision takes effect from the date of signature.

2. Decision No. 171/2008/QĐ-TTg dated December 18, 2008 of the Prime Minister on the establishment of the Vietnam Securities Depository Center shall cease to be effective from the date the Vietnam Securities Depository and Central Counterparty Corporation commences operations as stipulated in Clause 1, Article 8 of this Decision.

Article 8. Transitional Provisions

1. The commencement date of the Vietnam Securities Depository and Central Counterparty Corporation is after obtaining the Enterprise Registration Certificate and ensuring compliance with the provisions of Clause 6, Article 135 of the Securities Law No. 54/2019/QH14.

2. The Vietnam Securities Depository Center shall continue to organize and operate in accordance with the Securities Law No. 70/2006/QH11 which has been amended and supplemented by Law No. 62/2010/QH12 until the Vietnam Securities Depository and Central Counterparty Corporation commences operations as stipulated in Clause 1 of this Article.

Article 9. Responsibility for implementation

The Minister of Finance, Ministers, Heads of agencies at the ministerial level, Heads of agencies under the Government, Chairmen of People's Committees of provinces and centrally-administered cities, and related agencies are responsible for implementing this Decision./.