Circular No. 36/2017/TT-BTC amends and supplements certain provisions of Circular No. 217/2013/TT-BTC dated December 31, 2013 guiding the implementation of administrative penalties in the securities and securities market sector.

CIRCULAR

Amending and supplementing certain provisions of Circular No. 217/2013/TT-BTC dated December 31, 2013 guiding the implementation of administrative penalties in the securities and securities market sectorin the field of securities and the securities market

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

Based on the Administrative Violation Handling Law dated June 20, 2012;

Pursuant to Decree No. 81/2013/NĐ-CP dated July 19, 2013 of the Government detailing certain provisions and measures for implementing the Law on Handling Administrative Offenses;

Pursuant to Decree No. 108/2013/NĐ-CP dated September 23, 2013 of the Government stipulating administrative penalties in the securities and securities market sector and Decree No. 145/2016/NĐ-CP dated November 1, 2016 of the Government amending and supplementing certain provisions of Decree No. 108/2013/NĐ-CP dated September 23, 2013 of the Government stipulating administrative penalties in the securities and securities market sector;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Chairman of the State Securities Commission;

The Minister of Finance promulgates this Circular amending and supplementing certain provisions of Circular No. 217/2013/TT-BTC dated December 31, 2013 guiding the implementation of administrative penalties in the securities and securities market sector.

Article 1. Amending and supplementing certain provisions of Circular No. 217/2013/TT-BTC dated December 31, 2013 of the Minister of Finance guiding the implementation of administrative penalties in the securities and securities market sector as follows:

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

“a) For violations concerning the implementation of public offerings and issuance of securities as specified at Points b, c, and d Clause 3 Article 4, Clause 4 and Clause 5 Article 6, Clause 2 Article 7 of Decree No. 108/2013/NĐ-CP dated September 23, 2013 of the Government stipulating administrative penalties in the securities and securities market sector (hereinafter referred to as Decree No. 108/2013/NĐ-CP), the date of cessation of the violation for calculating the statute of limitations for punishment is the end date of the receipt of money for purchasing securities. For violations as specified in Clause 2 Article 6 of Decree No. 108/2013/NĐ-CP and Clause 2a Article 14 of Decree No. 108/2013/NĐ-CP added according to Clause 16 Article 1 of Decree No. 145/2016/NĐ-CP dated November 1, 2016 of the Government amending and supplementing certain provisions of Decree No. 108/2013/NĐ-CP (hereinafter referred to as Decree No. 145/2016/NĐ-CP), the statute of limitations for punishment is calculated from the date when the securities are listed or registered for trading for completed violations or from the date of recording the violation in the record for ongoing violations;

b) For violations concerning the registration dossier of public companies as specified in Clause 1 and Clause 2 Article 9 of Decree No. 108/2013/NĐ-CP, Point a Clause 3 Article 9 of Decree No. 108/2013/NĐ-CP amended according to Clause 10 Article 1 of Decree No. 145/2016/NĐ-CP and Clause 4 and Clause 5 Article 9 of Decree No. 108/2013/NĐ-CP added according to Clause 11 Article 1 of Decree No. 145/2016/NĐ-CP, the statute of limitations for punishment is calculated from the date of recording the violation concerning the registration dossier of public companies;"

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

"3. The recovery of securities that have been offered and issued and the refund to investors of the purchase price of securities or deposit (if any) and interest generated from the purchase price or deposit as specified in Point a Clause 3 Article 3 of Decree No. 108/2013/NĐ-CP amended according to Clause 2 Article 1 of Decree No. 145/2016/NĐ-CP shall be carried out as follows:

a) Within one working day from the date of receiving the decision on administrative penalty, the violator must publish on one central newspaper for three consecutive issues and on the company's website about the refund of the purchase price of securities or deposit (if any) plus interest calculated at the demand deposit rate of the bank where the violator has an account for collecting the purchase price or deposit. The amount of interest on the purchase price or deposit that the violator must pay to the investor is calculated from the date the investor paid the money until the date the violator refunds the money to the investor. In case the investor has legally transferred the securities purchased in the offering mentioned above, the violator is responsible for identifying the investors who received the transfer before the announcement of the refund and the quantity of securities they currently hold to inform those investors;

b) The violator must report to the State Securities Commission on the results of the refund of the purchase price of securities to investors within three working days from the completion of the refund to investors."

3. Clause 3 and Clause 8 Article 4 shall be amended and supplemented as follows:

"3. The provision at Clause 7 Article 20 of Decree No. 108/2013/NĐ-CP amended according to Clause 21 Article 1 of Decree No. 145/2016/NĐ-CP shall apply in cases of violations concerning the following information:

a) Information on conditions for granting licenses for the establishment and operation of securities companies, fund management companies, single client investment securities trust management companies, and branch offices of foreign securities companies or fund management companies in Vietnam; information on conditions for obtaining a certificate of eligibility to engage in derivative securities business, settlement, and transaction services;

b) Information on business activities, assets, financial status of organizations applying for licenses or additional licenses;

c) Information on technical infrastructure, information technology infrastructure with appropriate systems (trading system; settlement and payment system) for securities derivative business operations and services."

8. The act of "Creating false documents in the prospectus for individual share offerings without criminal prosecution" as stipulated in Clause 3a, Article 4 of Decree No. 108/2013/ND-CP, supplemented according to Clause 6, Article 1 of Decree No. 145/2016/ND-CP, the act of "Creating false documents in the prospectus for public securities offerings without criminal prosecution" as stipulated in Clause 3, Article 5 of Decree No. 108/2013/ND-CP, amended according to Clause 8, Article 1 of Decree No. 145/2016/ND-CP, and the act of "Establishing or confirming false documents to list securities or register securities trading" as stipulated in Clause 4, Article 14 of Decree No. 108/2013/ND-CP shall be specifically defined as follows:

a) It is the act of creating or confirming false or inaccurate documents or information to register for individual share offerings, public securities offerings, listing securities, or registering securities trading.

b) Upon discovering the acts stipulated in Clause 3a, Article 4 of Decree No. 108/2013/ND-CP, supplemented according to Clause 6, Article 1 of Decree No. 145/2016/ND-CP, Clause 3, Article 5 of Decree No. 108/2013/ND-CP, amended according to Clause 8, Article 1 of Decree No. 145/2016/ND-CP, and Clause 4, Article 14 of Decree No. 108/2013/ND-CP, the State Securities Commission and the Stock Exchange must prepare a record and seize the false documents. In cases where the false documents are licenses, the State Securities Commission and the Stock Exchange must notify the issuing authority in writing.

4. Supplement Clause 1a and Clause 1b following Clause 1 of Article 5 as follows:

“1a. The provision at Point c, Clause 1, Article 6 of Decree No. 108/2013/ND-CP, supplemented according to Clause 9, Article 1 of Decree No. 145/2016/ND-CP, shall apply in cases where the report on the use of capital audited and confirmed at the Shareholders' Meeting held after the completion of the public securities offering until the funds from the offering are fully utilized, or where the detailed explanation of the use of funds from the public securities offering is not provided in the annual financial statements audited and confirmed from the year of completion of the public securities offering until the funds are fully utilized.”

1b. The provision at Clause 2, Article 6 of Decree No. 108/2013/ND-CP shall apply to cases where a public company conducts a public securities offering after July 1, 2011.

5. Add Article 5a after Article 5 as follows:

“Article 5a. Violation of provisions on implementing individual share offerings

The provision at Point c, Clause 1, Article 4 of Decree No. 108/2013/ND-CP, supplemented according to Clause 4, Article 1 of Decree No. 145/2016/ND-CP, shall apply in cases where the report on the use of capital audited and confirmed at the Shareholders' Meeting held after the completion of the individual share offering until the funds from the offering are fully utilized, or where the detailed explanation of the use of funds from the individual share offering is not provided in the annual financial statements audited and confirmed from the year of completion of the individual share offering until the funds are fully utilized.”

6. Article 6 is amended and supplemented as follows:

“Article 6. Violation of provisions on submitting registration documents for public companies

1. The provision at Point b, Clause 3, Article 9 of Decree No. 108/2013/ND-CP shall apply in cases where the organization that violates the regulations has been instructed to correct inaccurate information in the registration documents for public companies but fails to do so or does not comply with the requirements of the State Securities Commission.

2. The act of "Failing to submit registration documents for public companies" as stipulated in Clause 5, Article 9 of Decree No. 108/2013/ND-CP, supplemented according to Clause 11, Article 1 of Decree No. 145/2016/ND-CP, shall apply in cases where the State Securities Commission has issued a written request for a public company to submit registration documents or supplementary registration documents, but the company fails to comply.

Customs procedures for imported goods transferred to the inland container depot (ICD) My Dinh and Long Bien shall be carried out in accordance with the Law on Customs, Decree No. 08/2015/NĐ-CP dated January 23, 2015 of the Government, and Decree No. 59/2018/NĐ-CP dated April 20, 2018 amending and supplementing certain provisions of Decree No. 08/2015/NĐ-CP of the Government detailing and guiding the implementation of the Law on Customs regarding customs procedures, inspection, supervision, and control, and related guiding documents."

“Article 7. Violation of provisions on listing and registering securities trading

1. The provision at Clause 2a, Article 14 of Decree No. 108/2013/ND-CP, supplemented according to Clause 16, Article 1 of Decree No. 145/2016/ND-CP, shall apply to the following cases:

a) A public company formed from state-owned enterprises conducting public securities offerings in accordance with laws on corporatization;

b) A listed company whose listing has been canceled but still meets the criteria for being a public company;

c) A consolidated company formed from enterprises including a listed company, where after consolidation, the consolidated company meets the criteria for being a public company but does not meet the listing conditions;

d) A public company that does not meet the listing conditions or meets the listing conditions but has not yet listed.

2. The act of "Failing to register securities trading or list securities" as stipulated in Point e, Clause 2a, Article 14 of Decree No. 108/2013/ND-CP, supplemented according to Clause 16, Article 1 of Decree No. 145/2016/ND-CP, shall apply in cases where the State Securities Commission has issued a written request for the public company to register securities trading or list securities, but the company fails to comply.

3. The additional penalty of "Suspension of securities listing or securities trading registration" as stipulated in Clause 5, Article 14 of Decree No. 108/2013/ND-CP shall apply to the act of establishing or confirming false listing registration documents or securities trading registration documents containing intentionally false information, concealing facts, or serious discrepancies, or the act of establishing or confirming false documents to list or register securities trading in cases where the Stock Exchange has approved the listing or registration of securities for the violating entity.

8. Article 8 is amended as follows:

“Article 8. Violation of provisions on organizing securities trading markets

1. The provisions of Clause 1 and Clause 2 Article 16 Decree No. 108/2013/ND-CP amended by Clause 17 Article 1 Decree No. 145/2016/ND-CP shall apply to any organization of a location or form of information exchange for the purpose of executing buy, sell and securities trading orders outside the Stock Exchange.

2. In cases where there is unlawful revenue, the amount of fine for the violation of the regulations on organizing the securities trading market shall be calculated based on the total revenue obtained by the entity from the implementation of the violation. If applying the maximum fine of five times the unlawful revenue still results in a lower fine than the maximum fine prescribed in Clause 1 Article 16 Decree No. 108/2013/ND-CP amended by Clause 17 Decree No. 145/2016/ND-CP, the authority imposing the fine shall apply the maximum fine prescribed in Clause 1 Article 16 Decree No. 108/2013/ND-CP amended by Clause 17 Decree No. 145/2016/ND-CP to impose the fine.

9. Supplement Clause 1a following Clause 1 Article 9 as follows:

"1a. The provisions of Point b Clause 1 Article 21 Decree No. 108/2013/ND-CP amended by Clause 22 Article 1 Decree No. 145/2016/ND-CP shall apply to securities companies that are not public companies. For public company securities companies violating corporate governance regulations, penalties shall be imposed according to the provisions of Article 11 Decree No. 108/2013/ND-CP and Clause 12 Article 1 Decree No. 145/2016/ND-CP."

10. Clause 1 Article 10 shall be amended and supplemented as follows:

"1. The illegal profit obtained from implementing insider trading and market manipulation activities as stipulated in Clause 1 and Clause 3 Article 29 Decree No. 108/2013/ND-CP amended by Clause 36 Article 1 Decree No. 145/2016/ND-CP is the unlawful income arising from the implementation of these actions during the period of the violation, after deducting taxes and fees payable. Illegal profit is calculated when the individual or entity with the violation buys or sells securities to realize the illegal profit. The purchase (sale) price for calculating illegal profit is the execution price and calculated according to the principle of weighted average purchase (sale) price.

In cases where one person uses multiple accounts for insider trading or market manipulation, the illegal profit is calculated based on the total accounts used for insider trading or market manipulation. In cases where a group of people collude to engage in insider trading or market manipulation, the illegal profit is calculated based on each account used for insider trading or market manipulation.”

11. Clause 4 Article 15 shall be amended as follows:

"4. The decision to impose fines signed by the Chairman of the State Securities Commission or the Head of the specialized inspection team of the State Securities Commission shall bear the seal of the State Securities Commission. In cases where the decision to impose fines is signed by the Inspector of the State Securities Commission, it shall bear the seal of the Inspection Department of the State Securities Commission.”

12. Article 16 shall be amended and supplemented as follows:

"1. Individuals and organizations committing administrative violations in the securities sector who are subject to a fine within the penalty range with a maximum fine of VND 15,000,000 or more for individuals, VND 30,000,000 or more for organizations, or who are subject to the main form of punishment being the revocation of the registration certificate for representative offices, securities practice certificates for a certain period, or who are subject to one of the supplementary forms of punishment or remedial measures as prescribed in Clause 2 and Clause 3 Article 3 Decree No. 108/2013/ND-CP and Clause 2 Article 1 Decree No. 145/2016/ND-CP shall have their information about administrative violations in the securities sector made public.

2. Within three working days from the date of issuance of the decision to impose administrative violations against individuals and organizations committing administrative violations as prescribed in Clause 1 of this Article, the decision to impose fines must be published on the electronic information website of the State Securities Commission. In cases where the violator is a trading member, listed organization, or securities trading registration organization, the decision to impose fines must also be published simultaneously on the electronic information website of the Stock Exchange. The decision to impose administrative fines must clearly state the basis for making the public announcement, the content of the public announcement; the name of the electronic information website of the State Securities Commission and the Stock Exchange for publishing the information publicly.

3. The content of the public announcement includes: the name, address, occupation of the violator or the name, address of the violating organization, the administrative violation, the form of punishment, and the remedial measures.

13. Point d Clause 1 Article 18 shall be amended as follows:

"d) Applying other coercive measures to compel the implementation of the remedial measures prescribed in Clause 3 Article 3 Decree No. 108/2013/ND-CP and Clause 2 Article 1 Decree No. 145/2015/ND-CP.”

Article 2. Implementation clause

1. This Circular takes effect from June 15, 2017.

2. The Chairman of the State Securities Commission is responsible for organizing and directing the imposition of administrative penalties in the securities sector and the securities market in accordance with the relevant laws.

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./.