Decree No. 51/2018/ND-CP Amending and Supplementing Certain Provisions of Decree No. 158/2006/ND-CP dated December 28, 2006 of the Government detailing the Law on Trade regarding commodity trading activities through Commodity Trading Exchanges.

DECREE

Amending and supplementing some articles of Decree No. 158/2006/NĐ-CPdated December 28, 2006 of the Government detailing the Law on Trade regarding trading activities of goods through Commodity Trading Centers 

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

Pursuant to the Law on Trade dated June 14, 2005;

Pursuant to the Enterprise Law dated November 26, 2014;

On the basis of the Investment Law dated November 26, 2014;

At the proposal of the Minister of Industry and Trade,

The Government promulgates this Decree amending and supplementing some articles of Decree No. 158/2006/NĐ-CP dated December 28, 2006 of the Government detailing the Law on Trade regarding trading activities of goods through Commodity Trading Centers.

Article 1. Amending and supplementing some articles of Decree No. 158/2006/NĐ-CP dated December 28, 2006 detailing the Law on Trade regarding trading activities of goods through Commodity Trading Centers (hereinafter referred to as Decree No. 158/2006/NĐ-CP)

1. Amending Clause 3 of Article 3 as follows:

"Article 3. Explanation of terms

3. An order transaction is a written request or other equivalent forms of customers to execute trading transactions of goods through Commodity Trading Centers.

2. Supplement Clause 14 and Clause 15 to Article 3 as follows:

“Article 3. Explanation of Terms

14. Interconnection means the agreement between Commodity Trading Centers to connect with each other, thereby allowing commodity contracts of one Commodity Trading Center to be traded at another Commodity Trading Center and vice versa.

15. Brokering trading of goods through Commodity Trading Centers refers to members of Commodity Trading Centers acting as intermediaries to facilitate the buying and selling of commodity contracts for customers on Commodity Trading Centers.

3. Amend Point b Clause 2 of Article 4 as follows:

"Article 4. State Management

b) Deciding on the establishment and operation of Commodity Trading Centers, approving the Articles of Operation, and approving amendments and supplements to the Articles of Operation of Commodity Trading Centers;"

4. Amending and supplementing Article 5 as follows:

“Article 5. Vietnamese traders participating in trading of goods through Commodity Trading Centers abroad

1. Vietnamese traders have the right to participate in trading of goods through Commodity Trading Centers abroad via Commodity Trading Centers in Vietnam that are interconnected with Commodity Trading Centers abroad.

2. Commodity Trading Centers shall be responsible for issuing and publicizing trading rules for goods through Commodity Trading Centers abroad.

3. Payment for transactions of goods through Commodity Trading Centers abroad shall be carried out through credit institutions authorized to conduct international payment transactions based on compliance with relevant foreign exchange management regulations.

4. Export and import of goods to implement trading of goods through Commodity Trading Centers abroad shall be conducted in accordance with regulations on international trade activities and agency purchase, sale, processing, and transit of goods with foreign countries, and other related laws.

5. Supplement Article 5a following Article 5 as follows:

"Article 5a. Notification of Interconnected Trading through Commodity Trading Centers Abroad

1. In cases where Commodity Trading Centers in Vietnam are interconnected with Commodity Trading Centers abroad, they must submit notification documents to the Ministry of Industry and Trade in one of three ways: direct submission, postal service, or electronic network of the Ministry of Industry and Trade. The documents include:

a) A notification letter about the interconnection with Commodity Trading Centers abroad;

b) A cooperation record between Commodity Trading Centers in Vietnam and Commodity Trading Centers abroad or business members of Commodity Trading Centers abroad, confirmed by the Vietnamese representative office abroad.

2. Commodity Trading Centers shall submit one set of notification documents to the Ministry of Industry and Trade within thirty days from the date of signing the cooperation record with Commodity Trading Centers abroad. Within thirty days from the date of receiving the notification documents from Commodity Trading Centers about interconnection with Commodity Trading Centers abroad, the Ministry of Industry and Trade shall issue a feedback letter to Commodity Trading Centers if the notification documents are incomplete. After this period, if Commodity Trading Centers do not receive a feedback letter from the Ministry of Industry and Trade, it means that the notification documents of Commodity Trading Centers are complete and valid."

6. Amend Article 6 as follows:

"Article 6. Legal Status of Commodity Trading Centers

Commodity Trading Centers are enterprises established and operating in accordance with the Enterprise Law and this Decree."

“a) Establishing and developing effectively concentrated raw material zones according to the orientations set forth in Decree No. 98/2018/NĐ-CP dated July 5, 2018 of the Government on policies encouraging the development of cooperation and linkage in agricultural production and consumption; Decision No. 100/QĐ-TTg dated January 19, 2019 of the Prime Minister approving the project to implement, apply, and manage traceability systems; Decision No. 1804/QĐ-TTg dated November 13, 2020 of the Prime Minister approving the Program to support the development of collective economic organizations and cooperatives from 2021 to 2025; Decision No. 255/QĐ-TTg dated February 25, 2021 of the Prime Minister approving the Plan to restructure the agricultural sector from 2021 to 2025; Decision No. 885/QĐ-TTg dated June 23, 2020 of the Prime Minister approving the Project to develop organic agriculture from 2020 to 2030, and according to the planning of concentrated raw material zones of localities.”

"Article 8. Conditions for Establishing Commodity Trading Centers

Commodity Trading Centers may be established if they meet the following conditions:

1. Registered capital of one hundred fifty (150) billion VND or more;

2. Having an information technology system meeting the requirements of technological solutions and techniques in trading activities of goods through Commodity Trading Centers, specifically:

- Stable server systems with at least one backup server always ready in case of main system failure;

- Server systems ensuring data backup of application operations, transaction data, and guaranteeing data recovery in case of incidents;

- Application software must comply with intellectual property rights as stipulated by law;

- Information technology systems must have log functions to record all commodity transactions, payments, and deliveries in the operational process for a minimum of five years;

- Information technology systems must meet technical standards for network security, if applicable.

3. The Articles of Operation must not contravene the provisions of this Decree."

8. Amend and supplement Article 9 as follows:

"Article 9. Documents for Requesting Establishment of Commodity Trading Centers

Documents for requesting establishment of Commodity Trading Centers include:

1. A proposal for establishing Commodity Trading Centers according to Model No. 01 prescribed in Appendix I attached to this Decree;

2. A copy of the enterprise registration certificate;

3. Economic and technical justification including objectives, operational premises, material facilities, and information technology systems along with supporting documents;

4. Draft Articles of Operation of Commodity Trading Centers containing the contents specified in Article 14 of this Decree, accompanied by a record of approval of the draft Articles of Operation. The draft Articles of Operation must be signed by the legal representative of the Commodity Trading Center."

9. Amend and supplement Article 10 as follows:

"Article 10. Examination and Issuance of License for Establishing Commodity Trading Centers

1. The Ministry of Industry and Trade is the authority receiving applications and is responsible for examining the conditions and applications for establishing a Commodity Exchange in accordance with this Decree.

2. Procedure for issuing a License to establish a Commodity Exchange

a) The trader submits one set of application documents to the Ministry of Industry and Trade via one of three methods: Direct submission, postal service, or through the Ministry's electronic network.

b) In cases where the application is not valid, within seven working days from the date of receipt of the trader's application, the Ministry of Industry and Trade shall issue a written request for the trader to amend and supplement the application.

c) Within forty-five days from the date of receipt of a valid application, the Ministry of Industry and Trade is responsible for examining and issuing a License to establish a Commodity Exchange according to the model attached as Appendix III to this Decree if the trader meets all the required conditions stipulated in this Decree. If the License is refused, the Ministry of Industry and Trade must provide a written response stating the reasons for refusal.

10. Amend and supplement Article 11 as follows:

Article 11. Content of the License to Establish a Commodity Exchange

The License to Establish a Commodity Exchange simultaneously serves as a Certificate of Eligibility for Business Operations and includes the following contents:

1. Name and main office address;

2. Full name, permanent residence address, nationality, identification card number, passport number, or other lawful personal identification of the legal representative of the Commodity Exchange;

3. Business registration number of the enterprise establishing the Commodity Exchange;

4. Registered capital of the Commodity Exchange;

5. Commodities traded.

11. Amend and supplement Article 12 as follows:

Article 12. Amendment and Supplement to the License to Establish a Commodity Exchange

1. In case there is a change in any of the contents of the License to Establish specified in Article 11 of this Decree, the Commodity Exchange must prepare an application and submit it to the Ministry of Industry and Trade requesting amendment and supplement to the License to Establish via one of three methods: Direct submission, postal service, or through the Ministry's electronic network.

2. The application for amendment and supplement to the License to Establish a Commodity Exchange consists of one set including:

a) A written request for amendment and supplement to the License to Establish a Commodity Exchange according to Model No. 02 attached as Appendix I to this Decree;

b) A copy of the License to Establish a Commodity Exchange;

c) Supporting documents proving the need for amendment and supplement.

3. Within ten days from the date of receipt of a valid application as stipulated in Clause 2 of this Article, the Ministry of Industry and Trade must decide on the amendment and supplement to the License to Establish a Commodity Exchange. In case the License to Establish a Commodity Exchange is not amended or supplemented, the Ministry of Industry and Trade must notify in writing and state the reasons.

12. Amend and supplement Clause 1, Clause 2 of Article 13 as follows:

Article 13. Reissue of the License to Establish a Commodity Exchange

1. In case the License to Establish a Commodity Exchange is lost, torn, or destroyed in another form, the Commodity Exchange must prepare an application and submit it to the Ministry of Industry and Trade requesting reissue of the License to Establish via one of three methods: Direct submission, postal service, or through the Ministry's electronic network.

2. The application for reissuance of the License to Establish a Commodity Exchange consists of one set including a written request for reissuance of the License to Establish a Commodity Exchange according to Model No. 03 attached as Appendix I to this Decree.

13. Amend Point e, Clause 1 of Article 14 as follows:

Article 14. Rules of Operation of the Commodity Exchange

e) Margin trading and transaction fees;

14. Supplement Article 14a following Article 14 as follows:

“Article 14a. Approval of the Amended and Supplementary Trading Rules of the Commodity Exchange

1. In case there is a change to the contents of the Trading Rules of the Commodity Exchange as stipulated in Article 14 of this Decree, the Commodity Exchange must prepare a dossier to submit to the Ministry of Industry and Trade requesting approval of the Trading Rules of the Commodity Exchange through one of the following methods: direct submission, postal service, or electronic network of the Ministry of Industry and Trade.

2. The dossier for requesting approval of the amended and supplementary Trading Rules of the Commodity Exchange shall be prepared in one set including:

a) A request for approval of the amended and supplementary Trading Rules of the Commodity Exchange;

b) The amended and supplementary Trading Rules of the Commodity Exchange;

c) Minutes of the approval of the amended and supplementary Trading Rules of the Commodity Exchange.

3. Within thirty days from the date of receipt of the valid dossier of the Commodity Exchange as provided for in Clause 2 of this Article, the Ministry of Industry and Trade must decide on the approval of the amended and supplementary Trading Rules of the Commodity Exchange. In case the amended and supplementary Trading Rules of the Commodity Exchange are not approved, the Ministry of Industry and Trade must notify in writing and specify the reasons.

15. Supplement Clause 12 to Article 15 as follows:

"Article 15. Powers of the Commodity Exchange

12. The Commodity Exchange in Vietnam has the right to interconnect with foreign Commodity Exchanges in accordance with the provisions of this Decree."

16. Supplement Clause 11, 12 to Article 16 as follows:

"Article 16. Responsibilities of the Commodity Exchange

11. Issuing listing rules, information disclosure rules, and trading rules for goods through the Commodity Exchange.

12. Issuing and publicizing operational rules and risk management rules of the Settlement Center."

17. Supplement Article 16a after Article 16 as follows:

"Article 16a. Foreign Investors Participating in Goods Trading Activities Through the Commodity Exchange in Vietnam

1. Foreign investors have the right to participate in trading goods through the Commodity Exchange in Vietnam.

2. Foreign investors have the right to contribute capital to establish a Commodity Exchange in Vietnam; purchase shares or equity contributions of the Commodity Exchange in Vietnam according to the following regulations:

a) Foreign investors are permitted to contribute capital to establish a Commodity Exchange in Vietnam; purchase shares or equity contributions of the Commodity Exchange in Vietnam with a ratio not exceeding 49% of the registered capital.

b) Foreign investors are permitted to participate in trading goods through the Commodity Exchange as customers or members of the Commodity Exchange (broker members, trading members) with unlimited ownership ratio of the registered capital.

c) Procedures for contributing capital, purchasing shares, or equity contributions of foreign investors shall be carried out in accordance with the Law on Enterprises, Investment Law, and other relevant laws."

18. Supplement Article 16b after Article 16a as follows:

"Article 16b. Reporting System of the Commodity Exchange

1. Periodic reports

a) Contents of periodic reports according to the model prescribed in Appendix II issued together with this Decree, including:

- Model No. 01: Report on the operation of the Commodity Exchange;

- Model No. 02: List of members of the Commodity Exchange.

b) Deadline for submitting periodic reports to the Ministry of Industry and Trade:

- Before April 15 for the first quarter report and before October 15 for the third quarter report each year;

- Before July 20 for the mid-year report;

- Before January 31 of the following year for the annual report of the previous year.

2. Emergency Reports

a) When there are unusual developments in transactions, the Commodity Exchange must send a report to the Ministry of Industry and Trade by the fastest means possible.

b) Other ad hoc reports as required by specific content and time by the Ministry of Industry and Trade or other competent authorities.

3. Form and address for sending reports (both periodic and ad hoc)

a) The Commodity Exchange must send reports to the Ministry of Industry and Trade in both written form and electronic data file format.

b) Address for sending written reports: Ministry of Industry and Trade, No. 54 Hai Ba Trung Street, Hoan Kiem District, Hanoi.

c) Address for sending electronic data files: [email protected]".

19. Amend Article 17 as follows:

"Article 17. Members of the Commodity Exchange

1. Members of the Commodity Exchange include:

a) Trading members;

b) Broker members.

2. Trading members of the Commodity Exchange may carry out proprietary trading activities and brokerage activities for goods trading through the Commodity Exchange.

3. Broker members may only carry out brokerage activities for goods trading through the Commodity Exchange."

20. Amend Clause 2 of Article 19 as follows:

"Article 19. Broker Members

Broker members must meet the following conditions:

2. Registered capital of at least five billion VND;"

21. Amend Clause 2 of Article 21 as follows:

"Article 21. Trading Members

Trading members must meet the following conditions:

2. Registered capital of at least seventy-five billion VND;"

22. Amend the name of Chapter IV as follows:

"Chapter IV

SETTLEMENT CENTER AND GOODS DELIVERY CENTER"

23. Amend Article 26 as follows:

"Article 26. Settlement Center

1. The Settlement Center for goods trading through the Commodity Exchange (hereinafter referred to as the Settlement Center) is an organization under the Commodity Exchange that performs the function of providing settlement services for transactions conducted through the Commodity Exchange, specifically as follows:

a) Assigning transaction account numbers to members of the Commodity Exchange; managing and using the guarantee deposit to ensure the status of members of the Commodity Exchange;

b) Calculating and updating margin levels of members in the trading system according to the operational rules of the Commodity Exchange;

c) Settling positions of members after the end of the trading session;

d) Updating open position limits of members in the trading system based on their account balances;

e) Checking and processing requests for withdrawal of margin deposits from trading members and broker members;

f) Imposing and collecting transaction fees from members;

g) Send payment orders to the bank providing settlement services designated by the Commodity Exchange to execute the transfer of funds and record debits/credits for members of the Commodity Exchange.

2. The Central Counterparty must operate independently from the members of the Commodity Exchange.”

24. Amend Clause 4 of Article 27 as follows:

“Article 27. Rights of the Central Counterparty

4. Other rights according to the operational regulations of the Commodity Exchange.”

25. Amend Clause 5 of Article 28 as follows:

“Article 28. Obligations of the Central Counterparty

5. Other obligations according to the operational regulations of the Commodity Exchange.”

26. Amend Article 32 as follows:

“Article 32. Commodities traded on the Commodity Exchange

1. For commodities listed under the restricted trade categories, the Commodity Exchange must register with the competent authority for approval before listing them for trading on the Commodity Exchange.

2. For commodities not listed under the prohibited, restricted, or conditional trade categories, the Commodity Exchange shall be responsible for submitting one set of notification documents to the Ministry of Industry and Trade thirty days prior to officially listing them for trading on the Commodity Exchange. The documents can be submitted directly, through postal service, or via the electronic network of the Ministry of Industry and Trade.

The notification documents include:

a) A notification letter regarding the listing of new commodity categories on the Commodity Exchange;

b) Contract specifications for each type of commodity intended for listing on the Commodity Exchange.

Within thirty days from the date of receipt of the notification documents from the Commodity Exchange regarding the listing of commodities for trading on the Commodity Exchange, the Ministry of Industry and Trade shall issue a feedback letter to the Commodity Exchange if the notification documents are incomplete. If the Commodity Exchange does not receive a feedback letter from the Ministry of Industry and Trade within this period, it means that the notification documents of the Commodity Exchange are complete and valid.”

27. Amend Article 53 as follows:

“Article 53. Competent Authority and Procedures for Administrative Violation Handling

The competent authority and procedures for handling administrative violations related to the trading of commodities on the Commodity Exchange shall be carried out in accordance with the laws on administrative violation handling.”

28. Add Article 53a following Article 53 as follows:

“Article 53a. Obligation to Publish Information of the Commodity Exchange

1. Within thirty days from the date of issuance of the Business Registration Certificate, the Commodity Exchange must publish the content of the Business Registration Certificate on three consecutive issues of a legally operating online newspaper or printed newspaper in Vietnam.

2. From the date of issuance of the Business Registration Certificate, the Commodity Exchange must publish its operational charter, member lists, and other member information; transaction and trading order information for commodity trading on the Commodity Exchange, and other information as stipulated in the operational charter at its headquarters, branches, representative offices, and on its official website.

3. In case of changes to the content of the Business Registration Certificate, the Commodity Exchange must publish the details of such changes within the time frame and in the manner prescribed in Clause 1 of this Article.”

29. Add Article 53b following Article 53a as follows:

“Article 53b. Revocation of Business Registration Certificate

1. The Minister of Industry and Trade has the authority to issue a decision to revoke the Business Registration Certificate for the Commodity Exchange in the following cases:

a) False or forged information in the application dossier for issuing, amending, supplementing, or reissuing the Business Registration Certificate for the Commodity Exchange;

b) Establishment of the Commodity Exchange by individuals prohibited from establishing enterprises under the laws on enterprises;

c) Failure to fulfill the obligation to publish information as prescribed in this Decree;

d) Failure to comply with the prescribed conditions;

đ) Failure to register for tax number or have the tax number terminated according to the law;

e) Not operating at the registered address for six consecutive months from the date of issuance of the Business Registration Certificate for the Commodity Exchange or the amended Business Registration Certificate (if there is a change in the address);

g) Ceasing operations for one year continuously without notifying the Ministry of Industry and Trade;

h) Not fulfilling the reporting requirements as prescribed in this Decree and the laws on enterprises for twelve consecutive months or within three months from the date of written request.

2. Within two working days from the effective date of the revocation decision, the Ministry of Industry and Trade shall send the revocation decision to the Commodity Exchange whose business registration certificate is revoked and relevant agencies and units; publish the revocation information on the Ministry of Industry and Trade's official website. The Commodity Exchange must submit the original Business Registration Certificate to the Ministry of Industry and Trade within five working days from the date of receiving the revocation decision.”

Article 2. Abolish provisions and amend wording

1. Abolish Point d Clause 2 Article 4 Decree No. 158/2006/NĐ-CP.

2. Abolish Clause 3 Article 4 Decree No. 158/2006/NĐ-CP.

3. Abolish Clause 6 Article 15 Decree No. 158/2006/NĐ-CP.

4. Abolish Clause 3 Article 19 Decree No. 158/2006/NĐ-CP.

5. Abolish Clause 3 Article 21 Decree No. 158/2006/NĐ-CP.

6. Abolish Clause 1, Clause 2 and Clause 3 Article 34 Decree No. 158/2006/NĐ-CP.

7. Abolish Article 46 Decree No. 158/2006/NĐ-CP.

8. Abolish Article 52 Decree No. 158/2006/NĐ-CP.

9. Replace the phrase "Ministry of Trade" with the phrase "Ministry of Industry and Trade" in Articles 4, 7, 9, 10, 12, 13, 16, 18, 32, 34, 55.

10. Replace the phrase "Settlement Center" with the phrase "Clearing Settlement Center" in Articles 26, 27, 28, 39, 41, 42.

Article 3. Effectiveness

This Decree takes effect from June 1, 2018.

Article 4. Transitional Provisions

1. Within twelve months from the date this Decree takes effect, Commodity Exchanges that have been licensed to establish prior to the effective date of this Decree shall be responsible for meeting the conditions stipulated in Clause 7 Article 1 of this Decree and shall not need to reapply for a License to Establish a Commodity Exchange.

2. After the period specified in Clause 1 of this Article, Commodity Exchanges that do not meet the stipulated conditions will have their Licenses to Establish a Commodity Exchange revoked.

State-owned enterprises that have been assigned by the Ministry of Agriculture and Rural Development to conduct offshore wind power project surveys before the effective date of this Circular shall continue to implement according to the assigned documents; any new matters arising after the effective date of this Circular shall be implemented in accordance with the provisions of this Circular.

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under central cities, and related organizations and individuals are responsible for implementing this Decree./.